7/24/13…the times ‘may be’ a’changin’

From The Friars Club Encyclopedia of Jokes: “The English think incompetence is the same thing as sincerity.” – Quentin Crisp…and…

“I say help the British! If it weren’t for them, we’d be talking some language we couldn’t understand.” – Bo Brown

Bloomberg Quotes of the Day: “Luck is what you have left after you give 100 percent.” – Langston Coleman

Bloomberg Top Stories:

*Manufacturing in Europe Unexpectedly Expands for First Time in Two Years

*Stocks Climb in Europe as Copper Rebounds on Economy; Treasuries Decline

*European Banks Face Capital Shortfall as Attention Turns to Leverage Ratio

*Apple’s Cook Plots Return to Growth After Coping With Aging Product Lineup

*Fed Criticized Over Ability to Supervise Bank-Owned Commodities Operations

 *Ford Raises Forecast as Northd America Leads Better-Than-Estimated Earnings

*Pepsico Second-Quarter Earnings Beat Estimates a Company Affirms Outlook

*Deutsche Bank Said to Merge Debt Groups in London as Head Trader Departs

*RBS Fined $8.6 Million by FCA for Failing to Report Wholesale Transactions

*Grandma on Feeding Tube Without Our Consent Symbolizes Japan’s End of Life – ours too if Sen. Grassley had had his way. Before you knock Obamacare, think alternatives

*Brazil Turns on Rouseff Amid Worst Growth in 24 Years as Lula Pleas Mount – falling like a ton of BRICS

*Congress to Detroit: Forget About a Bailout With Looming Debt Limit Battle

A trifecta! Options expiry mixed on slightly below average volume; Monday an up dayu on low volume while VIX continues to decline; Tuesday, a mixed day due to a 0.8% drop in Dow Transports, 0.4%+ loss in the two Nasdaq indices, while the S&P 500, Russell 2000 and NYSE Financials were FLAT!!! Let’s analyze the NDQ 100 – again – and compare to prior two sessions: it lost 24 points vs +10 vs -33 with 3:1 declining vs 2:1 advancing – barely vs +1.1:1. Leaders rotated again: Seven stocks accounted for 2/3 of the loss while only one gained more than one index point: AAPL -6.1! vs +1.1 vs -5.6; BIIB -1.9 vs +1.5; followed by (GOOG -1.7 vs +3.3 vs +3.3; AMGN -1.6 vs +3.1; MSFT -1.4 vs +4.6 vs -30!!! vs -3.2; CELG -1 vs +1.1, AMZN -1. More rotation. TXN +1.5

The VIX had finally had enough risikng to 12.63 +.64…or 6% in three sessions, 11.99 on Monday was lowest since 5/17 and, at least to TB, makes market not only very rich but even more vulnerable…especially when we are in the summer doldrums…you decide. A/D’s and Breadth were small and mixed…new 52 week highs declined while new lows were halved.

…here’s the book:

* Dow 30 +0.3% vs -0.1% vs flat vs +0.5% vs +0.1%; Dow Transports DOWN -0.8% vs flat vs +0.1% vs +1.7%!!! vs +0.8%; Russell 2000 FLAT vs +0.3% vs flat vs +0.7% vs +0.4%; Dow Utilities +0.3% vs +0.2% vs +0.1% vs +0.9%! vs -0.2%; S&P 500 FLAT vs +0.2 % vs +0.2% vs +0.5% vs +0.3%; Nasdaq Composite -0.4% vs +0.4% vs -0.7% vs flat vs +0.3%; NDQ 100 -0.5% vs +0.3% vs -1.1%!!! vs 0.2% vs +0.3%.

*NYSE Volume declined yet again to 2.42B shares (3rd weakest of 2013), vs 2.77B vs 3.28B vs 3.44B vs 3.15B vs 3.05B vs 2.6B (1.96B is the lowest of 2013). REAL NYSE Volume rose slightly but immaterially to a still very weak 608M shares vs 584M vs 872M vs 664M shares vs 666M (Hex?) vs 617M vs 562M (lowest since 7/3). The 12-month average is 720M shares and declining! The average since 6/30 is just 677M shares, ranging from 482M to 906M, 482M being the 2013 low! There have been just SEVEN 1B+ share sessions! There have been 28 800M+ shares in 2013: 10 up, 17 down, and one mixed, but on trades of less than that 90 have been up and 32 down…there have now been 28 mixed sessions.

*New 52 week highs have ranged from 33-864. They declined to 545 vs 630 vs 494 vs 690 vs 448 vs 456 vs 687. New lows were more than halved to 45 vs 103 vs 37 vs 27 –new low – vs 30 vs 37 vs 40 vs 32 vs 29.  

  1. Advance/Declines were mixed: +1.5x vs +1.3x vs 1:1 vs +2.1x! vs +1.9x! (recent range -17.5x to +4.4x) on NYSE and -1.1x vs +1.5x vs -1.1x vs +1.6x vs +1.5x (recent -3.5x to +3x). Breadth was also mixed! +1.6x vs +1.8x vs -1.1x vs +2.3x! vs 2x! (recent -18.6x!!! to +6.9x!!!) on NYSE and -1.3x vs+1.8x vs -1.6x vs +1.3x vs +1.8x (recent -12.8x to +6.2x)  
  2. NYSE Financials joined the herd and were FLAT vs +0.7% vs +0.1% vs +1.3%! vs 0.5%. BofA was most active again hitting $15.03, highest since Jan. 14 before closing off one cent at $14.91: -0.1% vs +1.2% vs -0.1% vs +3.1% vs +2.8%. Brokers flat vs flat vs flat vs +1.3% vs +0.2%; KBW Banks +0.1% vs +1% vs +0.3% vs +1.7% vs +0.6%; Nasdaq Banks +0.3% vs +0.9% vs +0.3% vs +1.4% vs +0.4%. No other financials were market movers…boring!!!  
  3. Volatility (S&P VIX) ROSE following two solid declines to 12.63 +.64, still -5% last three sessions. It declined to 12.07, lowest since April 12th with a high of 13.06! – remember Friday was a positive key reversal…will it be negated??? It peaked at 20.49, plunged to 18.90 on June options expiry then closed at 20.11 on 6/24 and has been down since – a decline of 33%! 6/24’s session high of 21.91 was highest since 12/31/12 (22.72)!!! The range since April ‘12 is 11.05 (multi- year low o n 3/14/13) to 21.9, It is well below the 40/50 day (15.93/15.33) and the 200 day (15.02)!!!…ytd the range is 11.05 (3/14) to 21.92 (6/24)! Are stop orders with limits prudent?…TB’s just sayin’…and repeating…

Global stocks better, ex-Japan/India: UK +0.9% vs +0.3% vs -0.3% vs -0.2% vs flat; France +1.3%! vs +0.3% vs +0.1% vs -0.3% vs +0.3%; Germany +1.2% vs +0.3% vs -0.1% vs -0.2% vs +0.2%; Japan DOWN 0.3% vs +0.8% vs +0.5% vs -1.5%!!! vs +0.1%; Hang Seng +0.2% vs +2.33%!!! vs +0.3% vs flat vs +0.2%; Korea +0.4% vs +1.3%! vs +0.5% vs -0.2% vs +1.1%!; India DOWN 1% vs +0.7% vs +0.1% vs +0.1% vs +0.5%. U.S. equity futures higher but in what has become normal…another extremely narrow trading range: DOW +34; SPX +5.80; NDQ +27.50. But lately o/n trades don’t matter.

Bonds closed little changed – long TIP remains highly volatile. Bonds are weaker overnight: 10 yr Treasury 2.55% -7/16 (recent range 2.74% to 1.63%!!!), and the 30 yr range of 2.82% to 3.71%, currently 3.62% -3/4. The long TIP is 1.32% -1 point! – still the weakest link since the (record?) low of 0.36% on 4/5. Recent high 1.53%! Libor update: 0.264%!!! 3 mos, 0.397% 6 mos. Both remain near the Jan. 2010 record lows (0.245% and 0.382% respectively). Foreign bond yields mostly higher: Germany 1.62% +7; UK 2.38% +8; France 2.25% +4, Italy 4.36% -1; Spain 4.66% -1; Portugal 6.30% +7; Greece 10.02 +19 vs 9.81% vs 9.95% +17 vs 9.86% vs -13 vs 9.93% vs 10.07% vs 10.02% -16!!! vs 10.27% -19!!! vs 10.33% -25!!! vs 10.69% vs 10.85% +28!!! vs 10.52% vs 10.54% +40!!! vs 10.85% -37!!! vs 11.22%. Recent range: 8.04% to 12.57%.  Japan 0.77% -1. Note daily changes on Greece!!!

Gold closed off slightly but drew no blood at $1335.20 -$2.10. The session high was $1349.20 – highest since 6/20! 6/27’s intraday low was $1179.40 – lowest since at least 2011 and now critical support. $1300 is again psychological support, while the close puts it between the 40 day/50 day: $1322/1336 – both still falling, but still it is way below, the 200 day – $1566!!! Overnight it is higher at $1341.60 +$6.40. Crude closed slightly higher at $107.23 +.32 – with a session low of $105.46!!! It remains well above the 40/50 day m/a’s (99.12/98.30) – both climbing sharply now, while the 200 day ($93.23), also rising, is distant support. First support is $104.21-36 – a triple bottom from 7/10-7/12. 4/18’s low of $85.61 was lowest since 12/11! It is little changed overnight at $107.15 -.08 on a narrow inside session. The range is $85.61-$109.32 since March 1, 2012.

Some random thoughts:

Are the sheep getting nervous? Congress pressuring Fed over lack of controls over commodities trading in aluminum…perhaps they will now remember the Crude bubble fo 2008? Do their memories go back that far? Doubtful but one can always hope, right?

Read this from Hedgeworld and indeed the winds of change may be here…the times they are a‘changin’ – one can hope! Hedgeworld Congress commodities

Have a terrific day…who knows what the future brings…que sera, sera…




  1. Yarnman said

    TB–I don’t wish to overburden you with too frequent emails, but today’s news and commentary is too depressing for me to refrain. A lead article in the NY Times reports how the House GOP has a series of bills that will cut spending so drastically that it could, in my opinion, reduce GDP by 1.5% next year. The Bonddad Blog makes an argument for the danger of deflation, using part of Bernanke’s recent testimony together with other data regarding foreign economies and commodity prices. Put all of this together with a certain fight over the debt ceiling tells me that going long is not worth the risk. Incidentally, my two senators and both representatives know how I feel. I live in Senator King’s hometown. At the very least, I owe you a lobster dinner if we are ever near enough together. –Yarnman

    • traderbill said

      Be careful Yarnman…TB has a long memory AND loves lobster! LOL.
      My friends and I are just as upset with out government (sic). But how do you explain today? Bonds down big; stocks down (except NDQ 100 but just a fraction of loss from yesterday (+10 points but AAPL up 18 index points…hello???); gold down, crude down; VIX higher but still in low 13’s~. Real NYSE Volume weak at 661M again. What’s a mother to do?
      WSJ Data is out so can’t get the rest…still shows yesterday’s close???

  2. LH said

    TB..isn’t it interesting that back in 2010 time frame, market days were either “risk on” or “risk off”, so when oil,stocks, EM were rising, sovereigns and gold were dropping and vice versa. Today we see stocks and bonds all moving up together, or else all dropping together on the day. Result of Fed stimulus being the exclusive daily focus? I wonder if that changes once Europe comes back from the summer and back into the headlines? “May you live in interesting times”… right? Take care. LH

    • traderbill said

      ah, we do live in interesting times…far TOO interesting!

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