1/11/12…twinkle, twinkle

Bloomberg Top Stories:

*Banks in Europe Resist Draghi Bid to Avert Credit Crunch by Hoarding Cash – no trust!

*Europe’s $39 Trillion Pension Threat Grows as Regional Economies Sputter

*Stocks Drop as Euro Weakens; Bonds Rise in Spain, Italy Before Debt Sales

*Spain’s Rajoy May Need Back Door Bailout for Regional Rescues

*NYSE-Deutsche Boerse Deal Hangs in Balance as Francioni Visits Niederauer – achtung!

*Ford Recalls 450k minivans, SUV’s in U.S. for Safety Flaws

*Twinkle-Maker Hostess Brands Files for Bankruptcy Protection in Manhattan

*Bernanke Doubling Down on Housing Bet Asks Government to Help

*Macy’s Bond Sale Signals Escape From Junk Just a Start – Bloomie’s cost them a bunch!

*Coal to Rebound in Asia From Worst Year Since ’05 on China – what about nat gas???

*AT&T-Verizon Purchasing Power Probed for Pared Competition

*Romney New Hampshire Win Cements Status as Republican Front-Runner

*California’s Top Earners Dwindling as Brown Counts on Their Higher Taxes

 

Volume rose sharply to 4.18B shares from a weak 3.28B, only the second ‘average’ volume in weeks…months? It was a strong day particularly for Transports, Nasdaq (which has been very weak), Russell 2000 and Financials. NYSE stocks executed on the Big Board rose to 841M shares from 721M shares, about 200 million short of the twelve month average and still indicative of a lack of retail participation. 38 of the last 41 sessions have been less than 1B! Advance/Declines were positive: +3.3:1 vs +1.8:1 vs -1.1:1 on NYSE and +3.6:1 vs +1.3:1 vs -1.2:1 on Nasdaq. Breadth was similar: +4.2x vs +2.1x vs -1.9x on NYSE and +2.7x vs +1.9x vs +1.4x on Nasdaq. New 52 week highs rose to 279 from 201 while new lows dropped to 46 vs 66. The ratio is now about 6x positive. The S&P VIX declined to 20.69 -.38, again near the lowest since 7/26.

Here are the results of the past three sessions: Dow +0.6% vs +0.3% vs -0.6%; Transports +1.4% vs +0.6% vs flat; Dow Utilities +0.1% vs +03% vs -0.6%; S&P 500 +0.9% vs +0.2% vs -0.3%; Nasdaq Composite +1% vs +0.1% vs +0.2%; Nasdaq 100 +0.7% vs -0.2% vs +0.3%; Russell 2000  +1.5%! vs +0.5% vs -0.3%; NYSE Financials +2%!!! vs -0.6% vs -0.9%. Leader: BAC +5.7%!!! vs 1.5% vs -2.1% vs +8.6%. Only active financial stock.

 

European equity markets weaker, Asia positive, except Korea: FTSE -0.7% vs +1.3%; CAC40 -0.4% vs +2.5%; DAX -0.4% vs +2.7%; Nikkei +0.3% vs +0.4%; Hang Seng +0.8% vs +0.7%; Korean KOSPI -0.4% vs +1.5%; Indian Sensex +0.1% vs +2.2%. U.S. Futures slightly weaker: DOW -40; SPX -6, yesterday’s rally just missed the 8/1 high…watch closely!; NDQ -8. Bonds slightly better after recovering from yesterday’s early morning losses with 10’s and 30’s below 2% and 3% respectively again. 10 yr 1.94% +5/16. RECORD low 9/23 of 1.6855%; 30 yr 2.99% +5/8;; Long TIP 0.72% +1/8. 0.57% at high. The 5 yr TIP yields MINUS 0.98%!!!; 10 yr -0.15%!!!. 3 mo. Libor 0.58%, and 0.81%, both steady. Bills 0.00% one month. 3 months 0.01%. 6 months 0.05%.

Gold rose sharply and closed right on the 200 day ($1631). It closed at $1631.30 +$23.40 amd is now $1641.30 +$10.00! The record high is $1923.70, a buying climax on 9/6. RES is $1685, the 40 day and $1665, the 50 day m/a. Crude closed higher at $102.24 +.93. It is now $101.82 -.42 Sup at $100.

 

…Twinkies, the pastry that gave Dan White the sugar high that caused him to kill SF Mayor Moscone and Supervisor Harvey Milk is now in bankruptcy…or at least its parent, Hostess is.

Wonder if that would have made a difference? At any rate the non-retail-led rally in stocks resumed as the tekkies pushed the S&P futures higher, but failed to take out the August1 high (when the selloff began in earnest). Watch closely as they obviously wanted to better that mark. If they can continue resistance is 1350, then the 5/2 high at 1372.80…can they do it? Doesn’t matter, what does is the reason for it and the risk of a failure here. Consider that yesterday’s high was barely above the October 27 high. If they fail, support is at the 200 day, $1255 – all figures relate to futures not spot. There was a big rally in financials, led by BofA with a 5.7% gain, the most active stock on the NYSE…as usual. JPM, Citi, and the other biggies also contributed to the 2% gain in the index which has been in a state of flux since early August, a trend that will most likely continue.

 

As for retail participation, NYSE actual volume, not just total volume of NYSE-listed stocks continues to be weak. It rose yesterday to 841M, which is still about 200 million below average and only three of the last 41 sessions have been above 1B shares, the last being on December 16th!

 

Meanwhile, bonds recovered most of their overnight losses during the session even as stocks rallied and both the 10 year and 30 year are back below 2% and 3% respectively. Keep your eye on gold which continues to rise, closed on the 200 day moving average and is up another $10 overnight. Crude seems rangebound at $101-103.

 

There is too much going on to risk taking a serious position here…unless you feel lucky, right?

 

 

. . .   – – –  . . . note that the same old SOS applies…perhaps more so!

 

Romney won the New Hampshire primary. He did much better than the Iowa Caucuses where he beat Santorum by just eight votes. He won last night with 39% followed by Ron Paul with 23%, and Huntsman with 17%. Gingrich and Santorum were next with only about 9% each.  Perry came in dead last with just 1% of the vote…game, set, match for him. But they are on to South Carolina, and things could be different in that notoriously conservative state…but Romney now looks like a shoo-in, which must make Team Obama very happy.

 

Yesterday was a record-setting day in Minneapolis as temps hit 50 degrees, warmer in some parts of the state….red sky this morning though and talk of snow by tonight…don’t bet on it being significant. What a winter! Meanwhile, the drought most of the Midwest is experiencing continues with not enough attention being paid to it. With a lack of runoff, next year could be worse…remember the Ole Miss starts here. TB met a nut broker…the commodity not a crazed individual. He told TB that mixed nut prices are up 50%…and try to find a peanut in the blend! They are non-existent!

 

Have a great day!

 

TB

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