This was a bit of a shakeout. There was no late rally to save the day, nor was there - oddly enough - any talk of tapering by Fed officials.
No, today was just one of those days that the market had a good look in the mirror and didn't like what it was seeing. Smart money is already out of the equity markets, but the dumb money will probably be looking to buy the dip, as has been the modus operandi for the past four-years.
It was mentioned here yesterday that this appeared to be an opportune time to go to cash or go short. That call could not have been more prescient as stocks fell out of bed and continued to roll on the floor, writhing in pain the rest of the session, having the worst two days since mid-April, which, considering where the market has traversed since then, could be only the beginning of a long, deep decline.
Marketeers will blame today's selloff on poor ADP numbers and maybe the ISM Services index, both coming in with disappointing reports, but data has been trending poorly for the past two months (some say four years) and the market is just now beginning to wake up to the reality of the depression being felt across the country and around the world. Business activity has slowed in almost every sector or has not grown at any kind of solid, sustained pace for most of the past six months, all the while equities were going through the roof.
If this is the beginning of a serious correction or the end of the bull and the beginning of a bear market, today and yesterday's action was just a warm-up.
Wall Street may be blind to poor economic data for a long time, but when the selling starts and there's real money to be lost, the traders all act like herd animals, rushing for the quickest way out.
Even though volume was not magnificent, the declines speak for themselves. The Dow Jones Industrials took a 1 1/2 percent hit today and are now three percent from the top, made on May 28.
The A-D line continues to deteriorate, with today's coming in a 4-1 for the losers; new lows exceeded new highs for the first time in months. Keep an eye on that metric for more clues to where this is going.
A June swoon or a hungry bear?
Dow 14,960.59, -216.95 (1.43%)
NASDAQ 3,401.48, -43.78 (1.27%)
S&P 500 1,608.90, -22.48 (1.38%)
NYSE Composite 9,189.21, -130.88 (1.40%)
NASDAQ Volume 1,728,689,625
NYSE Volume 3,620,423,750
Combined NYSE & NASDAQ Advance - Decline: 1369-5151
Combined NYSE & NASDAQ New highs - New lows: 69-108
WTI crude oil: 93.74, +0.43
Gold: 1,398.50, +1.30
Silver: 22.47, +0.063
Wednesday, June 5, 2013
Tuesday, June 4, 2013
Dow Ends Absurd Tuesday Streak; Stocks Breaking Down
The Dow Jones Industrials ended a string of 20 consecutive gains on Tuesday, with a blood-red beating on this day. The streak of ending positive for 20 consecutive Tuesdays was probably due - more than anything else - to POMO dates, but the concept is that the market is becoming like fantasy baseball, where stats on every conceivable construct are trotted out, such as a player's propensity to steal a base during a day game with his team ahead after three straight wins against a left-handed pitcher with a non-Latino playing right field.
That comparison may be a touch on the deep side, but the pint is that market statistics are useless in the past unless they offer some meaningful insight into the future and Tuesday gains do not pass the smell test.
There is nothing good about this market. Now would - in some people's opinions - be a good time to go short or go to cash.
Of course, since many readers of this blog are already in cash, that would mean going short is at an optimal point.
If one would like the comfort of shorting an entire index, the S&P is a good bet, for individual stocks, there are many from which to choose, but the most enticing are social media companies with extreme valuations, such as Facebook. Zynga was a disaster waiting to happen, and it did, though its low share price (threes and change) seriously precluded any dowside participation. Yahoo (YHOO) also appears ripe for a substantial revaluation to the downside. Industrials also seem to be at risk, but the market has yet to price in any effects of a global slowdown.
At the bottom of everything is currencies, and they remain the key element in the ongoing destruction of all fiat currency not backed by tangible assets. There is a severe collateral crisis combined with grand theft at the pinnacle of government worldwide, a now-vicious devaluation regime and capital velocity fast approaching zero.
Blackrock and Nuveen funds were prominent among new 52-week lows.
Any kind of growth reported by any government anywhere has to be suspect and viewed with a maximum of skepticism.
Despite cutting lossed roughly in half by the close, there was nothing to like about the overall action in equity markets. What began as a bit of slippage a few weeks ago is quickly turning into a correction, most of which will be predicated upon the numbers released by ADT (tomorrow) and the BLS non-farm payroll report, Friday.
15,000 on the Dow and 1600 on the S&P are major psychological levels which should not be overlooked.
Dow 15,177.54, -76.49 (0.50%)
NASDAQ 3,445.26, -20.11 (0.58%)
S&P 500 1,631.38, -9.04 (0.55%)
NYSE Compos 9,320.08, -37.01 (0.40%)
NASDAQ Volume 1,767,142,375
NYSE Volume 4,025,642,750
Combined NYSE & NASDAQ Advance - Decline: 2263-4193
Combined NYSE & NASDAQ New highs - New lows: 228-145
WTI crude oil: 93.31 -0.14
Gold: 1,397.20, -14.70
Silver: 22.41, -0.312
That comparison may be a touch on the deep side, but the pint is that market statistics are useless in the past unless they offer some meaningful insight into the future and Tuesday gains do not pass the smell test.
There is nothing good about this market. Now would - in some people's opinions - be a good time to go short or go to cash.
Of course, since many readers of this blog are already in cash, that would mean going short is at an optimal point.
If one would like the comfort of shorting an entire index, the S&P is a good bet, for individual stocks, there are many from which to choose, but the most enticing are social media companies with extreme valuations, such as Facebook. Zynga was a disaster waiting to happen, and it did, though its low share price (threes and change) seriously precluded any dowside participation. Yahoo (YHOO) also appears ripe for a substantial revaluation to the downside. Industrials also seem to be at risk, but the market has yet to price in any effects of a global slowdown.
At the bottom of everything is currencies, and they remain the key element in the ongoing destruction of all fiat currency not backed by tangible assets. There is a severe collateral crisis combined with grand theft at the pinnacle of government worldwide, a now-vicious devaluation regime and capital velocity fast approaching zero.
Blackrock and Nuveen funds were prominent among new 52-week lows.
Any kind of growth reported by any government anywhere has to be suspect and viewed with a maximum of skepticism.
Despite cutting lossed roughly in half by the close, there was nothing to like about the overall action in equity markets. What began as a bit of slippage a few weeks ago is quickly turning into a correction, most of which will be predicated upon the numbers released by ADT (tomorrow) and the BLS non-farm payroll report, Friday.
15,000 on the Dow and 1600 on the S&P are major psychological levels which should not be overlooked.
Dow 15,177.54, -76.49 (0.50%)
NASDAQ 3,445.26, -20.11 (0.58%)
S&P 500 1,631.38, -9.04 (0.55%)
NYSE Compos 9,320.08, -37.01 (0.40%)
NASDAQ Volume 1,767,142,375
NYSE Volume 4,025,642,750
Combined NYSE & NASDAQ Advance - Decline: 2263-4193
Combined NYSE & NASDAQ New highs - New lows: 228-145
WTI crude oil: 93.31 -0.14
Gold: 1,397.20, -14.70
Silver: 22.41, -0.312
Monday, June 3, 2013
Good News Is OK, but, Bad News is Awesome, Baby!
When the ISM Index posted a May reading of 49 today - showing contraction - there wasn't much reaction in the markets.
That release came at the same time - 10:00 am EDT - as the Construction Spending data, up 0.4%, though on expectations of a gain of 1.1%. For the general economy, neither data point would, could or should be considered good signs.
It took a while forinvestors speculators to figure it out, but, essentially, bad news for the general economy is really great news for stocks, because it suggests that the Federal Reserve, under the guidance of the spectacularly inept Ben Bernanke, will continue to goose stocks by supplying enormous amounts of stimulus via their bond-buying program without pausing, tapering or even considering slowing down at all.
When San Francisco Fed President John Williams said that tapering of the bond buying program could occur as early as this summer, he was shortly thereafter countered by Atlanta President James Lockhart who said the FOMC backs the stimulative measures.
After 2:00 pm EDT, the computers had it all figured out and sent stocks to the highs of the day into the close.
As long as the cheap (nearly free) money keeps flowing, the banks love it and will keep bidding up stocks to the sky and maybe beyond. One would tend to believe that in the event of a nuclear holocaust or the earth being hit by a giant-sized meteor, wiping out 90% of the global population, stocks would stage a rally that would make 16,000 on the Dow look like a spec in the rear-view mirror.
That's the twisted view that permeates the granite canyons of Wall Street, with no end in sight. For the bankers and their stock-trading units, the computer algos and the big bonuses, the Fed is the gift that just keeps on giving, depriving savers of any reasonable options and the worse the economy goes, the more money will be pumped into the global stock market Ponzi.
Too bad that gold and silver out-performed all of the major indices today, by a bunch. Besides that, the number of advancing issues just barely beat the decliners, and the new highs-new lows reading finally succumbed to the pressure and went negative for the first time in quite a while, a signal that should spook investors (how it affects computers is not well-known).
Whatever the case, it's all good, or bad, or, um, oh, forget it.
Dow 15,254.03, +138.46 (0.92%)
NASDAQ 3,465.37, +9.46 (0.27%)
S&P 500 1,640.42, +9.68 (0.59%)
NYSE Composite 9,356.14, +53.87 (0.58%)
NASDAQ Volume 1,965,356,375
NYSE Volume 4,495,515,000
Combined NYSE & NASDAQ Advance - Decline: 3409-3093
Combined NYSE & NASDAQ New highs - New lows: 189-262
WTI crude oil: 93.45, +1.48
Gold: 1,411.90, +18.90
Silver: 22.72, +0.478
That release came at the same time - 10:00 am EDT - as the Construction Spending data, up 0.4%, though on expectations of a gain of 1.1%. For the general economy, neither data point would, could or should be considered good signs.
It took a while for
When San Francisco Fed President John Williams said that tapering of the bond buying program could occur as early as this summer, he was shortly thereafter countered by Atlanta President James Lockhart who said the FOMC backs the stimulative measures.
After 2:00 pm EDT, the computers had it all figured out and sent stocks to the highs of the day into the close.
As long as the cheap (nearly free) money keeps flowing, the banks love it and will keep bidding up stocks to the sky and maybe beyond. One would tend to believe that in the event of a nuclear holocaust or the earth being hit by a giant-sized meteor, wiping out 90% of the global population, stocks would stage a rally that would make 16,000 on the Dow look like a spec in the rear-view mirror.
That's the twisted view that permeates the granite canyons of Wall Street, with no end in sight. For the bankers and their stock-trading units, the computer algos and the big bonuses, the Fed is the gift that just keeps on giving, depriving savers of any reasonable options and the worse the economy goes, the more money will be pumped into the global stock market Ponzi.
Too bad that gold and silver out-performed all of the major indices today, by a bunch. Besides that, the number of advancing issues just barely beat the decliners, and the new highs-new lows reading finally succumbed to the pressure and went negative for the first time in quite a while, a signal that should spook investors (how it affects computers is not well-known).
Whatever the case, it's all good, or bad, or, um, oh, forget it.
Dow 15,254.03, +138.46 (0.92%)
NASDAQ 3,465.37, +9.46 (0.27%)
S&P 500 1,640.42, +9.68 (0.59%)
NYSE Composite 9,356.14, +53.87 (0.58%)
NASDAQ Volume 1,965,356,375
NYSE Volume 4,495,515,000
Combined NYSE & NASDAQ Advance - Decline: 3409-3093
Combined NYSE & NASDAQ New highs - New lows: 189-262
WTI crude oil: 93.45, +1.48
Gold: 1,411.90, +18.90
Silver: 22.72, +0.478
Friday, May 31, 2013
Where's the Money? Sellers Swamp Market Late on Last Day of May
The only major index that finished up on the last day in May was the Nikkei, but, that index closed the month in negative territory - not by much - but that was a result the "unlimited" QE by the BOJ was supposed to make impossible.
Impossibility. It's a word tossed around until the impossible become possible, then probable, then actually happens. The Titanic sank. Buster Douglas beat Mike Tyson. Secretariat lost (I was there, at the whitney Stakes at Saratoga in 1973). Sometimes, the Yankees don't make the playoffs, let alone win the world series.
As impossible as it may seem for the Dow Industrials to reverse course in the final 2 1/2 weeks of May and lose all the momentum supplied by $85 billion a month in bond purchases by the Fed, it happened. Unlimited money printing, when al is said and done, may not be the panacea for free market capitalism. In fact, it may be just the opposite, and Mr. Market may finally have seen enough, though we probably won't know, at the earliest, until Friday of next week, when the June employment data is released in the BIS non-farm payroll figures.
If this is the beginning of the end for failed central bank policy-making, that may take longer to discern.
In any case, stocks meandered in the early going on Friday, before settling into selling mode at 2:00 pm EDT, and really accelerating in the final hour of trade. There doesn't need to be a reason, just a sentiment, which could be a reality: that the general world economy is slow at best, receding, at worst.
It could be technical, since the US indices were making new all-time highs on just about a daily basis until just about a week ago.
The culprit could be bonds, as the 10-year's spike to 2.18 intra-day had some investors and speculators re-examining the stocks versus bonds paradigm.
Or it could be Ben Bernanke, whose exit strategy from the relentless easy money will be to retire from the chairmanship of the Federal Reserve. We wish him... well, we're not going there.
In any case, stocks sold off to give the Dow and S&P back-to-back losing weeks for the first time this year, with possibly more to come. Volume on the day was quite robust, the A-D line was better than 4:1 losers over winners, and, no, the number of new 52-week lows did not exceed the new highs, but it was close.
To finish off what could be a watershed week, here's Dan Hicks and His Hot Licks performing part of today's title, "Where's the Money" from the 1972 album of the same name:
Dow 15,115.57, -208.96 (1.36%)
NASDAQ 3,455.91, -35.38 (1.01%)
S&P 500 1,630.74, -23.67 (1.43%)
NYSE Composite 9,302.27, -157.79 (1.67%)
NASDAQ Volume 1,879,071,500
NYSE Volume 4,366,197,000
Combined NYSE & NASDAQ Advance - Decline: 1358-5007
Combined NYSE & NASDAQ New highs - New lows: 215-182
WTI crude oil: 91.97, -1.64
Gold: 1,392.60, -18.90
Silver: 22.24, -0.447
Impossibility. It's a word tossed around until the impossible become possible, then probable, then actually happens. The Titanic sank. Buster Douglas beat Mike Tyson. Secretariat lost (I was there, at the whitney Stakes at Saratoga in 1973). Sometimes, the Yankees don't make the playoffs, let alone win the world series.
As impossible as it may seem for the Dow Industrials to reverse course in the final 2 1/2 weeks of May and lose all the momentum supplied by $85 billion a month in bond purchases by the Fed, it happened. Unlimited money printing, when al is said and done, may not be the panacea for free market capitalism. In fact, it may be just the opposite, and Mr. Market may finally have seen enough, though we probably won't know, at the earliest, until Friday of next week, when the June employment data is released in the BIS non-farm payroll figures.
If this is the beginning of the end for failed central bank policy-making, that may take longer to discern.
In any case, stocks meandered in the early going on Friday, before settling into selling mode at 2:00 pm EDT, and really accelerating in the final hour of trade. There doesn't need to be a reason, just a sentiment, which could be a reality: that the general world economy is slow at best, receding, at worst.
It could be technical, since the US indices were making new all-time highs on just about a daily basis until just about a week ago.
The culprit could be bonds, as the 10-year's spike to 2.18 intra-day had some investors and speculators re-examining the stocks versus bonds paradigm.
Or it could be Ben Bernanke, whose exit strategy from the relentless easy money will be to retire from the chairmanship of the Federal Reserve. We wish him... well, we're not going there.
In any case, stocks sold off to give the Dow and S&P back-to-back losing weeks for the first time this year, with possibly more to come. Volume on the day was quite robust, the A-D line was better than 4:1 losers over winners, and, no, the number of new 52-week lows did not exceed the new highs, but it was close.
To finish off what could be a watershed week, here's Dan Hicks and His Hot Licks performing part of today's title, "Where's the Money" from the 1972 album of the same name:
Dow 15,115.57, -208.96 (1.36%)
NASDAQ 3,455.91, -35.38 (1.01%)
S&P 500 1,630.74, -23.67 (1.43%)
NYSE Composite 9,302.27, -157.79 (1.67%)
NASDAQ Volume 1,879,071,500
NYSE Volume 4,366,197,000
Combined NYSE & NASDAQ Advance - Decline: 1358-5007
Combined NYSE & NASDAQ New highs - New lows: 215-182
WTI crude oil: 91.97, -1.64
Gold: 1,392.60, -18.90
Silver: 22.24, -0.447
Thursday, May 30, 2013
Global Equity-Ponzi Bubble Expands (except in Japan)
Apparently, Japanese Prime Minister Shinzo Abe and Bank of Japan Governor Haruhiko Kuroda just don't have the same financial panache as maybe Barack Obama and Fed head, Ben Bernanke.
If they did, their stock market - the Nikkei - would not have fallen five percent on Thursday, in a continuing downdraft in Japanese equities. Had they the skills of Bernanke, their stocks would have been up, like in the US, where the major averages shrugged off Wednesday's declines and rallied throughout the session.
Then again, maybe the Japanese have something up their sleeve, issuing new foreign exchange margin trading rules within the final hour of trading in New York, which prompted the markets - especially the Dow Industrials - to discard most of the gains on the day and cause the Dollar/Yen carry trade to slip into the red.
In today's economic landscape, controlled almost entirely by central banks, these kinds of things aren't supposed to happen. Stocks are always supposed to go up, the Yen must fall against the mighty US dollar (and all other currencies), bonds stabilize at historical low levels and unicorns puke up skittles and gold nuggets.
Maybe it's that last part - those gold nuggets - that have everybody nervous. Everyone knows that the spot, or paper, or futures gold price has nothing to do with the actual price of gold in physical terms and this disconnect, though held well below the surface purposely, because, in the words of the Great Bernanke, gold is not money and is something of an "ancient relic" in financial terms.
Well, that's just too bad, because gold has always been money, along with silver, and the price one pays for actual physical metal has become disjointed from all those other artificial prices, none of which entitles the holders of some precious scrip to actual, physical metal, and that's all that really counts in the end.
A promise to buy gold or silver or to have gold or silver or to receive gold or silver is not the same as actually holding it in one's possession.
In the long run, gold and silver will always be money. All the paper "equivalents" and substitutes will be about as worthless as... well, pieces of paper.
The wheels of the global Ponzi train to Zimbabwe are about to come off and the differences between that useless spot price and the real price of gold and silver are acting as the catalysts. When the markets finally collapse, which they - by mathematical certainty - must, fingers will be pointed everywhere: at the Fed, at the government, at the rich, at the poor, at Social Security, at China. But gold and silver will be blameless because, THEY ARE MONEY, and they will forever be money, despite Mr. Bernanke's views on the subject.
Dow 15,324.53, +21.73 (0.14%)
NASDAQ 3,491.30, +23.78 (0.69%)
S&P 500 1,654.41, +6.05 (0.37%)
NYSE Composite 9,460.05, +37.56 (0.40%)
NASDAQ Volume 1,746,768,625
NYSE Volume 3,812,669,250
Combined NYSE & NASDAQ Advance - Decline: 4070-2380
Combined NYSE & NASDAQ New highs - New lows: 295-80
WTI crude oil: 93.61, +0.48
Gold: 1,411.50, +20.20
Silver: 22.69, +0.237
If they did, their stock market - the Nikkei - would not have fallen five percent on Thursday, in a continuing downdraft in Japanese equities. Had they the skills of Bernanke, their stocks would have been up, like in the US, where the major averages shrugged off Wednesday's declines and rallied throughout the session.
Then again, maybe the Japanese have something up their sleeve, issuing new foreign exchange margin trading rules within the final hour of trading in New York, which prompted the markets - especially the Dow Industrials - to discard most of the gains on the day and cause the Dollar/Yen carry trade to slip into the red.
In today's economic landscape, controlled almost entirely by central banks, these kinds of things aren't supposed to happen. Stocks are always supposed to go up, the Yen must fall against the mighty US dollar (and all other currencies), bonds stabilize at historical low levels and unicorns puke up skittles and gold nuggets.
Maybe it's that last part - those gold nuggets - that have everybody nervous. Everyone knows that the spot, or paper, or futures gold price has nothing to do with the actual price of gold in physical terms and this disconnect, though held well below the surface purposely, because, in the words of the Great Bernanke, gold is not money and is something of an "ancient relic" in financial terms.
Well, that's just too bad, because gold has always been money, along with silver, and the price one pays for actual physical metal has become disjointed from all those other artificial prices, none of which entitles the holders of some precious scrip to actual, physical metal, and that's all that really counts in the end.
A promise to buy gold or silver or to have gold or silver or to receive gold or silver is not the same as actually holding it in one's possession.
In the long run, gold and silver will always be money. All the paper "equivalents" and substitutes will be about as worthless as... well, pieces of paper.
The wheels of the global Ponzi train to Zimbabwe are about to come off and the differences between that useless spot price and the real price of gold and silver are acting as the catalysts. When the markets finally collapse, which they - by mathematical certainty - must, fingers will be pointed everywhere: at the Fed, at the government, at the rich, at the poor, at Social Security, at China. But gold and silver will be blameless because, THEY ARE MONEY, and they will forever be money, despite Mr. Bernanke's views on the subject.
Dow 15,324.53, +21.73 (0.14%)
NASDAQ 3,491.30, +23.78 (0.69%)
S&P 500 1,654.41, +6.05 (0.37%)
NYSE Composite 9,460.05, +37.56 (0.40%)
NASDAQ Volume 1,746,768,625
NYSE Volume 3,812,669,250
Combined NYSE & NASDAQ Advance - Decline: 4070-2380
Combined NYSE & NASDAQ New highs - New lows: 295-80
WTI crude oil: 93.61, +0.48
Gold: 1,411.50, +20.20
Silver: 22.69, +0.237
Subscribe to:
Posts (Atom)
Posts
