With much of the nation's attention diverted from Wall Street toward the opening round of the NCAA Tournament or Washington's desperate dance to pass health care legislation, major stock indices made some odd directional moves.
The Dow vastly outperformed the other indices, with the NYSE Composite, the broadest measure, taking the largest loss of the day. Traders were busy closing positions on options trades, with quadruple-witching expiration tomorrow. Most adroit traders have already shut down for the week, with not much wiggle room remaining on options strike dates.
Dow 10,779.17,+45.50 (0.42%)
NASDAQ 2,391.28, +2.19 (0.09%)
S&P 500 1,165.82, -0.39 (0.03%)
NYSE Composite 7,443.57, -30.56 (0.41%)
Internals revealed the true nature of the market, which was hurriedly exiting positions. Losers led gainers, 3774-2685. There were 602 new highs and 42 new lows. Volume backed off from better activity earlier in the week.
NYSE Volume 4,785,140,500
NASDAQ Volume 2,091,388,625
Oil backed off a bit, losing 73 cents, to $82.20. Gold gained $3.40, to $1,127.40. Silver slipped 10 cents to $17.41.
The CPI, released prior to the market open, may have encouraged some selling as fears of deflation persist. The index was flat for the month of February, with many of the components showing losses. Initial unemployment claims came in at 457K, another cause for concern.
There are no economic released slated for Friday, and expectations are for a dull session, though traders should be alert to any abrupt move to the downside, which could turn into an avalanche under the proper conditions. There is little to trade on over the next 3-5 weeks, as 1st quarter earnings season approaches.
Thursday, March 18, 2010
Wednesday, March 17, 2010
Extending Gains, Stocks at 18-month Highs
Oh, Happy Day! If you haven't bothered to pay much attention to this space, you should be well off following the seventh straight advance for the Dow Jones Industrials, which broke and closed above the January highs and now sit at their best levels since October, 2008, when the bear market took its most prominent downside path.
What this would infer is that the financial crisis is fully behind us, recovered from and prosperity is now priced into the market to a substantial degree. Never mind that high unemployment persists and that housing remains in the throes of its worst extended period since the 1930s, money - as measured by the Fed funds rate of ZERO - is dirt cheap and stocks are flying.
Instead of looking this gift horse squarely in the mouth and playing this leg of the rally for all its worth, some of us have serious doubts going forward, though naysayers during spectacular bull trends (this is a bear market rally) are usually shuffled onto the last trains to loserville. No difference this time around, as sentiment has grown overwhelmingly positive. Stocks are the only investment with little risk and high reward, and that's what on everyone's plate.
While those viewing the macro-economic condition as less-than-healthy and still riddled with structural time-bombs, short-term, stocks have provided a great deal of upside action and quality trading plays. Note that the word "trading" was substituted for "investment," as the latter is no longer viewed with much respect. The money is there for the taking today, and take it is what most traders will do.
One tiny detail many may have missed here is that Friday marks a quad-witching day in which stock index options and futures and individual stock options and futures all expire. Being that the betting (note "betting" rather than "investment") has uniformly been to the high side, insider market participants will conclude their self-fulfilling prophecy with healthy gains, just as they have nearly every month and on every such quadruple-witching event of the past four quarters.
Also of note is that the Dow Industrials have now confirmed the breakout by the Transports, keeping Dow Theorists firmly in the back of the bus until such time as another aberration is recognized and then swiftly reconciled. If you expected stocks to rise, then you've hit the bulls-eye, though the reasons for gains may matter more than the actual finished product.
In other words, with easy money, bullish sentiment and no headwinds blowing against them, stocks had little to do but wait until people bid them higher. It's all so neat and simple when a plan comes so sweetly to fruition, no matter the underlying fundamentals.
Dow 10,733.67, +47.69 (0.45%)
NASDAQ 2,389.09, +11.08 (0.47%)
S&P 500 1,166.21, +6.75 (0.58%)
NYSE Composite 7,474.02, +47.32 (0.64%)
The internals were possibly even better than the headline numbers, with 4328 advancing stocks to 2196 losing value. New highs exploded to 1073, versus 77 new lows. That's the largest margin of difference - in either direction - in 16 months, and the best showing for new highs since prior to the bear market which began in late Summer of 2007.
Volume was very strong, owing again to the quad-witching condition.
NYSE Volume 5,549,815,500
NASDAQ Volume 2,166,110,750
Crude oil traders must be thinking there's a boom coming soon, because their pricing is out of this world. Crude closed up another $1.23, to $82.93, close to 18 month-highs itself. Gold was not so lustrous, but still up $1.80, to $1,124.00. Silver closed higher by 17 cents, to $17.50.
A few of the less-noticed economic data sets from the past few days may shed light upon why not everyone is sold on the recovery story. Capacity utilization ticked up a fraction in February, to 72.7%, still horrible. In a robust economy, that number would be over 90%. Consequently, industrial production saw a gain of only 0.1% in February, barely moving the needle.
Housing starts fell to 575,000 in January, again, a feeble number, and PPI, released this morning, showed a decline of 0.6%, or, in other words, outright deflation. However, instead of considering this a portent of a weak, stumbling, or at best, stagnant economy, the take was to call it "tame inflation" as though inflation would magically re-appear in time to rescue the pricing power of businesses.
This bear-market rally has now gone on for 13 months with only two near-corrections of 9% - in June, 2009 and February of this year - hardly the kind of performance one would expect from economic conditions such as exist today. But, Wall Street does as it pleases, and what pleases it most is stuffing more money into it's already lavishly-lined pockets.
Party on, Garth.
What this would infer is that the financial crisis is fully behind us, recovered from and prosperity is now priced into the market to a substantial degree. Never mind that high unemployment persists and that housing remains in the throes of its worst extended period since the 1930s, money - as measured by the Fed funds rate of ZERO - is dirt cheap and stocks are flying.
Instead of looking this gift horse squarely in the mouth and playing this leg of the rally for all its worth, some of us have serious doubts going forward, though naysayers during spectacular bull trends (this is a bear market rally) are usually shuffled onto the last trains to loserville. No difference this time around, as sentiment has grown overwhelmingly positive. Stocks are the only investment with little risk and high reward, and that's what on everyone's plate.
While those viewing the macro-economic condition as less-than-healthy and still riddled with structural time-bombs, short-term, stocks have provided a great deal of upside action and quality trading plays. Note that the word "trading" was substituted for "investment," as the latter is no longer viewed with much respect. The money is there for the taking today, and take it is what most traders will do.
One tiny detail many may have missed here is that Friday marks a quad-witching day in which stock index options and futures and individual stock options and futures all expire. Being that the betting (note "betting" rather than "investment") has uniformly been to the high side, insider market participants will conclude their self-fulfilling prophecy with healthy gains, just as they have nearly every month and on every such quadruple-witching event of the past four quarters.
Also of note is that the Dow Industrials have now confirmed the breakout by the Transports, keeping Dow Theorists firmly in the back of the bus until such time as another aberration is recognized and then swiftly reconciled. If you expected stocks to rise, then you've hit the bulls-eye, though the reasons for gains may matter more than the actual finished product.
In other words, with easy money, bullish sentiment and no headwinds blowing against them, stocks had little to do but wait until people bid them higher. It's all so neat and simple when a plan comes so sweetly to fruition, no matter the underlying fundamentals.
Dow 10,733.67, +47.69 (0.45%)
NASDAQ 2,389.09, +11.08 (0.47%)
S&P 500 1,166.21, +6.75 (0.58%)
NYSE Composite 7,474.02, +47.32 (0.64%)
The internals were possibly even better than the headline numbers, with 4328 advancing stocks to 2196 losing value. New highs exploded to 1073, versus 77 new lows. That's the largest margin of difference - in either direction - in 16 months, and the best showing for new highs since prior to the bear market which began in late Summer of 2007.
Volume was very strong, owing again to the quad-witching condition.
NYSE Volume 5,549,815,500
NASDAQ Volume 2,166,110,750
Crude oil traders must be thinking there's a boom coming soon, because their pricing is out of this world. Crude closed up another $1.23, to $82.93, close to 18 month-highs itself. Gold was not so lustrous, but still up $1.80, to $1,124.00. Silver closed higher by 17 cents, to $17.50.
A few of the less-noticed economic data sets from the past few days may shed light upon why not everyone is sold on the recovery story. Capacity utilization ticked up a fraction in February, to 72.7%, still horrible. In a robust economy, that number would be over 90%. Consequently, industrial production saw a gain of only 0.1% in February, barely moving the needle.
Housing starts fell to 575,000 in January, again, a feeble number, and PPI, released this morning, showed a decline of 0.6%, or, in other words, outright deflation. However, instead of considering this a portent of a weak, stumbling, or at best, stagnant economy, the take was to call it "tame inflation" as though inflation would magically re-appear in time to rescue the pricing power of businesses.
This bear-market rally has now gone on for 13 months with only two near-corrections of 9% - in June, 2009 and February of this year - hardly the kind of performance one would expect from economic conditions such as exist today. But, Wall Street does as it pleases, and what pleases it most is stuffing more money into it's already lavishly-lined pockets.
Party on, Garth.
Tuesday, March 16, 2010
Fed Does As Expected: Nothing; Stocks Gain
It all went as expected. With the Fed holding their key federal funds rate at 0-0.25%, and promising to keep it there for the foreseeable future, using the key words, "for an extended period" once again, traders were assured that cheap, virtually free money would continue to flow.
Not surprisingly, they bought more stocks, because, at least perceptually, risk has been reduced to almost nothing. Of course, Wall Street professionals are supposed to be the very best of the best as pricing risk, though their track record has lately been tarnished badly by the toxic mortgage, collateralized debt obligation, credit default swaps and bailout fiasco. Over the past five to seven years, the accurate discovery and pricing of risk has taken a back seat to greed and wealth.
The moral hazard has not been corrected, merely pushed out further by free money thanks to the Fed.
Dow 10,685.98, +43.83 (0.41%)
NASDAQ 2,378.01, +15.80 (0.67%)
S&P 500 1,159.46, +8.95 (0.78%)
NYSE Composite 7,426.70, +75.74 (1.03%)
Gainers sailed past decliners on the day, 4536-1994. New highs reached ratcheted up to 757, though new lows crept higher, to 75. Volume was better than most recent sessions, though that is in large part due to options quadruple-witching on Friday.
NYSE Volume 4,965,576,000
NASDAQ Volume 2,142,418,500
Going along with the general theme of weaker dollar, cheaper money, oil shot right back up to $81.70, higher by $1.90. Gold soared another $17.10, to $1,122.20. Silver gained 25 cents, to $17.33.
Everyone is hoping the the nascent recovery remains intact and economic conditions improve, though the overhang of housing (in a completely depressed state with no good outcome, unless you're a low-ball buyer with cash) and a stagnant employment market continue to exert pressure on any optimism.
Essentially, stocks are fine until they aren't. That's the message, though many companies have raised their dividends recently, in hopes that markets will respect their high rates of return and favor them over more speculative issues.
Not surprisingly, they bought more stocks, because, at least perceptually, risk has been reduced to almost nothing. Of course, Wall Street professionals are supposed to be the very best of the best as pricing risk, though their track record has lately been tarnished badly by the toxic mortgage, collateralized debt obligation, credit default swaps and bailout fiasco. Over the past five to seven years, the accurate discovery and pricing of risk has taken a back seat to greed and wealth.
The moral hazard has not been corrected, merely pushed out further by free money thanks to the Fed.
Dow 10,685.98, +43.83 (0.41%)
NASDAQ 2,378.01, +15.80 (0.67%)
S&P 500 1,159.46, +8.95 (0.78%)
NYSE Composite 7,426.70, +75.74 (1.03%)
Gainers sailed past decliners on the day, 4536-1994. New highs reached ratcheted up to 757, though new lows crept higher, to 75. Volume was better than most recent sessions, though that is in large part due to options quadruple-witching on Friday.
NYSE Volume 4,965,576,000
NASDAQ Volume 2,142,418,500
Going along with the general theme of weaker dollar, cheaper money, oil shot right back up to $81.70, higher by $1.90. Gold soared another $17.10, to $1,122.20. Silver gained 25 cents, to $17.33.
Everyone is hoping the the nascent recovery remains intact and economic conditions improve, though the overhang of housing (in a completely depressed state with no good outcome, unless you're a low-ball buyer with cash) and a stagnant employment market continue to exert pressure on any optimism.
Essentially, stocks are fine until they aren't. That's the message, though many companies have raised their dividends recently, in hopes that markets will respect their high rates of return and favor them over more speculative issues.
Monday, March 15, 2010
Oil Lower, Stocks Mixed, Senator Dodd Confused
Markets continued their pattern of going nowhere in a hurry on Monday, but oil futures traders may have tipped their hands, sending the slippery stuff back below $80/barrel.
In Washington, meanwhile, Senator Dodd doodled with the financial reform bill, making the Fed the ultimate protector of consumers, a laughable situation. Remember, it was Dodd, along with his house counterpart Barney Frank, who oversaw the destruction of Freddie Mac and Fannie Mae, watched with gaping jaws as Goldman Sachs and Wall Street hijacked the nation's economy and now thinks anointing the Federal Reserve as the head of a consumer financial protection agency is a grand idea.
Actually, the politics of the situation speak more boldly than the white-haired Senator from Connecticut (many of his constituents are in the financial industry). Having the Fed as a consumer protector is akin to hiring Tiger Woods as a marriage counselor. It may appear good on the surface, but the reality is that only the banks will be protected since they're the ones to whom the Fed is tied. The Fed is not a government agency. It is a PRIVATE BANK. Dodd's bill suggests self-regulation again, the very concept that dynamited the underpinnings of the financial industry over the past ten years.
In essence, Dodd's bill is about as useful as a fire extinguisher in a forest fire. Consumers will be protected to the extent that they distrust the banks and financial companies with whom they deal. If Dodd and his congressional playmates were serious about financial reform, the very first thing they'd do is re-institute the usury laws they helped decimate in the 90s, but that's a pipe-dream in today's environment. Congress is merely a patsy for the banks and the Fed. Consumers are pigeons, to be taken and swindled at every opportunity, including at the teller window and the voting booth.
The legacy of this and the past 12-15 congresses will be one of patronage and passivity. Not a single piece of financial or regulatory legislation passed in the past 15 years has improved the lot of everyday Americans. Banks and Wall Street have flourished while Main Street and the middle class has floundered in a sea of red ink, debt and tiresome politics.
Generally speaking, anything passed by congress these days should be ignored, especially since they can't seem to find a copy of the constitution anywhere in the Capitol. Dodd's proposed bill, like the health care legislation, protects the people who pay for their election campaigns. In Dodd's case, the financial industry; in the matter of health care, the pharmaceutical companies and health insurers get all the benefit, just like they did with Bush's prescription drug bill.
As mentioned in a post over a year ago, we have entered the post-government era in America. Real progress is being made behind the scenes in the underground economy which doesn't pay taxes, doesn't follow local, state or federal mandates and deals largely in cash. It now comprises most small businesses, home businesses, illegal operations such as drug dealing, prostitution, gambling and work-for-hire operations. If government would step back and get the hell out of the way, the American engine of progress that is the able-bodied unemployed, underemployed and off-the-books employed could set sail on a new chapter in economic history.
Americans are so keen on getting government out of their lives, off of their backs and away from their employment that more and more people are simply playing the non-compliance game. The number of individuals not reporting income, cheating on their taxes and/or simply ignoring all of the paperwork and hassle involved in dealing with government regulations is swelling by vast numbers. It cannot be tracked, it cannot be traced and it cannot be stopped. Quietly, Americans have begun their own revolution, in a very stealthy, entrepreneurial and innovative manner.
Fed up with Washington's political bickering and squabbling which produces worthless legislation, government employees who are paid 50-100% more than private sector counterparts with benefits far in excess of what they could even imagine to afford, and lack of prosecution of bank thieves in pinstriped suits, small business Americans will and are striking back at the heart of the government's grand swindle. Without money in the form of tax receipts, government ceases to hold power over individuals. Without funds, their projects will run into more and more deficits, eventually resulting in wage and benefit cuts to the rank-and-file, or layoffs, which will engender strikes, walk-outs and a final breakdown of the entire government/industry/financial complex.
The movement is well underway. Groups like tea parties are only the beginning, the euphemistic tip of the iceberg. This revolution will not be televised. It is hardly even spoken of, much less broadcast, but it is growing daily as pent up disgust and hatred of institutionalized mediocrity seeks an outlet. Americans always have fended for themselves and joined with others of like minds, whether the enemy be Germans in submarines, terrorists or well-tailored officials. Washington and Wall Street will have only themselves to blame when the realization of lower tax receipts becomes clear and evident. They have overstepped their bounds by an order of degree and the American public has begun to lash back with a fury usually reserved for rapists and traitors, of which congress and Wall Street has in ample supply.
Let there be no doubt. The American public is willing and able to break laws and conventions in order to save democracy and this current struggle - largely a financial one - is no different than the labor movements of the 30s or the war protests of the 60s. By November, with rancor drowning out campaign rhetoric, the voice of the people will wail the loudest by either disposing of incumbents or eschewing the polls altogether, as the issue is not Republican or Democrat, but politics as usual, which doesn't work, hasn't worked and never will work.
The struggle continues.
Meanwhile, in the caverns of Wall Street, confusion reigns supreme. With two of the major indices up and two down, there's an obvious lack of direction, though, just in case anybody cares to notice, the Dow Jones Transports and Industrials have diverged, as has the Dow and the NASDAQ. The NASDAQ cannot lead other indices higher. Every instance in which the NASDAQ has exceeded a previous high and the Dow did not follow has produced a nearly-immediate sell-off in all indices. Worse, the Dow Transportation Index, which broke to new highs last week, was not followed by the Industrials, a classic non-confirmation which spells disaster for the now over-extended bear market rally.
Thus far, the markets have resisted corrections, first, in June of last year and most recently in February, never falling into the -10% area that would indicate true corrective activity. Instead, the few players remaining in the bowels of the markets have intervened, producing a rally that is neither believable nor sustainable. However, since most Americans are now cheating the government in order to keep food on the table and heat in the furnace, don't be surprised if corporations haven't devised equally devious manners to inflate profits, hide losses and artificially grow earnings. The Ponzi scheme has become the norm for finances in the USA.
Dow 10,642.15, +17.46 (0.16%)
NASDAQ 2,362.21, -5.45 (0.23%)
S&P 500 1,150.51, +0.52 (0.05%)
NYSE Composite 7,350.96, -11.89 (0.16%)
Giving credence to the falsity of the markets, advancers were beaten badly by decliners on Monday, with losers ahead, 3791-2689. That's a notable divergence and should set off alarm bells in brokerages. The long-anticipated selling spree is about to commence. New highs moderated down to 475, but new lows fell to a mere 32. Trading volume was dismal, as befits an overbought market that cannot climb to new heights because the underlying fundamentals simply aren't there.
NYSE Volume 4,680,055,500
NASDAQ Volume 1,909,806,375
In another sign that the gloves are off and it's every trader for him or herself, oil slid $1.44, to $79.80, abruptly ending the three-week rally that brought it all the way to $83. The price of oil is inexorably tied to economic conditions. Despite the best work of hedge funds and market interventionists, the price of oil will someday revert to following supply-demand dictates from the market. That day cannot come soon enough.
Gold gained $3.60, to $1,105.10. Silver was up 6 cents, to $17.08 per ounce.
On Tuesday, the FOMC releases their latest policy dictate. They will change nothing and the market will, in turn, not react. Stocks are already pricey and cash is king. Sooner or later, the Wall Street moguls will find out that much of the paper they're trading is pure nonsense.
In Washington, meanwhile, Senator Dodd doodled with the financial reform bill, making the Fed the ultimate protector of consumers, a laughable situation. Remember, it was Dodd, along with his house counterpart Barney Frank, who oversaw the destruction of Freddie Mac and Fannie Mae, watched with gaping jaws as Goldman Sachs and Wall Street hijacked the nation's economy and now thinks anointing the Federal Reserve as the head of a consumer financial protection agency is a grand idea.
Actually, the politics of the situation speak more boldly than the white-haired Senator from Connecticut (many of his constituents are in the financial industry). Having the Fed as a consumer protector is akin to hiring Tiger Woods as a marriage counselor. It may appear good on the surface, but the reality is that only the banks will be protected since they're the ones to whom the Fed is tied. The Fed is not a government agency. It is a PRIVATE BANK. Dodd's bill suggests self-regulation again, the very concept that dynamited the underpinnings of the financial industry over the past ten years.
In essence, Dodd's bill is about as useful as a fire extinguisher in a forest fire. Consumers will be protected to the extent that they distrust the banks and financial companies with whom they deal. If Dodd and his congressional playmates were serious about financial reform, the very first thing they'd do is re-institute the usury laws they helped decimate in the 90s, but that's a pipe-dream in today's environment. Congress is merely a patsy for the banks and the Fed. Consumers are pigeons, to be taken and swindled at every opportunity, including at the teller window and the voting booth.
The legacy of this and the past 12-15 congresses will be one of patronage and passivity. Not a single piece of financial or regulatory legislation passed in the past 15 years has improved the lot of everyday Americans. Banks and Wall Street have flourished while Main Street and the middle class has floundered in a sea of red ink, debt and tiresome politics.
Generally speaking, anything passed by congress these days should be ignored, especially since they can't seem to find a copy of the constitution anywhere in the Capitol. Dodd's proposed bill, like the health care legislation, protects the people who pay for their election campaigns. In Dodd's case, the financial industry; in the matter of health care, the pharmaceutical companies and health insurers get all the benefit, just like they did with Bush's prescription drug bill.
As mentioned in a post over a year ago, we have entered the post-government era in America. Real progress is being made behind the scenes in the underground economy which doesn't pay taxes, doesn't follow local, state or federal mandates and deals largely in cash. It now comprises most small businesses, home businesses, illegal operations such as drug dealing, prostitution, gambling and work-for-hire operations. If government would step back and get the hell out of the way, the American engine of progress that is the able-bodied unemployed, underemployed and off-the-books employed could set sail on a new chapter in economic history.
Americans are so keen on getting government out of their lives, off of their backs and away from their employment that more and more people are simply playing the non-compliance game. The number of individuals not reporting income, cheating on their taxes and/or simply ignoring all of the paperwork and hassle involved in dealing with government regulations is swelling by vast numbers. It cannot be tracked, it cannot be traced and it cannot be stopped. Quietly, Americans have begun their own revolution, in a very stealthy, entrepreneurial and innovative manner.
Fed up with Washington's political bickering and squabbling which produces worthless legislation, government employees who are paid 50-100% more than private sector counterparts with benefits far in excess of what they could even imagine to afford, and lack of prosecution of bank thieves in pinstriped suits, small business Americans will and are striking back at the heart of the government's grand swindle. Without money in the form of tax receipts, government ceases to hold power over individuals. Without funds, their projects will run into more and more deficits, eventually resulting in wage and benefit cuts to the rank-and-file, or layoffs, which will engender strikes, walk-outs and a final breakdown of the entire government/industry/financial complex.
The movement is well underway. Groups like tea parties are only the beginning, the euphemistic tip of the iceberg. This revolution will not be televised. It is hardly even spoken of, much less broadcast, but it is growing daily as pent up disgust and hatred of institutionalized mediocrity seeks an outlet. Americans always have fended for themselves and joined with others of like minds, whether the enemy be Germans in submarines, terrorists or well-tailored officials. Washington and Wall Street will have only themselves to blame when the realization of lower tax receipts becomes clear and evident. They have overstepped their bounds by an order of degree and the American public has begun to lash back with a fury usually reserved for rapists and traitors, of which congress and Wall Street has in ample supply.
Let there be no doubt. The American public is willing and able to break laws and conventions in order to save democracy and this current struggle - largely a financial one - is no different than the labor movements of the 30s or the war protests of the 60s. By November, with rancor drowning out campaign rhetoric, the voice of the people will wail the loudest by either disposing of incumbents or eschewing the polls altogether, as the issue is not Republican or Democrat, but politics as usual, which doesn't work, hasn't worked and never will work.
The struggle continues.
Meanwhile, in the caverns of Wall Street, confusion reigns supreme. With two of the major indices up and two down, there's an obvious lack of direction, though, just in case anybody cares to notice, the Dow Jones Transports and Industrials have diverged, as has the Dow and the NASDAQ. The NASDAQ cannot lead other indices higher. Every instance in which the NASDAQ has exceeded a previous high and the Dow did not follow has produced a nearly-immediate sell-off in all indices. Worse, the Dow Transportation Index, which broke to new highs last week, was not followed by the Industrials, a classic non-confirmation which spells disaster for the now over-extended bear market rally.
Thus far, the markets have resisted corrections, first, in June of last year and most recently in February, never falling into the -10% area that would indicate true corrective activity. Instead, the few players remaining in the bowels of the markets have intervened, producing a rally that is neither believable nor sustainable. However, since most Americans are now cheating the government in order to keep food on the table and heat in the furnace, don't be surprised if corporations haven't devised equally devious manners to inflate profits, hide losses and artificially grow earnings. The Ponzi scheme has become the norm for finances in the USA.
Dow 10,642.15, +17.46 (0.16%)
NASDAQ 2,362.21, -5.45 (0.23%)
S&P 500 1,150.51, +0.52 (0.05%)
NYSE Composite 7,350.96, -11.89 (0.16%)
Giving credence to the falsity of the markets, advancers were beaten badly by decliners on Monday, with losers ahead, 3791-2689. That's a notable divergence and should set off alarm bells in brokerages. The long-anticipated selling spree is about to commence. New highs moderated down to 475, but new lows fell to a mere 32. Trading volume was dismal, as befits an overbought market that cannot climb to new heights because the underlying fundamentals simply aren't there.
NYSE Volume 4,680,055,500
NASDAQ Volume 1,909,806,375
In another sign that the gloves are off and it's every trader for him or herself, oil slid $1.44, to $79.80, abruptly ending the three-week rally that brought it all the way to $83. The price of oil is inexorably tied to economic conditions. Despite the best work of hedge funds and market interventionists, the price of oil will someday revert to following supply-demand dictates from the market. That day cannot come soon enough.
Gold gained $3.60, to $1,105.10. Silver was up 6 cents, to $17.08 per ounce.
On Tuesday, the FOMC releases their latest policy dictate. They will change nothing and the market will, in turn, not react. Stocks are already pricey and cash is king. Sooner or later, the Wall Street moguls will find out that much of the paper they're trading is pure nonsense.
Friday, March 12, 2010
Sellers Creeping into Market
Call it what you will, but today's action was indicative - as all of the past week has been - of uncertainty about further stock market advances and profit-taking.
Stocks have stalled on low volume, though with the steady supply of cheap money being fed into the system, the small, fractional gains could continue, though sharper players probably have already exited profitable positions.
Dow 10,624.69, +12.85 (0.12%)
NASDAQ 2,367.66, -0.80 (0.03%)
S&P 500 1,149.99, -0.25 (0.02%)
NYSE Composite 7,362.85, +9.61 (0.13%)
Internal indicators are still positive, however, with advancing issues eking out a win over decliners, 3378-3127. That was the closest margin in days, if not weeks. New highs came in explosively, at 805, but the number of new lows also climbed, to 69 on the day. Volume continues to be stuck in neutral; very low participation is indicated.
NYSE Volume 5,506,876,500
NASDAQ Volume 2,035,983,000
Commodities were flat, with oil dipping 6 cents, to $81.24. Gold lost $1.20, to $1,107.00, and silver fell 17 cents, to $17.03. An interesting indicator is the gold-silver ratio, which has been out of whack since 2003, but on pull-backs, silver, with more industrial uses than gold, usually gets hit harder. It's an interesting dynamic. Silver will follow gold to the upside, but generally underperform it. On the downside, it may be instructive as a predictor of future gold moves. Since silver is more closely tied to the real economy, it goes to reason that it would feel the pinch prior to its cousin gold, which is almost entirely an investment instrument.
A couple of data points should have moved the market, and might have been partially responsible for the poor showing on Friday. Retail sales were strong in February, up 0.3%, but january was revised sharply lower, from +0.5 to +0.1. That revision may have put a scare into investors, sensing that the current numbers were likely overstated. If so, that would jibe with the Michigan Sentiment survey, which fell to 72.5 from 73.6 in February.
Additionally, inventories were flat when the expectation was for a noticeable build. It didn't occur, thus, skepticism prevailed, and the market doesn't appreciate any kind of uncertainty, of which there is more than enough to go around.
At least the weather is improving and can't be blamed for anything.
Stocks have stalled on low volume, though with the steady supply of cheap money being fed into the system, the small, fractional gains could continue, though sharper players probably have already exited profitable positions.
Dow 10,624.69, +12.85 (0.12%)
NASDAQ 2,367.66, -0.80 (0.03%)
S&P 500 1,149.99, -0.25 (0.02%)
NYSE Composite 7,362.85, +9.61 (0.13%)
Internal indicators are still positive, however, with advancing issues eking out a win over decliners, 3378-3127. That was the closest margin in days, if not weeks. New highs came in explosively, at 805, but the number of new lows also climbed, to 69 on the day. Volume continues to be stuck in neutral; very low participation is indicated.
NYSE Volume 5,506,876,500
NASDAQ Volume 2,035,983,000
Commodities were flat, with oil dipping 6 cents, to $81.24. Gold lost $1.20, to $1,107.00, and silver fell 17 cents, to $17.03. An interesting indicator is the gold-silver ratio, which has been out of whack since 2003, but on pull-backs, silver, with more industrial uses than gold, usually gets hit harder. It's an interesting dynamic. Silver will follow gold to the upside, but generally underperform it. On the downside, it may be instructive as a predictor of future gold moves. Since silver is more closely tied to the real economy, it goes to reason that it would feel the pinch prior to its cousin gold, which is almost entirely an investment instrument.
A couple of data points should have moved the market, and might have been partially responsible for the poor showing on Friday. Retail sales were strong in February, up 0.3%, but january was revised sharply lower, from +0.5 to +0.1. That revision may have put a scare into investors, sensing that the current numbers were likely overstated. If so, that would jibe with the Michigan Sentiment survey, which fell to 72.5 from 73.6 in February.
Additionally, inventories were flat when the expectation was for a noticeable build. It didn't occur, thus, skepticism prevailed, and the market doesn't appreciate any kind of uncertainty, of which there is more than enough to go around.
At least the weather is improving and can't be blamed for anything.
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