(NOT) Paying Attention To Intra-Day Swings

Shortly after the open today, the Dow had shot up 88 points.

By noon, it was down 87, thus, making a 1% move in the course of 2 1/2 hours.

Coincidence or central planning aside, the upside move equaled the downside move, nearly to the penny.

From noon until 2:00 pm, the Dow index clawed back all of the losses and was trading positively again, up around 40 points, or, just about half of the early day gains. Eventually, the Dow closed up a few points, more or less unchanged.

Day-traders may be scratching their collective skulls over this odd pattern, though it should be noted that almost none of the moves - to the up or downside - had anything at all to do with fundamentals, sentiment, forward-thinking, the presidential election cycle, or the price of pork in China.

It probably had everything to do with front-running algos which dominate the so-called "trading," which has become more of a skimming operation by firms like Citadel and other adherents of non-free market operations.

The headline financial media will try to come up with story lines to match the mood, though none of them can adequately pass even the most rudimentary smell test. The financial talking heads in macro-land are faking it as best they can, while the market remains stuck in a no-man's land that's been in place for just about a year now (taking the long view), or, a truly narrow range on the Dow between 17,500 and 18,000 since March 18.

On 34 of the past 39 trading days (including today) the Dow closed within that range. Of the five days it closed outside that range, all of them were above the 18,000 line, the highest being 18,096, on April 20.

Essentially, stocks have been going nowhere for quite some time, especially over the past month and a half, in which the total range was roughly three percent.

Which brings us to the question of intra-day moves and whether or not to pay them any mind. Unless one is engaged in betting with friends on market swings, or day-trading (an occupation which can put your whole house in jeopardy), intra-day swings should be discounted dramatically. The old saying, "the trend is your friend," doesn't apply unless you're looking of weeks, months or years.

Going Nowhere, Slowly:
S&P 500: 2,064.11, -0.35 (0.02%)
Dow: 17,720.50, +9.38 (0.05%)
NASDAQ: 4,737.33, -23.35 (0.49%)

Crude Oil 46.39 -0.66% Gold 1,267.40 -0.30% EUR/USD 1.1376 +0.02% 10-Yr Bond 1.76 +1.15% Corn 387.50 -0.39% Copper 2.07 -0.05% Silver 17.08 -0.16% Natural Gas 2.13 -0.97% Russell 2000 1,108.60 -0.55% VIX 14.41 -1.91% BATS 1000 20,677.17 0.00% GBP/USD 1.4445 -0.01% USD/JPY 109.0300 -0.05%

The Great Give-Back; Stocks Looking Increasingly Risky

Remember all those big gains and happy faces on Wall Street after Tuesday's close?

All gone.

Because, stocks are tremendously overpriced.

Of course, there are other issues plaguing the US and global economies, but there really is no good reason to overpay for anything. From lettuce to gas to stone pavers, there's a worldwide oversupply of everything, and that includes stock certificates.

What is in short supply are honest politicians, central bankers who have morals, and honest money.

Buy gold. Buy silver.

Hump Day:
S&P 500: 2,064.46; -19.93 (0.96%)
Dow: 17,711.12, -217.23 (1.21%)
NASDAQ: 4,760.69, -49.19 (1.02%)

Crude Oil 45.99 +2.98% Gold 1,278.70 +1.10% EUR/USD 1.1427 -0.03% 10-Yr Bond 1.74 -1.31% Corn 376.25 -1.25% Copper 2.10 +0.26% Silver 17.45 +2.09% Natural Gas 2.17 +0.42% Russell 2000 1,114.74 -1.25% VIX 14.69 +7.78% BATS 1000 20,677.17 0.00% GBP/USD 1.4443 -0.03% USD/JPY 108.4565 +0.02%

Big, Baseless Rally Is Pointless; New All-Time Highs Pipe Dreams

BORING!

And baseless.

Here's the deal. When stocks outperform - on a YTD basis - gold and/or silver, in constant dollar terms, then you might have something. Until that time, stocks are simply paper blowing in the wind. Even if stocks shoot to new highs (previous all-time highs were about a year ago), they'll likely e worth the same or less in inflation-weighted terms, whereas precious metals (and other select assets) will be solid.

Most gold and silver investors have patiently been loading up over the past four years (many of them for much longer than that) and they are now sitting pretty. There are a good number of precious metals investors who hope the price suppression, which has been obvious for a long time, continues for another six months to a year, so they can buy more at depressed levels.

Be patient, my friend.

Holy Short Squeeze, Batman!
S&P 500: 2,084.39, +25.70 (1.25%)
Dow: 17,928.35, +222.44 (1.26%)
NASDAQ: 4,809.88, +59.67 (1.26%)

Crude Oil 44.47 +2.37% Gold 1,267.80 +0.09% EUR/USD 1.1370 -0.13% 10-Yr Bond 1.76 0.00% Corn 380.75 +3.18% Copper 2.10 -0.28% Silver 17.12 +0.21% Natural Gas 2.15 +2.43% Russell 2000 1,128.83 +0.95% VIX 13.65 -6.31% BATS 1000 20,677.17 0.00% GBP/USD 1.4444 +0.26% USD/JPY 109.2850 +0.78%

China's Commodity Carnage Crushes Crude, PMs

Overnight, China stocks fell as more poor economic data was presented, as hopes for a domestic recovery were sidelined by declining import and export data.

Additionally, commodity prices were negatively affected by government regulations which aim to crack down on speculation.

This translated into a very confused day for equity pros, though commodity traders apparently had the sell button surgically attached to their index fingers, with prices for oil down more than three percent while gold and silver took deep declines.

At the end of the day, stocks leveled off roughly where they began the day, though markets appear vulnerable to a downturn.

Monday's Mingle:
S&P 500: 2,058.69, +1.55 (0.08%)
Dow: 17,705.91, -34.72 (0.20%)
NASDAQ: 4,750.21, +14.05 (0.30%)

Crude Oil 43.24 -3.18% Gold 1,265.80 -0.06% EUR/USD 1.1382 -0.02% 10-Yr Bond 1.76 -1.07% Corn 369.25 -2.19% Copper 2.10 -0.19% Silver 17.07 -0.14% Natural Gas 2.10 -0.24% Russell 2000 1,118.25 +0.32% VIX 14.57 -1.02% BATS 1000 20,677.17 0.00% GBP/USD 1.4410 +0.03% USD/JPY 108.4335 -0.01%

Jobs Miss Mark: To Markets, OK, But FED COURTS DEPRESSION

Jobs. Who needs 'em?

Friday's epic non-farm payroll data turned out to be disappointing to the Fed cheerleaders and assorted brain-dead economists and analysts who are still touting the "recovery" mantra.

Instead of the predicted 205,000 net new jobs that were supposed to be created in April, the BLS reported a net gain of just 160,000, a 20% miss, but at least something to seize upon by those who believe in ultra-low interest rates (aka, free money).

Thus, in the world of bass-ackward economics, stocks actually gained on the final day of the week, thinking (probably correctly) that more evidence of a weak economy would cause the Fed to continue to pause on their relentless rate-hiking journey, which, to date, has been confined to one measly 0.25% hike in December of last year, which was a prima facia cause for a wicked stock market decline in January.

Since then, however, the Fed has talked down the rate hike theme with alarming accuracy as relates to paper assets (stocks), and the markets have responded in kind, reversing all of the losses from January and the first two weeks of February.

Odds of the Fed raising the federal funds rate in June are now approaching infinity, because the one thing the Fed wants to avoid is another market correction. They are, in the estimation of many leading private money managers, OUT OF THEIR MINDS.

A return to "normalized rates," - something on the order of 3-5% on the fed funds front - is still years out, and, since the only data the Fed is interested in happens to be the levels on the Dow, S&P and NASDAQ, the market is probably going to overrule the ivory tower charlatans at the Fed. Corporate profits are and have been heading south since the third quarter of 2015, and will likely continue to do so, as capital is being mis-allocated to an alarming degree.

The levels of absurdity between stock prices and profits also are approaching extreme levels. It's only a matter of time before investors (and the term is used loosely, because most of the market is algo-driven, speculative, and dominated by institutional buyers and sellers) give up on future gains, cash out and head to the safety of alternatives, those being cash, bonds, and precious metals to a small degree.

In other words, the Fed has not abolished the business cycle. They've managed only to delay the inevitable, and by delaying, in a perverse avoidance of any pain, will cause degrees more devastation to not just financial markets, but markets in everything.

The Fed is courting depression by denying the failure of their experiment in fiat money with no backing save faith, and that faith has been on the wane. Expect a cratering of the economy just in time for the November presidential election. Between now and then, plenty of market noise, but nothing any good at all.

For the Week:
Dow: -33.01 (-0.19%)
S&P 500: -8.16 (-0.40)
NASDAQ: -39.20 (-0.82)

On the day:
S&P 500: 2,057.14, +6.51 (0.32%)
Dow: 17,740.63, +79.92 (0.45%)
NASDAQ: 4,736.16, +19.06 (0.40%)

Crude Oil 44.56 +0.54% Gold 1,289.70 +1.37% EUR/USD 1.1405 -0.04% 10-Yr Bond 1.78 +1.83% Corn 377.25 +0.94% Copper 2.15 -0.09% Silver 17.50 +1.03% Natural Gas 2.09 +0.82% Russell 2000 1,114.72 +0.61% VIX 14.72 -7.48% BATS 1000 20,677.17 0.00% GBP/USD 1.4431 0.00% USD/JPY 107.1050 -0.02%