4/8/13…market commentary only, posted 4/9

There is no ‘random thoughts’ section due for personal reasons…not because I didn’t have a lot I wanted to say!

From the Friars Club Encyclopedia of Jokes: “I require only three things of a man. He must be handsome, ruthless, and stupid.” – Dorothy Parker

Bloomberg Quote of the Day: “From fanaticism to barbarism is only one step.” – Denis Diderot and…”I was never less alone than when by myself.” Edward Gibson

This week’s economic calendar is packed with important indicators. The highlight of the week will be the March Retail Sales and March PPI (Friday). We will get February Wholesale Trade and February JOLTs Job Openings (Tuesday), March Treasury Budget (Wednesday), March Import & Export Prices (Thursday), and April Consumer Sentiment Preliminary and February Business Inventories (Friday). In addition, the Federal Reserve will release the minutes to the March 19th – 20th FOMC Meeting on Wednesday. Courtesy of Economics Advisory Service. 

Bloomberg Top Stories:

*Fed Aims to Avert Fourth Summer Slump With Asset Purchase Pace Maintained

*European Stock Sales Pare Earlier Advance as Banks, Insurers Fall

*GE Agrees to Acquire Lufkin for $3.3 Billion to Add Oil, Gas Technologies

*Obama Economy Seen Emulating Clinton’ Best of Times 1990s With 2013 Data – huh??

*Colony Capital’s Barrack Sees Risk of Asset Bubble in U.S. Housing Market

*Portugal to Cut Spending After Court Bans Plan to Suspend Salary Payments

*Brazil’s Belated Domestic Servant Rights Compared to End of Slavery

*Gulf Investors Eye U.K. Banks Even With Tighter Rules, PCP’s Slavely Says – ???

*Goldman Sachs Targets Small Business Loans in Yield Search – reaching for returns?

*Trust in Gold Not Bernanke as U.S. States Promote Bullion for Legal Tender

*Margaret Thatcher, Who Helped End Cold War as U.K.’s Iron Lady, Dies at 87

*Congress Tax Writers Pledge Bipartisan Approach to Overhauling U.S. Code

*Camp, Baucus Pledge to Lower Rates, Tax More Income in U.S. Code Rewrite – hah!

*North Korea Closes Join Industrial Complex as South Warns of Nuclear Test

*Romney IRA Becomes Obama Target for Revenue With New $3 Million Cap – correct!

Not up nor down but mixed! Go figure on a day with the most abysmal labor report of the entire ‘recovery.’ The worst part being the destruction of the partipation and employed to total population ratios which plunged to the lowest levels since  1970 amd 1983 respectively! Only Dow Transports and Utilities rose…by 0.5% the pair while the worst performers were the Nasdaq’s, -0.7% and 0.8% respectively! Total NYSE volume rose..on a down day again to 3.5B vs 3.32B vs 4.04B. Advance/declines and breadth neutral, while the VIX rose by a measly .03 to 13.92 – above the 40/50 day but still way below the 200 day m/a. Here are some takeaways that indicate we just had a market ‘top’:

*Dow Transports were the best performer of the majors after being the goat for four straight sessions, rising  by 0.5% vs +0.1% vs -1.3% vs -1.2% vs -1.5%. Dow Utulities were the only other gainer, also up 0.5%. The S&P 500 declined by 0.4% vs +0.4%,  Nasdaq Composite -0.7% vs +0.2 vs -1.1%, the 100 -0.8% vs flat vs -0.9%, and the Dow -0.3% vs +0.4% vs -0.8%. The market remains under the control of the  high frequency geeks!.

*NYSE Volume rose to 3.5B shares vs 3.32B vs 4.04B (highest since 3/15’s options expiry!) vs 3.29B vs 2.74B vs 3.27B vs 2.9B shares. REAL Volume rose on the declines to 726M vs 647M vs 812M vs 639M vs 573M vs 876M (high since since 3/15) vs 596M shares vs 558M shares –the range since 2/11 is 558M to 1.825B on 3/15’s options expiry and a near 12 month high, second only to 12/21’s 1.88B shares. Note that 3/15’s (options expiry) was the only day since 2/28 to register over 1B shares! Ave vol. 12 mos. 738M, ytd 717M. There have been just 11 800+M shares in 2013 – mostly on DOWN days!

  1. new 52 week highs which have ranged from 121-709, were steady at 146 vs 143 vs 193 vs 417 vs 388 vs 613 vs 348 vs 422 vs 512. New lows rose to 96 vs 81 vs 114 vs 64 vs 69 vs 36 vs 60 vs 44 vs 56 vs 33 vs 36 vs 43 vs 50; recent high 98.
  2. Advance/Declines were slightlyh negative: -1.1x vs +1.6% vs -3.7x vs -1.1x vs -2.2x on NYSE and -1.5x vs +1.8x vs -3.3x vs -1.3x vs -2.7x on Nasdaq. Breadth was mixed: +1.0x vs +2.4x vs  -5.7x!!! vs -1.2x vs -3.4x on NYSE and -1.5x vs +2.1x vs -4.3x!!! vs +1.1x vs -3x on Nasdaq.
  3. The Dow fell by 0.3% vs +0.4% vs -0.8% vs +0.6% vs +0.4%. Dow Transports were up 0.5% vs +0.9% vs -1.3% vs -1.2% vs -1.5% while Dow Utilities shared honors at +0.5% vs +0.9% vs -0.3% vs +0.3% vs +0.2%.The two Nasdaq indices were worst declining by -0.7% vs +0.2% and -0.8% vs flat respectively vs +1.1% and +0.9% respectively!!! The Russell 2000 fell by 0.3% vs +0.8% vs -1.7% vs -0.5% vs -1.3%. NYSE Financials fell by -0.3% vs +1% vs -1.6% vs +0.7% vs -0.8%. Brokers -0.2% vs +0.8% vs -2.1% while the two bank indices were mixed at +0.8%? and -0.2% respectively vs +0.9% and +0.6% respectively vs -0.2% and -1.2% respecitively!. BofA again most active +0.3% vs +1.1% vs -2.8% to close at $11.97 +.03, so much for $12 for third day since 3/6- the range is $11.11, on 12/17 to $12.78 on 3/20. Note: 12 cents is a 1% change!!! No others.
  4. Lastly, volatility (S&P VIX), barely budged to 13.92 vs 13.89 vs 14.21 (high of 14.66 from a multi-year low!!!), it is oscillating wildly in a narrow range of 12.30-14.66, average 13.23, and remains above the 40/50 day m/a’s (13.53/13.49) and approaching the 200 day at 15.72…ytd the average has been 13.53 with a range of 19.28 (2/25!) to 11.05 (3/14) – 12 mo. ave 16.64!!!

Global equity markets generally modestly higher – Japan UP for a fourth straight session: UK +0.3% vs -1.8% vs -0.8% vs -0.4% vs +1.2%; France +0.3% vs -2%!!! vs -0.3% vs -0.2% vs +0.9%; Germany FLAT vs -2%!!! vs -0.3% vs-0.2% vs +1.1%; Japan +2.8%!!! vs +1.6% vs +2.2% vs +3%!!! vs -1.1%; Hang Seng -0.1% vs -2.7%!!! vs -0.1% vs -0.1% vs +0.3%; Kospi -0.4% vs -1.6%!!! vs -1.2% vs -0.2% vs -0.5% vs -0.4%; India -0.1% vs -0.3% vs -1.6%! vs -1.2%! vs +0.9%. U.S. stock futures opening lower: DOW -50; SPX -4; NDQ -5. Transports +4.

Bonds were slightly weaker Friday and little chanded overnight: 10 yr Treasury 1.71% unched (recent range WAS 2.06% to 1.85%), and the 30 yr’s 3.26% to 3.05%, 2.88% -1/32. The long TIP is just off that new (record?) low of 0.36% at 0.37%, the high yield was 0.67%! Libor update: 0.240% 3 mos., 0.442% 6 mos. – unchanged. Foreign bond yields mixed, Greece strong again? Germany 1.23% +2; UK 1.69% +6; France 1.74 -1, Italy 4.33 -4; Spain 4.71% -2; Portugal 6.29% +4; Greece 11.53% -37 vs 11.94% vs 11.2% vs 11.94% vs 12.09% vs 12.30% vs 12.57%!!! vs 11.66% vs 11.37% vs 11.48% vs 11.21% vs 11.06% vs 10.58%…exciting!!! Hoopa!  

Gold kissed $1600 goodbye Wednesday and still hasn’t looked back, closing up but still at a weak $1575.90 +$23.50 and well off the new low of $1539.40, lowest since 6/29/11!!! It is still way below resistance and the 1/17 high of $1699.90. The recent intraday high was $1618.30, almost to the 40 day on 3/21!  We are now back above the 2/21/13 low of $1554.30 – not seen since May 2012! Last time it was below $1500 was Sept. 2011, now critical. The breakdown puts first resistance at the 40/50 day m/a’s $1602-1616 – still falling steadily. Crude was weaker closing at $92.70 –.56, but with an intraday low of $91.91 – lowest since 3/21 – it is below BOTH the 50 day ($94.52) and 40 day ($93.94), four days following the rally intraday high of $97.35, highest since 2/15! The range is $91.60-$97.35 since 3/12! The recent low is $89.33, lowest since 12/26, set on March 4.

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