5/2/13…how revolting…

From the Friar’s Club Encyclopedia of Jokes: “We have 35 million laws to enforce the ten commandments.”

Bloomberg Quote of the Day: “Being in politics is like being a football coach. You have to be smart enough to understand the game and dumb enough to think its important.”  

Bloomberg Top Stories:

*First-Time Jobless Claims in U.S. Unexpectedly Decline to a Five-Year Low

*Draghi Cuts ECB Benchmark Rate to Record 0.5% as Economic Outlook Worsens

*Dratghi Says ECB Refinancing at Full Allotment Until Mid 2014 – but IF…  

*Trade Gap in U.S. Narrows More than Economists Estimated to $38.8 Billion – good!

*General Motors Narrows First-Quarter Deficit in Europe to Less Than Ford’s

*Productivity in U.S. Increases as Companies Attempt to Reduce Labor Costs – pretty easy if you are hiring fewer workers and not paying them a dime more, no???

*American Auto Industry Surges in First Market Share Gain in 20 Years – !!!

*European Power Prices Fall to Record as Coal Slumps to Near Three-Year-Low

*Canada Recruits Immigrants to Win Global Contest for Skilled Labor – not the U.S.!

*Buffett’s Berkadia Looks Beyond Apartment Debt as U.S. Retreats – more commercial!

*Boston Marathon Bomb Trail Leads Into Heart of Putin’s Own War on Terror

*U.S. Deleting Data on Life-Threatening Hospital Errors From Medicare Website

OK, after yesterday’s selloff which created yet another ‘one-day wonder,’ TB is ready to make a prediction: a modest ‘up’ day today and a big swoon tomorrow following yet another weak payrolls report. Got it? Yesterday eradicated the gains of Tuesday in spades as the ‘high freaks’ served up another dish of crow to the bulls. While volume was moderate, it was still sharply higher from the rally, again cofirming TB’s theory of relativity. As noted yesterday, Tuesday was monthend so they knew the indexers would be forced to buy on the close…are we that blind, or just plain stupid? They must love it! All indices were down notably both Dow Transports AND the Russell 2000 small cap! They fell by 2.3% followed by Dow Utilities and NYSE Financials -1%, The rest were all off 0.9% (recall TB hates it when that happens!), except the Nasdaq 100 which fell 0.5% vs +0.7% It lost 14 points of Tuesday’s 20 point gain with 3:1 declining vs 2:1 advancing! Hello??? Apple comprised 2.8, MSFT 2.7, AMZN 2.2; and GOOG/BIIB each suptracting 1 point, or half the loss vs Tuesday when just 7 stocks made up the entire gain! That SMELLS of high frequency trading! Put on your helmets tomorrow! Pray???

So let’s see what else happened lately:

*Dow Transports -2.3%!!! vs +0.5% vs +0.6% vs +0.1% vs +0.1% vs 0.6%; Russell 2000 -2.3% vs +0.5% vs +0.8% vs -0.5% vs +0.7% vs +0.5%; Dow Utilities -1%! vs +0.2% vs +0.7% vs flat vs +0.1% vs +0.4%; S&P 500 -0.9% vs +0.3% vs +0.7% vs -0.2% vs +0.4%. Nasdaq Composite -0.9% vs +0.7% vs +0.9% vs -0.3% vs +0.6%, NDQ 100 -0.5%! vs +0.7% vs +0.9% vs -0.3% vs +0.5%, NYSE Financials -1%! vs +0.7% vs +0.7% vs -0.1% vs +0.5% vs +0.7%. Dow 30 -0.9%!!! vs +0.1% vs +0.7%.

*NYSE Volume was slightly lower at 3.5B shares vs 3.67B vs 2.88B shares (weakest in 16 sessions!!!). REAL NYSE Volume fell sharply to 697M shares vs 887M vs 599M shares (lowest since 4/8) vs 628M vs 746M vs 706M vs 620M following SIX 700M+ share days ranging from 975M (selloff) to 743M (rally). This confirms that  Tuesday’s volume coming on the close – indexers squaring positions for monthend was the driver, not the ‘dawning of a new bull market.’  The average last week was just 687M shares vs 859M vs 689M!!! The last options expiry came in at a solid but not great 914M shares. The 12-month average is just 733M 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! There have been just fifteen 800+M shares in 2013 – just 4 up, 11 down and on trades of less than that 69 have been up and just 19 down…there have been 19 mixed sessions…do you see why volume matters???

  1. new 52 week highs have ranged from 121-709, dipped to 386 vs 486 vs 418 vs 267 vs  495 vs 400 vs 400 vs 237 vs 228 vs 106 vs 100. New lows surged to 61 vs 42 vs 29 vs 40 vs 34 vs 48 vs 43 vs 96 vs 82 vs 159 vs 237 vs 120 vs 197.
  2. Advance/Declines were NEGATIVE, compare to Tuesday!: -2.6x vs +2x vs +2.8x vs -1.4x vs  +1.8x vs +1.9x vs +4x vs +1.4x vs +2.6x vs -1.2x vs -3.5x vs +4.4x vs -7.1x on NYSE and -3.5x! vs +1.5x +2.1x vs -1.6x vs +1.7x vs +1.3x vs +3.4x 0.7% vs +1.5% vs +0.3% vs +1.3% vs  -0.8% vs -1.8%! Breadth was worse: -4.5x!!! vs +1.6x vs +3.4x vs -1.8x vs +2.2x vs +2.1x vs +3.9x vs +1.6x vs +2.3x vs -1.3x vs -10.5x!!! vs +6.4x vs -7.2x vs -2.2x on NYSE and -2.7x vs +1.9x vs +2.3x vs -1.1x vs +1.8x vs +1.5x vs +3x vs +2.5x vs +2.3x vs -3x! vs -5.2x vs +6.2x vs -12.8x!!! vs -1.4x .  
  3. NYSE Financials FELL by 1% vs +0.7% vs -0.1% vs +0.5%. BofA only ‘most active’ financial fell 1.8% to $12.09 -.22 vs -0.6% vs -0.3% vs +0.2% vs +2% vs +3% vs +0.5%.
  4. Volatility (S&P VIX) rose sharply to 14.49 +.97!!!, with a range of 13.87-14.67 – another reason to believe Friday will be a selloff – time to reinstitute those limit/stop orders again!!! The range for the last two weeks was 12.06 (multi year low) to 18.20, and it is now back above the 40/50 day (13.49/13.85) but still below the 200 day (15.26)…ytd the range is 19.28 (2/25!) to 11.05 (3/14) – 12 mo. ave 16.43!!!

Global equities weaker, ex-India!!! and Germany: UK -0.2% vs +0.7% vs -0.1% vs +0.2% vs -0.5%; France -0.3% vs +0.3% vs flat vs +1% vs -0.8%; Germany UP 0.4% vs +0.5% vs +0.8% vs +0.4% vs +0.4%; Japan -0.8% vs -0.4% vs -0.2% vs closed vs -0.3%; Hang Seng -0.3% vs +0.7% vs +0.7% vs +0.2% vs +0.7%; Korea -0.3% vs closed vs +1.2%! vs -0.2% vs -0.4%; India UP 1.2%!!! vs closed vs +0.6% vs +0.5% vs -0.6%. U.S. stock futures higher overnight: DOW +41; SPX +4.20; NDQ +10.25!!!

Bonds rallied even higher on weaker economic news and stock market weakness but are weaker overnight in the long end, with 10’s AND 30’s near the low  end of trading range established yesterday: 10 yr Treasury 1.64% -1/16 (recent range now 2.06% to 1.63%!!!), and the 30 yr’s 3.26% to 2.82%!!!, 2.84% -1/4. The long TIP is now 0.45% -1/2 – still lagging after setting a new (record?) low of 0.36% on 4/5, before backing off to 0.52%! The recent high yield was 0.67% on 3/11! Libor update: 0.237% 3 mos., 0.425% 6 mos. Foreign bond yields lower – especially Greece!!!: Germany 1.17% -4; UK 1.64% -1; France 1.67% -4, Italy 3.85% -3; Spain 4.09% -2; Portugal 5.60% -2; Greece 10.09%!!! -56!!! A BIG new low!!! vs 10.64%! vs 10.81% vs 10.92% vs 11.18% vs 11.13% vs 11.05% vs 11.08 vs 11.22% (recent range now 10.09%-12.57%!). Japan 0.56% -3.   

Gold closed sharply lower at $1446.20 -$25.90! disregarding Friday’s new intraday high of $1484.80, highest since 4/12! Last Tuesday’s intraday low of $1321.50 – was lowest since Sept. ’10. The loss over the two weeks is now back to $54. A week ago Monday’s $149 loss to a 52 week low of $1361.10 was disastrous. Resistance remains way above at the 40 day/50 day: $1532-1542 – still falling! Overnight it is $1463.70 +$17.50…trading it is not for the weak of heart! Crude closed sharply lower for a second day at $91.03 -$2.43, also disregarding Monday’s new intraday high of $94.69, highest since 4/11. Crude plunged through support (now resistance) at the converging the 40 day ($92.60), 50 day ($92.53) and 200 day ($91.86),!!! So much for erasing all of the loss since 4/5 Overnight it is $91.41 +.38 Last Tuesday’s session low of $86.20 was lowest since 12/13/12! The range is now $85.61-$97.80 since June 29, 2012!!!!

 

Some random thoughts:

Our government has failed us. We have a political system dominated by two dysfunctional parties, both beholding to their big donors NOT to the people who elected them. They simply don’t care and those who do appear to have given up the fight.

This is what you get when a country allows unlimited donations, no disclosure of the source in the case of the 501(c)4’s under the guise of freedom of speech. Say what you want but let us know who is saying it! Redistricting by the affected representatives, and a country run by lobbyists from financial services (Banks, Brokers, and Insurers) and big Pharma.

Where one was a conservative they are now branded liberals and liberals socialists. The wealthy – who gained from the financial collapse – continue to amass even greater riches while preventing any major tax reform…it is the code that needs revising not the brackets…and putting the burden on the middle class (?) and below who were unwitting pawns in their schemes.

Honk if you are proud of America and its ‘democratic’ ways. No, honk if you don’t believe ‘free market capitalism’ still exists or that it serves a social good. You decide.

TB

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