5/7/13…thank you Grover and Wayne – you fools!

From the Friar’s Club Encyclopedia of Jokes: “What happens when you play country music backwards? Your dog comes back, you get your truck back, your momma gets out of jail..”.

Bloomberg Quote of the Day: “It is better to know some of the questions than all of the answers.” – James Thurber

Bloomberg Top Stories:

*Stocks in Europe Climb to Five-Year High as Euro Rallies, Aussie Weakens – amazing it’s fixed…happy days are here again…for Europe and the U.S. – it’s fixed!

*HSBC Earnings Almost Double on Cost-Cutting Program as Bad Debts Decline

*Australia Pushes Down Currency by Reducing Benchmark Rate to Record 2.75%

*German Factory Orders Unexpectedly Jump for Second Month in Recovery Sign

*Pound’s Top Forecaster Says gains Are Fleeting as Carney Overhaul Looms

*Dijsselbloem Says EU Must Have Common-Deposit Guarantees for Banking Union

*JPMorgan Should Split Chairman-CEO Roles, Advisory Firm Glass Lewis Says

*U.S. Swap Regulators Face Congressional Pressure to Cut Dodd-Frank Rules – the banks are winning yet again…don’t you get it? The ‘fix’ is in!

*Billionaire Beny Steinmetz Facing – Financial Threat in U.S. Bribery Probe-Iron Ore

*Germans Splurge on Italian Vacation Homes Locals Now Struggling to Afford

*Pentagon for First Time Accuses China of Cyber Espionage Against U.S.

*Israel’s Strikes in Syria Undercut U.S. Caution on Imposing a No-Fly Zone

*Wall Street Pipeline Trinity Sees President Resign Amid Fraternity Battles

I have never seen this before: on Friday, the Dow rose 178 points shortly after the open and closed up 142 after putting in a new record high. Today? -5 on an inside day with a range of just 47 points??? One day wonder is putting it mildly when you can’t even muster support for follow-thru! Want more? S&P traded to a record high of 1618.46 Friday. Today it broke it with a whopping 1619.77??? Then it close up just 3 points with a total trading range of just 5 points??? That is not supposed to happen following a major rally? Even if it was High Freak induced…it was FAUX!!! Volume slumped from an average 3.6B shares to just 3.05B! Real trades on the NYSE collapsed to 619M from an average 716M shares. What stood out? Dow Transports which rose 79 points 1.3% – for honors AND a 100 point trading range, and yep a new high of 6314…eclipsing the 3/19 high by all of 23 points…wake up, investors, you have been had…again!

Sometime before this months options expiration on May 17th there will be a sharp pullback. How far? Dunno, but yesterday’s feeble markets following a major rally on no significant volume suggests it.

The best, and only double digit performer yesterday (the best sectors were up 0.6%), was Dow Transports +1.3% following their also best 2.1% gain on Friday. It is now the best performer ytd at +18.7% followed by: Dow Utilities +15.2%!!!, Dow 30 +14.2%; S&P 500 +13.4%; Russell 2000 +13%; NDQ 100 +11.1%, Nasdaq Composite +10.7%. NYSE Financials are also up 13.1%. This in four months? Will they be up 18%, 20% or more for the year? Not in TB’s book! Have you looked at economic growth or what is propping it up? The Fed!!! and when it is perceived that the pace is slowing look out below.

Yesterday, the Nasdaq 100 was up a paltry 0.4% or 10.8 points. Consider AAPL was +9 of those, GOOG 3, and MSFT 1.5…you do the math! Advancers ran 52/47 vs 84/16.

So let’s see what else happened:

*Dow Transports +1.3% vs +2.1% vs+1% vs -2.3%!!!; Russell 2000 +0.6% vs +1.6% vs +1.7% vs -2.3%; Dow Utilities DOWN 1.4% vs -0.3% vs -0.2% vs -1%! S&P 500 +0.2% vs +1.1% vs +0.9% vs -0.9%; Nasdaq Composite +0.4% vs +1.1% vs +1.3% vs -0.9%, NDQ 100 +0.4% vs +1.1% vs +1.3% vs .-0.5%, Dow 30 +1% vs +0.9% vs -0.9%.

*NYSE Volume plunged again to a weak 3.05B shares vs 3.6B vs 3.5B vs 3.67B vs 2.88B shares (weakest in 16 sessions!!!). REAL NYSE Volume also plunged  to a weak 619M shares from a weak 716M vs 643M vs 697M vs 887M vs 599M shares (lowest since 4/8)….indicative of a total absence of retail! Recent highs were 975M (selloff) to 887M (rally). The average last week was a weak 720M shares vs 687M vs 859M vs 689M!!! The last options expiry came in at a solid but not great 914M shares. The 12-month average is just 731M shares. The range since 2/11 is 558M to 1.825B on 3/15’s options expiry and a near 12 month high, second only to 12/21’s 1.88B shares. Note that 3/15’s (options expiry) was the only day since 2/28 to register over 1B shares! There have been just fifteen 800+M shares in 2013 – just 4 up, 11 down, but on trades of less than that 72 have been up and just 19 down…there have been 19 mixed sessions…hint: low volume rallies!!! Real buyers???

  1. new 52 week highs have ranged from 121-709, fell back to 499 vs 786 vs 411 vs 386 vs 486 vs 418 vs 267 vs  495 vs 400 vs 400 vs 237 vs 228 vs 106 vs 100. New lows slipped to 32 vs 36 vs 50 vs 61 vs 42 vs 29 vs 40 vs 34 vs 48 vs 43 vs 96 vs 82 vs 159 vs 237 vs 120 vs 197.
  2. Advance/Declines were only modestly positive: +1.5x vs +2.6x vs +3.1x vs -2.6x vs +2x vs +2.8x. (compare to +4x, +2.6x, -3.5x, +4.4x, -7.1x) on NYSE and +1.5x vs +2.8x vs +3x vs -3.5x. Breadth was also positive: +2.2x vs +3.7x vs +3.1x vs -4.5x!!! vs +1.6x (also compare +3.4x, 3.9x, -10.5x!!!, +6.4x, -7.2x) on NYSE and +1.5x vs +2.5x vs +2.9x vs -2.7x (compare +3x, -3x!, -5.2x, +6.2x, -12.8x.  
  3. NYSE Financials +0.6% vs +0.9% vs +1% vs -1%!. BofA only ‘most active’ financial rose 4.6%!!! to $12.80 +.56 (on a settlement with MBIA that cost them money but gave them a piece of the company??/ MBIA rose 41.3% – think about it!!!
  4. Volatility (S&P VIX) declined again to 12.66 -.19, with a very tight range of  12.75-13.19, compare to Thurs/Friday’s 13.58-14.48. The range for the last three weeks is 12.06 (multi year low) to 18.20, and it is now back below the 40/50 day (13.49/13.85) and the 200 day (15.26)…ytd the range is 19.28 (2/25!) to 11.05 (3/14) – 12 mo. ave 16.43!!!

 

Global equities strong, ex-Korea: UK +0.4% vs +0.9%! vs +0.7% vs -0.2% vs +0.7%; France +0.7% vs -0.2% vs +0.7% vs -0.3% vs +0.3%; Germany +0.9% vs flat vs +0.9% vs +0.4% vs +0.5%; Japan +3.6%!!! vs closed vs -0.8%! vs -0.8% vs -0.4%; Hang Seng +0.6% vs +1%! vs +0.1% vs -0.3% vs +0.7%; Korea DOWN 0.4% vs -0.2% vs +0.4% vs -0.3% vs closed; India +1.1%! vs +0.5% vs -0.8% vs +1.2%!!! vs closed vs +0.6%. U.S. stock futures higher in another narrow trading range: DOW +38; SPX +3.10; NDQ +6.75.

Bonds were totally destroyed on Friday and slid lower yesterday, continuing overnight.. the 30 yr is just shy of 3%…one heck of an ‘E’ ticket ride!!!!: 10 yr Treasury 1.78% -3/16 vs 1.74% (recent range 2.06% to 1.63%!!!), and the 30 yr’s 3.26% to 2.82%!!!, now 2.99% -3/8 vs 2.96%. The long TIP is now 0.58% -7/16!!! – performing miserably since setting a new (record?) low of 0.36% on 4/5, and now above the 0.55% recent high ! The recent high yield was 0.67% on 3/11! Libor update: 0.237% 3 mos., 0.428% vs 0.425%, 6 mos.!!! Foreign bond yields higher – except problem countries: Germany 1.29% +5; UK 1.80% +9!!!; France 1.82% +3, Italy 3.85% -6; Spain 4.05% -3; Portugal 5.43% +6; Greece 9.53% -6 vs 9.58% vs 9.68% vs 10.09%!!! vs 10.64% vs 10.81% vs 10.92% vs 11.18% vs 11.13% vs 11.05% vs 11.08 vs 11.22% (recent range now 9.53%!!!-12.57%!)..   

Gold closed little changed in a very narrow inside trading range (?), leaving Friday’s high of $1487.20, highest since 4/12, out to dry and closed at $1468.00 -$1.50. 4/16’s intraday low of $1321.50 – was lowest since Sept. ’10. Resistance remains way above at the 40 day/50 day: $1523-1535 – still falling! Overnight it is $1449.00 -$19!!! Crude closed slightly higher again at $96.16 +.65 but hit a new rally high of $97.17, nearing a 12 month high! It is well above Sup/Res at the 40 day ($92.89), 50 day ($92.63) and 200 day ($91.93). It is now $95.79 -.37.  4/18’s low of $85.61 was lowest since 12/11! The range is now $85.61-$97.80 since June 29, 2012!!!!

 

Some random thoughts:

Send Grover Norquist and Wayne LaPierre to the gallows before they destroy us. One wants to see the U.S. government fit in a bathtub and the other wants guns galore: the only way to stop a lunatic with a gun is another lunatic with a gun. Sorry, gun lovers but we are insane…the more guns this country produces the more people die…yet we only care or observe the ones in high profile mass shootings, not the pain inflicted by suicides (those by babyboomers now exceed soldiers!), random killings, etc. Is this something to be proud of? That doesn’t even consider the accidental or random shootings – a hunter accidentally shot and killed someone he thought was an animal.

Those who defend the Constitution and in this case the 2nd Amendment fail to consider what weapons were like in the late 1700’s…or that deaths by guns rapidly escalated with the invention of the revolver just before the Civil War. Would they have advocated weapons of the power there is today?…especially now that we have a standing army to defend us. Highly unlikely…keep that in mind you strict constructionists!

Congress continues to be hamstrung by the opposition and the ‘do-nothing’ Senate is now active but as they try to do something they are stopped at every turn by the House…or themselves! No sales tax on internet transactions except those with a presence in a state? The internet does not need any more subsidy and that is what it is…at the expense of the merchants who hire REAL people and support local economies and even the big retailers who also sell over the internet. There is a huge cost to society in this. Instead of starting a new business with 3-4 employees, why not just go to the internet and to hell with your local economy. Then you can also bitch about taxes and lack of infrastructure. That is what we now have and it is killing us.

Meanwhile, think what you want – it doesn’t matter as the corporations and lobbies are getting their way in the absence of any other grass roots action. Any that springs up is quickly quashed or ridiculed out of existence.

This may be your America but is sure as hell isn’t mine!

Have a great day!

TB

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