Another Leg down for Stocks; BTFD or Correction Coming?

As a fllow-up to Tuesday's dip into the red, stocks could not forge into positive territory on Wednesday, as the NASDAQ suffered its first three-day losing streak since August 2nd, and the other major averages fell in unison.

Losses were not deep, but steady throughout the afternoon session, closing near the lows. Topping concerns was renewed tension in Europe where protests in Spain overnight and in Greece during the day turned violent.

In Madrid, youths turned out in large numbers to protest parliament's ongoing forays into austerity and to voice anger of the 50% unemployment rate plaguing Spanish youth. Police beat protesters with batons and scores of arrests occurred.

Greece's protests were union organized, as many as 200,000 people from the largest public and private unions marched through the capitol. The demonstration was largely peaceful until anarchists began throwing molotov cocktails at police and media stations. Police responded with tear gas and pepper spray.

By comparison, markets were less jittery in the US as compared to Europe, where Spanish stocks slid by more than three percent and the majority of developed nations' bourses suffered losses of between 1.5 and 2.5 percent.

Commodities were also hit, with gold down sharply and oil closing below $90 per barrel for the first time in more than two months. Silver, which slipped nearly one percent in early trading, rebounded to finish the day close to unchanged.

Losses in risk assets prompted questioning over whether the Fed's new QEternity policy would be effective in boosting or maintaining asset prices in the near term or whether the global economies might be sinking further into a condition of malaise and ill-investment. Some analysts saw the pull-back as technical in nature; others thought a correction was overdue and about to commence.

That left traders in a quandary over where to move next: either out of stocks and back into bonds, or, to stay invested in equities.

Sadly, most people being sheeple, risk assets such as stocks are likely to remain in favor until a more robust, sustained devaluation takes place. Such a scenario could very well play out within the next two weeks. The third quarter is quickly drawing to a close, though the overall strength or weakness of the US economy cannot be measured accurately by the stock market.

Anecdotally, new home sales failed to meet expectations, another cause for concern on Wall street.

Hey, it's only money.

Dow 13,413.51, -44.04 (0.33%)
NASDAQ 3,093.70, -24.03 (0.77%)
S&P 500 1,433.32, -8.27 (0.57%)
NYSE Composite 8,221.75, -53.03 (0.64%)
NASDAQ Volume 1,725,565,750
NYSE Volume 3,535,526,250
Combined NYSE & NASDAQ Advance - Decline: 2145-3341
Combined NYSE & NASDAQ New highs - New lows: 136-48
WTI crude oil: 89.98, -1.39
Gold: 1,753.60, -12.80
Silver: 33.94, -0.01

Stocks Fall; Firstrade Securites Ill-Advised as Brokerage

Just after noon, stocks did an about-face and headed into negative territory, with losses accelerating into the close.

There was no real catalyst for the event, except for the possible realization that stocks have been trading at nose-bleed levels for months, the entire global financial condition is shaky at best and a complete joke of fiat money and debt piled on top of debt which will never be repaid.

There's a reason individual investors have fled from the stok market in droves over the past few years. In fact, there are multiple reasons, starting with the crash of 2008, which engendered problems that still have not been resolved. There's the flash crash, HFTs front-running every market order, other insider unscrupulous trading activity, the fact that no financial executive has even been indicted for crimes and probably never will be.

It is the same song and dance sen here nearly daily over the past five years and it's gotten to the point at which it is almost not worth the time to publish. There's a 101-point loss on the Dow today. There will be a 150-point gain tomorrow.

None of it makes any sense until one realizes that the game is rigged and completely out of control. The scrounging and skimming of other people's money is not going to end until regular people stand up and take action. Not demand action from their elected officials, because they're part of the problem, but take matters into one's own hands, like they have in Iceland, soon to come in Greece and shortly thereafter in Spain and Italy.

The US will get around to it last of all, if ever, because the living is good here in the states, no matter how bad the economy gets. There's always another way. The stock market is a road to nowhere for you, your money and your life.

Trading in the current climate is extremely risky and likely to end in disaster for anyone, even those with intimate knowledge of the depth of the crisis, the inner despair of Wall Street and the moaning from Main Street. Better to buy land, gold, silver, live off land you own (or, considering the state of real estate taxes, rent from the government) and make your own way as best as possible.

Dow 13,457.55, -101.37 (0.75%)
Nasdaq 3,117.73, -43.05 (1.36%)
S&P 500 1,441.59, -15.30 (1.05%)
NYSE Composite 8,274.77 -81.79(0.98%)
NYSE Volume 3,677,164,500
Nasdaq Volume 1,979,931,000
Combined NYSE & NASDAQ Advance - Decline: 1507-4082
Combined NYSE & NASDAQ New highs - New lows: 326-35
WTI crude oil: 91.37, -0.56
Gold: 1,766.40, +1.80
Silver: 33.95, -0.04

Stocks Fall for 16th Monday in Last 17; Riots Shutter Foxconn Plant

Seriously, folks, this is getting old.

Major US averages fell for the 16th time in the last 17 Mondays.

This is the new regime. Stocks always go down on Mondays and up on Fridays. They trade in extremely narrow ranges with little to no volatility. Anybody making open orders is immediately raped by HFTs and only insiders win. There is no volume (actually today's volume on the NYSE was in the range from pathetic to morose).

There was actually some positive news on the day. According to a Sunday Times article, Goldman Sachs (GS) is planning to lay off as many as 100 partners in the immediate future. The firm denied the allegations, saying that the changes had been long-planned and many of the departures are due to retirements. No matter the case, it's always good to hear that some of the tentacles of the "giant squid" are being shorn off.

A huge riot of some 5000 workers forced the shutdown of a huge Foxconn facility in Taiyuan, China. The facility reportedly employs 79,000 workers and manufactures the Apple iPhone and other electronic devices for companies such as Dell and Hewlett-Packard.

The price of crude oil fell again on Monday, causing speculation that the Fed's new bond purchase program, otherwise known as QEternity, is not going to be effective in creating jobs or strengthening the sagging US and global economies.

Business as usual.

Dow 13,558.92, -20.55 (0.15%)
NASDAQ 3,160.78, -19.18 (0.60%)
S&P 500 1,456.89, -3.26 (0.22%)
NYSE Composite 8,356.56, -20.95 (0.25%)
NASDAQ Volume 1,706,535,750
NYSE Volume 2,992,098,250
Combined NYSE & NASDAQ Advance - Decline: 2337-3175
Combined NYSE & NASDAQ New highs - New lows: 307-27
WTI crude oil: 91.93, -0.96
Gold: 1,764.60, -13.40
Silver: 33.98, -0.65

Initial Claims, Leading Indicators Disappoint; Investors Don't Care

Initial unemployment claims and the Conference Board's Index of Leading Economic Indicators both showed disappointing results but investors (those few left) didn't seem to care.

The number of people looking for jobs fell 3,000 from last week, with 382,000 new filers. Leading indicators were down 0.1 percent in August after rising 0.5 percent in July and dropping 0.5 percent in June.

Stocks traded lower in the morning, but quickly rebounded to unchanged, where they remained range-bound the remainder of the session.

It was another low-volume fiasco, brought to you by bankers who can't balance their books and journalists who can scarcely string together two cogent sentences.

Markets, especially those in the US, are so woefully correlated to the macro trade that it would be funny if it weren't so pathetic. Since fall of 2008, trading has been conducted on rumor, innuendo and the latest efforts by the Federal Reserve to "revive" the economy, even though their efforts have been directed almost entirely at rescuing failed financial institutions.

The Fed has thrown more than $20 trillion at the problems which first surfaced with sub-prime lending, but have since infected institutions and sovereign governments globally. Their efforts have been largely futile, wasteful and unfriendly to savers, but there seems to be no other way to keep the world's economic mess going other than to make frequent use of easing, by sopping up debt nobody wants because it is either eminently non-collateralized, below par or not redeemable for anything approaching fair value.

Global markets continue to plod along, nations continue to spend beyond their means and Wall Street thinks it's wonderful.

Just play along.

Dow 13,596.93 18.97(0.14%)
NASDAQ 3,175.96 6.66 (0.21%)
S&P 500 1,460.26 0.79 (0.05%)
NYSE Compos... 8,373.06 27.43 (0.33%)
NASDAQ Volume 1,789,587,250
NYSE Volume 3,372,348,500
Combined NYSE & NASDAQ Advance - Decline: 2132-3369
Combined NYSE & NASDAQ New highs - New lows: 225-35
WTI crude oil: 91.87, -0.11
Gold: 1,770.20, -1.50
Silver: 34.68, -0.09

BOJ Eases; Housing a Little Better; Oil Takes Another Hit

OK, it's getting a little stupid with the incessant chorus of monetization of government (and bank debt).

Today, the Bank of Japan (BOJ) joined in, announcing something along the lines of a couple quadrillion yen to be added to liquidity over the next six to eight months. That may not be correct, but the numbers were large, the editor is too tired from cutting down dead limbs (from actual trees), and the time period is rather irrelevant, since the BOJ has been doing this kind of thing for 20-odd years, with obvious effect: keeping the Japanese economy mired in a semi-permanent state alternating between inflation and depression.

Markets took the news in stride, as usual, bounced around a bit, eventually ending only slightly higher on low volume. That's the story for now, and, while it doesn't change much, some day it will. In the meantime, we're taking our own advice and buying land, seeds (tomatoes, tobacco, broccoli, etc.), silver and maybe some working firearms.

There was what might be called "encouraging" news on the housing front. Housing starts (officially, a shovel in the ground or a stake being placed on a lot by a surveyor) came in at 750K in August, but that was below forecast, though up from the July figure of 733K, which was revised downward from 746K, so, expect the August figures to be revised lower as well, for a net gain of, well, who knows?

Existing home sales for August came in at an annual run-rate of 4.82 million, up from an unrevised 4.47 million in July and well ahead of forecasts. That was the best of the news, because August building permits, viewed as an indicator of current demand, fell from 812K in July to 803K, putting something of a damper on the "animal spirits" which keep calling the bottom in the housing market month after month.

Is this the bottom? Maybe, though that depends on perspective and how far out you wish to project. Give housing another four years of ZIRP, massive MBS buying and monetization of the federal debt and see where we are then.

Even better news came from the oil commodity complex, where the price of crude took another massive hit. There's no telling where the selling is coming from, or why, though it certainly seems fishy given the closeness to the general election - just six short weeks away - and the inherently inflationary effect of Bernanke's QEternity, but, it's welcome relief for drivers in the US, at least.

Dow 13,577.96, +13.32(0.10%)
NASDAQ 3,182.62, +4.82(0.15%)
S&P 5001,461.05, +1.73 (0.12%)
NYSE Composite 8,400.31, +12.87 (0.15%)
NASDAQ Volume 1,826,526,125
NYSE Volume 3,409,506,250
Combined NYSE & NASDAQ Advance - Decline: 2914-2500
Combined NYSE & NASDAQ New highs - New lows: 315-28
WTI crude oil: 91.98, -3.31
Gold: 1,771.70, +0.50
Silver: 34.59, -0.13