7/25/13…let’s have a Tea Party! NOT!!!

From The Friars Club Encyclopedia of Jokes: “He would come in and say he changed his mind – which is a gilded figure of speech, because he didn’t have any.” Mark Twain

Bloomberg Quotes of the Day: “There are no shortcuts in evolution.” – Louis D. Brandeis …even if it sometimes appears there were!

Bloomberg Top Stories:

*Orders for U.S. Durable Goods Advanced by More-Than-Forecast 4.2% in June

*Jobless Claims Increased by 7,000 to 343,000 Last Week

*Stocks Fall on Earnings Reports While Copper Leads Decline in Commodities

*U.K. Economic Growth Accelerates in Broadest Expansion for Three Years

*Credit Suisse Profit Climbs 33% After Doubling of Investment Bank Income

*Facebook Rallies as Soaring Sales Silence Zuckerberg’s Mobile-Ad Skeptics

*Wall Street Banks Said to Weigh Halting Dealings With SAC as Charges Loom – DUH!

*Germany’s Euro Pessimism at 14-Month High After Draghi Pledge – as it should be!

*Bristol-Myers 2Q Adjusted Earnings 44 cents in line; EPS Year View Cut!

*Raytheon Boosts Full-Year Outlook as Second-Quarter Profit Beats Estimates

*Microsoft to Develop Apps for Apple to Google as Fallen Giant Adapts

*Jobless Parisians Mean Fewer Peugeots in Slumping French Automotive Market

*China Slowdown Overcome as Chilean Copper-Mine Utility Gains

*Fraternities Tap Kegs With Congress for Tax Break Without Hazing Penalties – !!!

*Spanish Train Crash Kills at Least 77 in Worst Toll Since Madrid Bombing

*Obama’s Ambassadors Gave at Least $13.6 Million in Campaign Contributions – I’m shocked…you mean those Ambassadorships are sold??? Wake up, America!

*North Carolina First to Consider Stricter Voting Laws After Court Ruling


Tuesday completed a trifecta…yesterday was a down day: stocks down, bonds down, gold down, crude down…get the picture? It made no sense. Back to that trifecta: Options expiry mixed on slightly below average volume; Monday an up day on low volume while VIX continued 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!!!

Now let’s look inside the numbers: Dow Transports off 1%, NDQ 100 rose 0.3%, the Dow 30 and Nasdaq Composite rose 0.1% while S&P 500 slipped 0.2%, Dow Utilities rose 0.2%; the Russell 2000 and NYSE Financials were off 0.1% Ah, but the VIX rose again! Back above 13! Next the NDQ 100 analysis – compare to the leaders of the prior three sessions: it rose 10 points vs -24 vs +10 vs -33 with 7:3 declining 3:1 declining vs 2:1 advancing  Leaders rotated again: AAPL +18!!! vs -6.1! vs +1.1 vs -5.6; MSFT +1 vs -1.4 vs +4.6 vs -30!!! vs -3.2; GILD +1; BRCM -2.2; QCOM -1.4…the rest had minor changes of <1 point…most were down slightly.

The VIX had finally rose for a second day to 13.28 +.62…with a range of 12.69-13.49. 11.99, Monday’s 11.99 low was lowest since 5/17 – is the euphoria oveer? The market is very vulnerable to earnings report which are coming in mixed. We remain in the summer doldrums…and that is not good for trend followers. A/D’s and Breadth were mixed for a second day…Nasdaq the loser…new 52 week highs higher as were new lows.

…here’s the book:

* Dow 30 -0.1% vs +0.3% vs -0.1% vs flat vs +0.5%; Dow Transports DOWN 1% vs -0.8% vs flat vs +0.1% vs +1.7%!!!; Russell 2000 -0.1% vs FLAT vs +0.3% vs flat vs +0.7%; Dow Utilities +0.2% vs +0.3% vs +0.2% vs +0.1% vs +0.9%; S&P 500 -0.2% vs FLAT vs +0.2 % vs +0.2% vs +0.5%; Nasdaq Composite -0.6% vs -0.4% vs +0.4% vs -0.7% vs flat; NDQ 100 -0.8% vs -0.5% vs +0.3% vs -1.1% vs 0.2%.

*NYSE Volume ROSE on a down day to a still-weak 3.07B shares vs 2.42B shares (3rd weakest of 2013), vs 2.77B vs 3.28B vs 3.44B (1.96B is the lowest of 2013). REAL NYSE Volume rose slightly for a second session to a still very weak 670M shares vs 608M 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 33 down …there have now been 28 mixed sessions.

*New 52 week highs have ranged from 33-864. They rose slightly to 569 vs 545 vs 630 vs 494 vs 690. New lows rose to 60 vs 45 vs 103 vs 37 vs 27 –new low.  

  1. Advance/Declines were mixed for a 2nd day: +1.3x vs +1.5x vs +1.3x vs 1:1 vs +2.1x (recent range -17.5x to +4.4x) on NYSE and -1.2x vs -1.1x vs +1.5x vs -1.1x vs +1.6x (recent -3.5x to +3x). Breadth was also mixed! +1.4x vs +1.6x vs +1.8x vs -1.1x vs +2.3x (recent -18.6x!!! to +6.9x!!!) on NYSE and -1.7x vs -1.3x vs +1.8x vs -1.6x vs +1.3x (recent -12.8x to +6.2x)  
  2. NYSE Financials were lackluster slipping 0.1% vs flat vs +0.7% vs +0.1% vs +1.3%. BofA was most active again on an inside day and this time falling to $14.71 -.23 a day after hitting $15.03, highest since Jan. 14: -1.6%! vs -0.1% vs +1.2% vs -0.1% vs +3.1% vs +2.8%. Brokers flat for THREE days! vs +1.3% vs +0.2%; KBW Banks flat vs +0.1% vs +1% vs +0.3% vs +1.7%; Nasdaq Banks +0.3% vs +0.3% vs +0.9% vs +0.3% vs +1.4%. That’s it!  
  3. Volatility (S&P VIX) ROSE for a second day following two solid declines to 13.28 +.62, so much for the declines!  On 7/23 it declined to 12.07, lowest since April 12th with a high of 13.06! – this totally negates Friday’s positive key reversal. VIX 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 in the soup: UK -0.8% vs +0.9% vs +0.3% vs -0.3% vs -0.2%; France -0.8% vs +1.3% vs +0.3% vs +0.1% vs -0.3%; Germany -0.9% vs +1.2% vs +0.3% vs -0.1% vs -0.2%; Japan DOWN 1.1%! vs -0.3% vs +0.8% vs +0.5% vs -1.5%; Hang Seng -0.3% vs +0.2% vs +2.33%!!! vs +0.3% vs flat; Korea -0.1% vs +0.4% vs +1.3%! vs +0.5% vs -0.2% vs +1.1%!; India DOWN 1.4% vs -1% vs +0.7% vs +0.1% vs +0.1%. U.S. equity futures lower and no longer in a tight trading range!!!: DOW -61; SPX -7.30; NDQ -2??? – this from the most confusing sector? Watch closely!

Bonds closed WEAK…in fact they were slammed, led by the long TIP – down 2 pts!; Little changed overnight: 10 yr Treasury 2.60% -1/16 (recent range 2.74% to 1.63%!!!), and the 30 yr range of 2.82% to 3.71%, currently 3.65% -1/8. The long TIP is 1.38% -3/16. The (record?) low of 0.36% was set 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 mixed and little changed: Germany 1.67% +3; UK 2.38% -1; France 2.28% +1, Italy 4.38% +2; Spain 4.63% -3; Portugal 6.31% +1; Greece 9.91% -3 vs 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 0.80% +3. Greece: incredible!!!

Gold closed lower but remains up on the weak and well above the critical $1300 closing at $13320.10 -$15.10! Tuesday’s 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 remains psychological support, while the close puts it right on the 40 day $1320 with res at the 50 day $1334 – both still falling. lt is way below, the 200 day – $1564!!! Overnight it is slightly lower at $1319.80 -.30. Crude closed very weak at  $105.39 -$1.84!!! – with a session low of $104.79!!! This negates the rally that began on 7/12. It remains well above the 40/50 day m/a’s (99.38/98.51) – both climbing sharply, while the 200 day ($93.31), 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:

Remember all that squawking over the minimum wage? Well, a study by Dean Baker’s CERI shows how it has hurt the economy but being far too low. Add to this switch from capital gains taxation to the worker and it is even more exacerbated which is a leading cause of the wealth gap…along with that ridiculous 15% tax on ‘carried interest’. Here is the link:  CERI Minimum Wage study

This dovetails into Paul Krugman’s column on the lunacy of comparing us…or any country to Greece and how it is hurting our economy to do so:  Krugman-Detroit/Greece

As FDR said, “the only thing we have to fear is fear itself.” Unfortunately, the GOP and more importantly the Eric Cantor-led Tea Party contingent never heard that.

That’s enough to digest for one day, right?

Over the hump…start planning your exciting summer weekend…NOW!!!



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