From the Friar’s Club Encyclopedia of Jokes: “He would come in an say he changed his mind – which was a figure of speech, because he didn’t have any.” – Mark Twain
Bloomberg Quote of the Day: “Though I am not naturally honest, I am so sometimes by chance.” – William Shakespeare
Bloomberg Top Stories:
*First Time Jobless Claims in U.S. Unexpectedly Decline to a Five-Year Low
*RCB Seen Desisting From Further Interest-Rate Cuts for at Least Two Years – !!!
*Spanish Bonds Drop as Demand Falls While Treasuries Gain – same old, same old
*JPMorgan Joins BofA With Perfect Trading in Quarter as Goldman Came Closer
*Goldman Said to Earn $500 Million Arranging Malaysia Bonds Without Bidding
*BOE Refrains From Stimulus as Policy Makers Assess U.K. Economic Recovery
*KKR Emerging as Global Private-Equity Winner in Asia Beating Carlyle, TPG
*Steinmetz’s $9 Billion Fortune Threatened in Soros-Funded Bribery Probes
*Bangladesh Garment Factory Fire Kills Eight as Rana Plaza Toll Reaches 921 – !!!
*Indonesia Kills Seven ‘Terrorism Suspects’ in Two-Day Raid Over Bombing Plot
*Gold Drop Vindicates Buffett’s All-In Wager on U.S. Rail – but it was UP yesterday?
Are the High Freaks finally tiring of this nonsense? A rally of this magnitude, with no economic reason and little real buying must be described as a faux rally, no?
Sometime before this months options expiration on May 17th there will be a sharp pullback. How far? Dunno, but the lack of REAL buyers suggests it will. Don’t fight it though – yet!
Yesterday’s rally was the feeblest yet with both the S&P 500 (+0.4%) and Dow (+0.3%) besting the Transports which rose a weak 0.2%. and the Russell 2000 small cap gained just 0.1%. This time it was the two Nasdaq indices – each up 0.5% that led, but in the 100, 2:1 rose producing a 15 point gain – 12 of which was in just 5 stocks again – led by the volatile AAPL (MSFT which had been doing well stumbled by 2.3 points for worst place). Note that new highs are now at near record levels showing it is very easy to produce them are index record highs but new lows are starting to climb – more difficult!
So let’s see what else happened:
*Dow Transports +0.2% vs +1.6% vs +1.3% vs +2.1% vs +1% vs -2.3%!!!; Russell 2000 +0.1% vs +0.8% vs +0.6% vs +1.6% vs +1.7% vs -2.3%; Dow Utilities DOWN 1.2%! vs +0.9% vs -1.4% vs -0.3% vs -0.2% vs -1%! S&P 500 +0.4% vs +0.5% vs +0.2% vs +1.1% vs +0.9% vs -0.9%; Nasdaq Composite +0.5% vs +0.1% vs +0.4% vs +1.1% vs +1.3% vs -0.9%, NDQ 100 +0.5% vs -0.1%? vs +0.4% vs +1.1% vs +1.3% vs .-0.5%, Dow 30 +0.3% vs +0.6% vs +1% vs +0.9% vs -0.9%.
*NYSE Volume rose to a near average 3.55B shares vs 3.3B vs 3.05B vs 3.6B vs 3.5B vs 3.67B vs 2.88B shares (now weakest in 22 sessions!!!). REAL NYSE Volume also rose to a near average 727M shares (highest since 4/30) vs 636M vs 619M vs 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 73 have been up and just 19 down…there have been 20 mixed sessions…hint: low volume rallies!!! Real buyers???
- new 52 week highs had ranged from 121-722, They ROSE again to 769 vs 722 vs 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 also rose to 45 vs 36 vs 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.
- Advance/Declines were positive – sort of: +1.9x vs +2.9x vs +1.5x vs +2.6x vs +3.1x vs -2.6x (compare to +4x, +2.6x, -3.5x, +4.4x, -7.1x) on NYSE and +1.4x vs +1.7x vs +1.5x vs +2.8x vs +3x vs -3.5x. Breadth was similar: +2.3x vs +2.5x vs +2.2x vs +3.7x vs +3.1x vs -4.5x!!! (also compare +3.4x, 3.9x, -10.5x!!!, +6.4x, -7.2x) on NYSE and +1.8x vs -1.1x! vs +1.5x vs +2.5x vs +2.9x vs -2.7x (compare +3x, -3x!, -5.2x, +6.2x, -12.8x.
- NYSE Financials rose 0.6% for a 3rd straight session: +0.6% vs +0.6% vs +0.6% vs +0.9% vs +1% vs -1%!. BofA rose 1.2% to $13.05 (high since 4/13/11!) +.15, while Citi rose 2.4%. Look at these dividend yields and you decide: BAC $0.01 or 0.3%; Citi $0.01 or 0.08%. So? Earnings have been produced by cost cutting and reduction of loan loss reserve…capische?
- Volatility (S&P VIX) fell slightly to 12.67 -.16, in another narrow range session, 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 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 weaker, ex-Korea: UK -0.1% vs +0.2% vs +0.4% vs +0.9%! vs +0.7%; France -0.9%! vs +0.8% vs +0.7% vs -0.2% vs +0.7%; Germany -0.2% vs +0.6% vs +0.9% vs flat vs +0.9%; Japan -0.7% vs +0.7% vs +3.6%!!! vs closed vs -0.8%; Hang Seng -0.1% vs +0.9% vs +0.6% vs +1%; Korea +1.2%!!! vs +0.1% vs -0.4% vs -0.2% vs +0.4% vs -0.3%; India -0.3% vs +0.5% vs +1.1% vs +0.5% vs -0.8% vs +1.2%. U.S. stock futures slightly weaker in yet another narrow trading range session: DOW -22; SPX -3.20; NDQ -9.50. Losing steam???
Bonds finally managed a slight rally yesterday – but not TIPS!!! And are all up modestly overnight – the 30 yr is back below 3%…one heck of an ‘E’ ticket ride!!!!: 10 yr Treasury 1.80% +1/8 (recent range 2.06% to 1.63%!!!), and the 30 yr’s 3.26% to 2.82%!!!, now 2.981% +1/4. The long TIP is back to 0.59% +7/16 – but still performing miserably since setting a new (record?) low of 0.36% on 4/5. The recent high yield was 0.67% on 3/11! Libor update: 0.275% 3 mos., 0.427% 6 mos.!!! Foreign bond yields slightly lower – ex high flying problem countries: Germany 1.25% -2; UK 1.76% -1; France 1.81% -1, Italy 3.86% +3; Spain 4.16% +9; Portugal 5.36% -1; Greece 9.43%!!! +9 vs 9.44% vs 9.53% 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 9.43%!!!-12.57%!)..
Gold continues to trade volatile and closed sharply higher, with an intraday high of $1475.80. near Friday’s high of $1487.20, highest since 4/12, and closed at $1473.70 +$24.90!?! 4/16’s intraday low of $1321.50 – was lowest since Sept. ’10. Resistance remains way above at the 40 day/50 day: $15117-1530 – still falling! Overnight however, it is $1464.00 -$9.70 with a session low of $1460. Crude closed strong at $96.62 +$1.00!!!! two days after posting a new rally high of $97.17, nearing a 12 month high! It is well above Sup/Res at the 40 day ($93.09), 50 day ($92.77) and 200 day ($92.00), all starting to rise. However, it is now $95.93 -.68. 4/18’s low of $85.61 was lowest since 12/11! The range is $85.61-$97.80 since June 29, 2012!!!!
Some random thoughts:
We are destroying our country with both our political dialogue and the damned sequestration which is threatening our national security. Meanwhile, some of the GOP ideologues continue to tout its success… may the end up hitting potholes and being on bridges as they collapse…then there will be urgency! This is the most misguided action of my lifetime. Obama isn’t looking good either but then this was supposed to be a doomsday action which would shock the ‘leaders’ (sic), into action. Meanwhile, infrastructure which was already sorely in need of repair, is worsening and even more importantly the importance of maintaining global security when there events of significant concern each half way around the world from us – in opposite directions. Do we need another Benghazi to reinforce that?
Speaking of Benghazi, true there were significant failures at State but the clear point here is to make Hillary Clinton a non-factor in the next election, thereby offsetting all of her achievements on something she had little control over. Do you really think the Secretary of State is in control of all ‘ops’ directly? If so, you really don’t understand the problem.
Sincerely,
TB
Traderbill's Financial Markets Weblog 