Bloomberg Quote of the Day: “Go on failing. Go on. Only next time try to fail better.” – Samuel Beckett  

Bloomberg Top Stories:

*Car Sales in Europe Climb After 19-Month Decline With Germany Rebounding

*Dollar Index Advances With U.S. Stock-Index Futures as Gold, Aussie Drop

*Japan Becomes Most Favored Nation in Investor Poll Reflecting Abe Optimism

*MacDonald’s Seen Overhauling Menu in U.S. With 145 Choices Slowing Service

*Oil Price-Fix Probe Widens as Finland’s Neste Helps European Union Inquirty – !!!

*Russia’s Economy Expands at the Weakest Pace Since ’09 as Investments Cool

*Tesla Plans to Raise $1.08 Billion to Repay Its U.S. Loan Early

*Euro Stocks Seen Rising on Stimulus Even as Profits Fall – get it? It’s about p/e’s!

*Oberhelman Enriched by Performance at Caterpillar While Worker Pay Stalls

*Ousted Acting IRS Chief Facing Lawmakers’ Grilling in Tax-Agency Scandal

*Obamacare Sees Switzerland Proving Mandatory-Private System Works – So?? GOP!

*Bipartisan (sic) U.S. House Negotiators Produce Tentative Immigration Proposal

A ‘minor’ setback? Who knows but the string of weak economic data, accompanied by weak earnings at WalMart…aren’t earnings what determine whether the p/e multiple is too high or too low, caused stocks to turn down, then up them down and close just off the lows. Nevermind though, we had another record high on the Dow and the S&P 500  was just bdlow its highs – lovely! NYSE Volume slipped  to 3.47B shares vs 3.66B but remains near normal. Average is the ‘new normal.’ But if it turns on you and that could happen this week, where will the support be? Could we see another ‘flash crash’? Today is options expiry in a market that is dominated by high frequency traders – not institutional buyers…their only role in this has been to be paralyzed against selling to avoid being left behind (note that even the selloffs of late are minor and not on large volume…that could change – quickly! Again Dow Transports fell (-0.8% vs +0.8% vs +1.9%), but worst was Dow Utilities -0.9% vs +0.7%, while the Dow fell 0.3% and S&P 0.5%…Russell 2000 small cap was -0.3% vs  +0.3% vs +1.3%. The two Nasdaq indices were down 0.1-0.2%. Look at this on the NDQ 100: Wednesday’s leader GOOG shed 2.8 while APPL; which lost 12 on Wednesday gained back 4.5 index points. Average. Today is options expiry and the VIX rose .26 to 13.07, its third, albeit slight increase in a row.

So let’s see what else happened:

*Dow Transports -0.8% vs +0.8% vs +1.9% vs -0.5% vs -1.1%; Russell 2000 -0.3% vs +0.3% vs +1.3%! vs -0.1% vs -0.4%; Dow Utilities -0.9% vs +0.7% vs +0.5% vs -0.6% vs -1.5%; S&P 500 -0.5% vs +0.5% vs +1% vs flat vs -0.4%; Nasdaq Composite -0.2% vs +0.3% vs +0.9% vs +0.1% vs -0.1%, NDQ 100 -0.3% vs +0.2% vs +0.5% vs flat vs -0.2% vs +0.5%, Dow 30 -0.3% vs +0.4% vs +0.8% vs -0.2% vs -0.2%.

*NYSE Volume slipped to a still average 3.47B shares vs 3.66B vs 3.43B vs 2.86B (low for the year) vs 3.49B. REAL NYSE Volume also slipped to a below average 679M vs 738M vs 700M vs 594M (lowest since 4/8) vs 670M vs 727M (highest since 4/30). 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 727M 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 75 have been up and just 22 down…there have been 20 mixed sessions…hint: low volume rallies!!! …and lately low volume selloffs.

1. new 52 week highs have now ranged from 100-864. They slipped back to 640 vs 864! vs 793 vs 462 vs 613. New lows however rose sharply again to 95 vs 66 vs 38 vs 39 vs 37 (recent range 29-237).
2. Advance/Declines were slightly negative: -1.5x vs +1.2x vs +2.1x vs -1.5x vs -1.8x (recent range -7.1x to +4.4x) on NYSE and -1.3x vs +1.3x vs +2.3x vs -1.2x vs -1.5x (recent -3.5x to +3x). Breadth was similar: -2.3x vs +2x vs +3.3x vs -1.4x vs -1.9x (recent -10.5x to +6.4x!!!) on NYSE and -1.1x vs +1.8x vs +2.4x vs +1.2x vs -1.1x (recent -12.8x to +6.2x)  
3. NYSE Financials fell 0.8% vs +0.7% vs +0.9% vs 0.3% vs -0.8%. BofA fell by 0.7% vs +0.8% to $13.35 -.09, now there are five $13 plus days since 4/11/11!
4. Volatility (S&P VIX) rose modestly for a third day to 13.07 +.26 (first time above 13 since May  2), most likely due to today’s options expiration! The range since 4/12 11.99 (multi year low) to 18.20, and it is below the 40/50 day (13.37/13.61) and the 200 day (15.05)…ytd the range is 19.28 (2/25!) to 11.05 (3/14) – 12 mo. ave 16.10!

Global equities higher: UK +0.4% vs -0.1% vs flat vs +0.2% vs +0.5%; France +0.4% vs +0.4% vs –0.1% vs flat vs +1%; Germany +0.3% vs -0.1% vs -0.1% vs +0.3% vs +0.7%; Japan +0.7% vs -0.4% vs +2.3%! vs -0.2% vs +2.9%!; Hang Seng closed vs +0.2% vs +0.5% vs -0.3% vs +0.5%; Korea closed vs +0.8% vs +0.1% vs +1% vs -1.8%; India +0.2% vs +0.2% vs +2.5%!!! vs +0.2% vs +0.7%. U.S. stock futures higher but still in a very narrow trading range session: DOW +50; SPX +6.40; NDQ +11.25!

Bonds rallied sharply even continuing when stocks rose and then closed at highs when stocks lost ground. Overnight no change except 10’s and 30’s which are slightly weaker overnight: 10 yr Treasury 1.89% -1/16 (recent range 2.06% to 1.63%!!!), and the 30 yr’s 3.26% to 2.82%!!!, now 3.11% -5/16. The long TIP is 0.71% -5/16 – still the weakest link since setting a new (record?) low of 0.36% on 4/5. Recent high yield is 0.74% set on 5/14! Libor update: 0.274% 3 mos., 0.419% 6 mos. Foreign bond yields lower across the board for a second day  led by Greece!!! Germany 1.30% -3; UK 1.84% -4; France 1.84% -3, Italy 3.92% -5; Spain 4.21% -7; Portugal 5.18% -3; Greece 7.96% -38!!! Vs 8.47% -13! vs 8.52% -56!!! vs 9.12%!!! -35!!! vs 9.44% vs 9.43% (recent range now 7.96%!!!-12.57%!). Japan 0.85% -1.  

Gold closed lower for a fifth day at $1386.90 -$9.30 with an intraday low of $1368, lowest since 4/17!. Last Friday’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 way above at the 40 day/50 day: $1490-1514 – still falling! Overnight it is falling again at $1376.90 -$10.00 with a session low of $1363.60!!! Crude closed higher at $95.16 +.83, 7 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 ($93.59), 50 day ($93.53) and 200 day ($93.71), starting to rise again! Overnight it is $95.86 +.70.  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:

Isn’t it amazing how the GOP is making everything political…conspiracies abound. The same people who say the Constitution is their Bible, violate it. Boehner says someone has to go to jail over the IRS scandal…targeting the Tea Party and other ‘conservative’ (sic) groups…it might just show that others were targeted on the other side. The Supreme Court, once again has mucked things up…just as when they awarded the presidency to Bush on political leanings.

I agree with former Justice Sandra Day O’Connor that Citizens United was just plain wrong. Beware of those who want to ‘educate’ us on the Constitution…or at least the way they see it. There was nothing – no thing – that was educational about it or the races, merely a string of negative ads that prevented the candidates – on both sides – from getting their message out. This has become about taking control of America. While both parties are guilty, the overwhelming evidence is against GOP support groups.

Several GOP’ers are claiming that this scandal is worse than Watergate…just as they fought to impeach Clinton…what fools we are…or they think we are.

How about this? Rep. Michele Bachmann, leader of the Tea Party group in the House, even while she is under investigation (and despite her misrepresentations during the campaign citing her Intelligence Committee (another sic) position which she totally misused in a matter that was befitting of ‘Tailgunner’ Joe McCarthy, remains in that post as Boehner shirked his duties), lashed out at Obama as she searched for a broad left-wing conspiracy. That dog won’t hunt and hopefully the investigation will show that while the IRS targeted these groups it was not on any administration authority. If so, it is egregious but let’s wait for the results, not rush to judgement as we are so willing to do.

Have a terrific weekend!

TB

Bloomberg Quote of the Day: “Ambition is the last refuge of the failure.” – Oscar Wilde  

Bloomberg Top Stories:

*Firs-Time Unemployment Claims in U.S. Jump to Highest Level in Six Weeks – !!!

*U.S. Stock Index Futures Decline on Jobless Claims, Housing-Starts Reports

*Consumer Prices in U.S. Dropped More Than Forecast as fuel Costs Decrease – ???

*Housing Starts in U.S. Decreased in April to Five Months Low; Permits Surge

*Berkshire Hathaway is cut by S&P as Rating Company Revises Its Criteria: AA<AA+

*Dimon Profits Best Ever as Wall Street Allies Affirm JPMorgan Chairman-CEO – sad!

*Obama Administration Mistakes Hand Republicans Openings to Beset President

*Obama Forces Out IRS Chief in Bid to Contain Damage to Second-Term Agenda

Yet another stock rally – this time on ‘average’ volume – finally! Average is the ‘new normal.’ But if it turns on you and that could happen this week, where will the support be? Could we see another ‘flash crash’? We have options expiry tomorrow and a market that is dominated by high frequency traders – not institutional buyers…their only role in this has been to be paralyzed against selling to avoid being left behind (note that even the selloffs of late are minor and not on large volume…that could change – quickly! Again Dow Transports were best (+0.8% vs +1.9%), followed by Dow Utilities +0.7% while the Dow and S&P were each up 0.4%+. The Russell 2000 small cap bored us at +0.3% vs +1.3%. Records were again set in the Dow, S&P 500 and while the Nasdaq indices had ‘rally’ highs (neither near the levels of the dotcom boom), the 100 rose just 0.2% (6.6 index points led by GOOG +6.6; MSFT +2.4 and INTC and ORCL each up 1+. BUT AAPL lost TWELVE points while gainers beat losers by 7:3. Nothing to be proud of here, especially when we are at nosebleed levels. Meanwhile, NYSE Volume rose slightly again to an average 3.66B shares vs 3.43B from 2.86B shares – worst of year! REAL trades on the floor also rose to an average 738M shares vs 700M vs 594M, lowest since April 8! With tomorrow’s options expiry rapidly approaching the VIX has risen, albeit slightly for the last two sessions but remains low.

So let’s see what else happened:

*Dow Transports +0.8% vs +1.9% vs -0.5% vs -1.1% vs +0.2%; Russell 2000 +0.3% vs +1.3%! vs -0.1% vs -0.4% vs +0.1; Dow Utilities +0.7%! vs +0.5% vs -0.6% vs -1.5% vs -1.2%; S&P 500 +0.5% vs +1% vs flat vs -0.4% vs +0.4%; Nasdaq Composite +0.3% vs +0.9% vs +0.1% vs -0.1% vs +0.5%, NDQ 100 +0.2% vs +0.5% vs flat vs -0.2% vs +0.5% vs -0.1%, Dow 30 +0.4% vs +0.8% vs -0.2% vs -0.2% vs +0.3%.

*NYSE Volume rose to an average 3.66B vs 3.43B vs 2.86B (low for the year) vs 3.49B vs 3.55B vs 3.3B vs 3.05B. REAL NYSE Volume also rose to an average 738M shares vs  700M vs 594M (lowest since 4/8) vs 670M vs 727M (highest since 4/30). 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 727M 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 75 have been up and just 21 down…there have been 20 mixed sessions…hint: low volume rallies!!! …and lately low volume selloffs.

1. new 52 week highs had ranged from 121-793, They set another new high of 864! vs 793 vs 462 vs 613 vs 769 (recent range 100-864). New lows however rose sharply to 66 vs 38 vs 39 vs 37 vs 45 vs 36 vs 32 (recent range 29-237).
2. Advance/Declines were slightly positive: +1.2x vs +2.1x vs -1.5x vs -1.8x vs +1.9x (recent range -7.1x to +4.4x) on NYSE and +1.3x vs +2.3x vs -1.2x vs -1.5x vs +1.4x (recent -3.5x to +3x). Breadth was similar: +2x vs +3.3x vs -1.4x vs -1.9x vs +2.3x (recent -10.5x to +6.4x!!!) on NYSE and +1.8x vs +2.4x vs +1.2x vs -1.1x vs +1.8x (recent -12.8x to +6.2x)  
3. NYSE Financials rose 0.7% vs +0.9% vs 0.3% vs -0.8% vs + 0.6%. BofA rose another 0.8% to $13.44 +.10, now there are four $13 plus days since 4/11/11!
4. Volatility (S&P VIX) rose modestly  for a second day, again ignoring the rally most likely due to Friday’s options expiration! The range since 4/12 11.99 (multi year low) to 18.20, and it is below the 40/50 day (13.37/13.61) and the 200 day (15.05)…ytd the range is 19.28 (2/25!) to 11.05 (3/14) – 12 mo. ave 16.10!

European equities weak, Asia mixed: UK -0.1% vs flat vs +0.2% vs +0.5% vs -0.1%; France +0.4% vs –0.1% vs flat vs +1% vs -0.9%; Germany -0.1% vs -0.1% vs +0.3% vs +0.7% vs -0.2%; Japan -0.4% vs +2.3%! vs -0.2% vs +2.9%! vs -0.7%; Hang Seng +0.2% vs +0.5% vs -0.3% vs +0.5% vs -0.1%; Korea +0.8% vs +0.1% vs +1% vs -1.8% vs +1.2%; India +0.2% vs +2.5%!!! vs +0.2% vs +0.7% vs -0.3%. U.S. stock futures little changed??? in another very narrow trading range session: DOW -6; SPX -1.80; NDQ +5.50! Market opening off slightly.

Bonds had a meaningless rally yesterday but it beat tanking as it has done since Bernanke spoke – the 30 yr is still ABOVE 3%…but gained 5/8 while 10’s rose by 3/8, and are up again overnight: 10 yr Treasury 1.91% +1/4 (recent range 2.06% to 1.63%!!!), and the 30 yr’s 3.26% to 2.82%!!!, now 3.12% +5/8. The long TIP is 0.72% +1/8 – still performing miserably since setting a new (record?) low of 0.36% on 4/5. It took out the recent high yield of 0.69% on 5/13 with a 0.74% Tuesday! Libor update: 0.274% 3 mos., 0.420% 6 mos. Foreign bond yields lower across the board…especially Greece and Portugal! Germany 1.35% -3; UK 1.88% -4; France 1.90% -4, Italy 3.96% -5; Spain 4.25% -7; Portugal 5.19% -12!; Greece 8.47% -13! vs 8.52% -56!!! vs 9.12%!!! -35!!! vs 9.44% vs 9.43% (recent range now 8.47%!!!-12.57%!). Japan 0.85% -1.  

Gold tanked again closing lower for a fourth day at $1396.20 -$28.30!!! with an intraday low of $1386.40, lowest since 4/17!. Last Friday’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 way above at the 40 day/50 day: $1496-1515 – still falling! Overnight it is tanking again at $1376.00 -$20.40 with a session low of $1368!!! Crude closed little changed at $94.30 +.09, six 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 ($93.37), 50 day ($93.16) and 200 day ($92.15). Overnight it is $94.61 +.31.  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:

While TB is a total disbeliever in the rally – for economic reasons…as well as domination by high frequency traders while the SEC stands idly by, over time the best markets have been in ‘slow growth, LOW inflation’ environments. We certainly have that along with record earnings. This begs the question: with so many unemployed, dropping out of the labor pool, and underutilized, how long can that go on. While the p/e’s are manageable they could quickly soar to excessive if earnings growth declines sharply as one would reasonably expect. Look to today and tomorrow for clues on the continuation of the rally…and don’t fight the tape BUT also, don’t jump on a fast-moving train!

Meanwhile the government and both parties remain out of control and serving their and their big contributors interests, not those of the American people. We are in a mess, one of our own making with the help of the U.S. Supreme Court!

Have a great day!

TB

Bloomberg Quote of the Day: “Failure is not fatal, but failure to change might be.” – John Wooden  

Bloomberg Top Stories:

*Industrial Production in U.S. Declines by Most in Eight Months on Cutbacks – stocks rally again? Hmmm…let’ see how today goes. -0.5% vs a revised +0.3% in March

*New York Area Manufacturing Unexpectedly Contracted in May on Fewer Orders – !!!

*Congress Focuses Inquiries on IRS Delay in Disclosing Tea Party Scrutiny

*IRS Sent Same Letter to Democratic Groups That Fueled Tea Party Row- politics!!!

Stocks staged a strong rally yesterday – once again at the expense of bonds. Dow Transports were best (+1.9%), followed by the Russell 2000 small cap +1.3%. But records were set in the Dow, S&P 500 and the Nasdaq indices had ‘rally’ highs (neither near the levels of the dotcom boom. Meanwhile, NYSE Volume rose from 2.86B shares – taking out 4/29’s 2.88B shares for worst of year – to 3.43B shares, almost average. REAL trades on the floor also rose to a sub-par 700M shares vs 594M shares, lowest since April 8! Thus the ‘selloff’ was manageable and not conclusive but Friday is options expiration so who knows?

But the rally does appear to be running out of steam in a wave of mixed economic reports and slow job growth and worse: a lack of earnings! Recall: Friday is options expiration!

So let’s see what else happened:

*Dow Transports +1.9%! vs -0.5% vs -1.1% vs +0.2% vs +1.6% vs +1.3% vs +2.1%; Russell 2000 +1.3%! vs -0.1% vs -0.4% vs +0.1% vs +0.8% vs +0.6% vs +1.6%; Dow Utilities +0.5% vs -0.6% vs -1.5% vs -1.2% vs +0.9% vs -1.4%; S&P 500 +1% vs flat vs -0.4% vs +0.4% vs +0.5%; Nasdaq Composite +0.9% vs +01% vs -0.1% vs +0.5% vs +0.1%, NDQ 100 +0.5% vs flat vs -0.2% vs +0.5% vs -0.1% vs +0.4%, Dow 30 +0.8% vs -0.2% vs -0.2% vs +0.3% vs +0.6% vs +1%.

*NYSE Volume rose to an average 3.43B shares vs 2.86B (low for the year) vs 3.49B shares vs 3.55B vs 3.3B vs 3.05B. REAL NYSE Volume also rose but to a below average 700M shares vs 594M (lowest since 4/8) vs 670M vs 727M (highest since 4/30) vs 636M vs 619M – again, where’s 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 727M 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 74 have been up and just 21 down…there have been 20 mixed sessions…hint: low volume rallies!!! Real buyers???

1. new 52 week highs had ranged from 121-722, They set a new high of 793!!! vs 462 vs 613 vs 769 vs 722 vs 499 (recent range 100-793). New lows were steady at 38 vs 39 vs 37 vs 45 vs 36 vs 32 (recent range 29-237).
2. Advance/Declines were positive: +2.1x vs -1.5x vs -1.8x vs +1.9x vs +2.9 (recent range -7.1x to +4.4x) on NYSE and +2.3x vs -1.2x vs -1.5x vs +1.4x vs +1.7x (recent -3.5x to +3x). Breadth was similar: +3.3x vs -1.4x vs -1.9x vs +2.3x vs +2.5x (recent -10.5x to +6.4x!!!) on NYSE and +2.4x vs +1.2x vs -1.1x vs +1.8x vs -1.1x (recent -12.8x to +6.2x)  
3. NYSE Financials rose 0.9% vs 0.3% vs -0.8% vs + 0.6% vs  +0.6%. BofA rose 2.8% to $13.34 +.36, now just three $13 plus days since 4/11/11!
4. Volatility (S&P VIX) rose modestly ignoring the rally most likely due to Friday’s options expiration!The range since 4/12 11.99 (multi year low) to 18.20, and it is below the 40/50 day (13.37/13.61) and the 200 day (15.05)…ytd the range is 19.28 (2/25!) to 11.05 (3/14) – 12 mo. ave 16.10!

European equities mixed, Asia better: UK flat vs +0.2% vs +0.5% vs -0.1% vs +0.2%; France –0.1% vs flat vs +1% vs -0.9% vs +0.8%; Germany -0.1% vs +0.3% vs +0.7% vs -0.2% vs +0.6%; Japan +2.3%! vs -0.2% vs +2.9%! vs -0.7% vs +0.7% vs +3.6%!; Hang Seng +0.5% vs -0.3% vs +0.5% vs -0.1% vs +0.9%; Korea +0.1% vs +1% vs -1.8% vs +1.2% vs +0.1%; India +2.5%!!! vs +0.2% vs +0.7% vs -0.3% vs +0.5% vs +1.1%. U.S. stock futures little changed in another very narrow trading range session: DOW -12; SPX -3; NDQ -3.50.

Bonds opened better and advanced throughout the morning then tanked from the highs and closes weaker but are trying again overnight – the 30 yr is still ABOVE 3%…one heck of an ‘E’ ticket ride!!!!: 10 yr Treasury 1.94% +1/4 (recent range 2.06% to 1.63%!!!), and the 30 yr’s 3.26% to 2.82%!!!, now 3.16% +9/16. The long TIP is 0.73% +1/8 – still performing miserably since setting a new (record?) low of 0.36% on 4/5. It took out the recent high yield of 0.69% on 5/13 with a 0.74% yesterday! Libor update: 0.274% 3 mos., 0.421% 6 mos. – both dropping aqain! Foreign bond yields mixed. Greece still plunging!!! Germany 1.37% -1; UK 1.90% -1; France 1.93% -2, Italy 4.04% +3; Spain 4.37% +5; Portugal 5.36% -2; Greece 8.52% -56!!! Vs 9.12%!!! -35!!! vs 9.44% vs 9.43% vs 9.44% vs 9.53% (recent range now 8.52%!!!-12.57%!). Japan 0.85% -1.  

Gold closed lower for a third day at $1424.50 -$9.90 with an intraday low of $1419.70. Last Friday’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 way above at the 40 day/50 day: $1497-1515 – still falling! Overnight it is weak again at $1411.30 -$13.20 with a session low of $1404.60. Crude also closed lower at $94.21 -.96, five 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 ($93.37), 50 day ($93.16) and 200 day ($92.15). Overnight it is $93.01 -$1.20 with a session low of $92.92.  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:

It is hard to imagine the strength of stocks and the accompanying weakness in bonds since Bernanke spoke to the Fed last week. Conclusion: stocks will continue to rally – until they don’t. P/E’s aren’t excessive unless the strong earnings aren’t sustainable!

Have a great day!

TB

Bloomberg Quote of the Day: “We have forty million reasons for failure, but not a single excuse.” – Rudyard Kipling  

Bloomberg Top Stories:

*ECB Picks Fight With Germany on Rules for Handling Failing Banks in Europe

*Stocks in Europe Decline With Metals on China Concern as Yen Strengthens

*Lehman Reaching Beyond Grave to Grab Millions From Nonprofits Over Swaps

*Shopping for Ratings Revived in Asset-Backed Bond Rebound

*Pimco Pares Risky Holdings on View Monetary Easing Distorts Global Markets

*Banks on Verge of Collapse in Denmark Granted Extra Time as FSA Steps Back

*Shortest U.S. Rates Drop Below Zero Amid Cash Infusion

*Stockbrokers Go Gray as Youth Proves Unsustainable Without Any Cold Calls

*Russia Says CIA Agent Detained During Recruitment Attempt, IFX Reports

*IRS Set for Grilling in Congress as U.S. Lawmakers Query Tea Party Focus

*Obama Blames Gridlock on Republicans in Seeking Donors at N.Y. Fundraiser

*Cameron’s Bid to Defuse Rebellion on EU Draws Coalition Partner Criticism  

Stocks staged a selloff yesterday – of sorts! Dow Utilities (-0.6%) were worst, followed by the hot Dow Transports (-0.5%), while the S&P 500 and Nasdaq 100 were FLAT. The Composite was up just 0.1% and the Dow down 0.2%. Meanwhile, NYSE Volume plunged to 2.86B shares – taking out 4/29’s 2.88B shares for worst of year! REAL trades on the floor also fell to 594M shares, lowest since April 8! Thus the ‘selloff’ was manageable and not conclusive but Friday is options expiration so who knows? One reason may be the same ‘real’ investors who have not participated in the rally in a meaningful manner are probably doing the same and have shown no need to sell given the magnitude of the rally and the records that have been broken…along with generally solid earnings reports.

But the rally does appear to be running out of steam in a wave of mixed economic reports and slow job growth and worse: earnings!

So let’s see what else happened:

*Dow Transports -0.5% vs -1.1% vs +0.2% vs +1.6% vs +1.3% vs +2.1%; Russell 2000 -0.1% vs -0.4% vs +0.1% vs +0.8% vs +0.6% vs +1.6%; Dow Utilities -0.6% vs -1.5% vs -1.2% vs +0.9% vs -1.4%; S&P 500 FLAT vs -0.4% vs +0.4% vs +0.5% vs +0.2%; Nasdaq Composite +01% vs -0.1% vs +0.5% vs +0.1% vs +0.4%, NDQ 100 FLAT vs -0.2% vs +0.5% vs -0.1% vs +0.4%, Dow 30 -0.2% vs -0.2% vs +0.3% vs +0.6% vs +1% – boring Dow!

*NYSE Volume plunged to 2.86B shares taking out 4/29’s 2.88B for low of the year vs 3.49B shares vs 3.55B vs 3.3B vs 3.05B. REAL NYSE Volume also plunged to a way below average 594M shares (lowest since 4/8) vs 670M vs 727M (highest since 4/30) vs 636M vs 619M – where’s 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 727M 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 21 down…there have been 20 mixed sessions…hint: low volume rallies!!! Real buyers???

1. new 52 week highs have ranged from 121-722, They fell sharply to 462 vs 613 vs 769 vs 722 vs 499 (recent range 100-786). New lows were steady at 39 vs 37 vs 45 vs 36 vs 32 (recent range 29-237).
2. Advance/Declines were negative: -1.5x vs -1.8x vs +1.9x vs +2.9x vs +1.5x vs +2.6x (recent range -7.1x to +4.4x) on NYSE and -1.2x vs -1.5x vs +1.4x vs +1.7x vs +1.5x (recent -3.5x to +3x). Breadth was mixed: -1.4x vs -1.9x vs +2.3x vs +2.5x vs +2.2x (recent -10.5x to +6.4x!!!) on NYSE and +1.2x! vs -1.1x vs +1.8x vs -1.1x vs +1.5x (recent -12.8x to +6.2x)  
3. NYSE Financials rose 0.3% vs -0.8% vs + 0.6% vs  +0.6% vs +0.6% vs +0.6%. BofA declined by 0.4% to $12.98 posting just two $13 plus days since 4/11/11!
4. Volatility (S&P VIX) dipped modestly to 12.55 -.04, in another narrow range session 12.49-12.87, compare to recent 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 (13.40/13.62) and the 200 day (15.09)…ytd the range is 19.28 (2/25!) to 11.05 (3/14) – 12 mo. ave 16.14!

Global equities mixed: UK +0.2% vs +0.5% vs -0.1% vs +0.2% vs +0.4%; France –flat vs +1% vs -0.9%! vs +0.8% vs +0.7%; Germany +0.3% vs +0.7% vs -0.2% vs +0.6% vs +0.9%; Japan -0.2% vs +2.9%!!! vs -0.7% vs +0.7% vs +3.6%!!!; Hang Seng -0.3% vs +0.5% vs -0.1% vs +0.9%; Korea +1% vs -1.8% vs +1.2% vs +0.1% vs -0.4%; India +0.2% vs +0.7% vs -0.3% vs +0.5% vs +1.1%. U.S. stock futures little changed in a very narrow trading range session: DOW +4; SPX +1.40; NDQ -0.50.

Bonds cannot stop their decline even on a day when stocks did poorly but modestly higher overnight – the 30 yr is still ABOVE 3%…one heck of an ‘E’ ticket ride!!!!: 10 yr Treasury 1.90% +3/16 vs 1.92 -3/16 (recent range 2.06% to 1.63%!!!), and the 30 yr’s 3.26% to 2.82%!!!, now 3.11% +7/16 vs 3.13% -11/16. The long TIP is 0.67% +1/4 vs 0.68% -13/16 – still performing miserably since setting a new (record?) low of 0.36% on 4/5. The recent high yield was 0.69% on 5/13! Libor update: 0.275% 3 mos., 0.423% 6 mos. Foreign bond yields slightly lower after being hit hard yesterday ex-Japan, Greece plunging again!!!: Germany 1.35% -1; UK 1.87% -1; France 1.92% -2, Italy 3.96% -1; Spain 4.28% -1; Portugal 5.39% -1; Greece 9.12%!!! -35!!! vs 9.44% vs 9.43% vs 9.44% vs 9.53% (recent range now 9.12%!!!-12.57%!). Japan 0.85% +11!!!  

Gold closed slightly lower for a second day at $1434.30 -$2.30, on an ‘inside’ session with a very narrow range. Last Friday’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 way above at the 40 day/50 day: $1506-1521 – still falling! Overnight it is weak again at $1426.20 -$8.10 with a session low of $1419.70. Crude also had a narrow inside day and closed lower at $95.17 -.87, four 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 ($93.30), 50 day ($93.01) and 200 day ($92.10). Overnight it is $94.85 -.32.  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 have become a country that is horribly conflicted. Everything is politicized. It is ‘he said, she said’ from Benghazi to the IRS scandal (note the IRS Commissioner is serving on an interim basis since the Senate is again stonewalling all nominations…note he was appointed however in 2008 by Bush!…and we can now add Justice Dept. on phone taps – in the name of national security.

All of this at a time when the economy is flailing and government is hamstrung by a minority in the House who refuse any and all revenue increases and are once again threatening on the debt ceiling. “We have a deal” is becoming a phrase of defeat as there are no ‘deal’s only angst and outrage. Where is ‘our’ collective outrage at our overpaid, unpopular government?

Have a great day!

TB

Bloomberg Quote of the Day: “Do not fear mistakes. You will know failure. Continue to reach out.” – Benjamin Franklin

Labor market trends are improving with the recent drop in claims and strong gains in nonfarm payroll employment.  However, manufacturing activity is weakening. Despite stronger real consumer spending growth in Q1, recent Motor Vehicle sales numbers suggest deceleration in consumer spending in the current quarter.   Inflation remains subdued.

This week’s economic calendar is packed with important indicators. The highlight of the week will be the April Retail Sales (Monday), April PPI (Wednesday) and April CPI (Thursday).

We will also get March Business Inventories (Monday), April Import & Export Prices (Tuesday), April Empire State Manufacturing and April Industrial Production (Wednesday), April Housing Starts and April Philadelphia Fed Survey (Thursday), and April Leading Indicators and May Preliminary Consumer Sentiment (Friday). Courtesy of Economic Advisory Service.

Bloomberg Top Stories:

*U.S. Retail Sales Unexpectedly Climb in Sign Consumers Gaining Confidence – maybe!

*Europe Stocks Pare Gains With S&P 500 Futures on Retail Sales (?) as Yen Falls

*Euro Gain Aided by Trade Surplus Topping China for First Time Since 2004

*America Animal Spirits Since ’07 Proving Superior to Europe Mired in Slump

*Israel Cuts Key Interest Rate, Will Buy Foreign Currency to Rein in Shekel

*Euro Recession Seen Persisting to Longest Since Single Currency’s Creation

*Draghi Gets Boost for Bond Market as His Tool Box Empties

*Bull Market Matches 1990s Interest-Fired Returns With Valuations 28% Lower

*Congressional Committees Set to Probe IRS Targeting of Tea Party Groups

It was just your typical day on Friday – in an era of High Freak trading that is. Friday is options expiration however so let the fireworks began. Have an opiniont but don’t fight the tape…nor get enamored with it even if Prof. Siegel sees Dow 17k by yearend.  I’m not even going to try to analyze the activity other than to say volume was WEAK!

So let’s see what else happened:

*Dow Transports +0.6% vs -1.1% vs +0.2% vs +1.6% vs +1.3% vs +2.1%; Russell 2000 +0.9% vs -0.4% vs +0.1% vs +0.8% vs +0.6%; Dow Utilities +0.2% vs -1.5% vs -1.2% vs +0.9% vs -1.4%; S&P 500 +0.4% vs -0.4% vs +0.4% vs +0.5% vs +0.2%; Nasdaq Composite +0.8% vs -0.1% vs +0.5% vs +0.1% vs +0.4%, NDQ 100 +0.7% vs -0.2% vs +0.5% vs -0.1% vs +0.4%, Dow 30 +0.2% vs -0.2% vs +0.3% vs +0.6% vs +1%.

*NYSE Volume plunged to a well below average 3.09B shares vs 3.49B vs 3.55B vs 3.3B vs 3.05B vs 3.6B vs 3.5B vs 3.67B vs 2.88B shares (now weakest in 23 sessions!!!). REAL NYSE Volume also FELL to a well below average 630M shares vs 670M vs 727M (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 657M shares vs 720M vs 687M vs 859M vs 689M, and the week’s high was just 730M shares! 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 74 have been up and just 20 down…there have been 20 mixed sessions…hint: low volume rallies!!! Real buyers???

1. new 52 week highs have recently ranged from 100-722, They fell again to 513 vs 613 vs 769 vs 722 vs 499. New lows rose slightly to 52 vs 37 vs 45 vs 36 vs 32. Recent range is 29 to 237.
2. Advance/Declines were modestly positive: +1.7x vs -1.8x vs +1.9x vs +2.9x vs +1.5x (compare to +4x, +2.6x, -3.5x, +4.4x, -7.1x) on NYSE and +2x vs -1.5x vs +1.4x vs +1.7x vs +1.5x on Nasdaq. Breadth was similar: +2x vs -1.9x vs +2.3x vs +2.5x vs +2.2x (also compare +3.4x, 3.9x, -10.5x!!!, +6.4x, -7.2x) on NYSE and +3.5x! vs -1.1x vs +1.8x vs -1.1x (compare +3x, -3x!, -5.2x, +6.2x, -12.8x.  
3. NYSE Financials +0.3% vs -0.8% vs + 0.6% vs  +0.6% vs +0.6%. BofA rose again by 0.9% to $13.02 +.11 just below the one $13.05 (high since 4/13/11!)
4. Volatility (S&P VIX) fell again to 12.59 -.54…too low? 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 slightly weaker, ex-Japan/Korea: UK -0.1% vs +0.5% vs -0.1% vs +0.2% vs +0.4%; France -0.2% vs +0.9% vs -0.9% vs +0.8% vs +0.7%; Germany -0.1% vs +0.7% vs -0.2% vs +0.6% vs +0.9%; Japan +1.2%! vs +2.9%!!! vs -0.7% vs +0.7% vs +3.6%!!!; Hang Seng -1.4%! vs +0.5% vs -0.1% vs +0.9% vs +0.6%; Korea +0.2% vs -1.8% vs +1.2% vs +0.1% vs -0.4%; India -2.1%!!! vs +0.7% vs -0.3% vs +0.5% vs +1.1%. U.S. stock futures slightly lower in a very narrow trading range session: DOW -21; SPX -2.90; NDQ -3.25. Stocks opening lower: Dow-31; S&P -2.55; COMP -2

Bonds slaughtered again on Friday and weaker overnight – the 30 yr is WELL ABOVE 3%…one heck of an ‘E’ ticket ride!!!!: 10 yr Treasury 1.92% -1/4 (recent range 2.06% to 1.63%!!!), and the 30 yr’s 3.26% to 2.82%!!!, now 3.13% -5/8. The long TIP is at a new recent high of 0.68% -11/16– and 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., 0.426% 6 mos. Foreign bond yields little changed: Germany 1.35% -3; UK 1.89% -1; France 1.93% +1, Italy 3.95% +7; Spain 4.25% +7; Portugal 5.39% +1; Greece 9.4% +3 vs 9.40% 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 9.40%!!!-12.57%!)..   

Gold closed sharply lower, yesterday at $1436.60 -$32. with a low of $1418.50, lowest since 4/24. 5/3’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 way above at the 40 day/50 day: $1510-1524. Overnight it is weaker at $1431.80 -$4.8. Crude also closed lower at $96.04 -.35, four 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 ($93.26), 50 day ($92.92) and 200 day ($92.07). Overnight it is $95.38 -.66.  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:

Is there anything left in America that hasn’t been politicized? Our Congressional leaders (sic) are totally irresponsible and intent on making us – as a country – look bad in the eyes of the world.

Benghazi worse than Watergate? Pullease! Sure a coverup, but it certainly would have been exploited…not justifying it but…consider how a GOP Congress allowed Bush, Cheney, and Rumsfeld, a free ride on a stupid, costly, and Middle East destabilizing war on horrible (a compliment) intelligence from sources only interested in their personal gains…which included monetary.

Now an IRS scandal…in what has proven to be SOP. True, it is horribly wrong, but so is two brothers who set up the Tea Party to further their own greedy interests.

There is now black or white…merely 50 shades of gray…and counting.

Sincerely,

TB

Bloomberg Quote of the Day: “Every journalist has a novel in him, which is an excellent place for it.” – Russell Lynes

Bloomberg Top Stories:

*Stocks in Europe Rise while Treasuries Fall as Yen Slips to Four-Year Low – !!!

*Central Banks Keep Easing as 511 Rate Cuts Fail to Spur World’s Economies – ditto!

*Sobel Plays Bad Cop to U.S. Treasury’s Lew Amid G-7 Debate Over Austerity – ugh!

*Buffett’s CEOs Spending $12.1 Billion Out of Spotlight Match boss on Heinz

*Stressed Irish Banks Pose Tough Hurdle on Bailout Exit Route – still stressed!

*No Lehman Moment as Six Biggest Banks Seen Too Big at $102 Billion to Fail – and that folks, is one sad commentary…

*Obama’s Second-Term Agenda Complicated by Delay Over Cabinet Confirmations – is this the kind of government you want? Are proud of? Or a party to be proud of? Not TB!

*U.S. Urges Russia to Avoid Destabilizing Weapons Sale to Syrian Regimes

The beat keeps on – ad nauseum. It seems the more weak signs in the economy the more stocks, or those running them, revel in it.  The best performer of late, Dow Transports, finally fell from its perch following a weak gain on Wednesday – is this a warning flag? Dow Utilities flopped again falling the most, 1.5% but look at the ever- headshaking NDQ 100: Down just 0.2% or 7 points but with just 46 advancing and 54 down. APPL is even more volatile, this time losing 5.7 index points followed by MSFT -2.4 (note they were the two biggest gainers on Wednesday!).  Only two stocks (NWSA/ORCL) gained more than one index point. Instant insanity!!! Now all the indices are at record highs…eking out slight new highs each day…until they don’t! You can buy in here if you like…but not with TB’s money!!!

So let’s see what else happened:

*Dow Transports DOWN 1.1% vs +0.2% vs +1.6% vs +1.3% vs +2.1% vs +1% vs -2.3%!!!; Russell 2000 DOWN 0.4% vs +0.1% vs +0.8% vs +0.6% vs +1.6% vs +1.7% vs -2.3%; Dow Utilities DOWN 1.5% vs -1.2%! vs +0.9% vs -1.4% vs -0.3% vs -0.2% vs -1%! S&P 500 -0.4% vs +0.4% vs +0.5% vs +0.2% vs +1.1% vs +0.9% vs -0.9%; Nasdaq Composite -0.1% vs +0.5% vs +0.1% vs +0.4% vs +1.1% vs +1.3% vs -0.9%, NDQ 100 -0.2% vs +0.5% vs -0.1%? vs +0.4% vs +1.1% vs +1.3% vs .-0.5%, Dow 30 -0.2% vs +0.3% vs +0.6% vs +1% vs +0.9% vs -0.9%.

*NYSE Volume slipped again to a below average 3.4B shares vs 3.55B 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 FELL to a well below average 670M shares vs 727M (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 20 down…there have been 20 mixed sessions…hint: low volume rallies!!! Real buyers???

1. new 52 week highs have ranged from 121-722, They fell to 613 vs 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 dipped to 37 vs 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.
2. Advance/Declines were negative: -1.8x vs +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 -1.5x vs +1.4x vs +1.7x vs +1.5x vs +2.8x vs +3x vs -3.5x. Breadth was similar: -1.9x vs +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 -1.1x vs +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.  
3. NYSE Financials fell 0.8% vs + 0.6% vs  +0.6% vs +0.6% vs +0.6% vs +0.9% vs +1% vs -1%!. BofA declined by 0.8% to $12.91 -.14 after posting just one  $13.05 (high since 4/13/11!) +.15
4. Volatility (S&P VIX) rose modestly to 13.13 +.47, in a slightly wider range session 12.78-13.53, 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 stronger, ex-Korea???: UK +0.5% vs -0.1% vs +0.2% vs +0.4% vs +0.9%!; France +0.96% vs -0.9%! vs +0.8% vs +0.7% vs -0.2%; Germany +0.7% vs -0.2% vs +0.6% vs +0.9% vs flat; Japan +2.9%!!! vs -0.7% vs +0.7% vs +3.6%!!! vs closed; Hang Seng +0.5% vs -0.1% vs +0.9% vs +0.6%; Korea DOWN 1.8%!!! vs +1.2%!!! vs +0.1% vs -0.4% vs -0.2%; India +0.7% vs -0.3% vs +0.5% vs +1.1% vs +0.5%. U.S. stock futures slightly higher in yet another narrow trading range session: DOW +35; SPX +2.40; NDQ +5.25.

Bonds don’t stand a fighting chance as their feeble attempt at a rally yesterday failed them even with a weak stock market  – especially TIPS!!! …and they are all up modestly overnight – the 30 yr is back ABOVE 3%…one heck of an ‘E’ ticket ride!!!!: 10 yr Treasury 1.85% -5/16 (recent range 2.06% to 1.63%!!!), and the 30 yr’s 3.26% to 2.82%!!!, now 3.05% -11/16. The long TIP is back to 0.63% -3/4 – and 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., 0.426% 6 mos. Foreign bond yields higher across the board but problem countries yields still very low: Germany 1.33% +7; UK 1.84% +6; France 1.91% +7, Italy 3.90% +2; Spain 4.19% +3; Portugal 5.37% +1; Greece 9.44% +2 vs 9.43% 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 9.42%!!!-12.57%!)..   

Gold closed  slightly lower, yesterday at $1468.60 -$5.10 in dull trading. Last Friday’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 way above at the 40 day/50 day: $1510-1525 – still falling! Overnight it is being slammed at $1435.30 -$33.30 with a session low of $1430. Crude closed a tad lower at $96.39 -.23, three 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 ($93.26), 50 day ($93.92) and 200 day ($92.07), all rising again. Overnight it is $95.49 -.90.  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:

The stock market refuses to give up the ghost and a ghastly ghost it is. In what kind of hell do stocks rally when the government is in chaos and the economy is showing signs of slowing even further? You have to believe…but…TB doesn’t! Sell in May???

Sincerely,

TB

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 17^th 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???

1. 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.
2. 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.  
3. NYSE Financials rose 0.6% for a 3^rd 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?
4. 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

Bloomberg Quote of the Day: “I was gratified to be able to answer promptly. I said, ‘I don’t know.” – Mark Twain

Bloomberg Top Stories:

*Hedge Funds Rush to $108 Billion Debt Market Trading Where Wall Street Once Tread

*European Stocks Advance With Metals After Economic Reports as Kiwi Slips

*Currency Rally Drives New Zealand Kiwi Sale as Sweden Weighs Krona Stance

*Bank of America’s Traders Have Perfect Quarter as Morgan Stanley Stumbles

*Paulson’ Bid to Resurrect Reputation is Undermined by Gold Fix Gone Bad – Hah!

*Russia to Join U.S. in Promoting Political Solution on Syria’s Civil War

*Littoral Combat Ships See Delivery Delays of Up to a Year, U.S. Navy Says – bad!!!

Another day of rally as the stock market continues to ignore signs of a weakening, slow growth economy. Record highs on the Dow, and S&P and the Transports continue to beat everything as they advance like a house on fire. But where is the volume? Below average reported on total NYSE trades and especially on trades executed on the floor. Despite the rally, the VIX rose slightly – put protection is incredibly cheap, and Advance/Declines are modestly positive while Breadth on the Nasdaq was slightly negative. This is a rally without buyers but driven as all have been this year by algorithmic computer generated trades. Caution: they have no memory or lasting effect.

Dow Transports continue to lead – unusual when factory orders declined and shipments are not strong. It rose by 99 points or 1.6% vs 79 points 1.3% vs 125 points or 2.1% – that is up 6% since May 1^st. Remember: trees don’t grow to the sky.

Sometime before this months options expiration on May 17^th there will be a sharp pullback. How far? Dunno, but the lack of REAL buyers suggests it will. Don’t fight it though – yet!

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.

Yesterday, the Nasdaq 100 actually fell by 0.1% despite the broadbased rally. It lost 2.5 points but with 58/41 advancing…but….only two stocks (DTV/INTC) rose by 1 point or more and 2 was best, and five stocks lost from 1-3 points for a combined loss of 11 – make sense? Not to this writer!

So let’s see what else happened:

*Dow Transports +1.6% vs +1.3% vs +2.1% vs+1% vs -2.3%!!!; Russell 2000 +0.8% vs +0.6% vs +1.6% vs +1.7% vs -2.3%; Dow Utilities +0.9% vs -1.4% vs -0.3% vs -0.2% vs -1%! S&P 500 +0.5% vs +0.2% vs +1.1% vs +0.9% vs -0.9%; Nasdaq Composite +0.1%? vs +0.4% vs +1.1% vs +1.3% vs -0.9%, NDQ 100 -0.1%? vs +0.4% vs +1.1% vs +1.3% vs .-0.5%, Dow 30 +0.6% vs +1% vs +0.9% vs -0.9%.

*NYSE Volume rose slightly to a still weak 3.3B shares vs 3.05B vs 3.6B vs 3.5B vs 3.67B vs 2.88B shares (weakest in 16 sessions!!!). REAL NYSE Volume also rose to a still weak 636M shares 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 72 have been up and just 19 down…there have been 20 mixed sessions…hint: low volume rallies!!! Real buyers???

1. new 52 week highs had ranged from 121-709, They ROSE again to 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 inched up to 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.
2. Advance/Declines were positive: +2.9x vs +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 +1.7x vs +1.5x vs +2.8x vs +3x vs -3.5x. Breadth was mixed: +2.5x vs +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 -1.1x! vs +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 +0.6% vs +0.9% vs +1% vs -1%!. BofA only ‘most active’ financial rose 0.1% to $12.89 +.01.
4. Volatility (S&P VIX) ROSE slightly to 12.84 +.18, with a slightly wider range of  12.49-12.96, 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 rallying again: UK +0.2% vs +0.4% vs +0.9%! vs +0.7% vs -0.2%; France +0.8% vs +0.7% vs -0.2% vs +0.7% vs -0.3%; Germany +0.6% vs +0.9% vs flat vs +0.9% vs +0.4%; Japan +0.7% vs +3.6%!!! vs closed vs -0.8%! vs -0.8%; Hang Seng +0.9% vs +0.6% vs +1% vs +0.1% vs -0.3%; Korea +0.1% vs -0.4% vs -0.2% vs +0.4% vs -0.3% vs closed; India +0.5% vs +1.1% vs +0.5% vs -0.8% vs +1.2%. U.S. stock futures slightly higher in another narrow trading range: DOW +12; SPX +0.90; NDQ +3. Losing steam???

Bonds continue to be slaughtered in the wake of the stock market rally and again overnight – the 30 yr is back above 3%…one heck of an ‘E’ ticket ride!!!!: 10 yr Treasury 1.79% -1/8 (recent range 2.06% to 1.63%!!!), and the 30 yr’s 3.26% to 2.82%!!!, now 3.01% -3/8!!! The long TIP is now 0.59% -7/16 – 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: 0.237% 3 mos., 0.428% vs 0.425%, 6 mos.!!! Foreign bond yields universally lower – ex-Spain: Germany 1.27% -2; UK 1.77% -2; France 1.82% -1, Italy 3.85% -1; Spain 4.10% +2; Portugal 5.43% -2; Greece 9.44%!!! -3 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 9.53%!!!-12.57%!)..   

Gold closed sharply lower, leaving Friday’s high of $1487.20, highest since 4/12, out to dry and closed at $1448.80 -$19.20 with an intraday low of $1440.40!!! 4/16’s intraday low of $1321.50 – was lowest since Sept. ’10. Resistance remains way above at the 40 day/50 day: $1520-1533 – still falling! Overnight however, it is $1465.70 +$16.90 with a session high of $1469/50 Crude closed modestly lower at $95.62 -.54  a day after posting a new rally high of $97.17, nearing a 12 month high! It is well above Sup/Res at the 40 day ($92.98), 50 day ($92.69) and 200 day ($91.96), all starting to rise.. It is now $95.86 +.24.  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:

Can stocks continue to rally even amid size of our slow growth economy inching lower and wages stagnating while jobs are more scarce (JOLTS), and consumer debt is devoid of credit card growth? I’m just asking…

TB

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 17^th 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 2^nd 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

Bloomberg Quote of the Day: “Don’t be humble, you’re not that great.” – Golda Meir

This week’s economic calendar is fairly light. We will get March JOLTs Job Openings and March Consumer Credit (Tuesday), March Wholesale Trade (Thursday) and April Treasury Budget (Friday). Courtesy of Economic Advisory Service

Bloomberg Top Stories:

*Yen Weakens for a Third Day as S&P 500 Index Futures Trade Little Changed

*Dollar Seen Rising 9% Among Biggest Dealers Citing U.S. Economic Growth (sic)

*Hedge Fund Gold Bulls Split with Buffett as Traders Say ‘Sell’ After Rebound

*Housing Crash a Fading Memory as U.S. Mortgage Defaults Drop to 2007 Level – hah!

*JPMorgan Shareholders Urged to Split Dimon’s Role Following Trading Loss – how long has TB been saying Chmn/CEO is a conflict of interest in ANY corporation???

*Spanish Lending Pain Shows ECB Rate Cut Meaningless for Banks – do tell!

*Biggest Exodus Since Whitney Ignoring May Win-Streak History – May is fading!

*Europe Gauge Shows 15^th Month of Contraction as Retail Sales Fall

Say it…get it out of your system…TB was WRONG! Yes, he was, but the opening suggested that the shorts were set and forced to cover…also, as is the case with the High Freaks, they reversed – from short to long. How else can you explain a rally of 100 points in the first TWO minutes of trading…you don’t honestly believe that REAL buyers are in trading at that point…even on a payrolls report! The high of 15009 was reached just over an hour after that (+178) – the rest of the day was spent slipsliding with a close at 14974 (+142). Convinced of the validity? Not this trader! But wait there’s more…

Volume rose to just 3.6B shares from the 3.5B average of the prior two days, in fact the week’s high volume of 3.67B shares (not much better than an average day was) on Tuesday – monthend! As for shares traded on the NYSE they were just 716M, with 116M on the close, and the weeks averages was a weak 720M. Opening volume there was normal, not the surge created by the High Freaks on the electronic trading platforms. Advance/Declines and Breadth were positive but unimpressive.

So, it will sell off today? Not likely, but it could…but certainly before options expiration on May 17^th. Why? Only the headline data was good and that only due to it surpassing estimates. Hours worked declined, miniscule increases in hourly earnings, no new manufacturing jobs, a loss of 6k construction jobs…but retail? Wait…it gets better: those jobs are low paying and thanks to our brilliant economists who believe ‘a jobs a job’ they conveniently ignored the fact that many of those jobs were part-time, i.e no benefits and a result have having fewer full time workers (if you replace, or cut back, full time workers to part-time you increase the workforce but with negative economic value. As I wrote Friday: The Unemployment Rate declined to 7.5% vs 7.6%: recall last month the Labor Force declined by 496k! This week it rose by just 210k but ‘Household Employment’ which declined by 206K last month ROSE by 293k – do you believe that? Besides Household employment is a joke since you don’t even have to be paid or can ‘work’ on a computer for just ONE hour a week! Why do we bother with this nonsense? Because over time – not month to month – it does align with the establishment survey. Now look at REAL unemployment: Augmented (discouraged workers) 11.2% vs 11.4%!; now add in part-time for economic reasons and you get 13.9% vs 13.8% +0.1%!!!  

If it wasn’t so sick it would be laughable. Now ask yourself if this data…and it was all they had to trade on which was proven before the open by the surge in the futures immediately after the report posted. But there is more: then came Factory Orders. This is what Economic Advisory Service had to say: Factory orders declined sharply in March. This was the biggest monthly drop since August 2012.  Although factory orders had been growing since April 2009, the growth rate was slowing over the past 3 years and is now declining.  While still possibly influenced by sequestration, these data currently indicate that the recent softness in manufacturing activity and capital spending is likely to continue, at least for several more months. Also, the ISM Nor-Manufacturing survey showed a 4% decline and the previous day’s Manufacturing Survey showed slowing growth. Last Tuesday’s Chicago Fed Survey also showed slowing.

Now back to employment…if we continued to add the same number of jobs each month for two years we would be back to the levels of 2007. Oh, yeah, stocks are a screaming buy here…not!!!

The Nasdaq 100’s gain was vs +1.1% (identical to the S&P 500 and Composite!) vs -0.5% vs +0.7% It gained 33 points, half of which were in GILD, GOOG,AAPL(each +3.5+), and five others at 1+ each. Advancers ran 84:16.

So let’s see what else happened:

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

*NYSE Volume was slightly higher at 3.6B shares (on another big rally?) vs 3.5B shares vs 3.67B vs 2.88B shares (weakest in 16 sessions!!!). REAL NYSE Volume rose to a modest 716M shares vs 643M vs 697M vs 887M vs 599M shares (lowest since 4/8). Recent range is 975M (selloff) to 887M (rally). The average for the week was a weak 720M shares and last week was just 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 732M 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, and on trades of less than that 71 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, surged to 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 fell to 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 positive but not great: +2.6x vs +3.1x vs -2.6x vs +2x vs +2.8x vs -1.4x vs  +1.8x vs +1.9x vs +4x vs +1.4x vs +2.6x vs -1.2x vs -3.5x vs +4.4x vs -7.1x on NYSE and +2.8x vs +3x vs -3.5x! vs +1.5x +2.1x vs -1.6x vs +1.7x vs +1.3x vs +3.4x 0.7% vs +1.5% vs +0.3% vs +1.3% vs  -0.8% vs -1.8%! Breadth was also positive: +3.7x vs +3.1x vs -4.5x!!! vs +1.6x vs +3.4x vs -1.8x vs +2.2x vs +2.1x vs +3.9x vs +1.6x vs +2.3x vs -1.3x vs -10.5x!!! vs +6.4x vs -7.2x vs -2.2x on NYSE and +2.5x vs +2.9x vs -2.7x vs +1.9x vs +2.3x vs -1.1x vs +1.8x vs +1.5x vs +3x vs +2.5x vs +2.3x vs -3x! vs -5.2x vs +6.2x vs -12.8x!!! vs -1.4x .  
3. NYSE Financials rose by 0.9% vs 1% vs -1% vs +0.7% vs -0.1% vs +0.5%. BofA only ‘most active’ financial rose just 0.4% to $12.24 +.05 vs +0.4% vs -1.8% vs -0.6% vs -0.3%. Brokers rose 2.4% (GS +1.2%;MS +21%?). JPM fell by 0.9% while WFC rose by 0.9% and USB by 0.6%.
4. Volatility (S&P VIX) declined again to 12.85 -.74, with a range of 13.58-14.48 – identical to Thursday! The range for the last two 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 mixed: UK +0.9%! vs +0.7% vs -0.2% vs +0.7% vs -0.1%; France -0.2% vs +0.7% vs -0.3% vs +0.3% vs flat; Germany flat vs +0.9% vs +0.4% vs +0.5% vs +0.8%; Japan closed vs -0.8%! vs -0.8% vs -0.4% vs -0.2%; Hang Seng +1%! vs +0.1% vs -0.3% vs +0.7% vs +0.7%; Korea -0.2% vs +0.4% vs -0.3% vs closed vs +1.2%!; India +0.5% vs -0.8% vs +1.2%!!! vs closed vs +0.6%. U.S. stock futures little changed and in a VERY narrow trading range – indecisive!: DOW +5; SPX +0.80; NDQ +8.25 – will Friday be just one more in a string of low volume ‘one-day wonders’???

Bonds were totally destroyed on Friday and off slightly overnight. the 10 yr lost narly a point from 1.62% to 1.74%; 30’s lost 2-3/8 from 2.82% to 2.95%! and the long time lost over THREE points from 0.45% to 0.55% – a week ago it was 0.40%!! All or off slightly overnight: 10 yr Treasury 1.74% (recent range 2.06% to 1.63%!!!), and the 30 yr’s 3.26% to 2.82%!!!, now 2.96% vs 2.95% -1/8. The long TIP is now 0.55% – performing miserable since setting a new (record?) low of 0.36% on 4/5, before backing off to 0.55%! The recent high yield was 0.67% on 3/11! Libor update: 0.237% 3 mos., 0.425% 6 mos. Foreign bond yields mixed – problem countries modestly higher ex-Greece! Germany 1.24% +1; UK 1.71% -1; France 1.80% -2, Italy 3.88% +1 was 3.75% early Friday!; Spain 4.05% +3 was 3.94%; Portugal 5.42% +2; Greece 9.58% +4 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 9.58%!!!-12.57%!)..   

Gold closed slightly higher but did have a new high early Friday of $1487.20, highest since 4/12, and closed at $1470.50 +$2.90. 4/16’s intraday low of $1321.50 – was lowest since Sept. ’10. Resistance remains way above at the 40 day/50 day: $1526-1538 – still falling! Overnight it is $1471.00 +$6.80. Crude closed higher again at $95.61 +$1.62 – swings are incredible!  Friday’s intraday high was $96.04,highest since 4/2. It is now well above Sup/Res at the the 40 day ($92.79), 50 day ($92.58) and 200 day ($91.82). It is now $95.20 -.42.  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:

As long as we cheer gains in payrolls that are mediocre at best while wages stagnate at best (except for overpaid senior management in most cases), stocks can perform. This of course is aided by companies incurring debt to pay dividends (since it is so cheap), and to offset options being exercised…by senior management again. When will reality set in?

Beats the hell out of me!

TB