6/5/13…a market or a casino? Neither and worse!

From the Friar’s Club Encyclopedia of Jokes: “From the minute I picked it up (a book) until I laid it down, I was convulsed with laughter. Some day I intend reading it.” – Groucho Marx

Bloomberg Quote of the Day: “If you are really thankful, what do you do? You share.” – W. Clement Stone…wonder if those top 1%er’s really believe that. TB

Bloomberg Top Stories:

*Stocks Decline on Fed Stimulus concern While Commodities Gain, Bonds/Yen Rally

*U.K. Services Growth Accelerates More Than Forecast to Fastest Since 2012

*JPMorgan’s Jefferson County Debt Debacle Poised to Cost Bank $1.6 Billion

*Abe Pledges Autumn Campaign to Loosen Japan Business Rules; Stocks Slump

*Dollar Set to Climb 10% as Deutsche Bank Cites Allure of Treasury Yields

*Americans Feeling More Confident in Poll as 60% See No Need for Better Job – ???

*Brazilian Real-Linked Bonds’ 13% Wipeout Means Foreigners Taking Hit

*Foes Gras Now Served in Coach Class as Airlines Spice Up Revenue Streams

*Saudi Women More Educated Than Men Wasted Resource as Economy Diversifies

*Turkey Clashes Persist as Government Cracks Down on Social Media Comments

When we go back to sane markets? Perhaps never but finally a look is being taken at ‘black pools’ and should also look at high frequency trading…but will it? Doubtful.

Told you Monday was a ‘dead cat bounce’ as market sold off again yesterday. Volume slipped but slightly above average. Advance/declines and breadth were both negative!

Nasdaq 100 fell 0.6%, tied with S&P and the Composite, while the Russell 2000 was worst at -0.8%, lost 17 point led by MSFT -4.3, GOOG -2, and four others losing 1 or more points, including AAPL and GILD. Decliners lead by 7:3

So let’s see what else happened:

* Dow 30 -0.5% vs +0.9% vs -1.4%!!! (range 276 points, loss 208!!!)  vs +0.1% vs -0.7%; Dow Transports -0.5% vs flat vs -0.8% vs +0.2% vs -1.1%!; Russell 2000 -0.8% vs +0.7% vs -1% vs +0.6% vs -1%!; Dow Utilities -0.3% vs +0.1% vs -0.6% vs flat vs -1.5%!!! vs -1.4%!!! – down 7% over the past 8 sessions, and since posting a near record  high on 4/30, have plunged 10.6%!!!; S&P 500 -0.6% vs +0.6% vs -1.4%! +0.4% vs -0.7%; Nasdaq Composite -0.6% vs +0.3% vs -1% vs +0.7% vs -0.6%; NDQ 100 -0.6% vs +0.3% vs -1% vs +0.6% vs -0.6%.

*NYSE Volume slipped to a slightly above average 3.6B shares vs 3.94B vs 3.91B shares vs 3.47B vs 3.56B vs 3.43B vs 2.75B (2013 low).  REAL NYSE Volume also slipped to a still above average 787M shares vs 880M vs 1.35B (highest since 3/15 and 2nd highest of the year!) vs 711 shares vs 722M vs 734M vs 587M. The 12-month average is just 724M 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. Friday was only the fourth day this year to register over 1B shares! There have now been just 19 800M+ shares in 2013 – 6 up, 13 down, but on trades of less than that 78 have been up and just 26 down…there have been 21 mixed sessions.

*new 52 week highs have ranged from 100-864. They were steady at 235 vs 234 vs 221 vs 300 vs 175 vs 517 vs 138!!! vs 811. New lows were halved to 182 vs 325 vs 290 vs 108 vs 191 vs 79 vs 49 (recent range now 29-290).

  1. Advance/Declines were negative: -1.7x vs -1.2x! vs -5.5x! vs +1.3x vs -3.8x!!! vs +1.4x vs -1.2% vs -1.4x vs -3.5x! (recent range -7.1x to +4.4x) on NYSE and -2.1x vs +1.4x vs -2.6x! vs +2x vs -2.3x vs +2.4x vs +1.1% vs +1.1x vs -2.9x! vs +1.2x vs -3.3x! (recent -3.5x to +3x). Breadth was similar: -2.2x vs +1.3x vs -6.8x!!! vs +2x vs -1.7x vs +1.8x vs -1.5x (recent -10.5x to +6.4x!!!) on NYSE and -2x vs +1.2x vs -3.8x!!! vs +3.5x vs -1.6x vs +2.5x (recent -12.8x to +6.2x)  
  2. NYSE Financials were off 0.4% vs +0.3% vs -1.7%!!! vs + 0.8% vs -0.3%. BofA fell for a third day by 0.7% vs -0.8% vs -1.1%! vs +3.3%??? vs +1.5%??? to $13.45 -10…17th day above $13 since 4/11/11. Brokers flat vs -0.9% vs -1.4%; KBW Banks -1% vs flat vs -1.7%; Nasdaq Banks -0.7% vs +0.6% vs -1.2%.
  3. Volatility (S&P VIX) was nearly unchanged for a 2nd day at 16.27 -.01, at highs since 4/18, (11th day above 13 since May 2). Intraday the range was 15.82-17.25 vs 16.15-17.58 – highest since 4/18. The range since 4/12 11.99 (multi year low) to 18.20, and it is back above the 40/50 day (13.88/13.78) and the 200 day (14.91)…ytd the range is 19.28 (2/25!) to 11.05 (3/14) – 12 mo. ave 16.10!

Global equities slammed, ex-India; UK -1.4% vs +0.7% vs -0.4% vs -0.9%! vs +0.2%; France -1.2% vs +0.5% vs +0.2% vs -0.7% vs +0.7%; Germany -1.1% vs +0.5% vs +0.2% vs -0.6% vs +0.5%; Japan DOWN 3.8%!!! vs UP 2.1% vs DOWN 3.7%!!! vs UP 1.4% vs DOWN 5.2%!!!; Hang Seng -1% vs -0.5% vs -0.4% vs -0.3% vs -1.6%!!!; Korea -1.3% vs flat vs -0.6% vs +0.1% vs -0.1% vs +0.8%; India +0.1% vs -0.3% vs -0.8% vs -2.3%!!! vs +0.3% vs -0.1%. U.S. stock futures slightly higher in another extremely narrow trading range  –  caution!: DOW +11; SPX +2.30; NDQ +6.

Bonds are better overnight but remain weak: 10 yr Treasury 2.12% +1/4 (recent range now 2.17% to 1.63%!!!), and the 30 yr’s 3.33% to 2.82%!!!, now 3.29% +1/2. The long TIP continues to be hammered but off the new high of 1.00% set Monday!!! Currently 0.97% +5/8- still the weakest link since a new (record?) low of 0.36% on 4/5. Since the Bernanke announcement on the 7th the high yield has gone from 0.82% set on 5/22 to 1.00%! Libor update: 0.274% 3 mos., 0.413% 6 mos. Foreign bond yields lower ex-BRICKS – reversal of yesterday!  Germany 1.53% -2; UK 2.02% -1; France 2.06% -2, Italy 4.11% +2; Spain 4.42% +2; Portugal 5.71% +8 vs -10!; Greece 9.05% +24 vs 8.83% -34??? vs 9.11% vs 9.20%!!! vs 8.80% vs 8.54% vs 8.39% vs 8.63% vs 8.54% vs 7.98% vs 7.97% vs 7.94% vs 7.96% vs 8.47% – it has now broken down from the rally! Recent range 7.94% to 12.57%. Japan 0.85% -3.  

Gold closed modestly lower yesterday and is again below $1400 at $1397.20 -$4.70 on a second straight ‘inside’ day. Last Thursday’s intraday high was $1417.70, highest since 5/15, despite Tuesday’s negative key reversal.  Reversal of fortune? It has been down 12 of the last 17 sessions following 5/20’s intraday low of $1338, lowest since 4/18. 5/10’s high of $1487.20 was highest since 4/12. 4/16’s intraday low of $1321.50 – was lowest since Sept. ’10. Resistance remains at the 40 day/50 day: $1432-1462 – still falling rapidly! Overnight it is $1403.05 +$5.80…round and round she goes, where she stops…nobody knows. Crude rallied nicely intraday to $94.41 before closing $93.31 -14, between the 40/50 day…one day after putting in an intraday low of $91.26 – lowest since 5/2! It remains above the 200 day with just one one day below since 5/1, making it support at $92.30! It is between the 40/50 day (93.25-93.66), just five days after a high of $95.92 – highest since 5/22!  The rally high is $97.11 set 5/20, nearing a 12 month high! Overnight $94.07 +.77. 4/18’s low of $85.61 was lowest since 12/11! The range is $85.61-$97.80 since June 29, 2012!!!!

 

Some random thoughts:

When will the SEC wake up and start giving control of the stock market back to REAL investors instead of speculators armed with billions and their computer algorithms which cause huge swings in stocks…sometimes in a single day…and then no support when they unexpectedly fall…this is a disaster waiting to happen. Consider Apple which rallied from $450.72 to $454.43 in the morning, then plunged in one hour from $452 to $447.39, back to $451 and then closed at $449.31, a 1.6% swing.

Also note that on the entire Nasdaq 100 six stocks lost more then one point, led by MSFT with a 4.3 index point loss, while none of the gainers were up even 1 point…this is typical!

Have a great day!

TB

 

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