10/23/12…13 days…style over substance

Bloomberg Quote of the Day: “By nature, men are nearly alike; by practice, they get to be wide apart.” – Confucius…he was a very wise man…and observant! TB


Bloomberg Top Stories:


*Stocks Decline With Commodities as Spanish bonds Retreat; Euro Depreciates

*Commodities Erase Gains for Year as Oil to Metals Retreat on Slower Growth

*Spain’s Economy Shrinks for Fifth Straight Quarter as Rajoy Mulls Bailout – mulls?

*Peugeot Said to Near Agreement on Government Guarantee for Bank Financing

*Bernanke QE3 Stock Market Missing Exuberance Greenspan Said Was Irrational

*CFTC Proposes Derivatives Rules to Protect Customer Funds After MF Global

*TD Bank Agrees to Buy Target Credit-Card Portfolio Totalling $5.9 Billion

*Hospital Shares Track Obama Odds as U.S. Election Years – for profit ones!

*Ohio Returns Go Worst to First Among States During Obama Term – they rock!

*Obama Presses Foreign Policy in Debate as Romney Mostly Agrees on Strategy

*Iran Threatens to Curtail Crude Exports If Western Sanctions Are Increased – awwww!

*Obama Won final Debate on Foreign Policy With Romney, 48% Say in CNN Poll

*Papal Butler’s Document Theft Harmed the Pope, Church, Vatican Court Says – you bet it did! How shameful is that for them to believe themselves harmed – unbelievable!


As the headline above states, commodities are tanking! Gold has now gone just about round trip and is in danger of breaking $1700 again – going down! Despite a slight gain yesterday it is off $16 o/n and the low was $1706.70! Crude prices are plunging too with a $1.28 decline yesterday and another $1.60 on to $86.89! This is a punctuation mark on the 20-30 cent declines in gas prices…you know the ones that Obama was blamed for causing to spike? The reason for the drop is the ‘decline in crude prices (which have been falling since 9/17: $99 to $87!!!). Seasonal driving is over and the reformulation to winter gas is complete…why are we so blind???


As TB pointed out yesterday the rise in trading volume Friday was strictly due to options expiry! Overall NYSE volume was 3.2B vs 3.87B while REAL volume was a weak 634M shares vs 941M shares. Don’t forget that that nice big volume was on a major DOWN session! While both the Dow and S&P flat, that was only after a steady climb from session lows – Dow was -100+! The two Nasdaq indices, worst performers on Friday were the only two up on the session!?!


Keep listening to CNBC though and you will lose your mind…recall it was they who touted Citi’s earnings all day saying they had finally turned the corner with nary a word on Pandit, yet the next day all day long it was such a good thing that Pandit was gone, leading to a three-day 10% rise in Citi stock. God bless them…as did the masochistic Prince Alaweed who has made a small fortune on Citi…unfortunately for him though he started with a large fortune!


Time to revisit those trailing stops – with limits! It could get ugly here…very ugly!


–          – –  . . .  – – –


…who won the debate? Except for the WSJ poll which gave Obama a B- and Romney a B+, it was Obama (they have consistently scored it that way). Romney backed off and their basic positions showed little difference. Too much talk about the Middle East though…what about Japan, India, the Euro crisis and how it has affected us? Thankfully, Shieffer didn’t let them dwell on Benghazi and even Romney backed off from his hawkish stance. As today’s slug says: style over substance. TB will tell you this: he would hate to be making a presentation that Romney didn’t agree with as that smug smile is constant while he drills his eyes into the target.


No more comments on the election…TB is played out. Not so for ‘The Donald’ however, who in yet another attempt to be in the limelight is belching out a ‘bombshell’ announcement that will affect ONE of the candidates…by Wednesday! Which one will it be? DUH!!! What will it be? Something weird no doubt which will not help Romney. With him for a supporter you don’t need enemies. Some say he will announce that Romney is going to be on The Apprentice.


Since the columns have been so long lately, TB is cutting it short today. Now shifting to what we can do…that is if Grover Norquist steps aside and we put some real effort into regulation.


Isn’t it sick that we are fining companies record amounts…each one seeming to top the last yet the fine is LESS THAN what they made on the violation? Is democracy wonderful or what? Repent…and keep your money while saving lawyers fees.


How about the Brian Sabol of the BBC…a huge coverup of a serial sex offender and child abuser. Now they are being brought to task…just like Murdoch’s fall from grace. Are these guys competing with the Vatican for denial and deceit?


Lance Armstrong makes TB ill. Imagine forcing his team to do blood doping so they couldn’t turn on him. Now he has been stripped of his Tour de France titles and faces lawsuits over prize bonuses. One unanswered question: what was the money hemorrhaging USPS doing sponsoring a cycling team? Beats the hell out of TB!


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


So much for Friday’s options expiry as stocks resumed the search for reality as equity volume plunged to 3.2B shares vs 3.87B shares vs 3.83B vs 3.64B shares on a weak session, except for the Nasdaq (which was the weakest on Friday!). On 9/1 volume hit 4.56B shares, high of the year. NYSE stocks executed without the aid of the ETN market plunged by a third back to 634M vs 941M shares (highest since 9/21) vs 692M (highest since 9/28). 9/15’s 464M shares was the lowest since 11/25/11! There have been just eight 700M+ days since 8/3. The high ytd was 9/21’s 1.8B shares – due to a quadruple witching and an S&P rebalancing. Since 6/29 just 13 sessions have surpassed 800M shares. The average since 8/1’s 1.03B is just 667M. The average for 2012 is just 772M shares and since 6/29 just 691M shares– WEAK!!! 101 of the last 140 sessions have been less than 800M shares (72%!). Since 2/29 there have been just 23 ‘average’ days (mostly down!), including 9/21’s high for 2012 of 1.8B (5B including ETNs) and just 20 have been above 900M – 798M is the 12 month average and slipping! Since 11/1/11 there have been just 17, 1B share days…13 in 2012! Since 2/6 there have been 60 sessions less than 700M shares. 220 of the last 235 sessions have been less than the 12 mo ave (94%)!


Advance/Declines were slightly negative: -1.1x vs -3.4x vs -1.1x vs +2.2x vs +3x on NYSE and -1.1x vs -4.2x! vs -2.1x vs +1.6x vs +1.8x on Nasdaq. Breadth was narrowly mixed: -1.1x vs -8.3x! vs -1.3x vs +2.7x vs +3.9x on NYSE and +1.2x vs -5.5x! vs -1.8x vs -1.1x vs +1.9x on Nasdaq. New 52 week highs plunged to 97 vs 177 vs 330 vs 363 vs 294 vs 150 (768 is cycle high). New lows fell back to 95 vs 121! vs 54 vs 48 vs 46. The ratio is now 1:1 vs +1.5x vs +6x vs +7x vs +6x. The S&P VIX, which surged on Friday dipped slightly to 16.62 vs 17.06 -.44 vs 15.14 vs 15.07 vs 15.22. The 12-month low was 13.32 on 8/17 while the 1012 high is 27.73 on June 4.


Here are the results of last 5 sessions: Dow FLAT vs -1.5% vs -0.1% vs flat vs +1%; Dow Transports -0.4% vs -1.4% vs +0.2% vs +0.6% vs +1.1%;Dow Utilities -0.4% vs -0.7% vs +0.3% vs +1.1%! vs +0.4%; S&P 500 FLAT vs -1.7% vs -0.2% vs +0.4% vs +1%; Nasdaq Composite UP 0.6% vs -2.2% vs -1% vs +0.1% vs +1.2%; Nasdaq 100 UP 0.4% vs -2.4% vs -1.1% vs -0.1% vs +1.2%; Russell 2000 -0.1% vs -1.9% vs -0.6% vs +0.9% vs .+1.4%; NYSE Financials +0.3% vs -1.4% vs flat vs +1.2% vs +1.1% (KBW Banks FLAT vs -0.7% vs -0.5% vs +1.6% vs -0.5%; Nasdaq Banks +0.4% vs -0.6% vs -0.7% vs +1.1% vs -1%; NYSE Brokers FLAT vs -2.8%!!! vs -1.1%! vs +2.5% vs +1.3%. NYSE Financial Leaders: BAC +1.2%? vs -0.3% vs +0.3% vs -0.2% vs +0.2% vs +3.5%! vs -2.3%; GE -1.5%


European stocks weak for a 4th session; Asia up, ex-Japan, Hong Kong closed: FTSE -1.2%! vs -0.1% v -0.1% vs -0.2% vs +0.5%; CAC 40 -1.7%!! vs -0.1% vs -0.5% vs -0.3% vs +0.3%; DAX -1.6%!! vs -0.3% vs -0.5% vs +0.3% vs +0.1%;Nikkei +0.1% vs +0.1% vs +0.2% vs +2%! vs +1.2%; Hang Seng closed vs +0.7% vs +0.2% vs +0.5% vs +1%; Korean KOSPI -0.8% vs -0.1% vs -0.8% vs +0.2% vs +0.7%;Indian Sensex -0.4% vs +0.6% vs -0.6% vs +1% vs +0.2%. U.S. stock futures SLAMMED: DOW -148!; SPX -16.60!; NDQ -26.50!


U.S. treasury bonds still bouncing around: 10 yr 1.77% +3/8 – record low of 1.40%; 30 yr 2.92% vs 2.95% +15/16. Long TIP 0.38% vs +.41% +13/16. 0.28% is record low!The 5 yr TIP yields -1.43% vs -1.46%; 10 yr -75% vs -.73%.Bills 0.09% 1 month; 0.10% 3 months; 0.15% 6 months. Reverse Repo 0.22% vs 0.29%! 3 mo. Libor 0.32%; 6 mo. 0.55!!! On 9/18 they were 0.38% and 0.67% respectively…with no policy change??? European problem sovereign 10 years, Germany-benchmark 1.58/% -4; Italy 4.82% +6; Spain 5.53% +8; Greece 1664% +37!!!…on 9/20: 19.75%!!!; Portugal 7.39% +2; Ireland 4.57% -4


Gold managed to close slightly higher but only after hitting a new low since 9/7 of $1714! And is now well below BOTH the 40 day AND 50 day moving averages for the first time since August 15th! It closed at $1726.30 +$2.30. It closed at $1798.10 last Friday, highest since 2/29 and it has lost $73 since. 7/12’s intraday low of $1547.60 was lowest since June 1. The record high is $1923.70, a buying climax on 9/6/11. RES now at $1725, the 50 day, $1746, the 40 day – both climbing! MAJOR SUP at $1669, the 200 day. CAUTION!!! 5/2’s o/n low of $1526.70 was lowest since 12/29! Currently $1710.30 -#15.80!!! O/N LOW $1706!!! Crude closed sharply down following Friday’s negative key reversal after trading weak for two weeks at $88.73 -$1.28! The $87.70 low of 10/3, was lowest since 8/3! It has traded below the 40/50/200 day since 9/19! RES at the 40 day (93.11), 50 day (93.63), and the 200 day (95.56)….all declining sharply. Overnight it is plunging again: $87.63 -$1.62 with the low at $86.89, taking out 10/3’s $87.70 low – note gasoline prices are also plunging!


(Commentary has been moved to page one after Top Stories)


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