9/13/11…why can’t we all just get along?

Bloomberg Top Stories:

 

*More Job Cuts Looming for European Banks Locked Into Higher Fixed Salaries

*Euro, U.S. Stock Futures Weaken on European Debt Concern: Crude Oil Rises

*European Banks’ Reluctance to Lend to Each Other Approaches 30-Month High

*Italian Borrowing Costs Rise at Auction as Investors Shun Indebted Nations

*Best Buy Profit Trails Analysts Estimates as TV Sales Drop; Forecast Cut  

*Microsoft Poised to Disappoint Shareholders With 19% Dividend Boost – come on

*Apple More Likely Than Ever to Return Investors’ Cash, Morgan Stanley Says

*Bank of America Cuts Top Workforce at Most U.S. Banks – good luck!

*McGraw Bowing to Pressure Breaks Up Business Founded by Great Grandfather

*Fewer Mailed Checks Means U.S. Post Service Can’t Pay Bills – see final blurb

*Perry Fends Off Attacks on Job Record, Immigration at Republican Debate

*Obama Proposes Tax Increases on Bonds, Carried Interest for high Earners

*High Cholesterol Levels Linked to Risk of Alzheimer’s Disease, Study Finds

 

Volume on NYSE stocks slipped slightly to 4.6B shares from 4.8B shares. Trades executed on the Big Board fell to 1.09B shares from 1.2B shares. While the rally is now totally negated, yesterday may have put in a low (see commentary). We took out the triple bottom on the Dow at 10929 8/26, 10932 9/6, and 10935 9/9 and almost hit minor support at the last stop from the August lows. This is CRITICAL support! The S&P is a little better with two minor lows below us 1119-1121 tested SEVEN times and only the 8/9 low of 1101 to save us – That is also equal to the 9/9/10 low!!! In other words, we are now in danger of negative 12 month returns for this quarter! Advance/Declines were mixed, thanks to the end of the session: -1.1:1 vs -5.6:1 vs -3.5:1 vs +9:1 vs -2.6:1 vs -5.6:1 on NYSE and +1.2:1 vs -5.2:1 vs -3.1:1 vs +5.5:1 vs -2:1 vs -4.6:1 on Nasdaq. Breadth was modestly positive: +1.3x vs -27x!!! vs -5.7x vs +18x vs -3.8x vs -19x -7x on NYSE and +3.2x vs -6.5x vs -1.8x vs +26x vs -1.9x vs -14x vs -4.7x on Nasdaq. New 52 week highs thought told the story, steady at 27, despite the tail-end rally, while new lows, which exploded to 467 last Tuesday, surged to 552 from 369, eclipsing the 467 of last Thursday!!!…that is a negative ratio of -20.4:1! The ratio has been positive for just six days since the rally peak! Despite the rally the VIX which gapped up for a second day on the open, recovered, yet closed virtually unchanged at 38.59 vs 38.52, indicating the rally was mere short-covering…duh! 48 was the selloff high, not seen since 5/21/10: 48.20!

 

Look at the last seven sessions…still net negative: Dow +0.6% vs -2.7% vs -1.0% vs +2.5% vs –0.9% vs -2.2% vs -1.0%; Transports -0.2% vs -2.3% vs -1.3% vs +3.4% vs -0.9% vs -3.4% vs -1.4%; S&P 500 +0.7% vs -2.7x vs -1.1% vs +2.9% vs -0.7% vs -2.5% vs -1.2%; Nasdaq Composite +1.1% vs -2.4x vs -0.8x vs +3.0% vs -0.3% vs -2.6% vs -1.3%; 100 +1.3% vs -2.3x vs -0.4% vs +2.6% vs flat vs -2.3% vs -1.0%; Russell 2000 +0.9% vs -3x!!! vs -2.1% vs +4.2% vs -0.4% vs -3.4% vs -2.5%. A puny rally that doesn’t even qualify as a dead cat bounce! God save the quarter!

 

Global stocks are mixed after Monday’s massacre on Greece: FTSE FLAT vs -2.4% vs -0.4% vs -0.6% vs +2.1% vs -3.6% vs -1.5%; CAC 40 -0.7% vs -4.8% vs -1.1% vs -0.3% vs +2.9% vs -4.7% vs -2.3%; DAX +0.5% vs -3.7% vs -0.5% vs -1.1%!!! vs +3.8% vs -5.3% vs -2.4% vs -1.6%; Nikkei +1% vs -2.3% vs -0.6% vs +0.3% vs +2.0% vs -1.9% vs -1.2%; Hang Seng closed vs -4.2% vs -0.2% vs -0.7% vs +1.7% vs -3.0% vs -1.8%; Korean KOSPI closed for a second day vs -1.8%!!! vs +0.3% vs +3.8% vs -4.4% vs -0.7%; Indian Sensex -0.2% vs -2.2% vs -1.7% vs +0.9% vs +1.2% vs -0.6% vs +0.9%. U.S. futures sagging for a third day: DOW -60; SPX -7.70; NDQ -8!!!

Gold is attempting to recover from Tuesday’s selloff. Note that in Euro terms it is at a record high, so the selloff is simply dollar related. It is well off its record high of $1923.50 of last Tuesday and is now $1824.60 +$11.30. Crude is now $89.51 +$1.32, thanks to yesterday’s rally on whatever, with major resistance at $90 and support a double bottom at $83! 10 yr bond is 1.95%; 30 yr 3.26%, yawn.

 

…remember Rodney King, the icon of the L.A. riots? Problem is, ole Rod had a chance to clean up his act and failed at it. Welcome to the U.S. of A. Obama gave a speech yesterday the reprised the one of last Thursday and not learning from his plea during the debt ceiling fiasco, told Americans to write, call, email, tweet, etc. Last time he did that the White House got besieged in emails criticizing him. Meanwhile the GOP, because he reiterated his call for eliminating tax breaks (you do remember their unanimous rejection of even $1 in revenues for $10 in budget cuts don’t you?), said this is not in the spirit of bipartisanship. TB urges you to think about the absurdity of that statement! The GOP is in a death spiral, taking the economy with it…not that Obama is offering much more other than bigger deficits down the road, but it his job as president to try to save the economy. ‘Nuf said on that sick topic.

 

Did you see the rally yesterday? Did you feel it? Did you get goose-bumps? Hardly.

Let’s look at how the session played out: first, the futures tanked and the market gapped down. At the low the Dow was off another 1%, as were Transports, S&P 500 -1.6%, both Nasdaq indices -1.2%, and the Russell 2000 -1.4%. But then a funny thing happened…we bounced…not on Obama which actually caused the market to stink, er sink, more, but on …uh…fill in the blanks __________ , because TB can’t give you a reason fundamentally, but will try with a fundamental one. Here goes:

 

Technically, and because we have been on such a roller coaster ride for the past three years, most have lost sight of the Fibonnaci charts. At the low yesterday of 1136, we were almost at the 50% retracement of the entire rally from the October 2007 highs to the March 2009 lows. So what you say? Had we broken it we would have proceeded to the 38.2% Fib retrace from the lows at 1014 on the S&P (futures will give a different number and more likely that is what was being targeted). If we break that the old 666 bottom comes into view and no one likes the hex! Of course in between is the 23.6$ retrace at 881 but psychologically a break of 1,000 would be disastrous as no one sees it as even a possibility. Well almost no one at least not at this point…but if we double dip, all bets are off. So the S&P is bounded, at least temporarily between the 61.8% retrace at 1229 – the August 30 high was 1220 – that level has been tested three times and failed at each – triple top!

 

There you have it: we may have put in a bottom yesterday but is this the ‘dawning of a new bull market’ as the old Merrill Lynch once said before a disastrous collapse in bonds which was what they expected to rally…4 months later by the way, they were correct, but only after a disastrous plunge that cost clients money.

 

You decide…it’s your money and retirement future.

. . .  – – –  . . .    . . .  – – –  . . .

 

Continuing to get positive comments on recent posts, agreeing for the most part but then don’t expect you to accept it lock, stock, and barrel…not even lock! If you have a negative comment, would love to hear it…helps keep things in balance.

 

Ah, the damned USPS…wasting taxpayer money…sorry but that is mandated. People are now using auto bill pay rather than mail checks and that is cutting further into first class revenues. So what’s a mother to do? They are taking mail that is clearly fraud and not going after the perps because it pays the bills! Doubt this? Talk to a senior. We have a relative who we have now taken over his finances to reduce strain. Every day he gets a stack of mail…seriously, at least six letters. Most purport that he has won $300,000 or $3 million and he must write back to claim it. When he does they charge him anywhere from $19.95 (one call ARP which is obviously intended to make you think it is AARP as that is their annual fee but this is PER MONTH!), to $59.95 for a free gift from Reader’s Digest…yes that venerable name. This is clearly mail fraud but USPS is turning their heads for the first class fees. Want proof? We have taken the phone numbers of the offending companies from credit card bills. We call and explain the situation and immediately they reverse the charges! They don’t want to make waves…so it is time for US to make waves…contact AARP, your representatives and put a stop to this. If it bankrupts the post office so be it…there is no way of saving an institution that by its very charter is a revenue loser, especially now with FedEX and others.

Time to forego daily mail delivery or at least weekends…your thoughts?

 

To those of you who think this column is too negative, a recent study showed that positive thinking is counter-productive…especially in a crisis as it is an opiate.

 

Have a terrific day!

 

TB

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: