8/14/13…a time for truth

From The Friars Club Encyclopedia of Jokes: “I never think at all when I write. Nobody can do two things at the same time and do both well.” – Don Marquis

Bloomberg Quote of the Day: “The best road to progress is freedom’s road.” – JFK

Bloomberg Top Stories:

*Europe Exits Longest Recession on Record With Germany-France Pacing Growth

*Italian Bonds Rise With Spain’s as European Recession Ends; Oil Declines

*U.S. Producer Prices Unexpectedly Little Changed in July as Car Cost Fell–est: +0.3%

*Fed Seen Tapering Purchase Next Month by 65% of Economists in Survey – WRONG!!!

*JPMorgan’s London Whale Trading-Loss Charges Said to Be Announced Today

*Ackman Defeat at J.C. Penny Hurting Pershing Square as Performance Trails

*Deere Raises Full-Year Forecast as Earnings Beat Estimates on Brazil Sales

*India Puts Restrictions on Foreign-Currency Outflows to Stem Rupee Plunge

*Losing Faith in Gold From Ghana to Vancouver Becomes Global Rout in 2013

*Egypt Security Forces Storm Pro-Mursi Camps as Islamists Say Hundreds Dead – you had better pay attention to this. Terrorism? You ain’t seen NOTHING yet!!!

*Wal-Mart Air Fleet Receives U.S. Taxpayer Support With Controllers Funded –SICK!

*Israel Frees 26 Palestinian Prisoners Hours Before Jerusalem Peace Talks – why did they announce building more residences there at this time? To withdraw it later? Sheesh!

Stock market was weak until…Fed governor said no cut in Fed purchases in September stocks rallied…then faded and ended with another ‘mixed’ session. Bonds had opened better, then faded and dove following the comment? They broke down for the 6th time since early May…unheard of weakness! Dow up just 0.2%; S&P +0.3%, Nasdaqs +0.4%+, BUT Russell 2000 -0.2%, Dow Utilities -0.5% and most importantly Dow Transports down 0.7%. What is strange is it was led by UAL…following Justice statement on AMR-USAir deal. Also, decliners ran 4:1 negative!!!

The Nasdaq 100 gained 15 points again by just 57:43: just FOUR members gained more than one point for a total of 27!!! (APPL +18.5!?! vs +10.8!!! vs -5.5 vs -3.3, QCOM/BIDU +1.2, MU/EBAY +1),and four decliners led by MSFT -4.8 vs -1.4 vs +6.2 vs +3.6, three others (FB/CELG/AMZN) lost about a point. Instant insanity!!!

Advance/Declines and Breadth were both slightly changed for a third day and still going nowhere. New 52 week Highs rose to 282 vs 223 vs 261 vs 293 while New Lows more than doubled to 262 vs 104 vs 152 vs 140. The VIX, closed below 13 for a second day as positions were squared ahead of Friday’s options expiry. Both days just off session lows.

…here’s the book:

* Dow 30 +0.2% vs flat vs -0.5% vs +0.2% vs -0.3%; Dow Transports -0.7% vs +0.2% vs -0.6% vs +0.8% vs -0.7% vs -1.3%; Russell 2000 -0.2% vs +0.5% vs -0.1% vs +0.5% vs -0.1% vs -1%; Dow Utilities -0.5% vs -0.7% vs -0.5% vs +0.3% vs -0.7% vs -0.5%; S&P 500 +0.3% vs -0.1% vs -0.4% vs +0.4% vs -0.4% vs -0.6%; Nasdaq Composite +0.4% vs +0.3% vs -0.3% vs +0.4% vs -0.4% vs -0.7%; NDQ 100 +0.5% vs +0.2% vs -0.4% vs +0.4% vs -0.3% vs -0.7%.

*NYSE Volume rose slightly to a still weak 3.02B shares vs 2.78B vs 2.94B vs 3.25B vs 3B vs 3.1B vs 2.52B (4th weakest of 2013…1.96B is the low). NYSE Volume also rose slightly to a still weak 619M shares vs 586M vs 637M vs 686m vs 617M (482M on 7/3 in a shortened trading session is the low). The 12-month average is 715M shares. The range since 6/28’s 1.75B share day excluding the three sessions above 800M is 482M-798M shares. The average since 6/28 is just 671M shares, ranging from 482M to 906M. There have been just SEVEN 1B+ share sessions! There have been 30 800M+ shares in 2013: 12 up, 17 down, and one mixed, but on trades of less than that 93 have been up and 39 down …the down days are starting to increase! There have now been 32 mixed sessions.

*New 52 week highs have ranged from 33-864. They rose to 282 vs 223 vs 261 vs 293 vs 161. New lows more than doubled to 262! vs 104 vs 152 vs 140 vs 240 vs 280 vs 145 – 27 is the recent low.

  1. Advance/Declines were slightly negative: -1.4x vs +1.1x vs -1.1x vs +1.9x vs -2.2x (recent range -17.5x to +4.4x) on NYSE and 1:1 vs +1.3x vs -1.5x vs +1.5x vs -2.1x (recent -3.5x to +3x). Breadth was similar: -1.3x vs +1.1x vs 1:1 vs +2.8x vs -2.2x (recent -18.6x!!! to +6.9x!!!) on NYSE and +1.1x vs +1.2x vs -1.2x vs +1.7x vs -1.9x vs -2.5x (recent -12.8x to +6.2x)  
  2. NYSE Financials rose but remain anemic: +0.3% vs -0.4% vs flat vs +0.6x vs0.7%. BofA was 2nd most active gaining +0.7% vs -0.3% vs -1.1% vs +0.6% vs -0.8%, closing at $14.51 +.10. It has been weak since hitting $15.03 14 days ago – highest since Jan. 14 and major res. Brokers +1.2% vs -0.2% vs +0.3% vs -0.1% vs -0.4% vs -1%; KBW Banks +0.3% vs -0.3% vs -0.4% vs +0.3% vs -0.9% vs -1%; Nasdaq Banks flat vs +0.1% vs -0.4% vs +0.4% vs -0.7% vs -0.9%.  NOTE: brokers rose due to a 5.6% gain on GS but not a new high!  
  3. Volatility (S&P VIX) continued to decline yesterday to 12.31 -.50 with a range of 12.29-13.37, obviously the last two days were due to the pending options expiry! Note the recent low of 11.84, the recent range is 11.83-13.91 but with 7/31’s high being 14.14!!! 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 below 14 since! 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 21.90. It is well below the 40/50 day (14.69/15.09) and the 200 day (14.80)!!!…ytd the range is 11.05 (3/14) to 21.92 (6/24)!

Global stocks higher for a second day led by Japan, Hong Kong closed: UK FLAT vs +0.4% vs -0.3% vs +0.3% vs -0.4%; France +0.3% vs +0.2% vs -0.2% vs -0.1% vs +0.7%; Germany +0.1% vs +0.7% vs -0.4% vs flat vs +1%; Japan +1.3% vs +2.6%!!! vs -0.7% vs +0.1% vs -1.6%! vs -4%!!! vs +1%! vs -1.4%!!! vs +3.3%!!! vs +2.5%!!! vs -1.5%! vs +1.5%! vs -3.3%!!! vs -3%!!! vs -1.1%!;  Hang Seng closed+1.2% vs +2.1%!!! vs +0.7% vs +0.3% vs -1.5%!!! vs -1.3%!!!; Korea +0.6% vs +1.5%! vs +0.2% vs -0.2% vs +0.3% vs -1.5%; India +0.7% vs +1.5% vs +0.8% vs +0.7% vs +0.7% vs -0.4% vs -2.3%. U.S. equity futures slightly lower in the ‘new normal’ narrow trading range – very narrow o/n! DOW -17; SPX -2.30; NDQ +1.50.

Bonds were slammed again all were off over a point, TIPS -2 pts, breaking down for the sixth time since early May! They are however up overnight: 10 yr Treasury 2.71% +3/32 (recent range 2.75% to 1.63%!!!), and the 30 yr range of 2.82% to 3.79%, currently 3.75% +1/4. The long TIP is 1.38% +1/4. The (record?) low of 0.36% was set on 4/5. Recent high 1.53%! Libor update: 0.263% 3 mos, 0.396% 6 mos, steady. Both remain near the Jan. 2010 record lows (0.245% and 0.382% respectively). Foreign bond yields mixed and little changed after being hammered along with Treasuries yesterday: Germany 1.81% +1; UK 2.63% +6; France 2.34% +1, Italy 4.20% -3; Spain 4.42% -6; Portugal 6.40% -2; Greece 9.46 -1 vs 9.54% twice vs 9.49% vs 9.59%. Look at some of its recent big moves: 9.64% -18; 9.81% -10; 10.02% +19; 9.95% +17; 9.86% -13;  10.02% -16; 10.27% -19; 10.33% -25!; 10.85% +28!; 10.54% +40!!!; 10.85% -37!!!. Recent range: 8.04% to 12.57%. Japan 0.74% +1.

Gold closed lower erasing about half of Monday’s gain but remains well above the critical $1300 at $1320.50 -$13.70 on an ‘inside’ day. Monday’s high was $1338, highest since 7/22! Last Wednesday’s session low was $1271.80 – lowest since 7/17! 7/23’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 is again psychological support, and it is now above both the 40 day $1291 and the 50 day $1311 – both still falling. The 200 day is a distant $1533!!! Overnight it is a tad higher at $1325.20 +4.70. Crude closed higher at $106.83 +.72. It remains safely above the 40/50 day m/a’s (103.05/101.58), both rising. The 200 day ($94.38) is distant support. MAJOR SUP. Minor sup 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 slightly higher overnight at $106.36 +.25. The high of $108.93 on 7/19! The range is $85.61-$109.32 since March 1, 2012.

Some random thoughts:

TB is not a bleeding heart socialist. He is a fiscal conservative but not a damned reactionary who will destroy our economy and possibly our system. That is what the fringe – that controls the GOP – is acting and dead set on it.

Why are they doing it? They are pawns of the very people who created the financial crisis and destroying the values in America.

Will write more tomorrow…color TB disgusted…and very worried!

Have a great day!

TB

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