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
Friday, May 31, 2013
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
Wednesday, May 29, 2013
Who Bought This Dip?
About the best that could be said about today's general market decline is that it could have been worse. Stocks were slammed right out of the opening bell, and quickly fell to their worst levels of the day. By around 11:00 am EDT, the Dow had slumped 180 points from the previous close, the NASDAQ was down 38, the S&P off by 20 and the Composite down a whopping 126 points.
Naturally, some traders smelled the unmistakable aroma of easy money, so the buying started in earnest, with the major averages getting back close to half of the losses by day's end.
Still, anyone buying this particular dip - which incidentally, began from a peak early in the morning on Tuesday - might not be in the chips any time soon, as the market of late has not shown a great propensity for quickly and quietly erasing losses from previous downfalls.
Despite yesterday's advance, stocks left half of the gains from early in the day off the table, vanished, so the decline on the Dow, from the top of 15,521.49 to today's close, is nearly 220 points, or, about 1 1/2 percent.
That surely isn't anything to write home about, but it is significant in a short, end-of-month week heading into the summer doldrums, so to speak. It's difficult to make a case for buying so close to a market all-time peak, but money has to go somewhere, it is said, though many outside the world of Wall Street are beginning to find better places for the dough than in stocks. Bonds have slumped as well, pushing up yields, the 10-year note hitting 2.16% yesterday before settling down at 2.11% today.
Other places people have been putting money are into homes, either as new purchases or renovations, classic and not-so-classic cars (everybody needs reliable transportation), arable land, small business machinery, art, collectibles, rarities, gold, silver and other hard assets.
If stocks continue to display weakness (or even if they continue to sprint back and forth and increase volatility) and the Fed continues twiddling and tweaking and cajoling the markets with jabberwocky talk about easing or tapering or slowing their bond purchases, people can and will look beyond the NYSE and the NASDAQ for better, tangible assets with intrinsic or functional value.
People may be wearying of the constant barrage of "suggestions" from the Fed, analysts, broker-dealers and other hucksters of equities and make the move to something that they can actually touch, feel and literally appreciate. Sometimes - and this may be one of those times - it's better to keep what money you have than to risk it in what appears to be a very risky environment.
Today's action was rather uniform, with all the major averages falling about the same percentage amount on better-than-average volume. If this looks like an orderly retreat, those who bought the dip midday might be wondering what happens when the market becomes a bit more disorderly.
Dow 15,302.80, -106.59 (0.69%)
Nasdaq 3,467.52, -21.37 (0.61%)
S&P 500 1,648.36, -11.70 (0.70%)
NYSE Composite 9,422.49 71.68(0.75%)
NYSE Volume 3,969,497,750
Nasdaq Volume 1,754,239,625
Combined NYSE & NASDAQ Advance - Decline: 1627-4849 (1:3)
Combined NYSE & NASDAQ New highs - New lows: 172-151 (narrowing of the gap)
WTI crude oil: 93.13, -1.88
Gold: 1,391.30, +12.40
Silver: 22.45, +0.26
Naturally, some traders smelled the unmistakable aroma of easy money, so the buying started in earnest, with the major averages getting back close to half of the losses by day's end.
Still, anyone buying this particular dip - which incidentally, began from a peak early in the morning on Tuesday - might not be in the chips any time soon, as the market of late has not shown a great propensity for quickly and quietly erasing losses from previous downfalls.
Despite yesterday's advance, stocks left half of the gains from early in the day off the table, vanished, so the decline on the Dow, from the top of 15,521.49 to today's close, is nearly 220 points, or, about 1 1/2 percent.
That surely isn't anything to write home about, but it is significant in a short, end-of-month week heading into the summer doldrums, so to speak. It's difficult to make a case for buying so close to a market all-time peak, but money has to go somewhere, it is said, though many outside the world of Wall Street are beginning to find better places for the dough than in stocks. Bonds have slumped as well, pushing up yields, the 10-year note hitting 2.16% yesterday before settling down at 2.11% today.
Other places people have been putting money are into homes, either as new purchases or renovations, classic and not-so-classic cars (everybody needs reliable transportation), arable land, small business machinery, art, collectibles, rarities, gold, silver and other hard assets.
If stocks continue to display weakness (or even if they continue to sprint back and forth and increase volatility) and the Fed continues twiddling and tweaking and cajoling the markets with jabberwocky talk about easing or tapering or slowing their bond purchases, people can and will look beyond the NYSE and the NASDAQ for better, tangible assets with intrinsic or functional value.
People may be wearying of the constant barrage of "suggestions" from the Fed, analysts, broker-dealers and other hucksters of equities and make the move to something that they can actually touch, feel and literally appreciate. Sometimes - and this may be one of those times - it's better to keep what money you have than to risk it in what appears to be a very risky environment.
Today's action was rather uniform, with all the major averages falling about the same percentage amount on better-than-average volume. If this looks like an orderly retreat, those who bought the dip midday might be wondering what happens when the market becomes a bit more disorderly.
Dow 15,302.80, -106.59 (0.69%)
Nasdaq 3,467.52, -21.37 (0.61%)
S&P 500 1,648.36, -11.70 (0.70%)
NYSE Composite 9,422.49 71.68(0.75%)
NYSE Volume 3,969,497,750
Nasdaq Volume 1,754,239,625
Combined NYSE & NASDAQ Advance - Decline: 1627-4849 (1:3)
Combined NYSE & NASDAQ New highs - New lows: 172-151 (narrowing of the gap)
WTI crude oil: 93.13, -1.88
Gold: 1,391.30, +12.40
Silver: 22.45, +0.26
Tuesday, May 28, 2013
The Faded Tuesday Rally
Sure, it was the 20th straight Tuesday in which stocks have advanced, which must be some kind of weird market record, but today's rally really wasn't what one would call robust or sustaining.
First, the volume wasn't there. Second, more than half of the gains made in the first hour of trading were eviscerated by 2:30 pm, with an uninspired late surge getting some of gains back. In the end, it was a nothing move, albeit higher, but with a fairly negative bias as the day progressed. It was almost as if nobody really wanted to be a part of the day's action, even after a three-day holiday.
More and more, people are talking about the great disconnect between main Street - where things aren't going so well - and Wall Street, where it's a party every trading day, and this kind of talk is beginning to make the rounds to trader's desks and onto the trading floors.
While stocks continue to reach new heights, there is scarcely a soul who really believes that stocks can continue to ramp higher. Thus, a top has either been reached or is nearby, simply because of changing, doubting sentiment, which, after all, is the heart and soul and lifeblood of any market.
We all know this cannot continue indefinitely, so the question is whether it all comes apart at once or slowly grinds lower in spurts and spasms over a longer period of time, possibly years, possibly many years.
That is what's known as the unknown unknown. As such, we offer no answers, only more questions.
This market is like an old pair of jeans. You know they're tattered and worn out, and need to go, but the memories of good times and the comfortable feel keeps you from parting with them.
Dow 15,409.39, +106.29 (0.69%)
NASDAQ 3,488.89, +29.74 (0.86%)
S&P 500 1,660.06, +10.46 (0.63%)
NYSE Composite 9,494.16, +51.93 (0.55%)
NASDAQ Volume 1,708,082,250
NYSE Volume 3,719,940,250
Combined NYSE & NASDAQ Advance - Decline: 4139-2471
Combined NYSE & NASDAQ New highs - New lows: 514-63
WTI crude oil: 93.53, -0.62
Gold: 1,378.90, -7.70
Silver: 22.19, -0.303
First, the volume wasn't there. Second, more than half of the gains made in the first hour of trading were eviscerated by 2:30 pm, with an uninspired late surge getting some of gains back. In the end, it was a nothing move, albeit higher, but with a fairly negative bias as the day progressed. It was almost as if nobody really wanted to be a part of the day's action, even after a three-day holiday.
More and more, people are talking about the great disconnect between main Street - where things aren't going so well - and Wall Street, where it's a party every trading day, and this kind of talk is beginning to make the rounds to trader's desks and onto the trading floors.
While stocks continue to reach new heights, there is scarcely a soul who really believes that stocks can continue to ramp higher. Thus, a top has either been reached or is nearby, simply because of changing, doubting sentiment, which, after all, is the heart and soul and lifeblood of any market.
We all know this cannot continue indefinitely, so the question is whether it all comes apart at once or slowly grinds lower in spurts and spasms over a longer period of time, possibly years, possibly many years.
That is what's known as the unknown unknown. As such, we offer no answers, only more questions.
This market is like an old pair of jeans. You know they're tattered and worn out, and need to go, but the memories of good times and the comfortable feel keeps you from parting with them.
Dow 15,409.39, +106.29 (0.69%)
NASDAQ 3,488.89, +29.74 (0.86%)
S&P 500 1,660.06, +10.46 (0.63%)
NYSE Composite 9,494.16, +51.93 (0.55%)
NASDAQ Volume 1,708,082,250
NYSE Volume 3,719,940,250
Combined NYSE & NASDAQ Advance - Decline: 4139-2471
Combined NYSE & NASDAQ New highs - New lows: 514-63
WTI crude oil: 93.53, -0.62
Gold: 1,378.90, -7.70
Silver: 22.19, -0.303
Friday, May 24, 2013
It's a Three-Day Weekend. Go Enjoy It, But Take Some Time to Read This
Catchy headline, huh?
If anybody really wants to spend time this holiday weekend wondering when the global financial system is going to finally melt down, this is not the place to look.
Our team of 300 editors (j/k) was let go at noon today for a weekend at the Hamptons, so all we're leaving you with are a few tidbits.
The most overlooked story of the day was how big retailers took it on the chin in the first quarter, most blaming "weather" as the root of their revenue and earnings misses.
Among the losers reporting on Friday were Sears (SHLD, 50.25, -7.92(13.62%)); Abercrombie & Fitch (ANF, 50.02 -4.35(8.00%)); Aeropostale (Aro, 14.76 -1.72(10.44%)) and; The GAP (GPS, 40.66 -0.70(1.69%)). While the mainstream tended to overlook these stunning losses - as they do all negative economic stories - consumers are apparently changing their spending habits, more along the lines of frugality and austerity, shunning brands and big-ticket items. Sears, BTW, is a dead entity. The market and the BOD just haven't realized it yet.
The other "tells" from today's disorderly trading were the low volume (nothing new there, move along), the drop in the NYSE Comp, which nobody pays any attention to, except us, since it is only one of the broadest measures of corporate America, the tape-painting which brought the Dow into positive territory and the other exchanges close to unchanged, the ongoing slippage in the A-D line and the compression in the new highs-lows (many fewer new highs the past few days, more new lows).
Make sure to remember what Memorial Day is all about, preserving the memory of those who died defending our values and freedoms. Semper Fidelis.
Dow 15,303.10, +8.60 (0.06%)
NASDAQ 3,459.14, -0.27 (0.01%)
S&P 500 1,649.60, -0.91 (0.06%)
NYSE Composite 9,427.63, -38.68 (0.41%)
NASDAQ Volume 1,364,804,375
NYSE Volume 2,753,824,000
Combined NYSE & NASDAQ Advance - Decline: 2894-3506
Combined NYSE & NASDAQ New highs - New lows: 128-37
WTI crude oil: 94.15, -0.10
Gold: 1,386.60, -5.20
Silver: 22.50, -0.012
If anybody really wants to spend time this holiday weekend wondering when the global financial system is going to finally melt down, this is not the place to look.
Our team of 300 editors (j/k) was let go at noon today for a weekend at the Hamptons, so all we're leaving you with are a few tidbits.
The most overlooked story of the day was how big retailers took it on the chin in the first quarter, most blaming "weather" as the root of their revenue and earnings misses.
Among the losers reporting on Friday were Sears (SHLD, 50.25, -7.92(13.62%)); Abercrombie & Fitch (ANF, 50.02 -4.35(8.00%)); Aeropostale (Aro, 14.76 -1.72(10.44%)) and; The GAP (GPS, 40.66 -0.70(1.69%)). While the mainstream tended to overlook these stunning losses - as they do all negative economic stories - consumers are apparently changing their spending habits, more along the lines of frugality and austerity, shunning brands and big-ticket items. Sears, BTW, is a dead entity. The market and the BOD just haven't realized it yet.
The other "tells" from today's disorderly trading were the low volume (nothing new there, move along), the drop in the NYSE Comp, which nobody pays any attention to, except us, since it is only one of the broadest measures of corporate America, the tape-painting which brought the Dow into positive territory and the other exchanges close to unchanged, the ongoing slippage in the A-D line and the compression in the new highs-lows (many fewer new highs the past few days, more new lows).
Make sure to remember what Memorial Day is all about, preserving the memory of those who died defending our values and freedoms. Semper Fidelis.
Dow 15,303.10, +8.60 (0.06%)
NASDAQ 3,459.14, -0.27 (0.01%)
S&P 500 1,649.60, -0.91 (0.06%)
NYSE Composite 9,427.63, -38.68 (0.41%)
NASDAQ Volume 1,364,804,375
NYSE Volume 2,753,824,000
Combined NYSE & NASDAQ Advance - Decline: 2894-3506
Combined NYSE & NASDAQ New highs - New lows: 128-37
WTI crude oil: 94.15, -0.10
Gold: 1,386.60, -5.20
Silver: 22.50, -0.012
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