Written last night due to an early flight to California for a memorial service. Back on Monday…hopefully. TB
From the Friar’s Club Encyclopedia of Jokes: “I don’t want to make the wrong mistake.” – Yogi Berra
Well the Fed spoke and if it is clear to you, consider yourself lucky. We have waited all this time…since early May for some clarification and guess what? We didn’t get it. Consequently, bonds slumped – and worse broke support levels!!! stocks slumped too but on a smaller scale….and oh boy, Friday is options expiry! You have to love it!
Since May 30th, the S&P VIX has closed between 15.14 and 18.59 with a range of 14.36 to 18.60 – the 40/50/200 day m/a’s are 14.37/14.26/14.98…it remains elevated! It closed back above 17 on Friday then declined for the last three sessions in the 16’s. New 52 week highs dropped to 257 vs 345 vs 264 vs 170 vs 159 vs 140 while new lows rose to 143 vs 104 vs 62 vs 72 vs 459 vs 507 vs 363. Stocks and bonds did a double dive after the Fed statement – all closing at or near the session lows!!! Are the record highs of late May just a memory?…indices breaking thru their 40/50 day m/a’s.. Advance/Declines and Breadth were negative – especially NYSE which posted huge declines! Volume rose back to slightly above average on the NYSE but actual floor trades blew thru the average to 760M (highest since June 6th!) vs 646M vs 679M vs 634M vs 756M. The 12 month m/a had now declined to 716M!!! Just 7 more trading days until quarter end…u pick ‘em.
All indices were DOWN more tan 1% led by Dow Utilities -2.3%!!! and the ‘best’ was the Nasdaq Composite -1.1%! Our Nasdaq 100 watch continues: it fell by 36.6 points with TEN members losing more than 1 index point and only one, ADBE gaining a single point! 9:1 declining! It was led by AAPL -7.1!!! vs -4.8!!! vs +3.1 vs -1; MSFT -3!!! vs +4.1!!! vs -2.3 vs -2 vs -4.5 vs -1.4, INTC -2 vs +1.6; GILD -1.8 vs +1.2 vs -1.6.
So let’s see what else happened:
* Dow 30 -1.4%! vs +0.9% vs +0.7% vs 0.7%vs +1.2% vs -0.8% vs -0.8% vs -0.1% vs +1.4%!; Dow Transports -1.2%! vs +1% vs -0.2% vs -0.5% vs +1.9%! vs -0.7% vs -1% vs -0.3% vs +2.4%; Russell 2000 -1.4%! vs +1.2%! vs +0.7% vs -0.8% vs +1.8%! vs -0.9% vs -1.1%; Dow Utilities -2.3%!!! vs +0.6% vs +0.5% vs +0.1% vs +1.5%! vs -0.9%!; S&P 500 -1.4%! vs +0.8% vs +0.8% vs -0.6% vs +1.5% vs -0.8% vs -1% vs flat vs +1.3%; Nasdaq Composite -1.1%! vs +0.9% vs +0.8% vs -0.6% vs +1.3% vs -1.1% vs -1.1%; NDQ 100 -1.2%! vs +0.8% vs +0.9% vs -0.6% vs +1.3% vs -1.1% vs -1%.
*NYSE Volume rose to an above average 3.54B shares vs 3.1B vs 3.08B from a very weak 2.91B shares (2nd lowest of 2013, 2.75B is the 2013 low), vs 3.41B vs 3.21B vs 3.41B. REAL NYSE Volume rose to 760M shares, highest since 6/6 from an average 646M shares vs 679M vs 634M vs 756M vs 692M vs 689M vs 595M (lowest since 5/24). The 12-month average is just 716M 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 82 have been up and 31 down…there have been 22 mixed sessions.
*New 52 week highs have ranged from 74-864. They fell to 257 vs 345 vs 264 vs 170 vs 159 vs 140 vs 141 vs 278 vs 227 vs 103 vs 74!!! New lows rose for a second day to 143 vs 104 vs 62 vs 72 vs 459 vs 507!!! (recent high). Recent range 49-507.
- Advance/Declines were negative – especially on NYSE!!!: -5.6x! vs +2.1x vs +2x vs -1.2x vs +5.6x! vs -4.2x! vs -6.4x! (recent range -7.1x to +4.4x) on NYSE and -2.6x? vs +2.3x vs +1.8x vs -2.5x vs +3.2x! vs -2.3x vs -2.8x (recent -3.5x to +3x). Breadth was even worse: -11x!!! vs +3.8x! vs +2.6x vs -1.9x vs +6.9x!!! vs -3.8x vs -4.4x! (recent now -11x!!! to +6.4x!!!) on NYSE and -2.2x? vs +3.1x! vs +2.6x vs -2.3x vs +3.9x! vs -3.2x vs -3.6x! (recent -12.8x to +6.2x)
- NYSE Financials plunged by 1.6%! vs 0.7% vs +0.9% vs 1.2% vs +2%! vs -1% vs -1.6%!; Brokers -0.9% vs +1% vs +2% vs -1.8% vs +2.2%! vs -0.8% vs -1.6%; KBW Banks -0.9% vs +0.8% vs +0.8% vs -1.6% vs +1.4% vs -1.1% vs -1.7%; Nasdaq Banks -0.8% vs +1% vs +0.5% vs -1.3% vs +1.3% vs -0.8% vs -1.1%. BofA was 3rd most active from 5th – had been number one or two most active since the crisis -0.6%? vs +.7% vs +1.1% vs -1.1% vs -1.2% vs +1.2% vs -1% vs -1.4%….closed at $13.19 -.08 and has a double bottom at $12.97 which is critical support! GE -1.4% vs +2.6% vs +1.1%. No other financial movers – the sector remains near their rally highs but very volatile.
- Volatility (S&P VIX) is still hovering just below 17 and closed at 16.64 +.03??? with a huge range of 15.36-17.18 – an outside day! The high was 5/12 at 18.60, not seen since 2/25. The range since 4/12 is now 11.99 (multi year low) to 18.60, and it remains above the 40/50 day (14.54/14.53) and the 200 day (14.99)…ytd the range is 19.28 (2/25!) to 11.05 (3/14) – 12 mo. ave 16.10!
No overnight commentary on global stocks or bonds due to an early flight to California!
Bonds were up slightly in the morning then tanked and like stocks went out very close to their session lows following the Fed announcement – valueless, and broke their trading ranges yet again – especially long TIPS: 10 yr Treasury 2.35% -1-7/16 (recent range now 2.35%!!! to 1.63%), and the 30 yr is now 3.41!!! to 2.82%, 3.41% -1-1/4. The long TIP was obliterated closing at 1.25% vs 1.13% -4-1/2 – it has lost more than TWENTY-FOUR points since May 2nd! – still the weakest link since a new (record?) low of 0.36% on 4/5, 12 mo. ave 0.65%!. Since the Bernanke announcement on May 7th the high yield has gone from 0.82% set on 5/22 to 1.25%!
Gold closed higher after three straight losing sessions at $1374.00 +$7.10!- a day after the lowest close since lowest close since 5/22! It has closed above $1400 just once in the past 13 sessions! 5/30’s intraday high was $1417.70, highest since 5/15. It has been down 17 of the last 29 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: $1413-1418 – slipping again. Crude closed a little higher at $98.24 +.20, three days after a strong finish, +$1.01 with an intraday high of $99.01 – highest high and close since 9/17/12! It remains well above the 40/50 day …13 days after putting in an intraday low of $91.26 – lowest since 5/2! It remains well above the 200 day ($92.31) with just one day below since 5/1, making it major support. First support at the 40/50 day (94.97-93.92 – crossed and rising!). 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:
Holy Moly! What is Bernanke and the Fed trying to do? Destroy BOTH markets? Do they honestly believe this slow growth economy can continue without them supporting it by buying every mortgage in sight – while the banks enrich themselves at the public trough by retaining the servicing fee? Do they honestly believe that the jobs being created are solid, well-paying jobs with benefits? Get real. Pull the plug and the economy goes down the drain. Wanna bet? Please don’t push me to that, Ben…say it isn’t so?
Now Obama is out with his trial balloons for a successor. Can you believe the man is honestly considering Geithner…or worse Summers who makes Greenspan look like an apologist! The only name I see on the horizon is already on the board and would make sense for both his legacy and the Fed: Janet Yellen! Go for it, Barrack!
Meanwhile the GOP is still obsessed with sending someone to jail over the IRS scandal. This is Benghazi on steroids…fools that they are. How can Boehner and now Intelligence Committee Chairman (ignore Mitch McConnell, everyone else does) Mike Rogers (R-MI) saying someone has to go to jail! Ah, on the Snowden case, he has also – again along with Boehner decided that the man is a traitor. But politics makes strange bedfellows…consider two weeks ago on Face the Nation Dianne Feinstein (R-CA) saying that General Clapper (you can’t make that up) told the truth…or maybe didn’t understand the question…come on, Dianne…get real! But what can one expect when the real security leak…or embarrassment is from my own state of Minnesota, Michele Bachmann! This woman is NUTS! Yet those in her extreme right wing district…perhaps the only one in Minnesota love her. Boehner: why the hell didn’t you kick this continually under investigation representative off the committee…as long as she remains it has no credibility…zero, zip, zilch with me! …and the GOP wonders why it is losing elections? Why don’t they listen to Bob Dole while they still have a party??? Ah, but they point to their success in gubernatorial races…how about Gov. Walker (R-WI). It adjoins Minnesota has higher unemployment lower pay and Walker was sponsored by none other than the infamous Koch brothers. I rest my case.
Do not forget that these same Koch brothers…the 5th richest men in America…also funded the Tea Party…bet they get a good laugh over cocktail hour…like Mortimer and Randolph Duke in Trading Places…destroying peoples lives on a $1 bet. Fools! Suckers!
Enjoy your weekend,