12/19/14…ain’t that a ‘witch’?

Quote of the Day from the Friars Club Encyclopedia of Jokes: “I’m at the age where just putting my cigar in the holder is a thrill.” – George Burns, lived to 100… stayed active! In Playboy at 90!

Bloomberg Quote of the Day: “Everything in moderation, including moderation.” – Julia Child… or as my late relative, Elbert Hubbard used to say, “Moderation in all things.” …I think I like Julia’s better!

Bloomberg Top Stories:
*Wall Street Firms Enduring Lost Decade After Goldman Sachs Peaked in 2007 – )
*U.S. Equity-Index Futures Fluctuate; Crude Rises With Ruble as Yen Weakens
*China Offers Enhanced Economic Cooperation as Russia Struggles With Crisis
*Oil Slump Exposes Hole in Shale Drillers’ Hedges as Three-Way Bets Tested – and NY imposed a ban on drilling in state!!!
*Sony Hackers Probably Snooped for Months Then Crashed system in 10 Minutes – !!!
*Japan Economy Minister Amari Wants Corporate Taxes Cut as Soon as Possible – !!!
*MetLife Derivatives, Illiquid Assets Cited by Panel After Risk Designation – !!!
*Pro-Taliban Cleric Now Wants Them Dead After Massacre of Pakistan Children
*Small-Cap Stocks Trailing S&P 500 by Most Since 1998 Is No Bargain to BofA – !!!

Thursday’s Market Summary:

When will it ever end (or as in Where did all the flowers go?: when will they ever learn…)? A humongous rally! In a week of BIG ups and downs. For the past FIVE session total NYSE Volume has averaged 4.6B shares! Note that the average volume for the past 12 months is just 727M shares. Share traded on the NYSE floor have averaged 993M compared to 833M since 10/1. December is now averaging 886M – incredible, along with incredible volatility…and it may not be over yet! Wait and see what happens today following the quadruple witching! Last year from 12/16-12/19 volume was pretty steady at around 733M shares, then on 12/20 (options!),it soared to 1.97B shares!!! Then it plunged through yearend to an average 460M shares – AND with a low of 272M on Dec. 24th! High was just 611M on 12/23! That is what happens when liquidity dries up!

The Russell 2000 weakest, up 1.5% BUT that followed a 3.1% gain Wednesday! HUGE!!! Dow Transports up just 1.6% for worst performer for a 2nd day following a 0.8% gain? This for the second best performer of the year behind Dow Utilities (?) – they were up 1.9% both days! The rest were up from 1.6-2.5%; wow, what a session that spiked out of the chute and never looked back…looks to TB like position squaring for money managers for yearend! They don’t like to wait till the last minute…ever! So where she goes from here is anyone’s guess, but ‘sometime’ between now and February we will probably get slammed again…and perhaps much worse! A/D’s and Breadth were ‘superstrong’ again, especially the latter…all bets are off! New 52 week highs nearly tripled to 330, very respectable, while new lows declined by 2/3 as one might expect to a more normal 73. The S&P VIX plunged again but despite a 2.63 drop to 16.81 remains very bearish! Note the range was 16.07-18.51!!! That is rather worrisome!

Total NYSE Volume slightly lower at 4.7B shares vs 4.93B vs 4.9B vs 4.38B vs 4.16B. Average volume since 9/30 continues to climb from about 3.6B shares or about 600M more than the 12-month average! Shares traded on the NYSE floor (aka REAL) slightly lower at 976B shares vs 1.05B, highest since 10/15’s options expiry of 1.22B, vs 1.02B vs 980M vs 941M. For comparison purposes, for the prior 12 months it is a historically weak 725M shares, but since 10/1: 830B shares – including a 1.22B (and four 1B+ share sessions), and since 12/1 886M shares!!! The lowest was 11/1’s 619M share session. April 30 – September 30 we had just SEVEN 800M shares…since 10/1: now at 22 – just one in Nov, and NINE 900M+ days: FOUR 800M days, FOUR 900M and FOUR 1B share days in Dec.!!!

A/D’s were very positive for a 2nd day following three negative sessions: NYSE: +4.1x! vs 6.7x!!! vs -1.4x vs -3.1x! vs -3.8x!!!; Nasdaq +3.2x vs 4x!!! vs -1.2x vs -2.5x vs -2.4x. Breadth was even better again: NYSE +8.1x!!! vs +14.3x!!! vs -1.2x vs -4.1x! vs -4.7x!!! vs +1.2x vs -15.5x!!! (Unbelievable!); Nasdaq +4.6x! vs 9.5x!!! vs -2.1x vs -3.3x!!! vs -2.6x. New 52 Week Highs nearly tripled to 330 vs 118 vs 56!!! vs 78 vs 111 – their range for the year is 39-612!!! New Lows fell by nearly 2/3 for a 2nd day to a more normal 73 vs 223 vs 712!!! vs 640 vs 603. The 2014 range is 24-1043!!! S&P VIX had a high of18.51 down from 24.61 and Tuesday’s 25.20, which was highest since 10/17 before closing at $16.81 -2.63. STILL very bearish!!! During the prior brief ‘rally’ it only made back down to 15.94! We still at risk of those bearish extremes that had a high of 31.06 (highest since 11/28/11!!!), and now a big possibility with options expiry this Friday! The average of the past 12 months is 14.08 and slowly climbing, with a low of 10.28!…high close of 26.25 on 10/15/14!

U.S. bond market closed weaker retracing the rally of the prior three days (including closing a gap up on 12/12! This puts them half way back to the 11/28 hight…don’t bet against them though – it ain’t over till it’s over…right, Yogi? Note on 12/2, the 30 yr bottomed at 3.01%. The recent 12 month low yields (10’s 2.06%!; 30’s 2.69%! and long TIP 0.76%!!!), 10’s closed at 2.21% -5/8; 30’s 2.82% -1-7/8!, and the long TIP 0.90% -2-15/16!!! Overnight, flutuating: 10’s 2.19% +1/8; 30’s 2.81% +5/16; long TIP 0.89% also +1/4. Where is there a safe harbor?
Libor update: 0.245% 3 mos.; 0.344% 6 mos. Both higher, but not far off their recent record lows! The Fed Funds rate has averaged 0.09% and is currently 0.13-0.14% – a slight 9-month high. T-Bills: 0.02% one-month; 0.03% 3 mos; 0.23%!!! – STILL climbing slowly!
Foreign bond yields mixed, PIIGS LOWER (Benchmark is 10yr): Germany 0.60% -2; UK 1.88% +1; France 0.89% –; Italy 1.96% +1; Spain 1.71%! -3; Portugal 2.72%! -3; Greece 8.22% 14; look at the last NINE days ranges: 7.03% to 8.88%!?! Not for the faint of heart! 10/16’s close was 8.54%! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.35% –.

Gold closed slightly higher but merely explored $1200 before settling at $1194.70 +.30, range $1189-1207, following Wednesday’s low of $1184.00, lowest since 12/1, below $1200 for the 4th time since 12/2 – $1200 is again resistance! Rally’s over…right? Last week’s intraday high was $1238.00 – highest since 10/22/ This is the 3rd sub-$1200 close which ended its seven straight $1200+ closes since 12/5 when the selloff began. Stuck below the 40/50 day! 11/7’s low was $1130.40, a new 12-month low!). Now 32 of last 33 sessions with prints below $1200. Last close above $1300 was on 8/15. 7/17’s session high was $1346.60, highest since March 19th!!! RESISTANCE again at $1200 (psych) and the 40 day ($1195!), the 50 day $1204, then the 200 day $1267. The 12-month high is $1392.60 on 3/17, highest high since 9/4/13. 11/7’s low was $1130.40! Overnight high is $1201.50, now $1198.50 +$3.70. Silver slightly below $16, following its $17.27 high last week! This after a $14.12 recent low, not seen in more than five years!

Crude still weak with a parallel session, with both days highs at $58.91. It closed at $55.11 -$2.36!!!, two days after plunging again to $53.60, lowest since 5/6/09! – there had been 10 straight lower closes! Consider: 10/25’s high was $84.83. There have been 51!!! handles since peaking at $107.73 on June 13th, highest since 9/19/13. The record high of $147.27 was on 9/30/08, the low since on 5/15/09 is $56.07: $89.85 is the average! Recent rally high and close are $110.70 and $110.53 respectively. RES at the 40 day ($71.86!), then the 50 day ($74.13!), and lastly the 200 day ($93.28!), all STILL increasing their rate of decline! Did we just avoid $50? The recent range is now $53.60-$112.24 since 3/1/12. Overnight, it is slightly higher in another inside session at $55.60 +$1.49, at session high and WEAK! Note that following the financial crisis it traded down to $32.40 on 12/31/08 from a high of $147.27 just three months earlier (-78%!!!).

Overnight Global Markets:

European equities weak ex-UK, Asia STRONG, Korea flat: UK +0.4% vs +1.6%! vs -0.8% vs – vs -0.3% vs -1.5%!; France -0.7% vs +2.9%!!! vs -0.7% vs -1%! vs +0.1% vs -1.5%; Germany -0.8% vs -0.9% vs -0.6% vs +0.1% vs -1.4%! Japan +2.4%!!! vs 2.3%!!! vs +0.4% vs -2%!!! vs -1.6%; Hang Seng +1.3%! vs +1.1%! vs -0.4% vs -1.6%! vs -1%! Korea +1.7%! vs -0.1% vs-0.2% vs -0.9% vs -0.1%; India +0.9% vs +1.6%! vs -0.3% vs -2%!!! vs -0.1% vs -0.9% vs -0.8%. U.S. equity futures not sure what to do: DOW +20 (131); SPX +2.60 (15); NDQ +7.75 (26). Hmm

Some random thoughts:

Would rather sit this one out and see how the quadruple witching goes!
Have a great weekend…and don’t buy anything today! Stocks that is!

TB

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12/18/14…a HUGE rally for the WRONG reasons! Caveat Emptor!

Quote of the Day from the Friars Club Encyclopedia of Jokes: “He’s so old that when he orders a three-minute egg, they ask for the money up front.” – Milton Berle
Bloomberg Quote of the Day: “In life as in a football game, the principle to follow is: Hit the line hard.” – Theodore Roosevelt…trivia: after his 12-year old son was injured in a football game he called for safer rules…once again, way ahead of his time. (Note: this was used a trivia question on This Week and only Newt Gingrich got it right!)

Bloomberg Top Stories:
*S&P Futures Jump as Stocks Soar From Russia to Dubai – they have to be kidding!
*Putin Strikes Uncompromising Stance by Blaming EU, U.S. for Russia Crisis – denial!
*Wells Fargo Rises to World’s Most-Valuable Lender Fueled by Bank Deposits – !!!
*Swiss Deposit Rate Pushed Below Zero in Echo of 1970’s to Halt Haven Dash – !!!
*Consumer Confidence in U.S. Climbs to Seven-Year High in Bloomberg Index
*Jobless Claims in U.S. Decrease to Lowest Level in Six Weeks Amid Growth
*Buffett’s Backup Investors Stumble as GM, Energy Bets Hurt Annual Results – oops!
*Dark Pools in Spotlight as EU Regulators Move to Fortify Financial Markets
*Barclays Shareholders Burned as Jenkins Persuades Analysts to Rate It Buy – bye!
*RadioShack Kept Alive by Traders With $25 Billion of Swaps – oh, oh!!!
*Rising Tides Make U.S. Front Yards Wetlands as Climate Change Takes Toll – DUH!
*Kraft Foods CEO to Leave Job This Month, With Chairman Stepping in to Role
*There’s a Blacklist in $800 Billion U.S. Loan Market and It’s Not Illegal
***Are the above headlines something that makes YOU want to race to buy stocks?***

Wednesday’s Market Summary:

An options expiry to remember…or perhaps forget! Round and round she goes, where she stops… ah! An amazing week “…filled with those events which alter and illuminate our lives…and you were there” (Walter Cronkite’s famous slug…who was he, you ask!). EIGHT straight sessions where at least ONE index has moved by 1%, most involved moves of nearly all indices accomplishing that feat, and four out of seven have been major down sessions. How bad? Bad enough that even with yesterday’s 288 point Dow rally, closing near the session high, it is STILL merely a ‘dead cat bounce’ (50% or less retracement from the massive selloff on 12/12 and only about a third from the 12/5 high! It included: FIVE consecutive lower highs, three consecutive lower lows, breaking the 40/50 day m/a’s and despite three attempts in a row to close above the 50 day, only yesterday was successful – but still below the 40 day! The Nasdaq’s similar and that is not a good sign (yesterday the 100 even had an ‘inside’ and close to parallel session, as did SPX! Dow Transports PLUNGED yesterday to their lowest since 10/30, negating the entire rally before reversing but still closing barely above the 50 day, marking its SEVENTH straight ‘lower high’ and EIGHTH straight ‘lower low’. The mercurial Russell 2000 small cap however, went to worst performer to best since the selloff began – in ONE session??? Wait, aren’t small caps supposed to be a sign of economic strength or weakness? They came to life yesterday after the Fed announcement of no rate hikes for ‘at least’ the next two meetings? Is marijuana use legal at FOMC meetings? Because someone, sorry Janet, is either ‘smoking rope’ or ‘drinking Kool-Aid ! Ah, perhaps they are merely looking at the U.S. and ignoring the rest of the world? Ya think? Movers yesterday were: Russell 2000 +3.1%!!!; SPX and both Nasdaq’s +2%; Dow Transports up just 0.8%; while Dow Utilities tacked on another 1.9%! So let’s now look at ytd and at 11/30 (with divs reinvested in the index – which in a rarity is only slightly better than putting the money in a one year T-Bill…unheard of when you are near record highs!): Dow 30 7.45% vs 10.95%; Dow Transports 21.49% vs 28.7%!!!; S&P 500 11.53% vs 15.46%; Nasdaq Comp 13.1% vs 17.82%; 100 18.22% vs 24.78%; Russell 2000 2.29% (note that a day earlier it was -0.92%!!!) vs +2.18%: NYSE Financials 6.36% vs 9.57%. That sums it up…oops…how could TB have forgotten Dow Utilities??? 28.41% vs s 29.57%!!! Remember too, that they don’t get the kicker they once did from dividends compared to NDQ and S&P.
NYSE Volume was HUGE at 4.92B shares for a second day – 5 of the last 6 have been 4+B!
As for A/D’s and Breadth they were strong but still pale compared to the weakest days; new 52 week highs rose but to a still very weak 118, while new lows declined to a still very high 223. The S&P VIX finally took a header BUT to a still very bearish 19.44 -4.13 AND with a high of 24.61 not much lower than Tuesday’s 25.20 high – highest since 10/17!

Total NYSE Volume inched higher to a strong 4.93B shares vs 4.9B vs 4.38B vs 4.16B vs 3.93B vs 4.05B. Average volume since 9/30 remains slowly climbing from about 3.6B shares or about 600M more than the 12-month average and finally beginning to rise again!!! Shares traded on the NYSE floor (aka REAL) ditto at 1.05B shares, highest since 10/15’s options expiry of 1.22B, vs 1.02B vs 980M vs 941M vs 824M vs 913M. For comparison purposes, for the prior 12 months it is a historically weak 725M shares, but since 10/1: 830B shares – including a 1.22B (and four 1B+ share sessions). The lowest was 11/1’s 619M share session. April 30 – September 30 we had just SEVEN 800M shares…since 10/1: now at 22 – just one in Nov, and EIGHT 900M+ days: FOUR 800M days, THREE 900M and FOUR 1B share days – now TWO in Dec.

A/D’s were very positive after three negative sessions: NYSE: +6.7x!!! vs -1.4x vs -3.1x! vs -3.8x!!! vs +1.4x vs -4.6x!!!; Nasdaq +4x!!! vs -1.2x vs -2.5x vs -2.4x vs +1.5x vs -4.6x!!! Breadth was huge: NYSE +14.3x!!! vs -1.2x vs -4.1x! vs -4.7x!!! vs +1.2x vs -15.5x!!! (Unbelievable!); Nasdaq +9.5x!!! vs -2.1x vs -3.3x!!! vs -2.6x vs +2.2x vs -2.5x. New 52 Week Highs doubled to 118, but from an extremely weak 56!!! vs 78 vs 111 vs 201 vs 215 – their range for the year is 39-612!!! New Lows fell by nearly 2/3 but remain strong at 223 vs 712!!! vs 640 vs 603 vs 364 vs 460. The 2014 range is 24-1043!!! S&P VIX had a high of 24.61, short of Tuesday’s 25.20, which was highest since 10/17 before closing at $19.44 -4.13 (-18%!). Remains very bearish!!! Likely due to short covering ahead of Friday’s options expiration. During the brief ‘rally’ it only made back down to 15.94! We are now nearing those bearish extremes that had a high of 31.06 (highest since 11/28/11!!!), and now a big possibility with options expiry this Friday! The average of the past 12 months is 14.08 and slowly climbing, with a low of 10.28!…high close of 26.25 on 10/15/14!

U.S. bond market closed weaker but still not far from Tuesday’s new 12-month lows! Note on 12/2, the 30 yr bottomed at 3.01%. The recent 12 month low yields (10’s 2.06%!; 30’s 2.69%! and long TIP 0.76%!!!), 10’s closed at 2.13% -5/8; 30’s 2.72% -11/16, and the long TIP 0.78% -3/4. Overnight, WEAK and diving: 10’s 2.21% -11/16; 30’s 2.81% -1-11/16! long TIP 0.85% also -1-11/16! Where is there a safe harbor?
Libor update: 0.243% 3 mos.; 0.340% 6 mos. Both not far off their recent record lows! The Fed Funds rate has averaged 0.09% and is currently 0.13-0.14% – barely, but a 9-month high. T-Bills: 0.02% one-month; 0.02% 3 mos; 0.23%!!! – STILL climbing slowly!
Foreign bond yields higher too ex-PIIGS (Benchmark is 10yr): Germany 0.62% +3; UK 1.87% +10!; France 0.89% +2; Italy 1.95% -1; Spain 1.74%! -2; Portugal 2.75%! -9!!!; Greece 8.37%!!! look at the last EIGHT days ranges: 7.03% to 8.88%!?! Not for the faint of heart! 10/16’s close was 8.54%! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.35% –.

Gold closed slightly higher but remains well below $1200 at $1194.30 +.40 after putting in a low of $1184.00, lowest since 12/1, below $1200 for only 3rd time since 12/2 – $1200 is again resistance! Rally’s over…right? Last week’s intraday high was $1238.00 – highest since 10/22/ This is the 2nd sub-$1200 close which ended its seven straight $1200+ closes since 12/5 when the selloff began. Back below the 40/50 day! 11/7’s low was $1130.40, a new 12-month low!). Now 31 of last 32 sessions with prints below $1200. Last close above $1300 was on 8/15. 7/17’s session high was $1346.60, highest since March 19th!!! RESISTANCE again at $1200 (psych) and the 40 day ($1196!), the 50 day $1203, then the 200 day $1267 – all inching lower again! The 12-month high is $1392.60 on 3/17, highest high since 9/4/13. 11/7’s low was $1130.40! Overnight it is slightly over $1200 at $1202.70 +8.20 with a high of $1213.90. Silver now back above $16 – barely after closing at $15.93, following its $17.27 high last week! This after a $14.12 recent low, not seen in more than five years!

Crude still searching for a bottom…but at least it traded up to $58.91 before closing at $56.47 up just 54 cents, a day after plunging again to $53.60, lowest since 5/6/09! – there had been 9 straight ‘lower lows’ and closes! Consider: 10/25’s high was $84.83. There have been 51!!! handles since peaking at $107.73 on June 13th, highest since 9/19/13. The record high of $147.27 was on 9/30/08, the low since on 5/15/09 is $56.07: $89.85 is the average! Recent rally high and close are $110.70 and $110.53 respectively. RES at the 40 day ($72.45!), then the 50 day ($74.77!), and lastly the 200 day (93.51!), all STILL increasing their rate of decline! Did we just avoid $50? The recent range is now $53.60-$112.24 since 3/1/12. Overnight, it is slighlty higher in an inside session at $57.08 -.73. Note that following the financial crisis it traded down to $32.40 on 12/31/08 from a high of $147.27 just three months earlier (-78%!!!).

Overnight Global Markets:

Global equities STRONG, Korea flat: UK +1.6%! vs -0.8% vs – vs -0.3% vs -1.5%!; France +2.9%!!! vs -0.7% vs -1%! vs +0.1% vs -1.5%! vs -0.4% vs +0.1% vs -1.8%!!! vs -0.9% vs +1.3% vs -0.9%; Germany -0.9% vs -0.6% vs +0.1% vs -1.4%! vs +0.1% vs +0.6% vs -1.6%!!! Japan +2.3%!!! vs +0.4% vs -2%!!! vs -1.6%!!! vs +0.7% vs -0.9% vs -2.3%!!!; Hang Seng +1.1%! vs -0.4% vs -1.6%!!! vs -1%! vs -0.3% vs -0.9% vs +0.1% vs -2.3%!!! Korea -0.1% vs-0.2% vs -0.9% vs -0.1% vs +0.3% vs -1.5%!!! vs -1.3%!; India +1.6%! vs -0.3% vs -2%!!! vs -0.1% vs -0.9% vs -0.8% vs +0.1% vs -1.2%! vs -1.2%! U.S. equity futures EXTREMELY strong: DOW +225!!! (250!); SPX +26.20! (31!); NDQ +59.25!!! (70!). U.S. markets opening in line!

Some random thoughts:

…if you believe that the above headlines warrant a rally, good luck! Read the Market Summary and you might not feel so elated. We could go down big time from here and if we do it is all the more reason to believe markets are RIGGED to favor flash traders and insiders…good luck!

Have a great day…but careful both today and tomorrow with options expiring!

TB

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12/17/14…no too another link in the dynasty! NO!

Quote of the Day from the Friars Club Encyclopedia of Jokes: “There’s one advantage to being 102 years old. There’s no peer pressure.” – Dennis Wolfberg
Bloomberg Quote of the Day: “In the middle of every difficulty lies opportunity.” -Albert Einstein…or did he mean it the other way around?

Bloomberg Top Stories:
*Consumer Prices in U.S. Decrease by Most in Six Years on Lower Fuel Costs – not good! Especially with Fed Funds at 0.1%!
*S&P 500 Futures Gain With Dollar Before Fed as Europe Stocks, Oil Decline – gain?
*Russia Tries Emergency Measures for a Second Day to Stem Ruble’s Decline
*FedEx Profit Misses Estimates on Plane Maintenance, Lower Fuel Surcharges
*Cuba Frees U.S. Prisoner Gross in Exchange for the Release of Three Cubans
*Citigroup Traders’ Bonus Pool Said to Remain Flat Even Amid Revenue Slump – don’t worry guys…Congress is your friend…bring on those derivatives!
*Crisis in Russia Hits Pimco, Wipes Out Options Contracts After Ruble Slump – oops!
*Currency Trading Getting More Costly as Stresses Extend Beyond Oil, Ruble – !!!
*Apple Halting Web Sales as Renault Raises Prices to Counter Ruble’s Plunge – ?
*UCB Pulls $1.5 Billion Sale of Its Ge4neric-Drug Unit to Two Buyout Firms
*Junk Bond Investors Seen Heading for First Worldwide Loss in Five Years – !!!
*Meningitis Outbreak That Killed 64 People Spurs U.S. Grand Jury Indictment – !

Tuesday’s Market Summary:

Another downer…and this time everything was down…with some peculiarities: Dow Transports which at +0.2% were the only positive Monday, lost 1.3%! The Russell 2000 which was worst performer at -1.1% lost just 0.1% making it yesterday’s BEST performer? Both Nasdaq’s lost yesterday: -1.2% and -1.6% respectively while both lost 1% on Monday!?! Dow Utilities were -0.2% yesterday after losing 0.8% Monday! S&P -0.9% vs -0.6%. This leaves the almighty Dow Industrials which had yet another wild ride. Recapping Monday: it opened strong, going vertical 125 points BUT that was the session high; it then went into steep decline falling 275 points then spent the rest of the session trying to get straight but failed, closing -100 (0.5%). Yesterday, it climbed 150, then hurriedly reversed plunging 250 points from the high and closing -112. Not that THREE of the last four sessions have close at or near the low, and worse, yesterday was a ‘key reversal’ (higher high, lower low and close below the prior day’s low!). THAT is bearish, folks.
Worse, NYSE volume went from a solid 4.38B shares to a HIGH 4.9B shares and again on a DOWN day! Not good. More bad news: A/D’s and Breadth were negative for a third straight day and have been so 4 of the last 5 sessions, the one positive being ‘feeble’ at best. New 52 week highs plummeted from a very weak 78 to an EXTREMELY weak 56, while new lows rose to an extremely high 712!!! Lastly the S&P VIX which had a slight decline Monday to a still very bearish 20.42 rose sharply to 23.57 +3.15 (+15.4%!), with a high of 25.20! Can’t wait for Friday…can you? This ‘could’ be the long awaited REAL correction! Like down 25%?

Total NYSE Volume surged to 4.9B shares!!! vs 4.38B vs 4.16B vs 3.93B vs 4.05B. Average volume since 9/30 remains about 3.6B shares or about 600M more than the 12-month average and finally beginning to rise again!!! Shares traded on the NYSE floor (aka REAL) even higher at 1.02B shares highest since 11/21 – last options expiry!) vs 980M vs 941M vs 824M vs 913M. For comparison purposes, for the prior 12 months it is a historically weak 724M shares, but since 10/1: 824B shares – including a 1.22B (and two more 1B+ share sessions) – highest since 9/19,. The lowest was 11/1’s 619M share session. April 30 – September 30 we had just SEVEN 800M shares…since 10/1: now at 22 – just one in Nov, and EIGHT 900M+ days: that is now FOUR 800M days, THREE 900M and now ONE 1B share day for Dec.

A/D’s were negative for a 3rd day: NYSE: -1.4x vs -3.1x! vs -3.8x!!! vs +1.4x vs -4.6x!!!; Nasdaq -1.2x vs -2.5x vs -2.4x vs +1.5x vs -4.6x!!! Breadth was similar: NYSE -1.2x vs -4.1x! vs -4.7x!!! vs +1.2x vs -15.5x!!! (Unbelievable!); Nasdaq -2.1x vs -3.3x!!! vs -2.6x vs +2.2x vs -2.5x. New 52 Week Highs shriveled to another extremely weak 56!!! vs 78 vs 111 vs 201 vs 215 – their range for the year is 39-612!!! New Lows jumped to an even higher 712!!! vs 640 vs 603 vs 364 vs 460. The 2014 range is 24-1043!!! S&P VIX surged again to 25.20, highest since 10/17 before closing up 15.4% at $23.57 +3.15. Very bearish!!! During the ‘rally’ it only made it to 15.94 – this despite the early rally! We are now nearing those bearish extremes that had a high of 31.06 (highest since 11/28/11!!!), and now a big possibility with options expiry this Friday! The average of the past 12 months is 14.05, with a low of 10.28!…high close of 26.25 on 10/15/14!

U.S. bond market closed strong with more new 12-month lows! Note on 12/2, the 30 yr bottomed at 3.01%. Updating the recent 12 month low yields (10’s 2.06%!; 30’s 2.69%! and long TIP 0.76%!!!), 10’s closed at 2.06% +9/16; 30’s 2.69% +1-3/16, and the long TIP 0.76% +2 points!!! Overnight, for a 2nkd straight day reversing much of the prior session highs! 10’s 2.10% -3/8; 30’s 2.74% -1 point!; long TIP 0.80% also -1 point!
Libor update: 0.243% 3 mos.; 0.341% 6 mos. Both not far off their recent record lows! The Fed Funds rate has averaged 0.09% and is currently 0.11-0.12%? – back from 0.13%, a 9-month high. T-Bills: 0.02% one-month; 0.03% 3 mos; 0.20%!!! – why did it rise?
Foreign bond yields little changed and mixed (Benchmark is 10yr): Germany 0.59% -1; UK 1.78% +1; France 0.89% +1; Italy 2.02% +1; Spain 1.81% +2; Portugal 2.91% +1; Greece 8.75% vs 8.78% (8.88% intraday) vs 8.58%! vs 8.88%!!! vs 8.70%! vs 8.24%! vs 7.71% vs 7.03%, -3. Not for the faint of heart! 10/16’s close was 8.54%! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.35% –.

Gold closed WEAK now lowing $28 in two sessions and traded down to $1192.70 for only 2nd time since 12/2 before closing at $1193.90 -$13.30! – $1200 is again resistance! Rally’s over…right? Last week’s intraday high was $1238.00 – highest since 10/22/ This ended its seven straight $1200+ closes since 12/5 when the selloff began. Back below the 40/50 day again! 11/7’s low was $1130.40, a new 12-month low!). Now 30 of last 32 sessions with prints below $1200. Last close above $1300 was on 8/15. 7/17’s session high was $1346.60, highest since March 19th!!! RESISTNANCE again at $1200 (psych) and the 40 day ($1197!), the 50 day $1204, then the 200 day $1268 – all have bottomed! The 12-month high is $1392.60 on 3/17, highest high since 9/4/13. 11/7’s low was $1130.40! Overnight it is slightly higher at $1198.30 +$4.00 – in an inside session. Silver cracking too – now below $16 at $15.83 +.07, following its $17.27 high last week! This after a $14.12 recent low, not seen in more than five years!

Crude still cannot find a bottom…will it be at $50??? It plunged again to $53.60, lowest since 5/6/09!, then closed at $55.93 UP .02? – that is it’s 9th straight ‘lower low’ and close! Consider: 10/25’s high was $84.83. There have now been 51!!! handles since peaking at $107.73 on June 13th, highest since 9/19/13. The record high of $147.27 was on 9/30/08, the low since on 5/15/09 is $56.07: $89.85 is the average! Recent rally high and close are $110.70 and $110.53 respectively. RES at the 40 day ($73.15!), then the 50 day ($75.43!), and lastly the 200 day (93.54!), all STILL increasing their rate of decline! We are now headed for $50!!! The recent range is now $53.60-$112.24 since 3/1/12. Overnight, it is in an insides sessioin and is now $55.20 -.73. Note that following the financial crisis it traded down to $32.40 on 12/31/08 from a high of $147.27 just three months earlier (-78%!!!).

 

Overnight Global Markets:

European equities weak again; Asia mixed: UK -0.8% vs – vs -0.3% vs -1.5%! vs -0.8% vs +0.1% vs -1.5%!!! vs -0.9%; France -0.7% vs -1%! vs +0.1% vs -1.5%! vs -0.4% vs +0.1% vs -1.8%!!! vs -0.9% vs +1.3% vs -0.9%; Germany -0.9% vs -0.6% vs +0.1% vs -1.4%! vs +0.1% vs +0.6% vs -1.6%!!! Japan +0.4% vs -2%!!! vs -1.6%!!! vs +0.7% vs -0.9% vs -2.3%!!!; Hang Seng -0.4% vs -1.6%!!! vs -1%! vs -0.3% vs -0.9% vs +0.1% vs -2.3%!!! Korea -0.2% vs -0.9% vs -0.1% vs +0.3% vs -1.5%!!! vs -1.3%!; India -0.3% vs -2%!!! vs -0.1% vs -0.9% vs -0.8% vs +0.1% vs -1.2%! vs -1.2%! U.S. equity futures gapped up but little bounce from there: DOW +48 (53 +24 gap); SPX +6.30 (15 +1); NDQ +10.50 (33 no gap?). Should be fun!

Some random thoughts:

…no more stinkin’ dynasties like the Clinton’s Bushes, or even Kennedy’s. It is time for us to get off ‘business as usual’. Actually, would have preferred Jeb over Dubya – the first time…then perhaps we wouldn’t have had Cheney (who made an ass of himself again on MTP interview with Chuck Todd). We NEED NEW BLOOD!!! Leaning strongly towards Senator Elizabeth Warren! At least SHE understands Wall Street. Perhaps she would bring in Brooksley Born as Treasury Secretary. Take away Goldman’s ‘bank’ status and start prosecuting them and Citi and JPM!

A little assignment…write your congressmen and senators if they voted for the budget bill. Chastise them for selling out to Citibank, and JPMorgan! That’s it for today.

All the best!

TB

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12/16/14…isn’t America great? Some say so…

Quote of the Day from the Friars Club Encyclopedia of Jokes: “While playing golf today I hit two good balls. I stepped on a rake.” – Henny Youngman
Bloomberg Quote of the Day: “The greatest mystery of existence is existence itself.” – Deepak Chopra

Bloomberg Top Stories:
*Ruble Dives to Record Low After Brief Gain on Biggest Rate Boost Since ’90 – !!!
*Stocks Drop as Oil Rout Accelerates; Ruble Weakens to Record, Bonds Climb
*Pakistan Gunmen Kill 146 at School in Deadliest Terrorist Attack Since ’07 – SAD!
*Jefferies Fixed-Income Revenue Plunges 73% on Losses From Distressed Debt – WOW!
*Sweden Pledges Whatever It takes as Nordic Crisis Policies Are Reversed
*Russia’s Rate Increase Threatens to Weaken Economy on Brink of Recession
*Brazil Bears Sensing Bottom Hit Mexico as ETF Short Interest Reveals Turn – !!!
*Why 1998 Was Different and the Same, to Crisis Now in Developing Nations
*Norway Krone Falls to Parity With Krona as Oil Drops Damps Economic Outlook
*Leveraged-Loan Gains Erased With Debt on Track for First Loss Since 2008 – !!!
*Holidays Bringing Good Tithings to U.S. Charities Favored by Elite Donors – Koch’s?

Monday’s Market Summary:

If you jumped in on that early morning rally, don’t blame TB. You were warned and the same goes for today! In fact for the rest of the week…this is a voodoo (doo doo?) market. Volume surged to 4.38B shares – oops, it was a down day, sorry. A/D’s and Breadth were about as bad as Friday! New 52 week highs shrunk to a very weak 78 while there were 640 new lows…doesn’t that tell you anything, Mr. Bull? Strangely (perhaps not so with options expiry looming) the VIX set another new recent high of 24.83 then settled down slightly at a still very bearish 20.12 -.66? All indices were down from 0.6% (Dow 30) to -1.1% (Russell 2000), EXCEPT Dow Transports??? They were up 0.2%??? Dow Utilities couldn’t take advantage of stock weakness this time, -0.8%.
Ah, but everything, not just stocks were weak: bonds after putting in new 52 week lows Friday, were off modestly; Gold was hit hard closing at $1207.70 -$14.80 and with a low of $1198 – first sub-$1200 print since 12/2 – just when you thought it was safe; Crude tanked again this time through two more handles to another new 5-1/2 year low of $55.02, before closing at a WEAK $55.91 -$1.90!!! – it better support at $50!

Total NYSE Volume rose again to 4.38B shares vs 4.16B vs 3.93B vs 4.05B vs 3.95B. Average volume since 9/30 remains about 3.6B shares or about 600M more than the 12-month average. Shares traded on the NYSE floor (aka REAL) higher at 980M shares – highest since 11/21 (options expiry!) vs 941M vs 824M vs 913M vs 834M. For comparison purposes, for the prior 12 months it is a historically weak 723M shares, but since 10/1: 822B shares – including a 1.22B (and two more 1B+ share sessions) – highest since 9/19,. The lowest was 11/1’s 619M share session. April 30 – September 30 we had just SEVEN 800M shares…since 10/1: now at 22 – just one in Nov, and now EIGHT 900M+ days: that is now FOUR 800M days and THREE 900M day for Dec.

A/D’s were very negative for a 2nd day: NYSE: -3.1x! vs -3.8x!!! vs +1.4x vs -4.6x!!! vs +1.5x vs -2.3x; Nasdaq -2.5x vs -2.4x vs +1.5x vs -4.6x!!! vs +2.1x vs -2.9x. Breadth was worse again: NYSE -4.1x! vs -4.7x!!! vs +1.2x vs -15.5x!!! (Unbelievable!) vs +1.4x vs -3.8x!!! Nasdaq -3.3x!!! vs -2.6x vs +2.2x vs -2.5x vs +2.1x vs -3.3x. New 52 Week Highs shriveled to an extremely weak 78!!! vs 111 vs 201 vs 215 vs 207 vs 386! – their range for the year is 39-612!!! New Lows higher again at 640 vs 603!!! vs 364 vs 460 vs 467! vs 416. The 2014 range is 24-1043!!! S&P VIX surged again to 24.83, highest since 10/17 before closing lower (?) at $20..42 -.66, but back from the session low of 17.77??? Very bearish!!! During the ‘rally’ it only made it to 15.94 – this despite the early rally! We are now nearing those bearish extremes that had a high of 31.06 (highest since 11/28/11!!!), and now a big possibility with options expiry this Friday! The average of the past 12 months is 14.03, with a low of 10.28!…high close of 26.25 on 10/15/14!

U.S. bond market closed weaker but near those new 12-month lows! Note on 12/2, the 30 yr bottomed at 3.01%. Updating the recent 12 month low yields (10’s 2.09%; 30’s 2.74%! and long TIP 0.83%), 10’s closed at 2.12% -5/16; 30’s 2.75% -3/16, and the long TIP 0.83% -7/8. Overnight HELLO!!! 10’s 2.04%!!! +11/16; 30’s 2.69%!!! +1-1/4!!!; long TIP 0.78% +1-5/16…ALL NEW LOWS!!!
Libor update: 0.243% 3 mos.; 0.341% 6 mos. Both not far off their recent record lows! The Fed Funds rate has averaged 0.09% and is currently 0.11-0.12%? – back from 0.13%, a 9-month high. T-Bills: 0.00%!!! one-month; 0.02% 3 mos; 0.19%!!! – why did it rise?
Foreign bond yields mixed, industrials lower, PIIGS higher reversing Monday’s gains? (Benchmark is 10yr): Germany 0.58%!!! -5!; UK 1.73%!!! -7!!!; France 0.86%!!! -3; Italy 2.05% +6!; Spain 1.82% +4; Portugal 2.93% +4; Greece 8.88% vs 8.58%! vs 8.88%!!! vs 8.70%! vs 8.24%! vs 7.71% vs 7.03%, +34!!! Not for the faint of heart! 10/16’s close was 8.54%! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.35%!!! -2.

Gold closed WEAK trading down to $1198 for the first time since 12/2 before closing at $1207.70 -$14.80! – $1200 in play again! Last week’s intraday high was $1238.00 – highest since 10/22/ This is its SEVENTH straight $1200+ close since 12/5 when the selloff began. Barely above the 40/50 day again for just the 7th time since 10/21! 11/7’s low was $1130.40, a new 12-month low!). This ended just two times in 32 sessions without a print below $1200. Last close above $1300 was on 8/15. 7/17’s session high was $1346.60, highest since March 19th!!! Support is at $1200 (psych) and the 40 day ($1198!), the 50 day $1204, RES at $1256, the 10/21 high, then the 200 day $1269 – all have bottomed! The 12-month high is $1392.60 on 3/17, highest high since 9/4/13. 11/7’s low was $1130.40! Overnight it is slightly higher at $1210.80 +$3.20 – BUT with a session low of $1196.60! There have now been 16 highs above $1200 since 10/31. Silver cracking too – below $17 for a 2nd day at $16.31 -.25, following its $17.27 high! This after a $14.12 recent low, not seen in more than five years!

Crude cannot find a bottom…will it be at $50??? It plunged to $55.02, lowest since 5/18/09!, then closed at $55.91 -$1.90!!! – that is it’s 8th straight ‘lower low’ and close! Consider: 10/25’s high was $84.83. There have now been 49!!! handles since peaking at $107.73 on June 13th, highest since 9/19/13. The record high of $147.27 was on 9/30/08, the low since on 5/15/09 is $56.07: $89.85 is the average! Recent rally high and close are $110.70 and $110.53 respectively. RES at the 40 day ($73.83!), then the 50 day ($76.12!), and lastly the 200 day (93.98!), all STILL increasing their rate of decline! We are now headed for $50!!! The recent range is now $55.02-$112.24 since 3/1/12. Overnight, it had yet another huge new low of $53.60 (now its 51st handle!!!), but bounced and is now $58.02 +.21. Ouch! Note that following the financial crisis it traded down to $32.40 on 12/31/08 from a high of $147.27 just three months earlier (-78%!!!).

Overnight Global Markets:

Global equities TANKING, especially Asia led by Japan UK – vs -0.3% vs -1.5%! vs -0.8% vs +0.1% vs -1.5%!!! vs -0.9%; France -1%! vs +0.1% vs -1.5%! vs -0.4% vs +0.1% vs -1.8%!!! vs -0.9% vs +1.3% vs -0.9%; Germany -0.6% vs +0.1% vs -1.4%! vs +0.1% vs +0.6% vs -1.6%!!! Japan -2%!!! vs -1.6%!!! vs +0.7% vs -0.9% vs -2.3%!!!; Hang Seng -1.6%!!! vs -1%! vs -0.3% vs -0.9% vs +0.1% vs -2.3%!!! Korea -0.9% vs -0.1% vs +0.3% vs -1.5%!!! vs -1.3%!; India -2%!!! vs -0.1% vs -0.9% vs -0.8% vs +0.1% vs -1.2%! vs -1.2%! U.S. equity futures also weak: DOW -75 (34); SPX -8.20 (33); NDQ -26.25 (66!). U.S. markets opening in the red but off the opening lows.

Some random thoughts:

…a friend sent me an article trying to rebut much of what TB said yesterday. The author was Victor Davis Hanson. Here are the key elements (italics) and TB’s comments

U.S. used to be an ‘egalitarian’ country…with the Democratic Party exhibiting that the most. I googled him and was surprised on several accounts. He is a Democrat; a Hoover fellow?; a supporter of Bush 43 AND his policies as well as Rumsfeld!?! Writes for: The Wall Street Journal, Commentary, (right as you can get), City Journal, The American Spectator ( very conservative) Policy Review, the Claremont Review of Books, and The Weekly Standard (Kritstol – ‘nuf said), – pretty much all well right of center. Is he a Republican in sheep’s clothing. I just feel you have to know where someone is coming from before interpreting their words. His words, my analysis:

The U.S. government now owes more than $18 trillion in long-term debt. Even after recent income tax hikes for the very wealthy and huge cuts in the defense budget, the Obama administration will still run an annual budget deficit of nearly $500 billion. – you do know that this is less than when the man took office, right? Also, that like Johnson, Dubya cut taxes 3 times – almost exclusively benefiting the wealthy, while fighting TWO wars? How can this man say he believes in a ‘balanced budget’? Oh, by cutting social progarms that grew as a result of Wall Street excesses.
No government official dares to trim Social Security or Medicare. Everyone knows that both programs are fiscally unsustainable. – is this bad policy or a failure to collect taxes from hedge fund operators, and grant huge subsidies to big companies while they export jobs and keep money offshore to avoid taxes. Why doesn’t he say anything about this?

More than 11 million undocumented immigrants are residing in the U.S. as federal immigration law is reduced to a bothersome irritant. A record 92 million American citizens 16 and older are not working. – interesting as he is a farmer (read OWNS a farm), yet has no respect for the workers who would be here legally if we hadn’t closed the borders after 9/11 and thus had to return illegally to work HIS fields as well as the vineyards, orchards, etc. of the entire west coast and Arizona!

Red-state and blue-state animosities reveal a nation more divided than at any time since the 1960s — or perhaps the pre-Civil War 1850s. – on this we can all agree but no one wants to fix it.
BUT the black community cannot accomplish this unless they stop defending the perps…which started with O.J.

Student-loan debt has surpassed $1 trillion. Six years of college has become the new normal. Even then, more than a third of the students who enter college never graduate. – and this is the fault of??? How about the for profit colleges where less than half graduate, most on student
loans with over a 50% default rate? WTF???

The Michael Brown shooting illustrates seemingly irreconcilable racial divides not seen in 50 years. Al Sharpton once was seen as a social arsonist and tax delinquent. Now he appears to be the White House’s most influential advisor on racial matters. – no argument here! This is fact!

The permanent bureaucracy is awash in serial scandals. The IRS, VA, GSA,NSA, ICE and Secret Service have all deservedly lost the public trust. — he isn’t seriously trying to say that
this was Obama’s fault…this is a deep problem. As for the IRS, that was a sham…there were dozens more conservative pacs formed so yes, more of them were investigated…wouldn’t you?

Our new foreign policy could be characterized as managed decline. Three defense secretaries have retired or resigned under Obama. Two of them, Robert Gates and Leon Panetta, wrote memoirs in which they blasted the administration. From Russia to the Pacific to the Middle East, the world seems to be descending into the law of the jungle as the U.S. withdraws from
its traditional role as a global overseer of the postwar order. – this is true and I addressed this in my column yesterday. Obama could have been part of the solution instead he is part of the problem…Wall Street backed and in bed with the Daley’s and Emanuel.

Neither drought, nor needlessly cumbersome regulations, nor unfair trade practices have stalled American agriculture. The farms of the United States — where less than 2 percent of the population resides — have never turned out so much safe, nutritious and cheap food that is feeding the world and earning America hundreds of billions of dollars in foreign exchange. – and THIS man has a farm in the Central Valley? Must be a gentleman farmer who forgot what he learned growing up on a farm. Also, we are forcing Afghani’s and Iraqi’s to use hybrid seeds – which have to be purchased each season as they do not reproduce. Fact!

The U.S. military — in which fewer than 1 in 100 Americans serve – is facing record cuts. The Navy will have fewer ships than the American fleet of World War I. The Air Force and the Marine Corps are shrinking. Yet superb American forces continue to ensure that the United States and its allies remain safe. Neither Vladimir Putin’s Russia, nor the communist Chinese hierarchy, nor the Iranian theocrats are quite ready to take the on the U.S. military. All are rightly worried that to do so would be suicidal. – Note that he did not serve (born in 1953) and Congress just approved nearly $500 billion for a plane the military doesn’t even want???

Only in America can you find the sort of innovation, talent, legal framework and can-do attitude needed to invent and refine hydraulic fracking and horizontal drilling. Just a few hundred thousand scientists, engineers, entrepreneurs, oil riggers and skilled craftsman have revived the
once-ossified oil industry for 320 million Americans. – only in America???

The United States is not running out of fuels — as was predicted over the last 20 years. It instead has become the largest gas-and-oil producer in the world. – tell me…why did (and especially now) we need the Keystone Pipeline that dumps the oil where we DON’T need it???

America is not saved by our elected officials, bureaucrats, celebrities and partisan activists. Instead, just a few million hardworking Americans in key areas — a natural meritocracy of all races, classes and backgrounds — ignore the daily hype and chaos, remain innovative and productive, and dazzle the world. – yet he would ask that they not earn a living wage and have seen their incomes slashed while the wealthy earn more as the GOP induced wealth gap widens??>? Also, for 40 years we have destroyed the pension system that we had replacing
it with IRA’s/401(k)’s that benefit only the wealthiest?

The silent few of a forgotten America have given the entire country an astonishing standard of living that is quite inexplicable. – or is it the VOCAL few, like the Kochs, Wall Street (where most of the billionaires came from).

Gosh, it makes you proud to be American…doesn’t it?

Parents, think about the world ahead for your kids…which won’t be too bad if your money doesn’t run out. Neither party is doing us a service but to continue to put the blame on Obama alone is disgraceful. He is part of the problem…and that is our electoral system which rewards
those who do the bidding of the Kochs and their buddies. Watch Barbara Walter’s interview with David Koch and ask if HE is one of those ‘silent few’.

Sorry but this really got to me!

Hope you have a wonderful Christmas and new year…as TB does for everyone.

TB

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12/15/14…they have so many ways to get you!

Quote of the Day from the Friars Club Encyclopedia of Jokes: “Golf is a lot like business. You drive hard to get in the green, and then wind up in the hole.” – Anon
Bloomberg Quote of the Day: “Art is never finished, only abandoned.” – Claude Monet

Friday’s Market Summary:

A bloodbath…and you were warned. Now here’s another warning: if you think the market is going to go down further, bear in mind that Friday is options expiration – the final quadruple witching of the year! Anything can happen. Most likely case is a ‘rebound’ ahead of it to ‘square’ positions, then its anyone’s guess. We have been disappointed several times in selloff’s that don’t even reach 20%, let the required 25% for a correction. Solution: hands in pockets! Off keyboard!
Worst performer was the Russell 2000 small cap down 2%! This was followed by the Dow 39 -1.8%, then the S&P 500 -1.6%; both Nasdaq’s were off about 1.2%, while Dow Transports and Utilities (?) both declined 1%. Bonds rallied large with the 30-year closing at a new 12-month low of 2.74%, while the 10-year and long TIP closing right on their respective lows ((2.09%/0.83%)!!! Gold was boring, closing only slightly lower, but Crude tanked to another new 5+ year low, closing just above it at $57.52!!! Ah, but cheap gas will keep the economy going! Wanna bet?
Back to stocks: A/D’s and Breadth were very negative; new 52 week lows sunk (stunk?) to and extremely weak 111 from 201, while new lows nearly doubled to a huge 603!!! THAT’S Bearish! Worse, Volatility was sharply higher…on a down day! This plus high volume plus new highs/lows plus A/D’s-Breadth…what does it spell? Trouble ahead! It was the 2nd worst week of the year for stocks (see details below…downright scary!). Will you have a good or a bad year? The next week could decide!

Total NYSE Volume rose to 4.16B shares vs 3.93B vs 4.05B vs 3.95B vs 3.72B. Average volume since 9/30 remains about 3.6B shares or about 600M more than the 12-month average. Shares traded on the NYSE floor (aka REAL) also sharply higher at 941M shares – highest since 11/21 (options expiry!) vs 824M shares vs 913M (1st 900M day since October!) vs 834M vs 770M, For comparison purposes, for the prior 12 months it is a historically weak 722M shares, but since 10/1: 819B shares – including a 1.22B (and two more 1B+ share sessions) – highest since 9/19,. The lowest was 11/1’s 619M share session. April 30 – September 30 we had just SEVEN 800M shares…since 10/1: now at 22 – just one in Nov, and now SEVEN 900M+ days: that is now FOUR 800M days and TWO 900M day for Dec.

A/D’s were very negative: NYSE: -3.8x!!! vs +1.4x vs -4.6x!!! vs +1.5x vs -2.3x; Nasdaq -2.4x vs +1.5x vs -4.6x!!! vs +2.1x vs -2.9x. Breadth was worse: NYSE -4.7x!!! vs +1.2x vs -15.5x!!! (Unbelievable!) vs +1.4x vs -3.8x!!! Nasdaq -2.6x vs +2.2x vs -2.5x vs +2.1x vs -3.3x. New 52 Week Highs nearly halved to an extremely weak 111!!! vs 201 vs 215 vs 207 vs 386! – their range for the year is 39-612!!! New Lows tried to double to 603!!! vs 364 vs 460 vs 467! vs 416. The 2014 range is 24-1043!!! S&P VIX added a full point to its already bearish close ending up at 21.08 with a high of 21.86 – highest since 10/17! During the ‘rally’ it only made it to 15.94 – this despite the early rally! We are now nearing those bearish extremes that had a high of 31.06 (highest since 11/28/11!!!), and now a big possibility with options expiry this Friday! The average of the past 12 months is 14.03, with a low of 10.28!…high close of 26.25 on 10/15/14!

U.S. bond market closed strong at or through the old 12-month lows! Note on 12/2, the 30 yr bottomed at 3.01%. Updating the recent 12 month low yields (10’s 2.09%; 30’s 2.74%! and long TIP 0.83%), 10’s closed at 2.09%! +11/16; 30’s 2.74%!!! NEW LOW +1-5/16, and the long TIP 0.83%!!! +9/16. Overnight back to weak!?! 10’s 2.11% -1/4; 30’s 2.76% -1/2; long TIP 0.84% -1/2…hmmm.
Libor update: 0.243% 3 mos.; 0.341% 6 mos. Both higher but still near their recent record lows! The Fed Funds rate has averaged 0.09% and is currently 0.09-0.11% – back from 0.13%, a 9-month high. T-Bills: 0.01%! one-month; 0.02% 3 mos; 0.19%!!! – why is it rising?
Foreign bond yields slightly, ex-PIIGS, which have been hurting – even Greece, which is back from 8.9%! (Benchmark is 10yr): Germany 0.63%! +1; UK 1.82%! +3; France 0.90%! +1; Italy 1.98%??? -8?; Spain 1.78% -9!!!; Portugal 2.90% -4; Greece 8.58%! vs 8.88%!!! vs 8.70%! vs 8.24%! vs 7.71% vs 7.03%, -25!!! Not for the faint of heart! 10/16’s close was 8.54%! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.37%!!! -2.

Gold closed slightly weaker but still holding safely above $1200 closing at $1222.00 -$3.10 – in an ‘inside’ session. Last week’s intraday high was $1238.00 – highest since 10/22/ This is its SIXTH straight $1200+ close since 12/5the selloff began. Well above the 40/50 day again for just the 6th time since 10/21! 11/7’s low was $1130.40, a new 12-month low!). This was only the 2nd time in 31 sessions without a print below $1200. Last close above $1300 was on 8/15. 7/17’s session high was $1346.60, highest since March 19th!!! Support is at $1200 (psych) and the 40 day ($1199!), the 50 day $1204, RES at $1256, the 10/21 high, then the 200 day $1269 – all have bottomed! The 12-month high is $1392.60 on 3/17, highest high since 9/4/13. 11/7’s low was $1130.40! Overnight it is weaker at $1212.50 -$10.00! – with a session low of $1206.50. There have now been 14 highs above $1200 since 10/31. Silver starting to crack – breaking $17 and now at $16.91 -.14, following its $17.27 high! This after a $14.12 recent low, not seen in more than five years!

Crude really took it Friday, first diving to $57.34, lowest since 5/18/09!, then closed barely above $57.52 -$2.43!!! – that is it’s 7th straight ‘lower low’ and close! Consider: 10/25’s high was $84.83. There have now been 47!!! handles since peaking at $107.73 on June 13th, highest since 9/19/13. The record high of $147.27 was on 9/30/08, the low since on 5/15/09 is $56.07: $89.85 is the average! Recent rally high and close are $110.70 and $110.53 respectively. RES at the 40 day ($74.49!), then the 50 day ($76.79!), and lastly the 200 day (94.22!), all STILL increasing their rate of decline! We are now headed for $50!!! The recent range is now $59.32-$112.24 since 3/1/12. Overnight, it had another hughe new low of $56.25 (now its 48th handle), but bounced and is now $58.02 +.21. Ouch! Note that following the financial crisis it traded down to $32.40 on 12/31/08 from a high of $147.27 just three months earlier (-78%!!!).

Overnight Global Markets:

European equities mixed and little changed and remain EXTREMELY weak – now four days! Asia slammed (led by Japan), Korea and India little changed: UK -0.3% vs -1.5%! vs -0.8% vs +0.1% vs -1.5%!!! vs -0.9%; France +0.1% vs -1.5%! vs -0.4% vs +0.1% vs -1.8%!!! vs -0.9% vs +1.3% vs -0.9%; Germany +0.1% vs -1.4%! vs +0.1% vs +0.6% vs -1.6%!!! vs -0.5% vs +1.3%; Japan -1.6%!!! vs +0.7% vs -0.9% vs -2.3%!!! vs -0.7%; Hang Seng -1%! vs -0.3% vs -0.9% vs +0.1% vs -2.3%!!! Korea -0.1% vs +0.3% vs -1.5%!!! vs -1.3%! vs -0.4%; India -0.1% vs -0.9% vs -0.8% vs +0.1% vs -1.2%! vs -1.2%! U.S. equity futures higher – another ‘dead cat bounce’? DOW +77 (40); SPX +11.30 (20); NDQ +26.25 (31). Note these merely offset most of the declines at this time last Friday!

Some random thoughts:

…the U.S. used to be an ‘egalitarian’ country…with the Democratic Party exhibiting that the most. Now both parties…or at least the leaders of the Dems…have abandoned that in favor of the wealthy – especially Wall Street. TB can understand one not calling themselves a Democrat (he refuses to do so), but how can anyone who ‘works’ for a living call themselves Republicans? The joke, folks, is on you! If you needed proof…since Bush 43 took office…look at how the party has intervened to prevent jobs growth and forced us to let our infrastructure rot. TB used to watch the GOP National Convention just to see all those smiling ‘average Joe’s’ sucking up the party line while they were in fact, being mocked. That Romney clip that he didn’t know was being filmed told the whole two-faced story. A travesty!

Equal time you say: Ok, yesterday on Bill Moyers was an interview with John H. MacArthur, publisher of Harper’s magazine. He homed in on the Clinton’s (both Bill and Hillary separately), and Obama, who can now only be called ‘two-faced’. The ‘great black hope’ (for both blacks and whites), let us down. His promise to change the way government does business was hypocritical. First, he had no plan (Lawrence Lessig), secondly he, the Daley’s, and Rahm Emanuel, were his closest advisors. Recall that William Daley, left Citigroup to become Chief of Staff (receiving a $10 million kiss goodbye, which was said to be necessary to get people to leave the private sector). Then in a musical chairs move (he was removed and replaced by Jack Lew, and ultimately Rahm Emanuel who ‘quit’ to run for mayor of Chicago…sweet!). Emanuel won, and replaced Richard M. Daley (the other son of legendary Chicago mayor Richard J. Daley)…isn’t nepotism great?

Now that you have the players, recall that Bill Daley, was Clinton’s Secretary of Commerce…you do remember NAFTA don’t you? That was a bill of goods crammed down the throats of the American people (sorry, TB didn’t realize the repercussions either), that shifted jobs to Mexico. Oh, and the outsourcing continued…India…then China…and guess what is next because they are ‘slightly’ cheaper? Viet Nam and Cambodia! Bill Clinton, friend of the people, not! Oh, and let’s not forget Hillary who preached for equal pay for women and increasing the minimum wage, THEN voted against them as a Senator! The point is they all speak out of both sides of their mouths…

Lee Iacocca wrote a book a decade or more ago, Where are the Leaders? It was short because he couldn’t come up with any! Flummoxed! We are still asking that question today, and may be into and after the next election.

Neither party gives a damn about the working people, only those who pump millions into their coffers (which thanks to the GOP just became easier). Jamie Dimon must be laughing his ass off over the budget ‘deal’ that was just passed…bipartisan by the way. Let’s get this straight: Obama, over the objections of key democrats, urged them to pass the bill. This despite allowing the wealthy to contribute even more to political campaigns and worse, castrating Dodd-Frank! How could a Democrat do this? Simple if you are in bed with the Daley’s. Now do you understand why the last three Defense secretaries, all said that they were overridden by Obama’s insiders?

Now for a positive: TB has followed closely the rising star, Elizabeth Warren, who first designed a consumer financial protection agency, was nominated to head it and had to withdraw after Jamie Dimon, blackballed her. But this woman has guts. She ran for and surprisingly became a U.S. Senator where she has become a thorn in the side of both parties. Is she our last hope? TB thinks so! She is articulate, assertive but not vindictive, and is a populist…something the Democratic Party has forgotten. At this point at least, TB believes she should be the first woman president. If we continue the status quo…it won’t matter who is elected as we morph from ‘egalitarian’ (already done), to an oligarchy, over the dead bodies of our nations founders!

Listen to this segment from Bill Moyers and see if you agree: democrats-bow-wall-street

Wow! Chuck Todd is no wimp! He took on Dick Cheney yesterday and made him look like a zealot…correction, Cheney did that to himself. He even contradicted Bush 43’s statement in his book that he wasn’t aware of the details of the prisoner detainment…I believe that. Meanwhile, Cheney used the feeble excuse that two presidential legal advisors said what they did was not torture. I agree that had we had another attack after 9/11 there would have been hell to pay, but we turned ourselves into the kind of ‘animal’s some Japanese became in WWII. By the way, if you doubt this, see Unbroken, premiers on Christmas Day…don’t recommend you see it then!

Lastly, somehow, David Koch (the guy who gives libertarians a bad name), allowed himself to be interviewed on the Barbara Walters The Ten Most Interesting People of 2014, last night.

“I’m basically a libertarian, and I’m a conservative on economic matters, and I’m a social liberal,” Koch told ABC News’ Barbara Walters during an interview for her special “  Now he has not only denigrated libertarians, but ‘social liberals’.

TB write this as a former Republican, now a man without a party. Have a great week!

TB

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12/12/14…Congress is squeaking…can we oil it?

Quote of the Day from the Friars Club Encyclopedia of Jokes: “I play golf in the low 80’s. If it’s any hotter, I don’t play.” – Joe E. Lewis
Bloomberg Quote of the Day: “Love is a chain of love as nature is a chain of life.” – Truman Capote…indecipherable to TB but then he always was…
Bloomberg Top Stories:
*U.S. Stock Futures Decline With European Equities as Oil Fall Below $60 – $58.70!
*IEA Lowers Forecast for Global Oil Demand for Fourth Time in Five Months – Egad!
*Wholesale Prices in U.S. DECLINED MORE Than Economists Forecast on Energy!
*Investors Dash for Europe – U.S. Debt as Moribund Inflation, Oil Spur Demand
*U.S. Spending Fight Moves to Senate as House Passage Caps Day of Discord – sick!
*Two Sigma Returns 47% as Hedge Fund Machines Beat Humans Confounded by Oil – !
*Junk-bond Well Runs Dry as Oil Shock Quells Debt Issuance – bet GE sells bonds!
*Record Oil Tankers seen Sailing to china Signals Price-Slump Stockpiling – not good!
*Democrats Find Voic in Proxy Fights With Wall Street After Election Loss
*$70 Oil Is Norway’s Break-Even for Policy Setting, Central Banks Says – $48 for shale!
*The New Guide to Trading on Insider Information Without the Risk of Prison – SICK!!!
*Mexico Shale Boom Outlook Dims as U.S. Drillers Struggle with Rout at Home – oops
Thursday’s Market Summary:
Hah, TB you don’t know your tail from a hole in the ground…idiot! See, the end of the world didn’t materialize…we had a nice rally! Is that so? Early in the morning, this scribe might have agreed while he scratched his head pondering the meaning of the word ‘huh’. Let’s recap: Gold still holding steady above $1200, Crude continuing to plunge – could we see gas below $2???; Bonds. which had been up slightly overnight as they probed their low recent yields, turned turtle on the stock rally which took the Dow up over 210 points…then stagnated…as if afraid to look down…and then it did, nearly back to ZERO on the day, before closing up 63, or 0.4% – weakest of the indices along with the Russell 2000. The rest were ALL up 0.5% and you know how TB feels about coincidences! Ok, Dow Transports were up 0.8%, but the winner was once again, the affable (not laughable) Dow Utilities +1%! YTD, w/divvies reinvested they are up 29% despite a few minor setbacks. Compare to second place Dow Transports +28.7% – the winner until this month…December can be a very cold month. NDQ 100 is up 24.7%; Dow +10.9%, and S&P 500 15.4%. Still pretty good but think how much better you would sleep at night collecting those dividends. Speaking of dividends, honk if you think ‘tax-dodging’ IBM is going to the several billion dollar increase by repatriating dollars…no way…they will issue debt here to pay for them, further insuring they pay no U.S. taxes…thanks, Jack Welch and his clone Jeff Immelt…you know, the guy Obama appointed to head his commission on ‘small businesses’ – isn’t that like making Count Dracula head of a blood bank? You bet! …and they are the last honest ‘big’ bank left in the country! Now look at Volume…3.9B steady, while A/D’s and Breadth were barely positive in comparison to yesterday’s NYSE Breadth of MINUS 15.5x!!! Ne 52 week highs steady at a feeble 201 while new lows declined but just to a still high 364! Saving the best for last, the S&P VIX dropped sharply on the open BUT just to 15.94 which is still very bearish, then, even as the market sat indecisive slowly began to rise, accelerating into the close ending at a HUGE 20.08 +1.55 (+8%)…and from the session low: up 26%!!! Unheard of! What a setup for next Friday’s options expiration…quadruple witching and the last one of the year. Could be downright ugly!

Total NYSE Volume near even at 3.93B shares vs 4.05B vs 3.95B vs 3.72B vs 3.36B. Average volume since 9/30 remains about 3.6B shares or about 600M more than the 12-month average. Shares traded on the NYSE floor (aka REAL) slipped but remains high at 824M shares vs 913M (1st 900M day since October!) vs 834M vs 770M vs 755M, For comparison purposes, for the prior 12 months it is a historically weak 721M shares…but since 10/1: 814B shares – including that HUGE 1.22B share day – highest since 9/19, followed by two more 1B plus days leading to options expiry!. The lowest was 11/1’s 619M share session. April 30 – September 30 we had just SEVEN 800M shares…since 10/1: now at 21 – just one in Nov, and SIX 900M+ days. Now FOUR 800M days and one 900M day for Dec.

A/D’s unimpressive: NYSE: +1.4x vs -4.6x!!! vs +1.5x vs -2.3x vs +1.1x; Nasdaq +1.5x vs -4.6x!!! vs +2.1x vs -2.9x vs +1.9x. Breadth was similar: NYSE +1.2x vs -15.5x!!! (Unbelievable!) vs +1.4x vs -3.8x!!! vs 1:1; Nasdaq +2.2x vs -2.5x vs +2.1x vs -3.3x vs +1.6x. New 52 Week Highs steady at a weak 201 vs 215 vs 207 vs 386 vs 363 – their range for the year is 39-612!!! New Lows fell back but remain strong at 364 vs 460 vs 467! vs 416 vs 283. The 2014 range is 24-1043!!! S&P VIX attempted to decline but only made it to 15.94 – this despite the early rally – then worked its way back to 20.13, highest since 10/10 before closing at 20.08 +1.55 or +26%!!! Those bearish extremes that had a high of 31.06 (highest since 11/28/11!!!), are now a big possibility with options expiry just a week away. The average of the past 12 months is 13.98, with a low of 10.28!…high close of 26.25 on 10/15/14!

U.S. bond market closed mixed but after being hit early in the session. Note on 12/2, the 30 yr bottomed at 3.01%. Updating the recent 12 month low yields (10’s 2.09%; 30’s 2.80%!; and long TIP 0.83%), 10’s closed at 2.16%! -1/32; 30’s 2.80%! NEW LOW +5/16, and the long TIP 0.85%!!! +1/2. Overnight rallying strong: 10’s 2.12%! +3/8; 30’s 2.77%!!! ANOTHER LOW +3/4; long TIP 0.83% +7/16 – tied for low!
Libor update: 0.240% 3 mos.; 0.338% 6 mos. Both still near their recent record lows! The Fed Funds rate has averaged 0.09% and is currently 0.11-0.13% – a 9-month high. T-Bills: 0.01%! one-month; 0.03% 3 mos; 0.19%!!! – why is it rising?
Foreign bond yields lower, ex-Greece which is nearing 9%!!! (Benchmark is 10yr): Germany 0.63%! -5!; UK 1.82%! -8!; France 0.89%! -5!; Italy 2.03% -2; Spain 1.86% -1; Portugal 2.93% -1; Greece 8.88%!!! vs 8.70%! vs 8.24%! vs 7.71% vs 7.03% +8. Not for the faint of heart! 10/16’s close was 8.54%! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.39 -1.

Gold is holding nicely safely above $1200 closing at $1225.60 -$3.30 – a ‘temporizing bid’ again two days after that strong rally and close that had a session high of $1238.00 – highest since 10/22 and the first REAL $1200+ close since the selloff began. Well above the 40/50 day again for just the 6th time since 10/21! 11/7’s low was $1130.40, a new 12-month low!). This was only the 2nd time in 31 sessions without a print below $1200. Last close above $1300 was on 8/15. 7/17’s session high was $1346.60, highest since March 19th!!! Support is at $1200 (psych) and the 40 day, the 50 day $1203, RES at the 200 day $1270 – all have bottomed! The 12-month high is $1392.60 on 3/17, highest high since 9/4/13. 11/7’s low was $1130.40! Overnight it is slightly weaker at $1223.90 -$1.70 – holding nicely with a low of just $1218! There have now been 13 highs above $1200 since 10/31. Silver trading near its $17.27 high at $17.08! This following a $14.12 recent low, not seen in more than five years!

Crude dove yet again to yet a new low 5+ year low (7/09), of $59.32 –it’s 6th straight ‘lower low’ before closing at $59.95 -$1.79! Consider: 10/25’s high was $84.83. There have now been 46!!! handles since peaking at $107.73 on June 13th, highest since 9/19/13. The record high of $147.27 was on 9/30/08, the low since on 5/15/09 is $56.07: $89.85 is the average! Recent rally high and close are $110.70 and $110.53 respectively. RES at the 40 day ($75.11!), then the 50 day ($77.45!), and lastly the 200 day (94.48!), all STILL increasing their rate of decline! We are now headed for $50!!! The recent range is now $59.32-$112.24 since 3/1/12. Overnight it is plunging through support again with another new low of $58.56 (now its 47th handle)!_It is now $58.70 -$1.25!!! Note that following the financial crisis it traded down to $32.40 on 12/31/08 from a high of $147.27 just three months earlier (-78%!!!).

Overnight Global Markets:

European equities EXTREMELY weak – now three days! Asia mixed, Japan higher? UK -1.5%! vs -0.8% vs +0.1% vs -1.5%!!! vs -0.9%; France -1.5%! vs -0.4% vs +0.1% vs -1.8%!!! vs -0.9% vs +1.3% vs -0.9%; Germany -1.4%! vs +0.1% vs +0.6% vs -1.6%!!! vs -0.5% vs +1.3%; Japan +0.7% vs -0.9% vs -2.3%!!! vs -0.7% vs +0.1%; Hang Seng -0.3% vs -0.9% vs +0.1% vs -2.3%!!! vs +0.2%; Korea +0.3% vs -1.5%!!! vs -1.3%! vs -0.4% vs -0.4%; India -0.9% vs -0.8% vs +0.1% vs -1.2%! vs -1.2%! U.S. equity futures SLAMMED – and yes, Thursday WAS a dead cat bounce? DOW -105 (124); SPX -10.70 (140; NDQ -24 (44). Worse, it is ‘orderly’!

Some random thoughts:

…with oil plunging…$58.56 overnight…and shale drillers requiring $48 to breakeven (not tht that matters because they will have to keep pumping to service debt and other expenses), Norway, and now Mexico are in trouble…and not related to oil is Greece which may have to tap the well yet again (ECB not ‘oil’). Note that Greek 10-year bond yields have risen to near 9% from 7% in just FOUR days! Also, Wholesale Prices are plunging now on Crude (gasoline is in CPI not in WPI), and imagine IF the Fed had tightened in its ill-advised inflation concerns! They (like Obama should have done), had better stay focused on jobs…and note that a lowering of inflation brings them closer to that zero inflection point that Bernanke so feared.

Meanwhile, Congress is now in a battle…actually two over the debt ceiling: the first along party lines (GOP outcasts objecting), and second, Dems and ‘across-the-aisle’ Republicans joining hands over the absurd and criminal idea of increasing political contribution amounts for the wealthy – their base! Boehner continuing to be a jerk while McConnell and Obama seem to be in détente. Technically the government is out of money but that will be solved today at the last possible minute…unless Sen. Ted Cruz holds sway.

Meanwhile the stock market is more volatile than nitro glycerine – a fool’s pastime.

Get out of here while you can and enjoy your weekend!

TB

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12/11/14…it’s good to own a hedge fund! and a 401(k)

Quote of the Day from the Friars Club Encyclopedia of Jokes: “My sex life is very bad. If it weren’t for pickpockets, I’d have no sex life at all.” – Henny Youngman
Bloomberg Quote of the Day: “Respect for the truth is an acquired taste.” – Mark Van Doren
Bloomberg Top Stories:
*Jobless Claims Drop as U.S. Corporations Hire at Strongest Pace Since 1999 – ah, but what are the salaries???
*Retail Sales in U.S. Climb by Most in Eight Months Amid Cheaper Fuel Price – yawn
*S&P 500 Futures Rise with Dollar on Retail Sales Growth While WTI Declines – huh?
*ECB Stimulus Case Boosted as Long-Term Loan Offering Draw Muted Response
*Carney Seeks Fed-Like Timing, Instant Minute4s in First Revamp in 17 Years
*Barclays, Deutsche Bank Forex Algorithms Said Probed by New York Regulator – !!!
*Fed Bubble Risks Paly Out in $550 Billion of Energy Debt – watch this!
*Banks Face Tougher Rules for Asset-Backed Debt as Basel Rejects Warnings
*Russian Central Bank’s One-Point Rate Increase Fails to Halt Ruble’s Slide
*Wal-Mart China Stores Inflated Profit Via Accounting, Internal Study Shows – oh oh!
*GE Is Poised to Increase Dividend in Climb Back From Cut in 2009 Recession – want to bet they do it by issuing debt so they can keep their cash offshore? Huh, sukkahs?
*Jeb Bush’s Offshore Private Equity Fund Raises Specter of Mitt Romney Woes – yep!
*Manhattan Prosecutor Bharara Fenced In By Ruling Undercutting Insider Wins – sick!
*Netanyahu Strengthened After Likud Vote Seen as referendum on Leadership – thought Netanyahu was a merger of Netflix and Yahoo! ???
*Putin’s Friends Reap Billions in State Deals as Russia’s Economy Teeters – so does he!
*Can You Spare 12 Cents a Gallon for Better U.S. Highways? – by Barry Ritholtz
Wednesday’s Market Summary:

You want to know how bad it was? Not only was every index down from 1.3% (Dow Utilities!!!) to -2.2% (Russell 2000), volume was a strong 4.05B shares, highest in 8 sessions! Oh but it gets worse…much worse: A/D’s and Breadth were very weak with NYSE Breadth an incredible -15.5:1! The final nail was the S&P VIX which ranged from 15.40-18.92 (highest since 10/20), and closed at 18.53 +3.64!!! That’s a 24.5% increase! Talk about bearish! New 52 week highs were steady at 215, while new lows dipped slightly to a still very high 430! Bonds continued to rally while Gold held most of Tuesday’s gain, but Crude was slammed once again to a new 5+ year low. Still bullish are you? Remember they didn’t even like Utilities yesterday!

Total NYSE Volume was 4.05B shares vs 3.95B vs 3.72B vs 3.36B vs 3.37B vs 3.58B vs 3.64B vs 4.14B. Average volume since 9/30 remains about 3.6B shares or about 600M more than the 12-month average. Shares traded on the NYSE floor (aka REAL) rose again to a strong 913M shares (1st 900M day since October!) vs 834M vs 770M vs 755M vs 798M vs 776M vs 809M vs 877M. For comparison purposes, for the prior 12 months it is a historically weak 720M shares…but since 10/1: 814B shares – including that HUGE 1.22B share day – highest since 9/19, followed by two more 1B plus days leading to options expiry!. The lowest was 11/1’s 619M share session. April 30 – September 30 we had just SEVEN 800M shares…since 10/1: now at 20 – just one in Nov, and now SIX 900M+ days. Now three 800M days and one 900M day for Dec.

A/D’s were very negative! NYSE: -4.6x!!! vs +1.5x vs -2.3x vs +1.1x vs -1.7x; Nasdaq -4.6x!!! vs +2.1x vs -2.9x vs +1.9x vs +1.5x. Breadth was worse on the Big Board: NYSE -15.5x!!! (Unbelievable!) vs +1.4x vs -3.8x!!! vs 1:1 vs -2.4x vs +2.4x;; Nasdaq -2.5x vs +2.1x vs -3.3x vs +1.6x vs -1.5x. New 52 Week Highs steady at a weak 215 vs 207 vs 386 vs 363 vs 302 – their range for the year is 39-612!!! New Lows remain VERY strong at 460 vs 467! vs 416 vs 283 vs 248. The 2014 range is 24-1043!!! S&P VIX rocketed to 18.92, highest since 10/10, and extremely bearish and closed just below at 18.53 +3.64, with a ‘low’ of 15.40!!! Now THAT’S bearish! We ‘could’ again see those bearish extremes that had a high of 31.06 (highest since 11/28/11!!!). The average of the past 12 months is 13.98, with a low of 10.28!…high close of 26.25 on 10/15/14!

U.S. bond market closed STRONG for a THIRD day! Note the 30 yr bottomed at 3.01%. The recent 12 month low yields (10’s 2.09%; 30’s 2.87%; and long TIP 0.83%), 10’s closed at 2.16%! +7/16; 30’s 2.83%! NEW LOW +13/16, and the long TIP 0.87%!!! +1/2. Overnight mostly better: 10’s 2.16% +1/16; 30’s 2.81% ANOTHER LOW +3/8; long TIP 0.85% +3/8.
Libor update: 0.239% 3 mos.; 0.338% 6 mos. Both still near their recent record lows! The Fed Funds rate has averaged 0.09% and is currently 0.11-0.13% – a 9-month high. T-Bills: 0.04% one-month; 0.03% 3 mos; 0.20% – why is it rising?
Foreign bond yields mixed; Greece sharply higher again!!! (Benchmark is 10yr): Germany 0.67% -1; UK 1.87%! -3; France 0.95%! -1; Italy 2.07% +1; Spain 1.88% +2; Portugal 2.94% +1; Greece 8.70%!!! vs 8.24% vs 7.71% vs 7.03% +41!!! Not for the faint of heart! 10/16’s close was 8.54%! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.40 +1.

Gold put in a ‘temporizing bid’ a day after a strong rally and close that had a session high of $1238.00 – highest since 10/22 and the first REAL $1200+ close since the selloff began. It closed at $1228.90 -$2.60. Well above the 40/50 day again for just the 5th time since 10/21! 11/7’s low was $1130.40, a new 12-month low!). This was the first time in 30 sessions without a print below $1200. Last close above $1300 was on 8/15. 7/17’s session high was $1346.60, highest since March 19th!!! Support is at $1200 (psych) and the 40 day, the 50 day $1203, RES at the 200 day $1270 – all have bottomed! The 12-month high is $1392.60 on 3/17, highest high since 9/4/13. 11/7’s low was $1130.40! Overnight it is slightly weaker again at $1223.40 -$6.00 – holding nicely! There have now been 12 highs above $1200 since 10/31. Silver trading near yesterdays $17.27 high! This following a $14.12 recent low, not seen in more than five years!

Crude dove once again to yet a new low 5+ year low (6/10), of $60.43 –it’s 5th straight ‘lower low’ before closing at $61.74 -$2.08! Consider: 10/25’s high was $84.83. There have now been 45!!! handles since peaking at $107.73 on June 13th, highest since 9/19/13. The record high of $147.27 was on 9/30/08, the low since on 5/15/09 is $56.07: $89.85 is the average! Recent rally high and close are $110.70 and $110.53 respectively. RES at the 40 day ($75.68!), then the 50 day ($78.09!), and lastly the 200 day (94.6!), all STILL increasing their rate of decline! A failure here could take us to $50!!! The recent range is now $60.43-$112.24 since 3/1/12. Overnight it is weaker with another slight new low of $60.30! It is now $60.68 -.24!!! Note that following the financial crisis it traded down to $32.40 on 12/31/08 from a high of $147.27 just three months earlier (-78%!!!).

Overnight Global Markets:

Global equities weak for a THIRD session! UK -0.8% vs +0.1% vs -1.5%!!! vs -0.9% vs +0.8%; France -0.4% vs +0.1% vs -1.8%!!! vs -0.9% vs +1.3% vs -0.9%; Germany +0.1% vs +0.6% vs -1.6%!!! vs -0.5% vs +1.3%; Japan -0.9% vs -2.3%!!! vs -0.7% vs +0.1% vs +0.2%; Hang Seng -0.9% vs +0.1% vs -2.3%!!! vs +0.2% vs +0.7%. Korea -1.5%!!! vs -1.3%! vs -0.4% vs -0.4% vs — India -0.8% vs +0.1% vs -1.2%! vs -1.2%! vs -0.4%. U.S. equity futures somewhat ‘bouncing’ – dead cat bounce? DOW +67 (64); SPX +9.20 (12); NDQ +13.75 (20).

Some random thoughts:

…yesterday, a federal court reversed some of the insider trading convictions for hedge funds. Isn’t that nice? First, they have been ripping off investors for years with their 2% plus 10% fees. Then when the market tanked, realizing they wouldn’t get back above the ‘high water mark’, many of them folded and resurrected themselves. Next came all those insider trading scandals and firings by the State of California and some other ‘wise’ investors. Then the convictions and now this…shameful! As if that isn’t bad enough, they continue to benefit from the ‘carried interest’ provision which allows the operators ordinary income to be taxed as capital gains at 35%! Finally it is getting Congress’ attention but will the Republicans have the guts to go against some of their big contributors? We’ll see, but the issue they are upset with is their 401(k)’s, where a few thousand of them have retirement funds in excess of $1 million (Romney had $101 million if you recall). But how did they do that? By buying shares of companies their private equity firms are doing and with their 401(k) money! So let’s say they get 5,000 shares at a penny a share and take it public at $30 a share…you do the math…oh, and remember they are ripping off Medicare too since without ordinary income (you know that is what ‘ordinary’ working people earn), they are not forced to contribute.

This just in: it seems Jeb Bush also has a nice offshore hedge fund…and an accompanying 401(k). Hmmm, I bet Elizabeth Warren doesn’t! She is the new ‘last hope’ for America! Vote Warren!

Note that there is a bi-partisan plan to raise the social security tax by creating a ‘donut hole’ so that the present cap remains but then kicks back in at $1 million…that alone could save social security…IF they have the cajones to do it! Wanna bet? What? And antagonize those big donors?

Have a great day!

TB

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