11/2612…dreaming of a Black Christmas

TB’s Quote of the Day: “I’m going to Disneyland!” – Mitt Romney…and he did…wait, wasn’t the winner supposed to say that? Do you think he knows?

 

TB’s Song of the day:

Come gather ’round people
Wherever you roam
And admit that the waters
Around you have grown
And accept it that soon
You’ll be drenched to the bone
If your time to you is worth savin’
Then you better start swimmin’ or you’ll sink like a stone
For the times they are a-changin’

Come writers and critics
Who prophesize with your pen
And keep your eyes wide
The chance won’t come again
And don’t speak too soon
For the wheel’s still in spin
And there’s no tellin’ who that it’s namin’
For the loser now will be later to win
For the times they are a-changin’

Come senators, congressmen
Please heed the call
Don’t stand in the doorway
Don’t block up the hall
For he that gets hurt
Will be he who has stalled
There’s a battle outside and it is ragin’
It’ll soon shake your windows and rattle your walls
For the times they are a-changin’

Come mothers and fathers
Throughout the land
And don’t criticize
What you can’t understand
Your sons and your daughters
Are beyond your command
Your old road is rapidly agin’
Please get out of the new one if you can’t lend your hand
For the times they are a-changin’

The line it is drawn
The curse it is cast
The slow one now
Will later be fast
As the present now
Will later be past
The order is rapidly fadin’
And the first one now will later be last
For the times they are a-changin’

Written and first recorded by Bob Dylan in 1964 ,it was later  recorded by Burl Ives and sung on the Smothers Brothers show in 1968…Viet Nam was the topic then, learn from it now! As Lee Iacocca said, “you can lead, follow, or get out of the way.” How true!

 

This week’s economic calendar is fuller than this week’s was but without many potentially market-moving indicators. We will get October Durable Goods Orders, the September Case-Shiller Home Price Index, and November Consumer Confidence (Tuesday), October New Home Sales (Wednesday), the second estimate of Q3 GDP (Thursday), and October Personal Income and the November ISM Chicago Survey (Friday). No data releases are scheduled for Monday. In addition to the economic data, the Federal Reserve will release its Beige Book (Wednesday) in preparation for the December 11th – 12th FOMC meeting. Courtesy of Steve Wood, Insight Economics

 

Bloomberg Top Stories:

 

*Goldman Sachs Turned Down Underwriting South Europe Banks as Crisis Lingers – !!!

*Stocks Drop as U.S. Index Futures Fall; Treasuries Advance, Soybeans Rise

*UBS Fined $447.6 Million as Bank (sic) Faces Higher Capital Demand After Abdoli

*Merchants Keep Holiday Deals Flowing to Sustain 13% Spending Jump

*Euro Finance Chiefs Claim Greek Progress as They Seek to Persuade ECB, IMF

*Credit Suisse Said to Eliminate About 100 Jobs at It’s U.K. Investment Bank

*Home Equity Lending in Comeback to Fuel U.S. Consumer Spending – oy vey!!!

*Bankrupt San Bernardino’s Political Dysfunction Complicates Calpers Debt

*Viet Nam’s Empty Office Towers Showing Developers’ Dreams Turned to Rubble

*Rape Charges Show Danger as U.S. States Fail to Use Forced Medication Laws

*Catalan Parties Backing Break from Spain Win Majority in Regional Election

*Christie Wins New Jersey Democrats’ support on Sandy Response, Poll Shows – !!!

*Thousands of Syrians Flee Toward Turkey as Assad’s Jets Bomb Near Border

 

Before we discuss the market, be advised of the 3.8% tax on investment income starting on January 1, 2013. That said, for those investing for retirement in IRA’s, 401(k)’s and other tax-advantaged ways may have a benefit coming due to the drubbing utilities and other dividend paying stocks have received over the past month (Dow Utilites are down 9.8% since Oct. 18! First, recall when that 15% dividend tax was added to the first Bush tax cut…Larry Kudlow, along with Jim Cramer were the two most vocal advocates saying millions of Americans own dividend paying stocks. Yes they do, Larry and Jim, but…ahem…about half of that is in the aforementioned accounts where it will be treated as ordinary income when withdrawn…how many times has TB told you this? It is a major cause of the widening in the wealth gap – which is not meaningless or mythical!

Here is a comment from Joanna Berwick, a portfolio manager for Fidelity on website AdvisorOne:

 

“About half of all assets that hold dividend-paying equities are already in tax-advantaged vehicles, so they’re indifferent to tax policy. Second, historical data around dividend-paying stocks’ performance when tax policies change is inconclusive: These assets have tended to outperform non-dividend-paying stocks, regardless of changes to dividend tax rates. This tells me that tax policy in a vacuum has only a slight influence over asset prices, compared with the overwhelming factors of the economic cycle and corporate profits.”

 

What a rally in stocks!!! Oh, you didn’t notice there was an early close so traders could go to take advantage of those holiday sales? A modest rally on another low volume day (higher overnight). Total NYSE volume plunged again to an incredibly low 1.45B shares, for a new 12 month low! vs  2.6B shares vs 3.2B shares vs 3.36B shares…but that didn’t stop the High Freaks from posting huge gains in all indices…think people! This is not a market…it isn’t even a casino where at least you know the odds! Remember the old saw: never short a THIN market? And it doesn’t get any thinner than this! Floor volume plunged again, to 329M shares in the shortened session (and second lowest of the year – 292M on 11/12!) vs 522M vs 645M shares vs 711M shares, lowest since 11/5. Advance/declines and breadth were both positive by about 2x on NYSE and Nasdaq. The VIX rose slightly to 15.31 vs 15.08. Stocks are a fool’s folly.

 

Bond market closed off about 1/8 in the long end and while still weak are doing well overnight on equity weakness: 10 yr note 1.66% vs 1..68%, 30 year 2.80% vs 2.83%.  3 mo. Libor steady at 0.31%, 6 mo. 0.52% but creeping up.

 

Gold and Crude were both up Friday. Gold was particularly strong taking out BOTH the 40 and 50 day moving averages and closing at $1751.80 +$23.60. Someone is betting on the fiscal cliff…have heard Soros mentioned! Meanwhile Crude closed up also but minimally after the intraday high of $88.53 took out the 40 day m/a but then settled back below at $88.23 +.88…guess that isn’t much a hedge against the fiscal cliff! Overnight Gold is off 80 cents and Crude 46 cents.

 

– – –  . . .  – – –

 

 

…why not? Retailers are dreaming of black not white with every midnight sale they plan. Does anyone care about the meaning of the holidays anymore? Apparently not! When TB was a lad old timers might remember Stan Freberg, a very funny guy, who besides a record called John & Marsha…very funny!  But he also made a lesser known Green Christmas, here is the link…worth reading the script: Green Christmas. Hillarious, but ad men then had nothing on the Scrooge’s of today. Not a thing!

 

The number one Scrooge is WalMart who keeps enriching the Walton’s and others to the tune of $16 billion last year (Walton cut was most of that). Meanwhile, these cheapo’s exemplify what we have come to expect from the Kochs and others. The employee be damned…they’re lucky to have a job…even if it is part-time and without benefits. That is one hell of a way to treat your best customers…but what can they do? They owe their souls to the company store (apologies to Tennesee Ernie Ford).

 

Incidentally, the Black Friday employees strike produced some interesting comments from WalMart…all around the whining employees be damned…and this: the company offered an additional 10% discount to the employees who came to work and ignored the strike. Somehow that seems like coercion and can you imagine what the company would say if the unrecognized union offered the same? This company has no soul!

 

Meanwhile, Target, Macy’s, Sear’s, even the loser Best Buy are trying hard not to just emulate them but outbid them for your business. Merry Christmas, sukka! Guess what? Home equity loans are becoming hot again…how else you gonna pay for the presents?

 

Is it any wonder we lack civility, text rather than talk, go to the noisest restaurants we can find and listen to the screamers on Fox NEWS…they are oh so brilliant and honest!

 

Meanwhile, the GOP thinks we are a nation of whiners…riding on the coattails of the wealthy…”you can help yourself but don’t take too much” as God Bless the Childsays.

 

We send our soldiers off to war, praise them for their service, then have no use for them when they can’t find a job…more whiners!

 

We fine the big banks for their transgressions, mostly against individuals, big fines, record fines, nobody goes to jail or is even prosecuted criminally…except BP…if they were a bank they too would have had their hand slapped…nothing more. But the people who were really harmed get nothing, the government gets money for its coffers, and the CEO’s for their part continue to reap those big salaries and bonuses. Thank you shareholders…sukka’s!

 

So on Friday they ran stocks by an average of about +1.3% on no volume and with very little REAL investor participation…so what if during the day Europe didn’t look so good and we are going to have all those hearings on the fiscal cliff…we’ll just take ‘em back down then…sukka’s!

 

It was W.C. Fields that said, “never give a sucker and even break.” At least he was joking! This is not funny!

 

Speaking of which, Dan Senor, advisor to Mitt Romney unloaded on the GOP for deserting him after the elections. Hello? This is the man who said none of the loss was his fault, on several occasions offended, women, minorities, and the 47% who pay no taxes (nobody pays NO taxes Mitt…you just don’t know about sales tax, property tax, state tax, etc.). The rift in the GOP is now so wide that there is almost consensus…actually two!

 

Here is a link to a truly great, concise, objective, analysis of who got us to the fiscal cliff:

marketwatch/10-people-who-led-us-to-the-fiscal-cliff-2012

 

Have a great week…shop early, shop often!

 

TB

 

 

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

 

 

Volume fell to 1.45B shares in a shortened session but that didn’t prevent the Freaks from running the table…thanks to an absence of anyone, let alone sellers…they must have been trading their algorithms among themselves. 1.45B vs  2.67B va 3.2B vs 3.36B shares just four days after it hit 4B on an options expiry! NYSE stocks executed without the aid of the ETN market fell to 329M shares, second lowest of the year vs 522M vs 645M vs 711M. The 949M of last Friday was highest since 10/19. There have been just 18 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 17 sessions have surpassed 800M shares, mostly down days. The average since 8/1’s 1.03B is just 679B. The average for 2012 is just 764M shares and since 6/29 just 692M shares– WEAK!!! 118 of the last 161 sessions have been less than 800M shares (73%!). Since 2/29 there have been just 26 ‘average’ days (mostly down!), including 9/21’s high for 2012 of 1.8B (5B including ETNs) and just 21 have been above 900M – 773M is the 12 month average. Since 11/1/11 there have been just 17, 1B share days…13 in 2012! Since 2/6 there have been 70 sessions less than 700M shares. 234 of the last 256 sessions have been less than the 12 mo ave (91%)! This is a manipulated market – going wherever the freaks want it to!

 

Advance/Declines were strong…too strong for the volume! +5x!!! vs +2.1x vs -1.3x vs +7.8x!?! vs +2.9x on NYSE and +3.2x vs +1.8x vs -1.1x vs +3.7x vs +1.4x on Nasdaq. Breadth was even stronger: NYSE: +15.6x!!! vs +2.6x vs +1.2x vs +13.4x!?! vs +2.1x on NYSE and +5.6x!!! vs +2.4x vs +1.2x vs +5.7x! vs +1.9x on Nasdaq. New 52 week highs were slightly higher at a still weak 159 vs 122 vs 124 vs 94 vs 40 vs 28 (768 is cycle high), while new lows were halved to 43 vs 88 vs 106 vs 103 vs 352 vs 502!. The ratio remains positive for a third session following 9 straight negatives: +3.7x vs +1.4x vs <1.1x vs -1.1x vs -7.5x! vs -17.9x!!! vs -8.4x! Recent high was +7x! The S&P VIX dipped to 15.14 vs 15.31. 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 +1.4% vs +0.4% vs -0.1% vs +1.7% vs +0.4%;  Dow Transports +1.1% vs +0.3% vs flat vs +1.9% vs -1.5%!!!;Dow Utilities DOWN 0.1% vs -0.4% vs -0.3% vs +0.2% vs +1.2%!; S&P 500 +1.3% vs +0.2% vs +0.1% vs +2% vs +0.5% vs -0.2%; Nasdaq Composite +1.4% vs +0.3% vs flat vs +2.2% vs +0.6%; Nasdaq 100 +1.5% vs +0.2% vs flat vs +2.4% vs +0.4%; Russell 2000 +1.1% vs +0.6% vs +0.1% vs +2% vs +0.9%; NYSE Financials +1.4% vs +0.2% vs +0.4% vs +2% vs +0.5% (KBW Banks +1.6% vs -0.3% vs +0.7% vs +2.2% vs +0.6%; Nasdaq Banks +1.8% vs flat vs +0.4% vs +1.7% vs +0.7%; NYSE Brokers +1.6% vs +0.4% vs -0.5% vs +2.2% vs +1.2%.NYSE Financial Leaders: BAC +1.3% vs +1.5% vs +1.5% vs +4.1%??? vs +0.2% But BAC still in the $9-10 range, closing at $9.90, after hitting $8.95 four days ago! No other leaders – again!

 

Global equities weaker after three straight up sessions: FTSE -0.7% vs +0.2% vs +0.7% vs +0.1% vs -0.2%; CAC 40 -0.9% vs +0.1% vs +0.4% vs +0.3% vs -0.4%; DAX -0.4% vs +0.1% vs +0.9% vs +0.1% vs +0.1%;Nikkei +0.2% vs closed vs +1.6%!!! vs +0.9%! vs -0.1%; Hang Seng -0.2% vs +0.8% vs +1%! vs +1.4%!!! vs -0.2%; Korean KOSPI -0.2% vs +0.6% vs +0.8% vs -0.3% vs +0.6%;Indian Sensex +0.2% vs -0.1% vs +0.3% vs +0.7% vs -0.1%. U.S. stock futures near bottom of range: DOW -51; SPX -6.50; NDQ -6.75. Watch Friday’s faux rally fade…and fade…

 

U.S. treasury bonds traded lower again on Friday but are better overnight: 10 yr 1.68% +1/4- record low of 1.40%; 30 yr 2.79% +11/16. Long TIP 0.36% +3/4 – 0.25% is the record low!The 5 yr TIP yields –1.44%; 10 yr -.79%.T-Bills: 0.16% 1 month; 0.09% 3 months; 0.14% 6 months. Reverse Repo 0.31%. 3 mo. Libor 0.31%; 6 mo. 0.52% but inching up. On 9/18 they were 0.38% and 0.67% respectively. European problem sovereign 10 years, Germany-bench: 1.42% -1; Japan 0.72% -1; Italy 4.76% +2; Spain 5.59% +2; Greece 16.26% +12 – a week ago it was 17.03%!!! …on 9/20: 19.75%!!!; Portugal 7.79% +10; Ireland 4.40% +5.

 

Gold took out the intraday high set two weeks ago Friday of $1739.40 with the highest high since 10/12. It closed at $1751.80 +$23.60. The intraday high was slightly higher at $1755. On 10/4 it closed at $1796 highest since 2/29 and it has lost $44 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. Two levels of RES were taken out and are now SUP at $1736, the 40 day, $1743, the 50 day, CROSSED!MAJOR SUP at $1670, the 200 day. 5/2’s o/n low of $1526.70 was lowest since 12/29! It is now $1750.60 -.84.Crude closed slightly higher after briefly taking out the 40 day with an $88.53 print but was unable to hold closing  at $89.26 +.88. SUPPORT at the 40 day (88.38), RES at the 50 day (89.36), and the 200 day (94.15), all still falling! It is currently $87.82 -0.46.

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