6/28/12…do we care?

From Keep Calm and Carry On: “Use your health, even to the point of wearing it out. That is what it is for. Spend all you have before you die; Do not outlive yourself.” – George Bernard Shaw…most of us will get a chance to test his theory, right? 

 Quote sent by a friend: “ When debt-fueled asset price explosions seem too good to be true—they probably are” – Ken Rogoff and Carmen Reinhart.

Bloomberg Top Stories:

*Stocks Decline as Euro Weakens on German Jobs Before Summit – again and again!

*Moment of Truth Elusive Again as Europe’s Leaders Gather for Crisis Summit

*JPMorgan Drops After New York Times Says Trading Loss Totaled $9 Billion –egads!

*Gross Says It Will Take Decades to Recover From Levels of Excessive Debt – right!!!

*GM, Ford Sever Ties to Retirees Saying They’ll Outlive Funds – so who will pay?

*Contractors Face Disabled Hiring Test U.S. Agencies Flunk – inequality?

*Obama’s Legacy at Risk as Supreme Court Set to Rule on Health-Care Battle

*Syrian Refugees in Turkey Lack Only What They Want Most: A Road Back Home

Volume dipped again to 3.24B shares vs 3.31B shares taking significant credibility from yesterday’s rally.The seesaw may continue again today was futures are weak overnight. NYSE stocks executed without the aid of the ETN market plunged to 684M vs  712M, the lowest since May 25th! In contrast to Friday’s 1.58B, highest since 3/16’s 1.648B share day. 34 of the last 59 sessions have been less than 800M shares!!! Since 2/29 there have been just 14 ‘average’ days (mostly down!), including 3/16’s prior high for 2012 of 4.65B and just 12 have been above 900M – 946M is 12 month average. Since 11/1 there have been just 13, 1B share days…nine in 2012! Since 2/6 there have now been EIGHT sessions less than 700M shares. 145 of the last 163 sessions have been less than the 12 month average!

Advance/Declines were solid but trend is absetn: +3.6x vs +1.8x vs -3.3x +2.2x vs -4.3x on NYSE and +2.3x vs +1.2x vs -2.9x vs +2.4x vs -3.8x on Nasdaq. Breadth was similar: +4.3x vs +1.9x vs -8.6x!!! vs +2.2x vs -13.7x!!! on NYSE and +3.2x vs +1.4x vs -6.5x! vs +3x vs -5.7x on Nasdaq.. New 52 week highs climbed to 197 vs 137 (high was 420 on 3/26), while new lows plunged to 94 vs 140. The ratio is now about 2x vs 1:1 vs -1.6x vs  +1.3x vs +1.2x. The S&P VIX declined slightly to 19.45 -.27, below the 40/50/200 day averages.

Here are the results of last 5 sessions: Dow +0.7% vs +0.3% vs -1.1% vs +0.5% vs -2%; Transports +0.5% vs +0.4% vs -1.9% vs -0.8% vs -2%; Dow Utilities +1.2% vs +0.3% vs -0.4% vs +0.1% vs -1.2%; S&P 500 +0.9% vs +0.5% vs -1.6%! vs +0.7% vs -2.2%!; Nasdaq Composite +0.7% vs +0.6% vs -2% vs +1.2% vs -2.4%; Nasdaq 100 +0.8% vs +0.6% vs -2% vs +1.2% vs -2.5%; Russell 2000 +1.5% vs +0.4% vs -1.7% vs +1.4% vs -2.4%; NYSE Financials +1.2% vs +0.6% vs -2.2% vs +1.1% vs -2.5% (KBW Banks +1.4% vs +0.6% vs -2.7% vs +1.4% vs -2.3%; Nasdaq Banks +1.5% vs +0.7% vs -2% vs +1.7% vs -1.9%; NYSE Financial Leaders: BAC +2% vs +0.2% vs -4%!!! vs +1.5% vs -3.6%!; GE +1.7% vs +1.4% vs -1.5%. RF (Regions) +0.8%; JPM +3% vs +1.2% vs -1.9% vs +0.1% vs -2.3%.  Not leaders, but… C +1.3% vs –0.1% vs 4.4%! vs +0.5% vs -3.6%; WFC +1.3% vs +3.4% vs -1.8% vs -0.5% vs -1.4%; USB +0.3% vs +0.5% vs -1.8% vs +1.6% vs -1.5%. NOTE BofA is trading in a range of $8.11 to $6.72. Still highest volume on NYSE? Hello???

Global stocks weaker sans Japan…a few others slightly positive: FTSE -0.6% vs +0.6% vs +0.2% vs -0.7% vs -0.8%; CAC 40 -0.3% vs +0.5% vs +0.1% vs -2%; DAX -0.9% vs +0.3% vs flat vs -1.8% vs -0.8%; Nikkei +1.7% vs +0.8% vs -0.8% vs -0.7% va -0.3% vs +0.8%; Hang Seng -0.8% vs +1% vs +0.5% vs -0.5% vs -1.4% vs -1.3%; Korean KOSPI +0.1% vs flat vs -0.4% vs -1.9% vs -2.2%!!!; Indian Sensex +0.1% vs +0.4% vs +0.1% vs -0.5% vs -0.4%. U.S. stock futures weak but coming back: DOW -47; SPX -4; NDQ -6.50 – from down 17!.

Bonds gained modestly yesterday and are up slightly overnight: 10 yr 1.61% +1/8 – record low 6/1 of 1.442%!; 30 yr 2.68% +5/32; Long TIP 0.46% +5/16. Record low yield of 0.347% on 6/1. The 5 yr TIP yields -1.00%;10 yr -0.51%. Bills 0.05% 1 month; 0.08% 3 months; 0.15% 6 months. Reverse Repo 0.24%. 3 mo. Libor 0.46%, and 0.73% – steady. European problem sovereign 10 years, Germany-benchmark: 1.52% -5 bp’s; Italy 6.17% +1; Spain 6.86% +2; Greece 25.55% -10; Portugal 9.68% +1; Ireland 6.84% +1.  

Gold closed slightly higher but with no significance and is tell shy of $1600 and resistance at $1608-17. It closed at $1578.40 +$3.50. Friday’s intraday low of $1555.60 was lowest since June 8th! The hit is $211 since 2/28! 2/28’s $1792.70 intraday high was not seen since 11/16! The record high is $1923.70, a buying climax on 9/6. Res is $1595, the 40 day and $1607, the 50 day, then $1674, the 200 day. It is now $1570.70 -$7.70. 5/2’s o/n low of $1526.70 was lowest since 12/29! Crude closed slightly higher again at $80.21 +.85. Last Friday’s low of $77.93 was lowest since 10/5/11. It has been below $85 since June 1!  RES at the 40 day (88.64), and the 50 day (91.69), then the 200 DAY (96.07), – 40/50 still plunging. First res $89.17, the 11/1/11 low, then $92.52-54, the lows of 12/16-12/17, a prior double bottom, MAJOR sup remains at $74.95, the 10/4/11 low!!! It is now $80.36 +.15.

While the Dow is still up 3.4% ytd, it is now down 4.4% for the quarter. Similarly the S&P 500 is down 5.44% for the quarter but up 5.9% ytd. Nasdaq Composite -7% vs +10.4%; Nasdaq100 -6.9% vs +12.6%; Russell 2000 -6.5% vs +4.8%. NYSE Financials are -9.2% but +7.2% ytd. You would have saved yourself a lot of grief to sell at the end of the first quarter or early April. More to come so brace yourself! If you had sold the Nasdaq 100 on April 3 and gone to cash you would be up 22.5%!

. . .   – – –  . . .  (SOS)   . . .   – – –  . . .  (SOS)   . . .   – – –  . . .  (SOS)   . . .   – – –  . . .  (SOS)

…about healthcare? About ending up paying for people who cannot afford healthcare in spades over what protection would cost? Sounds like the dental problem TB discussed yesterday. What about mobility? Pre-existing conditions after losing ones job? Today the long-awaited decision by the Supreme Court will tell us what if anything survives.

Interestingly, this throws the ball back in the GOP camp. They endorsed healthcare until the Dems went after it. Then they backed away. For their part, the Dems didn’t let the GOP do much of anything. Both parties failed the test of Medicare purchasing prescription drugs and thus controlling prices and nothing was done about health care costs. Malpractice should have been reformed to mean gross negligence – such as cutting off the wrong limb, not failing to detect something that had a low probability of being a problem.

Meanwhile Wall Street is trying to sort out who the winners and losers will be under various scenarios. How accurate will they be?

Listened to a small business owner who said that having to provide medical care for all his employees would mean that he couldn’t hire other employees or grow his capital. He did not sound educated so who gave him those sound bites? Is it better to have a job that pays minimum wage with no benefits?…is that helping the economy grow? Is it solving or hurting the healthcare problem? You decide…the Court will today!

Hope you have a terrific day,

TB

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