9/23/13…poor Thomas Jefferson

Today’s Quote from the Friars Club Encyclopedia of Jokes: “Did you hear the latest about fighting on the Left Bank? Italy surrendered.” – unattributed

Bloomberg Quote of the Day: “From even the greatest of horrors irony is seldom absent.” – H.P. Lovecraft

Bloomberg Top Stories:

*Stocks Seen at Risk With U.S. Government Shutdown Looming Before a Default.–Fools!

*European Stocks Fluctuate on German Coalition Talks as Aussie Strengthens

*Apple Had a Record 9 Million IPhone Sales on First Weekend; Shares Advance

*Southern Europeans Who Didn’t Want More Merkel Get Her Anyway After Vote

*Fed Faces New Era of Thinking Internationally as Yellen Nears Nomination

*Israel Unexpectedly Cuts Interest Rate by Quarter-Point After Fischer Exit

*Bears Retreating as Europe Short Sales Drop $80 Billion to Seven-Year Low – huh?

*Greece Needing to Meet Bailout Terms Plans Foreclosure Revival – Hoopah!!!

*Self-Driving Vehicles Move Ahead Faster Than U.S. Rules of the Road

*At 77 He Flips Burgers Eaarning in Week His Former Middle Class Hourly Wage – !!!

*Merkel Begins Search for Coalition Partner After Record Election Victory

*Kenyan Security Forces Battle to end Mall Siege After Terrorists Kill 69

*Rohani Takes His Charm Offensive to United Nations Used to Iran Hectoring

*Labor Party Will Increase Demands on U.K. Banks If It wins 2015 Election

This week’s economic calendar is full of important indicators. The highlight of the week will be the August Personal Income (Friday). We will also get July Case-Shiller Home Price, September Consumer Confidence and September Richmond Fed Manufacturing (Tuesday), August Durable Goods Order and August Dallas New Home Sales (Wednesday), GDP – Q2 3rd Estimate (Thursday) and September Consumer Sentiment Final (Friday). Courtesy of Economic Advisory Service.

Told you it would be volatile: Dow gave up all gains since the Fed statement and had worst day in 3 weeks! S&P nearly gave up all the Fed gains. VIX CLOSED LOWER today at a strong 13.12 – figure that one out!

Bonds rallied again but not significantly. Crude was crushed and broke down once again! Gold gave back most of gains breaking 40/50 day m/a’s but closed at $1325 saving it from breaking $1300 again!

Now get this…TB believes it was record total volume on NYSE 4.82B shares AND 2.06B shares traded ON the NYSE third highest of all time! 6/30/06 3.38B shares; 7/24/02 2.79B shares. Normally it is a very bad thing to have high volume on a down day but with BAC/AA/HPQ all coming out of Dow so not a surprise. Also note that 5 minutes before the close real NYSE volume was 866M and at the close 974M shares.

This is not a market it is a damned casino. JPM in trouble yet closed up slightly while USBank and GS hit new highs!!!

Dow was second worst performer  -1.5% to Dow Utilities -1.5%. All indices were down

The two Nasdaq indices had minor losses of 0.4% vs +0.2% following 1%+ gains Wednesday…Apple a big part of it again. The 100 lost 13 points vs -6.3 points with 2:1 declining. Let’s look at the leaders and their changes over the past six sessions if they were leaders: MSFT -6.9 vs +2.2 vs +3 vs +1 vs -1.4 vs +2; APPL -4.4 vs +6.4 vs +7.9 vs +4.2 vs -12.3 vs -6.5 – do you see a trend here???; +1.2; MDLZ -1; FB +2.5 vs +1.2 vs n/a vs +4 vs -2.8; GOOG +1.2 vs -1.2 vs +4.2…get the picture? Trendless in Seattle!  Advance/Declines were NEGATIVE, new 52 week highs solid but plunged, while new lows rose modestly. Most significant…or confusing was volatility which decline for a second day to a low 13.12 -.04, but look at the range: 12.52-13.47! Anything but a boring  quadruple witching!!!

Dow 30 -1.2% vs -0.3% vs +1% vs +0.2% vs +0.8% vs +0.5%; Dow Transports -0.5% vs +0.3% vs +1.5% vs +0.1% vs +1.1% vs +0.5%; Russell 2000 –0.2% vs -0.2% vs +1% vs +1% vs +0.2% vs +0.5%; Dow Utilities -1.5% vs -0.3% vs +3%!!! vs +0.5% vs +0.1% vs +0.9%; S&P 500 -0.7% vs -0.2% vs +1.2% vs +0.4% vs +0.6% vs +0.3%; Nasdaq Composite -0.4% vs +0.2% vs +1% vs +0.8% vs -0.1% vs +0.2%; NDQ 100 -0.4% vs +0.2% vs +1.3% vs +0.7% vs -0.3% vs +0.1%.

*NYSE Volume soared to a record high (?) 4.82B shares vs 3.72B vs 3.96B vs 2.75B vs 3.06B vs 2.7B (2.52B is 4th weakest of 20131.96B is the low). REAL NYSE Volume also surged to the third highest ever 2.06B shares (6/30/06 3.38B; 7/12/02 2.29B) vs 738M vs 820M vs 577M vs 627M vs 567M (482M on 7/3 in a shorten2d trading session is the 2013 low). The 12-month average is 718M shares. The range since 6/28’s 1.75B share day, excluding the four sessions above 800M, is 482M-798M shares. The average since 6/28 is just 660M shares, ranging from 482M to 906M. There have been just SEVEN 1B+ share sessions! There have been 32 800M+ shares in 2013: 13 up, 17 down, and two mixed.

*New 52 week highs have ranged from 33-864. They were steady at 590 vs 587 vs 310 vs 449 vs 191. New lows fell to a low 36 vs 56 vs 59 vs 45 vs 87.

  1. Advance/Declines were negative: -2.5x vs-1.4x vs +6x!!! vs +2x vs +2.1x vs +1.6x; (recent range NOW -17.5x to +6x) on NYSE and -1.1x vs -1.2x vs +2.8x vs +2.1x vs +1.2x vs +1.5x (recent -3.5x to +3.8x). Breadth was mixed: -4x!!! vs -1.7x vs +7.2x!!! vs +2.7x vs +2x vs +1.7x (recent NOW -18.6x!!! to +7.2x!!!) on NYSE and -1.5x vs +1.3x vs +3x vs 3.5x vs +1.1x vs +1.4x (recent is -12.8x to +6.5x)  
  2. NYSE Financials fell by 0.8% vs -0.6% vs +1.7%! vs +0.3% vs +1% vs +0.2%. BofA most active -1.1% vs -0.7% vs +1.3% vs +0.1% vs +0.4% vs +0.2%, closing at $14.46 -.15. It has struggled since hitting $15.03 on 8/1 – highest since Jan. 14 and major res. Brokers +0.4% vs -0.5% vs -0.9%! vs +0.9% vs +0.9% vs +0.4%; KBW Banks +0.2% vs +0.2% vs +0.2% vs +1% vs +0.2% vs +0.2%; Nasdaq Banks +0.7% vs -1.4%!!! vs -0.3% vs +0.2% vs +0.2%.  GS/USB new highs while C/MS/UBS all declined 1.4%!
  3. Volatility (S&P VIX) DECLINED despite stocks being weaker for a second day on options expiry!!! to close at 13.12 -.04 with a range of 12.52-13.47!!! 14 and 12 are now key. Two weeks ago it closed at 17.01 but a week prior it was at 13.98. The recent range is now 11.83-17.81. It peaked at 22.79 on 12/28/12. It is now below the 40 day (14. 27), the 50 day (14.08) and the 50 day (14.50)…ytd the range is 11.05 (3/14) to 21.92 (6/24)!

Global stocks weak, Asia weak, Japan closed: UK -0.5% vs -0.2% vs +1.4%!!! vs  +0.1% vs -0.4%; France -0.3% vs -0.2% vs +0.9% vs +0.5% vs -0.2%; Germany -0.4% vs -0.2% vs +1% vs +0.4% vs -0.2%; Japan closed vs -0.2% vs +1.8% vs +1.4% vs -0.7% vs closed; Hang Seng -0.6% vs closed vs +1.7% vs -0.3% vs +1.5%!; Korea +0.2% vs  closed vs -0.4% vs +1% vs -0.5%; India -1.8%!!! vs -1.2%! vs +3.4%!!! vs +0.8% vs +0.3%. U.S. equity futures lower, ex-NDQ, in another very narrow trading range! DOW -21; SPX -3.30; NDQ +10 (Apple???).

Bonds gained steam through the session and closed strong but not quite to Wednesday levels. Overnight they are slightly higher: 10 yr Treasury closed 2.73% vs 2.75% vs 2.69% vs 2.86%, now 2.73% +1/16 (recent range now 2.99% to 1.63%!!!), and the 30 yr range 2.67% to 3.90%, closed 3.76% vs 3.80% vs 3.75% vs 3.82%, now 3.75% +1/8. The long TIP closed 1.41% vs 1.46% vs 1.42% vs 1.51%, now 1.40% +5/16. The (record?) low of 0.36% was set on 4/5. Recent high yield: 1.63%! Libor update: 0.251% 3 mos, 0.372 6 mos. Another new record low on 6 mos. 3.72%, while 3 mo. is knocking at the Jan. 2010 record lows (0.245% and 0.382% respectively). Foreign bond yields little changed ex-Greece which is weaker: Germany 1.95% -1; UK 2.93% -1; France 2.46% -1; Italy 4.28% -1; Spain 4.27% -2; Portugal 7.04% +2; Greece 9.71% +10 vs 9.57%!!! -26!!! vs 9.79% -25 vs 10.13 Recent range: 8.04% to 12.57%. Japan 0.68% -1.

Gold was hammered Friday but held solidly above $1300 with a low of $1325, closing at $1325.60 -$43.70 after bouncing from Tuesday’s weak $1291, first time below $1300 since 8/9! Overnight it plunged to $1313.40 before bouncing and is now $1322.80 -$9.70! Last Monday’s high was $1336 – above the 50 day. A week ago Friday’s low $1304.60!!! 8/14’s session low was $1271.80 – lowest since 7/17! 6/27’s intraday low was $1179.40 – lowest since at least 2011 and critical support. $1300 remains psychological support, while the 40 day ($1350) and the 50 day ($1340) were breached and are now MAJOR RESISTANCE. The 200 day is at $1484.

Crude was destroyed Friday possibly on Syria whatever that means. Wednesday’s  session high was $108.49 from $104.94, lowest since 9/3 and lowest close since 8/22! THAT LOW was blown out Friday with a $104.32 print and close of $104.67 -$1.72. Amazing a day after hitting a high of $108.99! Just ten days ago it set a rally high and close of $110.70 and $110.53 respectively. It is back below the 40/50 day m/a’s ($106.71-.68), and crossed! The 200 day ($97.15) is distant support. 4/18’s low of $85.61 was lowest since 12/11! Major Res is the high the spike to $112.24 on 8/28. That move was immediately rejected! The range is $85.61-$112.24 since March 1, 2012. Overnight it is slightly weaker at $104.19 -.56 with a session low of $104.10 – another new recent low!!! Tell it goodbye!!!

 

Some random thoughts:

It is hard to say anything positive about this country now: our president is impotent, Congress under siege by an extremist GOP right wing that no one can control as they continue to self-destruct while taking the rest of us with them. This is reminiscent of:

*pre-WWII period of isolationists who not only turned a blind eye to Hitler but pacified him and was anti-Semitic in its own right. But what did the government…even under FDR want? To appease them so they would repay the loans made to the allies in WWI to – drumroll please – THE BANKS!!! Same old, same old. If you want to learn more an incredible read is In The Garden of Beasts by Eric Larson – a history writer who has the ability to make you feel like you are there…and it is a sick feeling. No heroes in it!!!

*Sen. Joe McCarthy and his anti-communist crusade. This is one of the sickest men TB has ever heard of and would have gleefully joined Hitler in his atrocities.

TB loathes those self-righteous souls with their American Flag pins (like the Germans with their swastika and Hitler salure), and a copy of the Constitution and Declaration of Independence in their breast pocket…and either they didn’t bother to read them but they have used their own sick interpretation to get their way while appeasing their god, Grover Norquist while ‘Rome’ (D.C.) burns. They and the self-righteous Supreme Court Chief Justice and his right-wing cohorts who gutted the Voting Rights Act leaving it to Congress to rewrite it…fat chance…meanwhile Texas and some of the other affected states rushed to pass Voter ID laws and go back to their old business of denying votes, while professing to be for immigration reform which is now clearly off the table. Who loses on this: We the People! Oh and they preach their love for Jefferson without any perception of the irony as these two quotes illustrate:

“If a nation expects to be ignorant and free, in a state of civilization, it expects what never was and never will be.” (as cited in Padover, 1939, p. 89)

“. . . whenever the people are well-informed, they can be trusted with their own government; that, whenever things get so far wrong as to attract their notice, they may be relied on to set them right.” (as cited in Padover, 1939, p. 88)

Now what to they want? To do the opposite of both those quotations…and if so strive unwittingly to fulfill Jefferson’s biggest fear: that this nation cannot survive. Pity them, pity us.

Have a prosperous week,

TB

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