Stocks took heavy punishment to the mid-section, right from the opening bell, rallied midday, but eventually fell out of the ring late in the session.
Much of the distaste for equities came from China, where the Shanghai index had its worst day in four years and is in a bear market. The PBOC has openly declared war on speculation, seeking to tighten via overnight lending rates, a move that cannot be good for markets in the short term, but, long term, may hold some weight as a key to global recovery.
The Dow slipped as many as 248 points in the early going, nearly erasing all of its losses mid-afternoon on some very dovish comments by usually-hawkish Dallas Fed President Richard Fisher, but finished well into the red zone on very late, but very spirited, trading.
The NASDAQ suffered its first four-day losing streak since November of 2011, which says a great deal about where the market has been and maybe even more about where it is going. The Dow and S&P closed lower for the third day in the last four, with the S&P closing below key support levels. The Dow Transports were monkey-hammered, suggesting that the primary trend has changed from bullish to bearish, which, if so, would be a huge development, though it's still too early to tell.
Between China liquidity concerns and a large sell-off in the 10-year note - hitting a high of 2.63 before settling back to 2.57 - the equity markets were whipsawed though the middle of the day.
Signs that the US economy is improving continue apace, with the Dallas Fed manufacturing index posting an impressive gain in the latest survey. Naturally, the market took this as another sign that the Fed would be backing off its bond purchases in the near future, so, despite being unabashedly positive economic news, the markets took it in exactly the opposite manner.
Volume was very high for a summer session, indicative of the heightened interest since the Fed announcement last week. Declining issues outnumbered advancing one by a 4:1 margin. New lows had a 10:1 advantage over new highs, the most since March of 2009, a significant development, indicating severe short-term weakness and - to the bulls - a potential buying opportunity
With the second quarter running down and Fed speakers dotting the landscape this week, it might be a good time for traders to relent, especially those on the short side. The major indices are well into correction territory and taking some profits off the table might not be a bad idea, with a short week just prior to earnings season. Markets close at 1:00 pm EDT on Wednesday, July 3, are closed for the 4th of July and will have a full - though not well-attended - session on July 5.
Any good trader and even some marginal ones, should have been able to book solid profits on the downside move from the prior two weeks and may want to reassess while the market gyrates through the end of the quarter and a holiday week.
The volatility of the past few weeks may subside somewhat, having moved sharply during that time, so taking a break in what is traditionally a time to do so, seems not only smart, but almost instinctive.
Dow 14,659.56, -139.84 (0.94%)
NASDAQ 3,320.76, -36.49 (1.09%)
S&P 500 1,573.09, -19.34 (1.21%)
NYSE Composite 8,892.02, -126.53 (1.40%)
NASDAQ Volume 1,980,708,750
NYSE Volume 5,304,444,000
Combined NYSE & NASDAQ Advance - Decline: 1306-5469
Combined NYSE & NASDAQ New highs - New lows: 68-683
WTI crude oil: 95.18, +1.49
Gold: 1,277.10, -14.90
Silver: 19.49, -0.466
Monday, June 24, 2013
Friday, June 21, 2013
Dead Cats Don't Bounce... Much; Stocks End Worst Week Since Obama Re-election
Hey, we're screwed.
Anybody buying stocks today must have had money to burn because the direction is definitely to the downside for the foreseeable future.
Interest rates kept creeping higher and stocks met what used to be support, now known as resistance. The S&P couldn't get past 1600 and the Dow failed repeatedly at 14,850, the previous intra-day low.
Stocks had their worst week since November 5-9, 2012, the week inclusive of the re-election for Bachus Obummer. It's not a coincidence. Thank you , thank you , thank you, Mr. Bernanke. Volume was even heavier than yesterday, likely the highest of the year. Love volatility or go home.
Watch closely the new highs vs. new lows, which have shifted to heavy overweight in new lows. This is not a drill. A bear market forecast could appear any time, since the Bull is already well past four years old.
In keeping with the spirit of hating stocks and loving arable land, tools, machinery, goldfish ponds and pre-1965 silver coins, here's Billy Preston, circa 1974 (ugh, a bad year, but check out the hair)...
Dow 14,799.40, +41.08 (0.28%)
NASDAQ 3,357.25, -7.39 (0.22%)
S&P 500 1,592.43, +4.24 (0.27%)
NYSE Composite 9,018.57, +22.60 (0.25%)
NASDAQ Volume 2,685,610,750
NYSE Volume 6,174,438,000
Combined NYSE & NASDAQ Advance - Decline: 3467-3076
Combined NYSE & NASDAQ New highs - New lows: 80-343
WTI crude oil: 93.69, -1.45
Gold: 1,292.00, +5.80
Silver: 19.96, +0.136
Anybody buying stocks today must have had money to burn because the direction is definitely to the downside for the foreseeable future.
Interest rates kept creeping higher and stocks met what used to be support, now known as resistance. The S&P couldn't get past 1600 and the Dow failed repeatedly at 14,850, the previous intra-day low.
Stocks had their worst week since November 5-9, 2012, the week inclusive of the re-election for Bachus Obummer. It's not a coincidence. Thank you , thank you , thank you, Mr. Bernanke. Volume was even heavier than yesterday, likely the highest of the year. Love volatility or go home.
Watch closely the new highs vs. new lows, which have shifted to heavy overweight in new lows. This is not a drill. A bear market forecast could appear any time, since the Bull is already well past four years old.
In keeping with the spirit of hating stocks and loving arable land, tools, machinery, goldfish ponds and pre-1965 silver coins, here's Billy Preston, circa 1974 (ugh, a bad year, but check out the hair)...
Dow 14,799.40, +41.08 (0.28%)
NASDAQ 3,357.25, -7.39 (0.22%)
S&P 500 1,592.43, +4.24 (0.27%)
NYSE Composite 9,018.57, +22.60 (0.25%)
NASDAQ Volume 2,685,610,750
NYSE Volume 6,174,438,000
Combined NYSE & NASDAQ Advance - Decline: 3467-3076
Combined NYSE & NASDAQ New highs - New lows: 80-343
WTI crude oil: 93.69, -1.45
Gold: 1,292.00, +5.80
Silver: 19.96, +0.136
Thursday, June 20, 2013
The Day After: Stocks take Biggest Losses of Year; Gold, Silver Smashed
There was no place to hide for investors of any stripe on the day after the Fed's dramatic announcement on Wednesday that it planned to reduce asset purchases later this year.
Stocks, bonds, and commodities were all priced lower, reflecting the possible reality that the world's economy would not be propped up indefinitely by the Federal reserve's money-printing schemes of quantitative easing (QE) and zero percent interest rate policy (ZIRP).
Following Wednesday afternoon's sharp selloff, Thursday quickly turned into a blood bath, with all of the major averages breaking through support at 50-day moving averages and precious metals dropping to levels not seen in roughly three years.
Godl was down nearly $100/ounce at 4:00 pm EDT, with traffic shifting from the Comex and Globex to Asian markets which are sure to feel the after-effects of the West's massive breakdown.
Despite the huge moves in equities, the major indices are still only down less than five percent from all-time closing highs made late in May, but the abruptness of the moves in all markets was an unexpected shock to portfolios everywhere.
The 10-year note hit a three-year high yield, but pulled back slightly to end the day at 2.39. The five-year also closed at multi-year highs of 1.26% and the 30-year bond finished at 3.48%, 33 basis points higher than a month ago.
Fallout from today's moves in the markets will be far-reaching and should be considered the beginning of a new paradigm, one in which interest rates will continue to rise as (and if) the economy continues to improve, a scenario not fully bought into by everyone. While housing has shown strength in recent months, higher interest rates can only slow the growth potential as home-buyers will be able to afford less for their money or may delay purchases altogether.
Gold and silver were especially hard hit, with gold finishing below the $1300 level and silver under $20 per ounce.
With no real economic data of note and earnings still two to three weeks away, the markets will have to find some kind of stabilizing catalyst in the final week of June or heading into the Independence Day holiday the first week of July, investors will find themselves truly independent... of profits, assets and good trading ideas.
Everybody knew this day of reckoning was coming, though few thought it would be so soon and appear with such ferocity. Trading volume was at the highest level of the year, significant in that tomorrow's quarterly options expirations may have been closed out earlier than most had planned, rendering tomorrow's triple-or-quadruple-witching day moot.
Advancing issues were dwarfed by decliners, which outpaced them 9-to-1. New lows exceeded new highs, 436-59.
The losses on major indices were the worst since November 7, 2012, the day after the re-election of Barack Obama. It's not just coincidence that stocks would take their biggest tumbles on the day after electing the worst president in American history (he's easily outdone GW Bush, already) and the day following the tactical blundering of the Chairman of the Federal Reserve. We are a nation of sheep led by abject morons.
Dow 14,758.32, -353.87 (2.34%)
NASDAQ 3,364.64, -78.57 (2.28%)
S&P 500 1,588.19, -40.74 (2.50%)
NYSE Composite 8,996.35, -259.36 (2.80%)
NASDAQ Volume 1,961,153,875
NYSE Volume 5,276,584,500
Combined NYSE & NASDAQ Advance - Decline: 685-5966
Combined NYSE & NASDAQ New highs - New lows: 59-436
WTI crude oil: 94.94, -3.30
Gold: 1,278.00, -96.00
Silver: 19.56, -2.063
Stocks, bonds, and commodities were all priced lower, reflecting the possible reality that the world's economy would not be propped up indefinitely by the Federal reserve's money-printing schemes of quantitative easing (QE) and zero percent interest rate policy (ZIRP).
Following Wednesday afternoon's sharp selloff, Thursday quickly turned into a blood bath, with all of the major averages breaking through support at 50-day moving averages and precious metals dropping to levels not seen in roughly three years.
Godl was down nearly $100/ounce at 4:00 pm EDT, with traffic shifting from the Comex and Globex to Asian markets which are sure to feel the after-effects of the West's massive breakdown.
Despite the huge moves in equities, the major indices are still only down less than five percent from all-time closing highs made late in May, but the abruptness of the moves in all markets was an unexpected shock to portfolios everywhere.
The 10-year note hit a three-year high yield, but pulled back slightly to end the day at 2.39. The five-year also closed at multi-year highs of 1.26% and the 30-year bond finished at 3.48%, 33 basis points higher than a month ago.
Fallout from today's moves in the markets will be far-reaching and should be considered the beginning of a new paradigm, one in which interest rates will continue to rise as (and if) the economy continues to improve, a scenario not fully bought into by everyone. While housing has shown strength in recent months, higher interest rates can only slow the growth potential as home-buyers will be able to afford less for their money or may delay purchases altogether.
Gold and silver were especially hard hit, with gold finishing below the $1300 level and silver under $20 per ounce.
With no real economic data of note and earnings still two to three weeks away, the markets will have to find some kind of stabilizing catalyst in the final week of June or heading into the Independence Day holiday the first week of July, investors will find themselves truly independent... of profits, assets and good trading ideas.
Everybody knew this day of reckoning was coming, though few thought it would be so soon and appear with such ferocity. Trading volume was at the highest level of the year, significant in that tomorrow's quarterly options expirations may have been closed out earlier than most had planned, rendering tomorrow's triple-or-quadruple-witching day moot.
Advancing issues were dwarfed by decliners, which outpaced them 9-to-1. New lows exceeded new highs, 436-59.
The losses on major indices were the worst since November 7, 2012, the day after the re-election of Barack Obama. It's not just coincidence that stocks would take their biggest tumbles on the day after electing the worst president in American history (he's easily outdone GW Bush, already) and the day following the tactical blundering of the Chairman of the Federal Reserve. We are a nation of sheep led by abject morons.
Dow 14,758.32, -353.87 (2.34%)
NASDAQ 3,364.64, -78.57 (2.28%)
S&P 500 1,588.19, -40.74 (2.50%)
NYSE Composite 8,996.35, -259.36 (2.80%)
NASDAQ Volume 1,961,153,875
NYSE Volume 5,276,584,500
Combined NYSE & NASDAQ Advance - Decline: 685-5966
Combined NYSE & NASDAQ New highs - New lows: 59-436
WTI crude oil: 94.94, -3.30
Gold: 1,278.00, -96.00
Silver: 19.56, -2.063
Wednesday, June 19, 2013
Fed Clarifies Position on Bond Purchases; Markets Hate It
The widely-anticipated June FOMC meeting was worth the wait, as Fed Chairman Ben Bernanke and his merry bank of economic soothsayers proved once and for all that they haven't got a clue what they're doing and that the market controls their actions, not the other way around.
Key take-aways from the policy decision (unchanged) and Bernanke's press conference were that the Fed saw downside risks to the economy "diminished," and that asset purchases - given improved economic conditions (pipe dream) - the Fed would begin to unwind, or, taper, those purchases from the current monthly level of $85 billion a month by the end of this year and end them completely by the middle of 2014.
This, of course, will never happen, as economic conditions are not improving, and, even if they are, are not improving quickly enough to warrant removal of the Fed's substantial monetary stimulus.
Market reaction was a bit slow to coalesce, but when it finally got the drift of what Bernanke was saying, sold off hard, with both stocks and bonds going into the tank. The Dow suffered one of its worst days of the year, off more than 200 points, while bond yields rose to 14-month highs on the ten-year note, at 2.33% and two-year highs on the five (1.26%).
What Bernanke didn't say was almost as intriguing as what he did, refusing to comment on why he is not going to attend the annual summit at Jackson Hole, sponsored by the Kansas City Fed, or whether or not he had plans to retire when his term expires early next year, though it appears, especially after President Obama's off-the-cuff remarks to Charlie Rose two nights ago, that the Chairman's tenure is at an end.
Bernanke did make one other clarification of note, that the Fed would hold its mortgage-backed securities to maturity, rather than sell them into the secondary market. Again, what he didn't say may be notable, as the decision to hold to maturity may be predicated on these securities (some of which are toxic to some degree or another) may not have the value at which the Fed is holding, or, since the Fed is pretty much 60% or more of the entire MBS market, maybe there is no secondary market of value.
Overall, it was a constructive session on the markets, but one which, unfortunately for bulls, appears to be in furtherance of the downward trend in equities.
With today's selloff, the bias has returned to the sell side and it seems as if the smart money is getting out while the getting is good.
Dow 15,112.19, -206.04 (1.35%)
NASDAQ 3,443.20, -38.98 (1.12%)
S&P 500 1,628.93, -22.88 (1.39%)
NYSE Composite 9,255.71, -143.93 (1.53%)
NASDAQ Volume 1,698,203,375
NYSE Volume 4,021,718,750
Combined NYSE & NASDAQ Advance - Decline: 1357-5161
Combined NYSE & NASDAQ New highs - New lows: 254-125
WTI crude oil: 97.97, -0.47
Gold: 1,350.20, -16.70
Silver: 21.25, -0.427
Key take-aways from the policy decision (unchanged) and Bernanke's press conference were that the Fed saw downside risks to the economy "diminished," and that asset purchases - given improved economic conditions (pipe dream) - the Fed would begin to unwind, or, taper, those purchases from the current monthly level of $85 billion a month by the end of this year and end them completely by the middle of 2014.
This, of course, will never happen, as economic conditions are not improving, and, even if they are, are not improving quickly enough to warrant removal of the Fed's substantial monetary stimulus.
Market reaction was a bit slow to coalesce, but when it finally got the drift of what Bernanke was saying, sold off hard, with both stocks and bonds going into the tank. The Dow suffered one of its worst days of the year, off more than 200 points, while bond yields rose to 14-month highs on the ten-year note, at 2.33% and two-year highs on the five (1.26%).
What Bernanke didn't say was almost as intriguing as what he did, refusing to comment on why he is not going to attend the annual summit at Jackson Hole, sponsored by the Kansas City Fed, or whether or not he had plans to retire when his term expires early next year, though it appears, especially after President Obama's off-the-cuff remarks to Charlie Rose two nights ago, that the Chairman's tenure is at an end.
Bernanke did make one other clarification of note, that the Fed would hold its mortgage-backed securities to maturity, rather than sell them into the secondary market. Again, what he didn't say may be notable, as the decision to hold to maturity may be predicated on these securities (some of which are toxic to some degree or another) may not have the value at which the Fed is holding, or, since the Fed is pretty much 60% or more of the entire MBS market, maybe there is no secondary market of value.
Overall, it was a constructive session on the markets, but one which, unfortunately for bulls, appears to be in furtherance of the downward trend in equities.
With today's selloff, the bias has returned to the sell side and it seems as if the smart money is getting out while the getting is good.
Dow 15,112.19, -206.04 (1.35%)
NASDAQ 3,443.20, -38.98 (1.12%)
S&P 500 1,628.93, -22.88 (1.39%)
NYSE Composite 9,255.71, -143.93 (1.53%)
NASDAQ Volume 1,698,203,375
NYSE Volume 4,021,718,750
Combined NYSE & NASDAQ Advance - Decline: 1357-5161
Combined NYSE & NASDAQ New highs - New lows: 254-125
WTI crude oil: 97.97, -0.47
Gold: 1,350.20, -16.70
Silver: 21.25, -0.427
Tuesday, June 18, 2013
When Three Strikes Is a Home Run
In the game of baseball, there are rules, immutable and unchanging. Three outs per inning. A caught fly ball is an out. Three strikes and you're out.
The world of high finance, as demonstrated daily on the trading platforms, carries no such rules, other than simple casino-style paradigms. Make the right bet, at the right time, and you're a winner, after the various parties to the trade take their respective cuts, of course. The broker gets theirs, the government, another. It's more about timing and luck, especially these days, when nothing much matters other than the directionality of the various computer algos plying and playing the indices.
So it is that in stocks, you have situations like today, wherein three strikes equates to hitting a home run. Prior to the opening bell, three different sets of economic data were presented, and, against expectations, all were swings and misses, except maybe the seasonally-adjusted building permits, which could be weighed as a foul tip into the catcher's mitt, a strike by any other name.
First came the May CPI, up 0.1%, on expectation of a rise of 0.2%, well short of the Fed's annualized two percent inflation target. Strike one. Next up, housing starts, which banked 914K, well below expectations of 950K. Strike two. As mentioned above, building permits, which mean nothing other than somebody is planning to do something, like put up a fence or remodel a bathroom, were just under the expected annualized rate of 975K - at 974K. Strike three.
The market response was as expected, with deference and possibly blissful ignorance toward the headline numbers, straight up all day, a veritable home run, even as auto sales in Europe reached 20-year lows and an agent of our very own secret police, the NSA (No Such Agency, to wise guys) testified to congress that the wholly unconstitutional massive spying program that filters every American's phone calls, emails and internet activity, prevented the bombing of the NY Stock Exchange by some nefarious, insidious suspect known only as "the doctor" in 2008. The NSA says more than 50 terrorist plots were uncovered by their spy programs since 9/11/2001. Not even the best Hollywood script writers could have come up with a better narrative to deprive citizens of their fourth amendment rights. Those NSA guys hire only the best, you know.
Thus stocks ended the day close to all-time highs once again. The Dow Industrials are within spitting distance - less than 100 points - of the May 28 closing high of 15,409.39 as the Fed ponders what to do next, wrapping up their two-day FOMC meeting on Wednesday. A policy decision is due out at 2:00 pm EDT, followed by a reading of the statement and press conference, by everybody's favorite "doctor," the dis-honorable Ben Bernanke, balding, bearded, wizened Chairman of the Federal Reserve.
With recent jawboning efforts pointing toward some tightening of Fed policy, the markets seem to be expecting no change in course for the every-easy Fed, and, while there's some nervousness over the wording of the statement, one might suspect that an even more important date - expiry of June options contracts on Friday - may be what's really driving the markets higher this week.
With baited breath we await the words offearless leader the Chairman. Can't wait.
Dow 15,318.23, +138.38 (0.91%)
NASDAQ 3,482.18, +30.05 (0.87%)
S&P 500 1,651.81, +12.77 (0.78%)
NYSE Composite 9,399.63, +61.74 (0.66%)
NASDAQ Volume 1,593,283,375
NYSE Volume 3,392,735,750
Combined NYSE & NASDAQ Advance - Decline: 4430-2051
Combined NYSE & NASDAQ New highs - New lows: 327-76
WTI crude oil: 98.44, +0.67
Gold: 1,366.90, -16.20
Silver: 21.68, -0.081
The world of high finance, as demonstrated daily on the trading platforms, carries no such rules, other than simple casino-style paradigms. Make the right bet, at the right time, and you're a winner, after the various parties to the trade take their respective cuts, of course. The broker gets theirs, the government, another. It's more about timing and luck, especially these days, when nothing much matters other than the directionality of the various computer algos plying and playing the indices.
So it is that in stocks, you have situations like today, wherein three strikes equates to hitting a home run. Prior to the opening bell, three different sets of economic data were presented, and, against expectations, all were swings and misses, except maybe the seasonally-adjusted building permits, which could be weighed as a foul tip into the catcher's mitt, a strike by any other name.
First came the May CPI, up 0.1%, on expectation of a rise of 0.2%, well short of the Fed's annualized two percent inflation target. Strike one. Next up, housing starts, which banked 914K, well below expectations of 950K. Strike two. As mentioned above, building permits, which mean nothing other than somebody is planning to do something, like put up a fence or remodel a bathroom, were just under the expected annualized rate of 975K - at 974K. Strike three.
The market response was as expected, with deference and possibly blissful ignorance toward the headline numbers, straight up all day, a veritable home run, even as auto sales in Europe reached 20-year lows and an agent of our very own secret police, the NSA (No Such Agency, to wise guys) testified to congress that the wholly unconstitutional massive spying program that filters every American's phone calls, emails and internet activity, prevented the bombing of the NY Stock Exchange by some nefarious, insidious suspect known only as "the doctor" in 2008. The NSA says more than 50 terrorist plots were uncovered by their spy programs since 9/11/2001. Not even the best Hollywood script writers could have come up with a better narrative to deprive citizens of their fourth amendment rights. Those NSA guys hire only the best, you know.
Thus stocks ended the day close to all-time highs once again. The Dow Industrials are within spitting distance - less than 100 points - of the May 28 closing high of 15,409.39 as the Fed ponders what to do next, wrapping up their two-day FOMC meeting on Wednesday. A policy decision is due out at 2:00 pm EDT, followed by a reading of the statement and press conference, by everybody's favorite "doctor," the dis-honorable Ben Bernanke, balding, bearded, wizened Chairman of the Federal Reserve.
With recent jawboning efforts pointing toward some tightening of Fed policy, the markets seem to be expecting no change in course for the every-easy Fed, and, while there's some nervousness over the wording of the statement, one might suspect that an even more important date - expiry of June options contracts on Friday - may be what's really driving the markets higher this week.
With baited breath we await the words of
Dow 15,318.23, +138.38 (0.91%)
NASDAQ 3,482.18, +30.05 (0.87%)
S&P 500 1,651.81, +12.77 (0.78%)
NYSE Composite 9,399.63, +61.74 (0.66%)
NASDAQ Volume 1,593,283,375
NYSE Volume 3,392,735,750
Combined NYSE & NASDAQ Advance - Decline: 4430-2051
Combined NYSE & NASDAQ New highs - New lows: 327-76
WTI crude oil: 98.44, +0.67
Gold: 1,366.90, -16.20
Silver: 21.68, -0.081
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