Yesterday, a gap lower at the open. Today, a gap up.
This is all according to plan, which excludes individual investors to the great benefit to those in the know.
Imagine being an insider. On Monday, you buy shares of your particular stocks of the day at the lows of the day, around 10:00 to 10:30 am ET and all day long, you watch as they gain in value. Then, on Tuesday, you sell at some high point right before the dismal Chicago PMI and Conference Board's Consumer Confidence number (more on thses later). Naturally, you ignored the poor showing from the Case-Shiller 20-city index, because nobody cares about housing, right?
You're a winner, in all aspects except for honesty, integrity and fairness. Worry not, because you or your firm made massive money all through the month of January, as the Dow rose 3%, the S&P gained 4% and the NASDAQ was up 8%.
Smashing! Except that gold and silver trounced your paper-made profits. Gold finished the month of January with a 13.9% gain and silver was up 19% for the month. And there's no chance of the metals going to zero and no counter-party risk. Well, golly.
As for that Chicago PMI, the market was looking for a number of 62.8, after December's 62.2 print. The reality was a poor 60.2, the lowest number since August, 2011, another indication that the holiday season in particular was something of an over-hyped bust and that the recovery continues to be choppy and not well-anchored. Bummer!
According to the Conference Board, consumer confidence was measured at 64.8 in December, but flopped to 61.1 in January. Double bummer!
The aforementioned Case-Shiller data, albeit back-dated, showed that home prices fell 3.7% from November 2010 through November 2011. Prices fell 0.7% (adjusted) or 1.3% (unadjusted) in November from October, as 19 of 20 cities experienced price declines. Phoenix was the only city registering a positive figure.
Not to worry. January's window dressing is complete and there's nothing to worry about heading into February... except for that nagging European debt crisis, Greece, the utter collapse in the Baltic Dry Index, and the looming showdown in washington over whether or not to extend the Bush tax cuts another 10 months, as congress, rather than deal with real issues, took the easy route in December and compromised to keep them intact through the end of February (they'll extend, as extending is part of their "extend and pretend" strategy).
No, no, nothing can go wrong. Let's just keep day-trading until...
By the way, volume continues to be dreadful, even though the Fed, through it's ZIRP to infinity policy, has forced fund managers into much more riskier trading scenarios than they normally would endeavor.
You can cite the January Barometer, which posits that "as goes January, so goes the rest of the year." except for last year, that is.
Well, keep trading stocks. They matter. Right?
Dow 12,632.91, -20.81 (0.16%)
NASDAQ 2,813.84, +1.90 (0.07%)
S&P 500 1,312.40, -0.61 (0.05%)
NYSE Composite 7,838.30, +3.89 (0.05%)
NASDAQ Volume 1,602,785,875
NYSE Volume 4,156,928,000
Combined NYSE & NASDAQ Advance - Decline: 3135-2441
Combined NYSE & NASDAQ New highs - New lows: 276-22 (extreme, poised for reversal or breakout)
WTI crude oil: 98.48, -0.30
Gold: 1,737.80, +6.80
Silver: 33.26, -0.27
Tuesday, January 31, 2012
Monday, January 30, 2012
Abundant Skepticism in US Stock Markets
There's nothing quite like a Monday morning gap down at the open to portray the absurdity of the modern US equity markets.
Stocks opened sharply lower (the Dow down as much as 131 points by 10:30 am ET), but then staged a day-long rally ending with mostly flat to slightly lower averages that had everybody but day-traders scratching their heads.
The reason day traders would be among the least surprised by the tenor of today's trading is that gap ups and downs have become somewhat the norm over the past few years and especially so in the last six to eight months. Shrewd day-traders are out by the close and ready with new positions at every open, so, the gaps in trading from one day to the next create boundless opportunities for profit.
And who might these day-traders be? They are not, as many assume, older, well-off types who sit in front of computers in their McMansions ticking off trades. They are more than likely to be hedge funds and the brokerages of the largest banks in the world, and therein lies the wickedness and fruitlessness of trading in today's markets for the individual investor.
Today's deep dive at the open was fomented by a couple of data points from the government that saw personal income rise by 0.4% in December, but personal spending flat for the same month. That translated into a savings rate of 4% for the average American, far beyond what the powers that be would prefer, but the flat line on spending in December meant that the much-ballyhooed Christmas spending spree was more hot air and bluster than reality and the US economy is still barely treading water.
Adding insult to the intelligence of the American investor was the fact that almost every other stock market in the world took losses on the day, the euro was sharply lower against the US dollar (normally a selling signal) and the Greece debt crisis - which was supposed to be solved over the weekend - continues to deepen.
Anyone thinking that today's action in equities was a sign that the economy is on solid ground probably also thinkis Bank of America is a good investment (paging Dick Bove) and that Newt Gingrich would do well as a presidential candidate against Barack Obama.
Our markets are permanently broken, manipulated and dishonest and until there are radical changes in the ways brokerages are regulated and separated, not only from their holding banks, but from the Fed, the government and the PPT.
Until then, beware of rallies off of sharp opening declines and huge gaps up at opens as well. They're nothing but openings for traders with more skills, more money and more advantage than the average Jane or Joe, and the movements of the market are nothing more than maintaining the illusion of stability until the elections in November.
Dow 12,653.72, -6.74 (0.05%)
NASDAQ 2,811.94, -4.61 (0.16%)
S&P 500 1,313.02, -3.31 (0.25%)
NYSE Composite 7,830.42, -46.19 (0.59%)
NASDAQ Volume 1,621,418,500
NYSE Volume 3,493,897,750
Combined NYSE & NASDAQ Advance - Decline: 1983-2611
Combined NYSE & NASDAQ New highs - New lows: 218-25 (still extreme, bordering on absurd)
WTI crude oil: 98.78, -0.78
Gold: 1,731.00, -1.20
Silver: 33.53, -0.26
Stocks opened sharply lower (the Dow down as much as 131 points by 10:30 am ET), but then staged a day-long rally ending with mostly flat to slightly lower averages that had everybody but day-traders scratching their heads.
The reason day traders would be among the least surprised by the tenor of today's trading is that gap ups and downs have become somewhat the norm over the past few years and especially so in the last six to eight months. Shrewd day-traders are out by the close and ready with new positions at every open, so, the gaps in trading from one day to the next create boundless opportunities for profit.
And who might these day-traders be? They are not, as many assume, older, well-off types who sit in front of computers in their McMansions ticking off trades. They are more than likely to be hedge funds and the brokerages of the largest banks in the world, and therein lies the wickedness and fruitlessness of trading in today's markets for the individual investor.
Today's deep dive at the open was fomented by a couple of data points from the government that saw personal income rise by 0.4% in December, but personal spending flat for the same month. That translated into a savings rate of 4% for the average American, far beyond what the powers that be would prefer, but the flat line on spending in December meant that the much-ballyhooed Christmas spending spree was more hot air and bluster than reality and the US economy is still barely treading water.
Adding insult to the intelligence of the American investor was the fact that almost every other stock market in the world took losses on the day, the euro was sharply lower against the US dollar (normally a selling signal) and the Greece debt crisis - which was supposed to be solved over the weekend - continues to deepen.
Anyone thinking that today's action in equities was a sign that the economy is on solid ground probably also thinkis Bank of America is a good investment (paging Dick Bove) and that Newt Gingrich would do well as a presidential candidate against Barack Obama.
Our markets are permanently broken, manipulated and dishonest and until there are radical changes in the ways brokerages are regulated and separated, not only from their holding banks, but from the Fed, the government and the PPT.
Until then, beware of rallies off of sharp opening declines and huge gaps up at opens as well. They're nothing but openings for traders with more skills, more money and more advantage than the average Jane or Joe, and the movements of the market are nothing more than maintaining the illusion of stability until the elections in November.
Dow 12,653.72, -6.74 (0.05%)
NASDAQ 2,811.94, -4.61 (0.16%)
S&P 500 1,313.02, -3.31 (0.25%)
NYSE Composite 7,830.42, -46.19 (0.59%)
NASDAQ Volume 1,621,418,500
NYSE Volume 3,493,897,750
Combined NYSE & NASDAQ Advance - Decline: 1983-2611
Combined NYSE & NASDAQ New highs - New lows: 218-25 (still extreme, bordering on absurd)
WTI crude oil: 98.78, -0.78
Gold: 1,731.00, -1.20
Silver: 33.53, -0.26
Paying Bills
This guest post from Lewis Beck
I have started paying all of my bills online. It is so much easier and it keeps me more organized. I used to have a stack of bills that came in the mail and I would have to use several stamps and mail each bill back. Sometimes, if I was out of stamps, I would end up mailing my bills back late because I would forget to go buy more stamps. If my bills were late, I would be charged a late fee. When I pay bills online can do it immediately and I do not have to worry about if the bill is going to be late. I also just get an email when the bill is due, so I do not have to worry about getting so much mail that just sits on my counter. I do not have to worry about late fees or stamps. It is so much easier to pay my bills online. I am so glad that I have Satelite Internet Oregon. It has made my life much less complicated and I do not know what I would do without the internet.
Friday, January 27, 2012
4th Quarter GDP Up 2.8%; 1.9% from Inventory Build; Checklist for Peace and Prosperity
US markets opened the day with news that the first estimate of 4th quarter 2011 GDP came in at 2.8%, a tad shy of the 3.0% (and many higher) estimates from the punditry. That bit of reality got stocks off to a ragged start and the choppiness continued throughout the day with the NASDAQ the only positive index for the bulk of the session.
The saddest part of the GDP breakout was that 1.9% of the 2.8% gain came from inventory build, which, as experienced in years past, will be quickly pushed out the door in the first quarter of 2012 and not fully replaced. That sets up an extraordinary condition through the first quarter: that of teetering on the brink of GDP contraction. Everyone is aware of the situation, which is why trading volumes have been so weak and stocks now being used as short-term bets rather than investments.
Still, the always-bullish crowd on Wall Street still, according to the January Barometer, believes there are better days ahead. That is until the bad days come, which they surely will. The aforementioned barometer is an old adage that purports that market direction, as dictated by the change in the month of January, will remain the same throughout the year. Last year, January was strong, just as this year, but we ended the year flat, and, after April, and especially after July, it was mostly downhill, so, take the sage guidance of the January Barometer with as many grains of salt as your risk appetite will allow.
Full year 2011 GDP was a grand 1.575%. And that's probably a stretch.
Muddle, muddle, toil and trouble,
Huddle, huddle, masses under the bubble.
America's economy is not growing and that's a good thing, though only for selected groups, like those who have seen it coming all along, nascent Nihilists and, of course, those at the top of the food chain (damn bankers).
Finally, here's my checklist for peace and prosperity in one's life:
Note that anything I-related, phone, pad, whatever, are not even optional. They're just future junk.
Since anybody who reads this blog is probably a notch or four above the teeming masses, we, as a group, should be exceptionally pleased that the system hasn't gone full retard into the eventual collapse, yet. Gives us more time to prepare for Armageddon, should it come, though we will be best prepared to fight off the zombies.
My advice: stick to your plan and work it. Hard. Tell those who think you're nuts (98% of population) to F-off. Fight like a gladiator for every penny and never lose faith in your own unique human ability, which knows only the limits you put on it.
Life is good and getting better for those who are prepared. The heck with the rest of the idiots.
Finally, two ideas in just four short words to mull over the weekend: Ron Paul. Short Google.
Dow 12,660.46, -74.17 (0.58%)
NASDAQ 2,816.55, +11.27 (0.40%)
S&P 500 1,316.32, -2.11 (0.16%)
NYSE Composite 7,876.60, -7.30 (0.09%)
NASDAQ Volume 1,685,430,875
NYSE Volume 3,822,956,000
Combined NYSE & NASDAQ Advance - Decline: 3540-1981
Combined NYSE & NASDAQ New highs - New lows: 235-18 (still extreme, but stalling out)
WTI crude oil: 99.56, -0.14
Gold: 1,732.20, +5.50
Silver: 33.79, +0.05
The saddest part of the GDP breakout was that 1.9% of the 2.8% gain came from inventory build, which, as experienced in years past, will be quickly pushed out the door in the first quarter of 2012 and not fully replaced. That sets up an extraordinary condition through the first quarter: that of teetering on the brink of GDP contraction. Everyone is aware of the situation, which is why trading volumes have been so weak and stocks now being used as short-term bets rather than investments.
Still, the always-bullish crowd on Wall Street still, according to the January Barometer, believes there are better days ahead. That is until the bad days come, which they surely will. The aforementioned barometer is an old adage that purports that market direction, as dictated by the change in the month of January, will remain the same throughout the year. Last year, January was strong, just as this year, but we ended the year flat, and, after April, and especially after July, it was mostly downhill, so, take the sage guidance of the January Barometer with as many grains of salt as your risk appetite will allow.
Full year 2011 GDP was a grand 1.575%. And that's probably a stretch.
Muddle, muddle, toil and trouble,
Huddle, huddle, masses under the bubble.
America's economy is not growing and that's a good thing, though only for selected groups, like those who have seen it coming all along, nascent Nihilists and, of course, those at the top of the food chain (damn bankers).
Finally, here's my checklist for peace and prosperity in one's life:
- Paid for (free and clear) house to live in Nice stacks of Precious Metals Guns & ammo Food in storage Garden Plenty of cash for six months expenses Solid understanding of the situation Don't give a rat's behind about upcoming elections Severe, deep-seated hatred of banks and government A business that keeps churning cash Clear conscience
Note that anything I-related, phone, pad, whatever, are not even optional. They're just future junk.
Since anybody who reads this blog is probably a notch or four above the teeming masses, we, as a group, should be exceptionally pleased that the system hasn't gone full retard into the eventual collapse, yet. Gives us more time to prepare for Armageddon, should it come, though we will be best prepared to fight off the zombies.
My advice: stick to your plan and work it. Hard. Tell those who think you're nuts (98% of population) to F-off. Fight like a gladiator for every penny and never lose faith in your own unique human ability, which knows only the limits you put on it.
Life is good and getting better for those who are prepared. The heck with the rest of the idiots.
Finally, two ideas in just four short words to mull over the weekend: Ron Paul. Short Google.
Dow 12,660.46, -74.17 (0.58%)
NASDAQ 2,816.55, +11.27 (0.40%)
S&P 500 1,316.32, -2.11 (0.16%)
NYSE Composite 7,876.60, -7.30 (0.09%)
NASDAQ Volume 1,685,430,875
NYSE Volume 3,822,956,000
Combined NYSE & NASDAQ Advance - Decline: 3540-1981
Combined NYSE & NASDAQ New highs - New lows: 235-18 (still extreme, but stalling out)
WTI crude oil: 99.56, -0.14
Gold: 1,732.20, +5.50
Silver: 33.79, +0.05
Thursday, January 26, 2012
Welcome to the Age of Financial Repression; Markets Fall, Metals Gain
This was truly a strange day in US equity markets. On the heels of Wednesday's Fed announcement that the federal funds rate would stay at 0-0.25% until the latter part of 2014 (read: as long as we need ZIRP to keep the economy from collapse) and blow-out earnings from Caterpillar (CAT), stocks opened sharply higher, but then nose-dived right at 10:00 am, after the Commerce Dept. reported that new home sales in December fell by 2.2%, to an annualized rate of 307,000. Additionally, the median price of a new house purchased last month declined 12.8% from a year ago. 2010 now stands complete as the worst year for new home sales since records began being kept in 1963.
On top of the earlier-reported initial unemployment claims spiking back up to 377,000 from an upwardly-revised 356,000 last week, not even the hope of endless largesse from the Federal Reserve could keep stocks in positive territory. All major indices ended in the red. By contrast, gold and silver posted solid gains.
A term one won't be hearing much on mainstream media is "financial repression," and if it sounds harsh, it's because it is, and it is the reality of much of today's economic world.
Here's a definition of Financial Repression from Investopedia:
Bingo. Another term for the collusion of business and government is fascism.
Welcome to the new world order. For a glimpse of who and what are destroying the value of capital and thus, your money, just take some time to view the goings-on at the World Economic Forum in Davos, Switzerland. Surely, George Soros, Mark Zuckerman, Jamie Dimon and a gaggle of billionaires have the worming men and women of the world's best interests at heart.
Dow 12,734.63, -22.33 (0.18%)
NASDAQ 2,805.28, -13.03 (0.46%)
S&P 500 1,318.43, -7.62 (0.57%)
NYSE Composite 7,883.90, -30.91 (0.39%)
NASDAQ Volume 2,061,939,750
NYSE Volume 4,521,722,000
Combined NYSE & NASDAQ Advance - Decline: 2651-2944
Combined NYSE & NASDAQ New highs - New lows: 332-21 (very extreme)
WTI crude oil: 99.70, +0.30
Gold: 1,726.70, +26.60
Silver: 33.74, +0.62
On top of the earlier-reported initial unemployment claims spiking back up to 377,000 from an upwardly-revised 356,000 last week, not even the hope of endless largesse from the Federal Reserve could keep stocks in positive territory. All major indices ended in the red. By contrast, gold and silver posted solid gains.
A term one won't be hearing much on mainstream media is "financial repression," and if it sounds harsh, it's because it is, and it is the reality of much of today's economic world.
Here's a definition of Financial Repression from Investopedia:
A term that describes measures by which governments channel funds to themselves as a form of debt reduction. This concept was introduced in 1973 by Stanford economists Edward S. Shaw and Ronald I. McKinnon. Financial repression can include such measures as directed lending to the government, caps on interest rates, regulation of capital movement between countries and a tighter association between government and banks. The term was initially used in response to the emerging market financial systems during the 1960s, '70s and '80s.
Bingo. Another term for the collusion of business and government is fascism.
Welcome to the new world order. For a glimpse of who and what are destroying the value of capital and thus, your money, just take some time to view the goings-on at the World Economic Forum in Davos, Switzerland. Surely, George Soros, Mark Zuckerman, Jamie Dimon and a gaggle of billionaires have the worming men and women of the world's best interests at heart.
Dow 12,734.63, -22.33 (0.18%)
NASDAQ 2,805.28, -13.03 (0.46%)
S&P 500 1,318.43, -7.62 (0.57%)
NYSE Composite 7,883.90, -30.91 (0.39%)
NASDAQ Volume 2,061,939,750
NYSE Volume 4,521,722,000
Combined NYSE & NASDAQ Advance - Decline: 2651-2944
Combined NYSE & NASDAQ New highs - New lows: 332-21 (very extreme)
WTI crude oil: 99.70, +0.30
Gold: 1,726.70, +26.60
Silver: 33.74, +0.62
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