3/13/13…volatility speaks volumes

From the Friars Club Encyclopedia of Jokes: “There are two million interesting people in New York City and only seventy-eight in Los Angeles.” – Fred Allen

Bloomberg Quote of the Day: “Your attitude, not your aptitude, will determine your altitude.” – Zig Ziglar

Bloomberg Top Stories:

*Retail Sales in U.S. Increased 1.1% in February, theMost in Five Months

*U.S. Stock Futures Erase Loss, Treasuries Fall on Retail-Sales Data

*London Gains First-Mover Advantage in Europe’s Race to Start Yuan Trading – !!!

*Pound Corporate Bonds Fall to Worst From First in Cash Flight From Britain – !!!

*Jamie Dimon’s Extra $1.4 Million Payout Hangs on Fed’s Dividend Decision

*Iran Oil Exports to Increase 13% Even With Wider Sanctions in IEA Forecast

*Fidelity Turns to BlackRock’s IShares Line for Expansion Into ETF Business

*Oil Riding Rails Jumps to Record as Buffett Urges Chest-Pulling Freight

*DeLong Says Now Isn’t Time to Cut U.S. Budget With Rare Free Lunch Offered

*American Tax Cheats Picked Off One by One After Swiss Advisor Mails It In

*No Pope Elected Yet as Cardinal Are Looking Beyond Europe to Vote Again

*Democrat’s Budget Plan Gives Obama Room for Grand Bargain Fight With Ryan

*Europeans Are World’s Biggest Smokers-Drinkers as WHO Urges Rise In Prices

*Could Paul Ryan Be An Inflation Nutter?     

A down day…finally…not an interesting session. Oh yeah, the Dow eked out another record high, but by just 30 points this time. By the close it was FLAT…ok, a 3 point gain. Volume rose slightly as did the VIX and Apple dragged the NDQ 100 down yet again. NYSE Financials were also weak with some big losses for the top banks. Gold and Crude were up but not impressively but both had the highest intraday high since 2/27/13.

TB is sticking with ‘sell in May and go away’ – IF we make it that far…when else have you been able to buy puts so cheaply???

Total NYSE total volume rose slightly to 3.22B shares vs 2.98B vs 3.64B vs 3.62B vs 3.67B vs 3.57B vs 3.38B vs 3.76B vs 3.53B vs 2/28’s 4.2B (highest of 2013 by about 400M shares). Real NYSE volume was also slightly higher but remains WEAK! It ran 622M shares up from 599M shares (lowest since 2/11’s 497M!!!) vs 690M vs 708M vs 684M vs 683M vs 693M  – vs 2/28’s (monthend) 1.01B shares!!!(second only to 1/18’s 1.07B and third best to 12/21’s 12 mo. high of 1.88B shares). Note that 700M occurred just once last week while the average volume since 2/15 is a weak 740M shares!!! Ave vol. 12 mos. 744M, ytd 710M. There have been just eight 800+M shares in 2013. THIS produced a Dow rally of 11.6% since the 12/28 low???…and now SIX consecutive record highs (ave 52 points, 371 total and since the rally began 7 days with the gain just 2.4% higher). Also, since the last options expiry on 2/22 the Dow is up 3.2%, S&P +2.5%. This on a very thin-based rally which is unbelievably getting weaker! Yesterday could have been the beginning of a correction ahead of Friday’s options expiry! ALSO, the VIX which surged to 19.28 on 2/28 fell to an incredibly low 11.56 Mondayday – with a low of 11.50 – lowest since 3/2/07, rose slightly to 12.29.

  1. new 52 week highs which had ranged from 121-680 (2/19), before falling to just 121, fell again to 413 vs 560 vs 630 vs 447 vs 539 from a very high 709 vs 418 vs 274 vs 326 vs 268 vs 145 vs 273 vs 214. New lows rose slightly to 36 vs 26 vs 24 vs 64 vs 73 vs 98 vs 93 vs 59 vs 49 vs 74 vs 52. Puts remain incredibly cheap!
  2. Advance/Declines were modestly negative after 10 straight positive sessions at -1.4x vs +1.2x vs +2x vs +1.4% vs +1.3x vs +2.8x vs +1.3x vs +1.3x vs +1.1x vs +3.2x vs +2x on NYSE and -1.4x vs +1.1x vs +2.1x vs +1.6x vs +1.2x vs +2.4x vs +1.2x vs +1.3x vs -1.1x vs +2x vs +1.5x vs -4.4x on Nasdaq. Breadth was similar at -1.3x vs +1.6x vs +2x vs +1.8x vs +2.2x vs +4.1x vs +1.5x vs +1.2x vs -1.1x vs +6.2x +2.4x vs -9.7x on NYSE and -1.7x vs +2.1x vs +1.9x vs +1.9x vs +1.4x vs +3.4x vs +1.8x vs +1.7x vs -1.1x vs +4.4x vs +1.6x vs -4.5x on Nasdaq.
  3. Both Nasdaq indices fell by about 0.4% vs +0.4%, with the NDQ 100 losing 11 points – 9.5 of them from Apple!!!  Only 40 advanced, 60 decliners. The Russell 2000 small cap which had been the only impressive index slipped 0.2% vs FLAT vs a 0.9% gain vs 0.5% vs +0.3% vs +1.2% vs +0.2% – that is still up 3.4% in 9 sessions! Don’t look down!
  4. NYSE Financials FELL 0.7% vs +0.6% for three days vs +0.3% vs +0.9% vs +0.5% vs +0.1% vs -0.2% vs +1.4% vs +0.6% vs -2.5%. BofA still most active and fell 1.2% to close at $12.01 (low $11.91!) vs +0.7% vs +1.6%, coming back from $11.11, lowest since 12/17, and still above the 40/50 day m/a’s from the lowest close this year – from $12.42 high on 2/13. Note: 11 cents is a 1% change!!!  Citi FELL 1.3% vs +2% vs +3.7%. No other financial most actives!
  5. Lastly volatility (S&P VIX) which had back to back lows going back to 2006 – 12.13 then back to 18.99 (with an intraday high on 2/28 of 19.28, highest since 12/31 – highs on 12/30-31 were 22.72 and 22.19 respectively, highest since 6/15. It rose after plunging to 11.56 closing at a still very complacent 12.27. Monday’s low of 11.50, had not occurred since 3/21/07 (11.21). Given all the world’s headlines and lack of income gains how can we be so complacent? Ah, in ’07 we were near the record high…you know…the one we just broke! For what reason???

Global equity markets are weaker – ex-Korea: UK -0.8% vs +0.1% vs +0.2% vs +0.7% vs +0.4%; France -0.4% vs +0.1% vs -0.3% vs +1.2% vs +0.6%; Germany -0.1% vs flat vs -0.2% vs +0.8% vs +0.3%; Japan -0.6% vs -0.3% vs +0.5% vs +2.6% vs +0.3%; Hang Seng -1.5%! vs -0.9% vs FLAT vs +1.4% vs flat; Kospi UP 0.3% vs -0.5% vs -0.1% vs +0.1% vs -0.8% vs +0.2%; India -1% vs -0.4% vs -0.2% vs +1.4% vs +0.8%. U.S. stock futures also weaker in narrow range: DOW -27; SPX -3; NDQ -5.50. Opening down slightly following Retail Sales.

Despite the equity minor weakness, bonds rallied from their recent lows with the 10 yr closing at 2.02% +3/8 vs 2.06%, and the 30 yr at 3.21% +7/8 vs 3.26%, higher overnight too: 10 yr Treasury range of from 2.06% to 1.85% last 16 sessions, now 2.00% +1/8, and the 30 yr’s 3.26% to 3.05%, now 3.20% +1/4. The long Tip also came back from 0.66% – a new high – to close at 0.63% +13/16. now 0.62% +1/4. Libor update: 0.241% 3 mos., 0.446% 6 mos, steady. Foreign bond yields mixed with problem credits weaker: Germany 1.45% -3; UK 1.93% -3; Italy 4.70% +10; Spain 4.74% +3; Portugal 5.80% +1; Greece 10.46% +6.

Gold closed solidly higher and along with Crude had the highest close since 2/27/13. It had been little changed for four sessions, still near support with the loss from the 1/17 high of $1699.90 at $115! It closed at $1591.70 +$13.70, still down -$57 in 11 sessions but also above a week ago Thursday’s low of $1554.30 – not seen since May 2012! Overnight it is $1594.60 +$2.90. The total breakdown through the 40/50/200 day m/a’s, has major resistance $1634-1668, with first resistance at $1600, a double bottom from 8/14-15, also a psychological level. Last time it was below $1500 was Sept. 2011!!! Crude rose slightly yesterday, six days after setting another new low of $89.33, lowest since 12/26, and way below the 40 day ($94.67), AND $94.31, the 50 day. It closed at $92.54 +.48. Overnight it is $92.76 +.22.

Some random thoughts:

First Paul Ryan and his not-so-grand ‘bargain.’ Here is a Bloomberg article challenging his premises…also, if we adopt HIS budget and head into a deep recession, what does he plan to do about it? Bloomberg  Opinion/Ryan

Next, electing a Pope. What a mess…first while the percent of Americans who are Catholic is steady at 25%, that is due to more Hispanics coming here. One in three Americans who were raised Catholic have left the church…can you blame them? That doesn’t include those who believe the dogma is seriously flawed and hypocritical. For a very troubling story read this: Catholic Church Denial/Father Macias

Those two stories should keep you busy for the day…

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