6/12/13…you can fool some of the people…

From the Friar’s Club Encyclopedia of Jokes: “Did you know Mozart had no arms or legs? I’ve seen statues of him on people’s pianos.” – Victor Borge

“People who say money can’t buy happiness just don’t know where to shop.” – Tom Shivers 

Bloomberg Quote of the Day: “Study nature, love nature, stay close to nature. It will never fail you.” – Frank Lloyd Wright…unless…unless…global warming gets us first!

Bloomberg Top Stories:

*Traders Said to Manipulate Foreign-Exchange Rates to Profit From Clients – they learned from the U.S. banks manipulation of overdraft fees!

*Unemployment in U.K. Shrinks More Than Forecast as Recovery Gathers Pace

*U.S. Index Futures Advance as Yen Weakens With Bonds; Commodities Decline

*Greece Loses Status as a Developed Market as MSCI Raises U.A.E’s Ranking

*Volkswagen Selling 1.2 Billion-Euro Convertible Debt to Fund Growth Push

*U.S. Stock-Market Volatility Bets Hit Record on Fed Speculation – told you so!

*Saudi Border Towers Help Keep Stimulus at Home as Growth Lures Immigrants

*India Women Choosing Sterilization Suffer Rusty Scalpels as $10 Buys Food

*Istanbul Square Empties After Night of Violence as Protestors Flee Police

*U.S. Lawmakers Demand Prosecution of Secret-Leaking Ex-Security Contractor

*Iowa-to-Maryland Storms Set to Hit 20% of Americans With Hail, Lightning- !!!

 

The headline above on volatility speaks volumes…wake up, investors…today’s markets are about anything but investing…speculation is key, driven by high frequency trades. If that’s what you want…you’ve got it…enjoy! Look at the past three sessions: big rally, nothing, big selloff…is that the kind of world you want to invest in? No momentum! Why? Because they don’t want it. Ask a trader (not an investor) what his best friend is. He will undoubtedly say ‘volatility’ but that is not what YOU want as an investor!

All indices were off by 0.7% (Utilities) to 1.6% (NYSE Financials…aided by an outraged Jamie Dimon speaking at a Morgan Stanley conference). So were bonds most of the session before posting a rebound in the afternoon, commodities (Gold off $9 but intraday low was worst since 5/23; Crude -.39 but the $94.04 intraday low negated the rally),

Advance/Declines and Breadth were very negative New 52 week highs were halved while new lows more than doubled! Volatility (S&P VIX) rose sharply in a wide range of 16-17.14 after gapping up on the open and closing a gap from three days ago!

The Nasdaq 100 fell 1% or 30.6 with just 14 members up and 83 down! 9 stocks led by MSFT -4.5 vs -1.4; GOOG -2.5 vs +2.5; AMZN -2.5; ORCL -2 and five others including AAPL lost more than 1 index point. Tech is treacherous and blowing with the wind.

So let’s see what else happened:

* Dow 30 -0.8% vs -0.1% vs +1.4%! vs +0.5% vs -1.4%! vs -0.5% vs +0.9% vs -1.4%!!!; Dow Transports -1% vs -0.3% vs +2.4%!!! vs +1% vs -1.9%! vs -0.5% vs flat vs -0.8% vs +0.2% vs -1.1%; Russell 2000 -1.1% vs +0.5% vs +0.8% vs +1.2% vs -1.4%! vs -0.8% vs +0.7% vs -1% vs +0.6% vs -1%; Dow Utilities -0.7% vs -0.3% vs +0.8% vs +1.3% vs -0.9% vs -0.3% vs +0.1% vs -0.6% vs flat vs -1.5%!!! vs -1.4%!!! – now down 6.8% over the past 13 sessions, and since posting a near record high on 4/30, have plunged 11.7%!!!; S&P 500 -1% vs flat vs +1.3%! vs +0.9% vs -1.4%! vs -0.6% vs +0.6% vs -1.4%!; Nasdaq Composite -1.1% vs +0.1% vs +1.3% vs +0.7% vs -1.3%! vs -0.6% vs +0.3% vs -1%; NDQ 100 -1% vs flat vs +1.4% vs +0.5% vs -1.2%! vs -0.6% vs +0.3% vs -1%!

*NYSE Volume rose to an average 3.41B shares vs 2.95B (lowest level in 10 sessions) vs 3.37B vs 3.48B vs 3.62B vs 3.6B vs 3.94B vs 3.91B vs 3.47B vs 3.56B vs 3.43B vs 2.75B (2013 low).  REAL NYSE Volume rose to a still below average 689M shares vs  595M (lowest since 5/24) vs 729M vs 800M vs 740M vs 787M vs 880M vs 1.35B (highest since 3/15 and 2nd highest of the year!) vs 711 shares vs 722M vs 734M vs 587M. The 12-month average is just 720M 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. May 31st was only the fourth day this year to register over 1B shares! There have now been just 20 800M+ shares in 2013 – 7 up, 13 down, but on trades of less than that 79 have been up and 28 down…there have been 22 mixed sessions.

*New 52 week highs have ranged from 74-864. They fell to 141 vs 278 vs 227 vs 103 vs 74!!! vs 235 vs 234 vs 221 vs 300 vs 175 vs 517 vs 138!!! vs 811. New lows nearly doubled after tripling to 363!!! vs 143 vs 50 vs 95 vs 125 vs 182 vs 325 vs 290 vs 108 vs 191 vs 79 vs 49 (recent range 29-290).

  1. Advance/Declines were very negative: -6.4x! vs -1.2x vs +2.2x vs -3.6x vs  -4.3x!!! vs -1.7x vs -1.2x vs -5.5x! vs +1.3x vs -3.8x!!! (recent range -7.1x to +4.4x) on NYSE and -2.8x vs +1.8x vs +1.9x vs +2.4x vs -3.4x! vs -2.1x vs +1.4x vs -2.6x vs +2x vs -2.3x vs +2.4x vs +1.1% vs +1.1x vs -2.9x! vs +1.2x vs -3.3x! (recent -3.5x to +3x). Breadth was similar: -4.4x! vs -1.1x vs +2.7x vs +5.3x! vs -4.3x!!! vs -2.2x vs +1.3x vs -6.8x!!! vs +2x vs -1.7x vs +1.8x vs -1.5x (recent -10.5x to +6.4x!!!) on NYSE and -3.6x! +1.3x vs +2.6x vs +2.6x vs -4.9x!!! vs -2x vs +1.2x vs -3.8x!!! vs -+3.5x vs -1.6x vs +2.5x (recent -12.8x to +6.2x)  
  2. NYSE Financials were -1.6% vs flat vs +1.3% vs +1.1% vs 1.8%!!! vs -0.4% vs +0.3% vs -1.7%!!! Brokeers -1.6%; KBW Banks -1.7%; Nasdaq Banks -1.1%. BofA declined for a 2nd day by -1.4% vs 0.6% vs +1.4% vs +0.8% vs -2%!!! vs -0.7% vs -0.8% vs -1.1%! vs +3.3%??? vs +1.5%??? to $13.30 -.08…21st day above $13 since 4/11/11. Brokers +0.2% vs +3.3%!!! vs +2.1% vs -2.3%! vs flat vs -0.9% vs -1.4%; KBW Banks +0.6% vs +1.6% vs +1.2% vs -1.4%! vs -1% vs flat vs -1.7%; Nasdaq Banks +0.7% vs +0.9% vs -1.2%! vs -0.7% vs +0.6% vs -1.2%. C -3.8%! % vs+2.1%…only other financial mover. But: JPM -1.6%; WFC -1.4%; USB -0.5%; GS -2.5%! MS -3.9%!!!; UBS -2% – the brokers hit their rally highs within the past two days…a warning!
  3. Volatility (S&P VIX) rose sharply 3 days after another recent high of 18.51 intraday, not seen since 2/25…and traded in a broad bank of 16-17.14, gapping up on the open and closing another gap from two days ago, before closing at 17.07 +1.63! (16th day above 13 since May 2). The range since 4/12 is 11.99 (multi year low) to 18.51, and it remains  above the 40/50 day (14.25/14.10) and the 200 day (14.96)…ytd the range is 19.28 (2/25!) to 11.05 (3/14) – 12 mo. ave 16.10!

European equities higher, Asia weak; UK +0.2% vs -1.7%! vs +0.5% vs +0.2% vs -1.4%!; France +0.5% vs -2%!!! vs +0.5% vs +0.5% vs -1.2%!; Germany -0.1% vs -1.7% vs +1.2% vs +0.7% vs +0.4% vs -1.1%!; Japan -0.2% vs -1.5% vs +4.9% vs -0.2% vs -0.9% vs -3.8%!!! vs +2.1% vs -3.7%!!! vs +1.4% vs -5.2%!!!; Hang Seng closed vs -1.2%! vs +0.2% vs -1.1%! vs -1% vs -0.5% vs -0.4% vs -0.3% vs -1.6%!!!; Korea -0.6% vs -0.6% vs +0.5% -1.8%!!! vs -1.5%!!! vs -1.3%; India -0.5% vs -1.5%! vs +0.1% vs -0.5% vs -0.3% vs +0.1% vs -0.3% vs -0.8% vs -2.3%!!! U.S. stock futures traded higher overnight and stocks are opening higher: DOW +83; SPX +8; NDQ +13.

Bonds managed to rally but it was feeble even as stocks tanked and are off again overnight giving up most of yesterday’s gains: 10 yr Treasury 2.21% -1/4 (recent range now 2.24% to 1.63%!!!), and the 30 yr’s 3.33% to 2.82%!!!, now 3.35% -5/8. The long TIP remains extremely weak after breaking down yet again setting another new high of 1.21% yesterday vs 1%, set just a week ago Monday!!! Currently 1.13% -3/16 – it has lost more than TWENTY points since May 2nd! –  still the weakest link since a new (record?) low of 0.36% on 4/5. Since the Bernanke announcement on the 7th the high yield has gone from 0.82% set on 5/22 to 1.21%! Libor update: 0.273% 3 mos., 0.414% 6 mos. Foreign bond yields mixed with Portugal falling the most but Greece continuing to be highly volatile!: Germany 1.61% +1; UK 2.17% +1; France 2.20% -1, Italy 4.31% -5; Spain 4.55% -9; Portugal 6.14% -20?; Greece 9.94%! +23??? vs 10.27%!!! vs 9.28% vs 9.00% vs 9.05% vs 8.83% vs 9.11% vs 9.20%!!! vs 8.80% vs 8.54% vs 8.39% vs 8.63% vs 8.54% vs 7.98% vs 7.97% vs 7.94% vs 7.96% vs 8.47% – it has broken down from the rally! Recent range 7.94% to 12.57%.   

Gold closed slightly lower at $1377.00 -$9 only after hitting a sesson low of $1364.50, lowest since 5/23. It has closed above $1400 just one of the past FIVE sessions! 5/30’s intraday high was $1417.70, highest since 5/15.  It has been down 13 of the last 22 sessions following 5/20’s intraday low of $1338, lowest since 4/18. 5/10’s high of $1487.20 was highest since 4/12. 4/16’s intraday low of $1321.50 – was lowest since Sept. ’10. Resistance remains at the 40 day/50 day: $1416-1441 – still declining! Overnight it is little changed at $1376.10 -.90. Crude also closed slightly lower at $95.38 -.39 –  two days after the highest close since 5/20 ($96.03), but remains well above the 40/50 day …five days after putting in an intraday low of $91.26 – lowest since 5/2! It remains well above the 200 day ($92.26) with just one day below since 5/1, making it major support. First support at the 40/50 day (93.58-93.53 – crossed yesterday!).  The rally high is $97.11 set 5/20, nearing a 12 month high! Overnight $95.96 +.58. 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:

Timing is everything, right? No sooner had TB written negatively on Jamie Dimon, CHAIRMAN AND CEO of JPMorganChase but he spoke at a Morgan Stanley investors conference…complete with expletives. Doth he protesteth too much? Nobody did anything wrong…all was above board. Jamie? Do you want that as your epitaph?

TB took a PR class many moons ago and one thing the prof drilled into us: you can write all the positives you want about a company but if you don’t back it up with actions it is for naught. Something went wrong yesterday for the ‘overhyped’ banks as they and their brethren, brokers (now faux banks) were destroyed…will BofA break $13 for first time since May 9th? It could…session low yesterday was $13.07. Wake up investors…wherever you are!

Have a terrific day!…er, not you, Jamie!

 

TB

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