The markets opened with ebullience after NY Fed President Bill Dudley's comments suggested that the Federal Reserve was not considering any major policy changes, with the Dow reaching the highs of the day - the Dow gaining 155 points - between 10:00 and 11:00 am EDT.
All of a sudden, when Fed Chairman, speaking before the congressional Joint Economic Committee, didn't absolutely rule out that the Fed could begin tapering bond purchases before Labor Day, stocks took an abrupt U-turn, but stabilized in positive territory.
Upon the release of minutes from the Fed's April policy meeting, however, things began to get ugly. The minutes revealed that some members of the FOMC thought they should be tapering - or easing - right away or as early as their June meeting, considering the effects of the program and how the economy seemed to have been improving.
That had a chilling effect on the trading floor, as volume picked up, and stock prices headed south in one of the most volatile sessions in some time - a full 276-point round-trip on the Dow industrials. The other major indices followed suit and actually recorded worse losses, on a percentage basis.
Today's key reversal was a triple-engulfing variety, eclipsing the highs and lows of the three previous sessions, and that, to chartists everywhere, screams of directional bias, in this case, to the downside.
Whether or not traditional chart theory will hold water in this artificial liquidity environment is anybody's guess, because stocks have shown recently an uncanny ability to disregard any kind of bad news, though this kind of news - that the Fed might be pulling back the punch bowl from the drunken, leveraged party that is Wall Street - is of a different nature altogether.
As far as bull and bear markets are concerned, we're still a far cry from calling a turn, though tomorrow, the bull's reign will be entering its 51st month and stocks have just exhibited the kind of explosive move to the upside that is indicative of final tops. The coming days, weeks and months will be critical if only to ascertain whether this move is a one-day event, the beginning of a short-term correction or the start of a bear market.
Key factors to consider in today's movement were volume - one of the highest of the year - the advance-decline line and how meaningfully traders will take the mixed messages from various Fed officials.
Another insight is how fruitless the markets have become, when the only pertinent news concerns whether or not the Fed will keep accommodating the broken banks and brokerages with historical low interest rates, which incidentally, shot higher today, the 10-year breaking through the 2.0% yield mark.
Even more important is whether the Fed is actually planning to take its foot off the gas soon or is blowing more hot air, i.e., jawboning the market.
Considering the relative performance of the US economy (sluggish at best) and the consequences of tightening policy even a little bit from this unprecedentedly-accommodative posture it might be best to take a wait-and-see attitude toward the markets in general. Rather than an abrupt, decisive move to the downside (though it could very well happen), some sideways movements in the markets would seem to make more sense, at least until there is clarity on Fed policy, along with a host of other potential market-moving issues.
Dow 15,307.17, -80.41 (0.52%)
NASDAQ 3,463.30, -38.82 (1.11%)
S&P 500 1,655.35, -13.81 (0.83%)
NYSE Composite 9,501.99, -96.28 (1.00%)
NASDAQ Volume 2,058,095,625
NYSE Volume 4,350,662,000
Combined NYSE & NASDAQ Advance - Decline: 1555-4990
Combined NYSE & NASDAQ New highs - New lows: 753-35
WTI crude oil: 94.28, -1.90
Gold: 1,367.40, -10.20
Silver: 22.47, +0.017
Wednesday, May 22, 2013
Tuesday, May 21, 2013
Stocks Advance on St. Louis Fed Chief's Comments
Question: How do you know when St. Louis Fed President James Bullard is advocating for the Fed to continue buying MBS and Treasuries?
Answer: When his lips are moving.
Bullard, one of the most dovish characters in the history of monetary policy, would probably advocate buying swampland if he thought it would goose the economy a bit, but let's not give him any ideas.
His lips moved today, and so did the markets, though in a suitably sheepish kind of way, off the highs, with the Dow far outpacing the other indices.
That was all one needed to know today about the doings on Wall Street. The real show continued down in that other viper's den - Washington, DC - where the IRS scandal widened and deepened. It's really not worth commenting upon at this stage of the game, but, a la Watergate, the number of lies are mounting, the stories are getting twisted, the number of guilty-looking witnesses growing and the conspiracy theorists are having a field day.
With any luck, President Obama will be dragged in by Labor Day, or before he and congress are supposed to get serious about the debt ceiling... again.
The sooner the trash is removed from the nation's capital (suggest starting with the Attorney General), the better.
Dow 15,387.58, +52.30 (0.34%)
NASDAQ 3,502.12, +5.69 (0.16%)
S&P 500 1,669.16, +2.87 (0.17%)
NYSE Composite 9,598.26, +10.72 (0.11%)
NASDAQ Volume 1,745,513,375
NYSE Volume 3,777,275,000
Combined NYSE & NASDAQ Advance - Decline: 3504-2926
Combined NYSE & NASDAQ New highs - New lows: 629-25
WTI crude oil: 96.16, -0.55
Gold: 1,377.60, -6.50
Silver: 22.46, -0.127
Answer: When his lips are moving.
Bullard, one of the most dovish characters in the history of monetary policy, would probably advocate buying swampland if he thought it would goose the economy a bit, but let's not give him any ideas.
His lips moved today, and so did the markets, though in a suitably sheepish kind of way, off the highs, with the Dow far outpacing the other indices.
That was all one needed to know today about the doings on Wall Street. The real show continued down in that other viper's den - Washington, DC - where the IRS scandal widened and deepened. It's really not worth commenting upon at this stage of the game, but, a la Watergate, the number of lies are mounting, the stories are getting twisted, the number of guilty-looking witnesses growing and the conspiracy theorists are having a field day.
With any luck, President Obama will be dragged in by Labor Day, or before he and congress are supposed to get serious about the debt ceiling... again.
The sooner the trash is removed from the nation's capital (suggest starting with the Attorney General), the better.
Dow 15,387.58, +52.30 (0.34%)
NASDAQ 3,502.12, +5.69 (0.16%)
S&P 500 1,669.16, +2.87 (0.17%)
NYSE Composite 9,598.26, +10.72 (0.11%)
NASDAQ Volume 1,745,513,375
NYSE Volume 3,777,275,000
Combined NYSE & NASDAQ Advance - Decline: 3504-2926
Combined NYSE & NASDAQ New highs - New lows: 629-25
WTI crude oil: 96.16, -0.55
Gold: 1,377.60, -6.50
Silver: 22.46, -0.127
Monday, May 20, 2013
Stocks Close (mostly) Lower, But Metals Reverse Early Declines
Stocks were up, then down, then up, then down, never deviating far from the UNCH line, finally ending down, with the exception of the COMP, which was up marginally.
These moves were so minuscule and the volume so light that most of the traders could have taken the day off and nobody would have noticed.
What was noticeable were the moves in gold and silver, both of which were hammered lower in light Asian trading, before reversing course to finish with fairly impressive gains. In particular, gold, which had traded lower for seven consecutive sessions, ended nearly 1.5% higher and tacked on another $12 after the NYMEX close. Silver was also ramping higher in electronic trading, up another 40 cents from the open outcry finish.
If there ever was a key reversal day for the precious metals, today was it. The criminal central banking elites have been banging the metals lower for the better part of the past month, but Andrew McGuire, whistle-blower and expert metals trader, called this one over the weekend, saying the bullion banks were about to punish the shorts with a buying spree to replenish supplies depleted during the recent downward manipulation.
So far, that looks like a prescient call.
Stocks were unaffected by the moves in gold and silver, more attuned to the differing tones comeing from various Fed officials, most of whom are hinting that QEternity could be winding down (tapering) in short order. All the talk is nothing more than "jawboning" a tactic by which the Fed talks one way but actually has no intention of doing anything except continue current policy.
Such talk is needed to cool overheated markets, such as in US stocks, and, while its efforts have been mostly for naught - the indices keep rising - a problem the Fed does have to consider is that it is running out of things to buy, particularly MBS. At $40 billion a month, the Fed is effectively sucking up about 60% of all issuance, choking the market, which, after all, it the intent of the policy.
However, with rates so consistently low (and rising a bit of late), refinancing activity is expected to slow, which would push the Fed's buying up to 90% or more of issuance, and that would not only choke the market, but strangle it and kill it.
The same condition exists in Treasuries, but not to such a degree, though the government is on track to issue less in short-term notes than the Fed has scheduled to buy. This is a situation the Fed obviously did not consider when it embarked upon its gigantic bond-buying program, but, if taken out until the end of 2013, the folly of the Fed will be shown for all to see, i.e., the emperor having no clothes.
Should such a condition prevail, interest rates would rocket higher, stocks would tank and the federal deficit would then be reduced to spending much more - in percentage terms - to service its debts, prompting further borrowing, forcing the Fed to buy up even more debt.
An endless, non-virtuous circle, just as un-planned.
Dow 15,335.28, -19.12 (0.12%)
NASDAQ 3,496.43, -2.53 (0.07%)
S&P 500 1,666.29, -1.18 (0.07%)
NYSE Composite 9,587.51, +11.09 (0.12%)
NASDAQ Volume 1,687,899,125
NYSE Volume 3,556,500,250
Combined NYSE & NASDAQ Advance - Decline: 3699-2778
Combined NYSE & NASDAQ New highs - New lows: 768-36
WTI crude oil: 96.71, +0.69
Gold: 1,384.10, +19.40
Silver: 22.58, +0.23
These moves were so minuscule and the volume so light that most of the traders could have taken the day off and nobody would have noticed.
What was noticeable were the moves in gold and silver, both of which were hammered lower in light Asian trading, before reversing course to finish with fairly impressive gains. In particular, gold, which had traded lower for seven consecutive sessions, ended nearly 1.5% higher and tacked on another $12 after the NYMEX close. Silver was also ramping higher in electronic trading, up another 40 cents from the open outcry finish.
If there ever was a key reversal day for the precious metals, today was it. The criminal central banking elites have been banging the metals lower for the better part of the past month, but Andrew McGuire, whistle-blower and expert metals trader, called this one over the weekend, saying the bullion banks were about to punish the shorts with a buying spree to replenish supplies depleted during the recent downward manipulation.
So far, that looks like a prescient call.
Stocks were unaffected by the moves in gold and silver, more attuned to the differing tones comeing from various Fed officials, most of whom are hinting that QEternity could be winding down (tapering) in short order. All the talk is nothing more than "jawboning" a tactic by which the Fed talks one way but actually has no intention of doing anything except continue current policy.
Such talk is needed to cool overheated markets, such as in US stocks, and, while its efforts have been mostly for naught - the indices keep rising - a problem the Fed does have to consider is that it is running out of things to buy, particularly MBS. At $40 billion a month, the Fed is effectively sucking up about 60% of all issuance, choking the market, which, after all, it the intent of the policy.
However, with rates so consistently low (and rising a bit of late), refinancing activity is expected to slow, which would push the Fed's buying up to 90% or more of issuance, and that would not only choke the market, but strangle it and kill it.
The same condition exists in Treasuries, but not to such a degree, though the government is on track to issue less in short-term notes than the Fed has scheduled to buy. This is a situation the Fed obviously did not consider when it embarked upon its gigantic bond-buying program, but, if taken out until the end of 2013, the folly of the Fed will be shown for all to see, i.e., the emperor having no clothes.
Should such a condition prevail, interest rates would rocket higher, stocks would tank and the federal deficit would then be reduced to spending much more - in percentage terms - to service its debts, prompting further borrowing, forcing the Fed to buy up even more debt.
An endless, non-virtuous circle, just as un-planned.
Dow 15,335.28, -19.12 (0.12%)
NASDAQ 3,496.43, -2.53 (0.07%)
S&P 500 1,666.29, -1.18 (0.07%)
NYSE Composite 9,587.51, +11.09 (0.12%)
NASDAQ Volume 1,687,899,125
NYSE Volume 3,556,500,250
Combined NYSE & NASDAQ Advance - Decline: 3699-2778
Combined NYSE & NASDAQ New highs - New lows: 768-36
WTI crude oil: 96.71, +0.69
Gold: 1,384.10, +19.40
Silver: 22.58, +0.23
Friday, May 17, 2013
Stocks End Week on Super-Duper High Note as All Indicators Are Ignored
Other than options expiry, there was no good reason for stocks to go higher today, though this market doesn't need any reasons or rationale for any kind of movement. So, it was not surprising that, on a day in which the only relevant data came from the University of Michigan consumer sentiment and the Conference Board's Index of Leading Economic Indicators - incidentally, the only two data points that were positive this week - that stocks would rise to new all-time highs on the Dow and S&P, while the NASDAQ continued its recent string of 12 1/2-year-highs.
Consumer sentiment catapulted from April's 76.4 to 83.7 in May, while the LEI came in with a gain for April of 0.6% on expectations of 0.3, after March's disappointing -0.2%, not that the prior reading mattered at all.
Stocks are raging, and to those who have invested and made money, congratulations. For those who have stayed on the sidelines, this is surely not an opportune time to invest, despite what all the financial pundits are saying, unless one believes it is wise to buy at all-time highs.
So ends another week in fantasy-land, aka, Wall Street.
Gold and silver were again taken out back and punished severely, but - big surprise - crude oil continued to march toward the $100/barrel level.
Happy motoring!
Dow 15,354.40, +121.18 (0.80%)
NASDAQ 3,498.97, +33.72 (0.97%)
S&P 500 1,667.47, +17.00 (1.03%)
NYSE Composite 9,576.41, +87.10 (0.92%)
NASDAQ Volume 1,820,408,750
NYSE Volume 3,736,158,250
Combined NYSE & NASDAQ Advance - Decline: 4518-1925
Combined NYSE & NASDAQ New highs - New lows: 703-45
WTI crude oil: 96.02, +0.86
Gold: 1,364.70, -22.20
Silver: 22.35, +0.307
Consumer sentiment catapulted from April's 76.4 to 83.7 in May, while the LEI came in with a gain for April of 0.6% on expectations of 0.3, after March's disappointing -0.2%, not that the prior reading mattered at all.
Stocks are raging, and to those who have invested and made money, congratulations. For those who have stayed on the sidelines, this is surely not an opportune time to invest, despite what all the financial pundits are saying, unless one believes it is wise to buy at all-time highs.
So ends another week in fantasy-land, aka, Wall Street.
Gold and silver were again taken out back and punished severely, but - big surprise - crude oil continued to march toward the $100/barrel level.
Happy motoring!
Dow 15,354.40, +121.18 (0.80%)
NASDAQ 3,498.97, +33.72 (0.97%)
S&P 500 1,667.47, +17.00 (1.03%)
NYSE Composite 9,576.41, +87.10 (0.92%)
NASDAQ Volume 1,820,408,750
NYSE Volume 3,736,158,250
Combined NYSE & NASDAQ Advance - Decline: 4518-1925
Combined NYSE & NASDAQ New highs - New lows: 703-45
WTI crude oil: 96.02, +0.86
Gold: 1,364.70, -22.20
Silver: 22.35, +0.307
Thursday, May 16, 2013
Stocks Have a Late-Day Reality Check (and reality wins)
After yesterday's golden sombrero (a baseball slang term denoting a player striking out four times in four at-bats) of economic data, today's market was welcomed with another 0-for-4 reading on economic data, that on top of Wal-Mart's (WMT) poor first quarter which was a miss on the revenue side, blamed, laughingly, on weather (we have it every day, dolts) and late income tax refunds (pure baloney).
Prior to the opening bell, initial unemployment claims came in at 360K, when the market was looking for a benign 335K, oops. At the same time, April CPI registered -0.4%, the worst showing (for inflationists) since 2007, and housing starts slumped rom 1021K in March to 853K in April, a massive fall-off and well below rosy expectations for 970K. So much for the "rebound" in housing which was supposed to be leading the recovery.
Topping off the list, at 10:00 am EDT, was the Philadelphia Fed's Manufacturing Index, expected to show modest growth to a humorous 2.5, but bolted out at -5.2, another sign that business activity is actually slowing down and doing so in a rather hasty retreat, not only in the US, but globally. France, apart from the farce that is Europe, is also heading deeper into recession, and China's growth is slowing considerably faster than anyone might have expected (except those who don't believe China's economic numbers in the first place).
Thus, stocks hugged the flat-line before caving in - around 3:00 pm EDT - to the pressure of eight straight missed on key economic data, a poor earnings season typified by revenue misses and the continuing crisis at the top of the federal government of not one, not two, but three separate scandals.
Market declines on the day were not exactly pronounced, but, checking the calendar and noting that this is the day before monthly options expiry, it all begins to make more sense. Nobody's yet brave enough to call this a top, but it sure looks like one, smells like one and has all the antecedent timing factors to actually be one.
We'll see if there's any carry-over to tomorrow's week-ending session. Today's late tape was bolstered by tape-painting and/or short covering, which lifted the indices off their lows.
Dow 15,233.22, -42.47 (0.28%)
NASDAQ 3,465.24, -6.37 (0.18%)
S&P 500 1,650.47, -8.31 (0.50%)
NYSE Composite 9,489.18, -62.24 (0.65%)
NASDAQ Volume 1,924,503,750.00
NYSE Volume 3,771,709,500
Combined NYSE & NASDAQ Advance - Decline: 2633-3851
Combined NYSE & NASDAQ New highs - New lows: 607-62
WTI crude oil: 95.16, +0.86
Gold: 1,386.90, -9.30
Silver: 22.66, +0.001
Prior to the opening bell, initial unemployment claims came in at 360K, when the market was looking for a benign 335K, oops. At the same time, April CPI registered -0.4%, the worst showing (for inflationists) since 2007, and housing starts slumped rom 1021K in March to 853K in April, a massive fall-off and well below rosy expectations for 970K. So much for the "rebound" in housing which was supposed to be leading the recovery.
Topping off the list, at 10:00 am EDT, was the Philadelphia Fed's Manufacturing Index, expected to show modest growth to a humorous 2.5, but bolted out at -5.2, another sign that business activity is actually slowing down and doing so in a rather hasty retreat, not only in the US, but globally. France, apart from the farce that is Europe, is also heading deeper into recession, and China's growth is slowing considerably faster than anyone might have expected (except those who don't believe China's economic numbers in the first place).
Thus, stocks hugged the flat-line before caving in - around 3:00 pm EDT - to the pressure of eight straight missed on key economic data, a poor earnings season typified by revenue misses and the continuing crisis at the top of the federal government of not one, not two, but three separate scandals.
Market declines on the day were not exactly pronounced, but, checking the calendar and noting that this is the day before monthly options expiry, it all begins to make more sense. Nobody's yet brave enough to call this a top, but it sure looks like one, smells like one and has all the antecedent timing factors to actually be one.
We'll see if there's any carry-over to tomorrow's week-ending session. Today's late tape was bolstered by tape-painting and/or short covering, which lifted the indices off their lows.
Dow 15,233.22, -42.47 (0.28%)
NASDAQ 3,465.24, -6.37 (0.18%)
S&P 500 1,650.47, -8.31 (0.50%)
NYSE Composite 9,489.18, -62.24 (0.65%)
NASDAQ Volume 1,924,503,750.00
NYSE Volume 3,771,709,500
Combined NYSE & NASDAQ Advance - Decline: 2633-3851
Combined NYSE & NASDAQ New highs - New lows: 607-62
WTI crude oil: 95.16, +0.86
Gold: 1,386.90, -9.30
Silver: 22.66, +0.001
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