3/21/13…Sammy is the man!

From the Friars Club Encyclopedia of Jokes: Confidence: what you start off with before you completely understand the situation.

Bloomberg Quote of the Day: “Art is making something out of nothing and selling it.” – Frank Zappa…no one knows this better than ole Frank!

Bloomberg Top Stories:

*European Economy Gauge Shows Deeper Contraction Than Forecast for Month

*Stocks in Europe Decline on German Manufacturing Contraction; Euro Weakens

*Cyprus Confronts Funding Deadline(3/25), as Anastasiades Works to Avoid Collapse

*S&P 500 Rally Toward Record Broadest Since ‘90’s as Equal-Weight Gains 192%

*Banker Bonus Curbs Sealed in EU Parliament After U.K. Fails to Dilute Plan – !!!

*Bernanke Saying He’s Dispensable Suggests Tenure as Fed Chief Winding Down – !

*Deutsche Bank Rises After Jain Cites Lower Costs for ‘Solid’ First Quarter – oh?

*Europe Getting Closer to Banking Union Fails to Help Cyprus in Debt Crisis – !!!

*China’s Solar Billionaire Undone as Lenders Push Suntech Toward Bankruptcy – !!!

*Einhorn Struggling to Prove He Creates Value on Way Up as Much as on Way Down

*Ocalan Calls From Prison for His Kurdish Resistance to Swap Arms for Talks

*Palestinians Await Obama’s Visit Seeking U.S. Turnaround on Statehood Bid – uh, no

*Obama Emphasizes Agreement With Netanyahu as Differences Linger Over Iran

*Anti-Terror Drone Program Weighed by Obama for Shift to Pentagon From CIA – !

*Osborne’s Tight Budget Doubles Down on a Failing U.K. Fiscal Policy – is this where we are headed??? If Ryan gets his way austerity will widen wealth gap, weaken GDP!

   

Finally the market staged a rally…ex-Transports which fell by 0.4%, but…

*Volume fell again which you do not want to see on a rally day, both total and real!

*Dow +0.4%, S&P 500 and both Nasdaq indices rose by 0.7% and Russell 2000 by 1%

*Dow Utilities gained 0.8%…on an up day, why? NYSE Financials higher: +0.6%

*Advance/declines and breadth were solidly positive, New Highs strong at 513 vs 328

*Volatility (VIX) plunged by 12% to 12.67, back below 40/50 day m/a’s

 

FOMC announcement showed no change in policy…steady as she goes

NYSE Volume fell leaving just one positive on last Friday’s options expiry (as usual since the only two days where we have high volume are options expiry and sometimes monthend). It was 3.32B shares vs 3.74B vs 3.15B vs 4.93B (2013 high), average of last 15 sessions is 3.53B shares – weak! Real NYSE volume also fell to 673M shares from an average 731M shares vs 676M vs 1.825B (new 12-month high!!!). The range since 2/11 is 497 to 1.83B with an average of 730M shares. Last Friday’s 1.83B shares was second only to 12/21’s 12 mo. high of 1.88B shares. Note that Friday was the only day since 2/28 to register over 1B shares with no other sessions reaching anywhere near 800M shares!!! Ave vol. 12 mos. 742M, ytd 726M. There have been just NINE 800+M shares in 2013.

  1. new 52 week highs which have ranged from 121-709, rose to 531 vs 328 vs 282 vs 584 vs 652 vs 410 vs 413 vs 560 vs 630. New lows fell to 43 vs 50 vs 42 vs 64vs 50 vs 42 vs 36 vs 26 vs 24 vs 64 vs 73 vs 98.
  2. Advance/Declines were positive for the first time in four days at +2.9x! vs-1.3x vs -1.5x vs -1.1x vs +2x on NYSE and +2.4x vs -1.4x vs -1.9x vs -1.3x vs +2.1x on Nasdaq. Breadth was similar at +3.2x! vs -1.6x vs -2.6x! vs -1.1x vs +2.8x on NYSE and +3.5x! vs -1.8x vs -2.3x! vs -2x vs +1.9x on Nasdaq.
  3. The Dow rose 0.45% after being flat. All indices except Transports (-0.4%) were positive including Dow Utilities +0.8%???. Russell 2000 was tops +1%!
  4. NYSE Financials rose by 0.6% after being the big loser for two days vs -0.7% vs -1.1% most of the loss was due to brokers. NYSE Brokers +1.6%! vs -0.7% vs -1.1% vs -0.2% vs flat vs +1.1%. BofA still most active – natch: +0.6% vs +1% vs -0.1% vs +3.8% vs +0.4% vs +1.4% vs -1.2% vs +0.7% vs +1.6% – the range is $11.11, on 12/17 to $12.78 yesterday! Note: 11 cents is a 1% change!!!  GE was only other financial most active +0.6%. JPM and Citi remain weak after hitting new highs.
  5. Lastly volatility (S&P VIX), which gapped up on the open Monday(from a multi-year low!!!) fell by 12% from a bearish 14.38 and intraday the high of 16.23 to 12.67 -1.72. That is still up 10% in 3 days!!! When something like this can occur because of a mouse like Cyprus one has to wonder. But recall the financial collapse began with Iceland, spread to Ireland, then to the Euro countries and the U.S. and ultimately to Greece…now Cyprus??? Is this really a good time to be bullish on stocks???

Global equity markets weak for third time in four sessions, ex-Japan, led down by Europe: UK -0.8% vs +0.3% vs flat vs -0.7% vs -0.6%; France -1.2% vs +1.2% vs -0.6% vs -1.3% vs -0.9%; Germany -0.8% vs +0.8% vs -0.3% vs -1.1% vs -0.3%; Japan +1.3% vs closed vs +2%!!! vs -2.7%!!! vs +1.5%; Hang Seng -0.1% vs +1% vs -0.2% vs -2% vs -0.4% vs -0.4%; Kospi -0.4% vs -1%! vs +0.5% vs -0.9% vs -0.8%; India -0.5% vs -0.7% vs -1.5%!!! vs -0.7% vs -0.7% vs +1.1%. U.S. stock futures slightly higher, ex-NDQ, and trading in a narrow range: DOW +16; SPX +0.20; NDQ DOWN -1.250

Oddly on the failure of the Greek deposits ‘tax’ to pass, bonds declined after being higher on Friday, Monday, Tuesday. Overnight they are modestly higher: 10 yr Treasury 1.95% +1/8 vs 1.96% but below the 2.06% to 1.85% prior 19 sessions, and the 30 yr’s 3.26% to 3.05%, closed 3.20%, now 3.18% +3/8. The long Tip made it to 0.60% Tuesday but is now back to 0.65% but +3/8, the high yield was 0.66%. Libor update: 0.243% 3 mos., 0.447% 6 mos. Foreign bond yields LOWER ex-U.K.: Germany 1.38% -1; UK 1.79% +1; Italy 4.57% -5; Spain 4.84% -11!!!; Portugal 5.85% -4; Greece 11.37% -9 vs 11.48% vs 11.21% vs 11.06% vs 10.58%. Now the problem credit aren’t even trading equally…huge differences in spreads!!!

Gold slipped after being higher for five days but remains above $1600 for a third day. It is still below resistance and way below the 1/17 high of $1699.90. It closed at $1607.50 -$3.80.  2/21/13’s low was $1554.30 – not seen since May 2012! Last time it was below $1500 was Sept. 2011. Overnight it is up just 20 cents. Crucial to hold $1600 The total breakdown through the 40/50/200 day m/a’s puts major resistance $1621-1669, with major support at $1600, a double bottom from 8/14-15, also a psychological level. Crude rose yesterday after Monday’s wild ride which took it to $91.76 and placing the rally in jeopardy before bouncing. It closed at $93.50 +.98 on a second essentially parallel session. The recent low is $89.33, lowest since 12/26, set on March 4. Overnight it is $93.22 -.28 and still below the converging 50 day ($94.36), and 40 day ($94.39)!

 

Some random thoughts:

Ya know…”sometimes ya got it, sometimes ya don’t”….this is one of those mornings so will save it for something meaningful…hey! Some of them have been LONG this week.

But first a story about Sammy Davis Jr. He was performing at Harrah’s South Lake Tahoe when TB worked for the bank in Nevada. He started his act at the dinner show, sang two songs, then said the quote above. What about ‘the show must go on” you say? Well, he was a perfectionist and didn’t want to put on a bad show…but…he then said that the evening was on him and picked up the entire tab. What was worse, the checks hadn’t been delivered so more drinks were ordered…it was a big hit! But that is the class the man had. Never a comment, just made people feel good about him. Ever hear of anyone else doing that? Not TB! Also, while Sinatra could be a jerk, to friends he was a great guy, and generous. Don’t judge people by what you hear…it ain’t always as it seems.”

Have a great day!

TB

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