9/24/13…the peoples business

Today’s Quote from the Friars Club Encyclopedia of Jokes: “I just bought a rather unusual tree. Twenty-four feet high, cost a fortune. It’s a bonsai sequoia.” Unattributed.

Bloomberg Quote of the Day: “My country, right or wrong; if right, to be kept right; and if wrong, to be set right.” – Carl Schurz…note Tea Baggers he doesn’t mean politically!

Bloomberg Top Stories:

*Applied Materials to Buy Tokyo Electron for $9.39 Billion After Chip Slump

*German Business Confidence Rises for Fifth Month While Trailing Forecasts

*Bonds Climb in Germany While Stocks Fluctuate With Futures; Copper Drops

*Dell Buyout is No Model for BlackBerry Holders as Fairfax Lacks Financing

*Soros to Goldman Poised to Win on Contrarian Bet Amid U.S. Housing Crisis

*Hungary Lowers Main Interest Rate to Record 3.6% as Fed Maintains Stimulus

*Crude Oil Inventories Decrease to 18-Month Low in Survey – yet crude still >$104

*Death Dinners at Graying Baby Boomers’ Table Break Taboo Over Dying Talk

*Kenya Moves to End Occupation of Shopping Mall by Terrorists After 62 Die

*Obama in Spotlight With Rohani as UN Leaders Await Sign of U.S. – Iran Thaw

*Uninsured Population in U.S. Unchanged as Health Exchanges Await Customers

*Netanyahu to Urge Caution in Obama Response to Iranian Nuclear Overtures    

 

Options expiration is over…as is the adjustment in the Dow members…but so what? Market is now more volatile as the VIX closed up 9.1% at 14.31 +1.19% this a day following a low print of 12.52!!! Told you it would be volatile! Dow Transports were worst performer falling 0.6% followed by the S&P, -0.5%.

If you had any doubts that while the Fed was important last week, there are major concerns on the govt/economy. Dow Utilities was only index that close higher, +1%. Meanwhile quarterend is just a week away!!! All other indices were down!

The two Nasdaq indices had minor losses of 0.3% and 0.2% respectively – similar to Friday Wednesday…Apple keeping it from being a rout. The 100 gave up just 5.5 points BUT APPLE ADDED 19.2!!! It was the only member to gain more than a point! Meanwhile SEVEN stocks lost more than a point. Let’s look at the leaders and their changes over the past seven sessions that they were leaders: MSFT -6.9 vs +2.2 vs +3 vs +1 vs -1.4 vs +2; APPL +19.2!!! vs -4.4 vs +6.4 vs +7.9 vs +4.2 vs -12.3 vs -6.5 – do you see a trend here???; GOOG -4.1 vs +1.2 vs -1.2 vs +4.2; FB +2.5 vs +1.2 vs n/a vs +4 vs -2.8. AMZN -2 vs +1.7. Others from yesterday: GILD -1.7; ANGN/BIIB -1.2; CSCO/CELG -1.1. Advance/Declines were negative for a second day as was Breadth while new 52 week plunged, and new lows quadrupled!

Bonds continue to rally from their weakened state – for how long? Crude was crushed and broke down yet again! Gold also weak but still holding above $1300!

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

*NYSE Volume plunged to a below average 3.07B shares from a record high (?) 4.82B shares vs 3.72B vs 3.96B vs 2.75B (2.52B is 4th weakest of 20131.96B is the low). REAL NYSE Volume also plunged to an average 690M shares from the third highest ever, 2.06B shares (6/30/06 3.38B; 7/12/02 2.29B) vs 738M vs 820M vs 577M (482M on 7/3 in a shortened trading session is the 2013 low). The 12-month average is 720M 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 692M shares, ranging from 482M to 906M plus the 2.025B shares on Friday. There have been just EIGHT 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 more than halved to 221 from 590 vs 587 vs 310 vs 449. New lows quadrupled to a solid 168! vs 36 vs 56 vs 59 vs 45.

  1. Advance/Declines were negative: -1.4x vs -2.5x vs-1.4x vs +6x!!! vs +2x; (recent range -17.5x to +6x) on NYSE and -1.3x vs -1.1x vs -1.2x vs +2.8x vs +2.1x (recent -3.5x to +3.8x). Breadth was similar: -2.1x vs -4x!!! vs -1.7x vs +7.2x!!! vs +2.7x (recent -18.6x!!! to +7.2x!!!) on NYSE and -2.1x vs -1.5x vs +1.3x vs +3x vs 3.5x (recent -12.8x to +6.5x)  
  2. NYSE Financials fell by 0.8% vs -0.8% vs -0.6% vs +1.7%! vs +0.3%. BofA most active -2.1%!!! vs -1.1% vs -0.7% vs +1.3% vs +0.1%, closing at $14.14 -.30 – lowest since 8/30! It has struggled since hitting $15.03 on 8/1 – highest since Jan. 14 and major res. Brokers -0.5% vs +0.4% vs -0.5% vs -0.9%! vs +0.9%; KBW Banks -1.6%!!! vs +0.2% vs +0.2% vs +0.2% vs +1%; Nasdaq Banks -0.4% vs +0.7% vs -1.4%!!! vs -0.3% vs +0.2%. A day after GS/USB had new 52 week highs GS fell by 0.4% vs +1.2%; MS -3.4% vs -1.4% and UBS -0.7% vs -1.5%!!! Since hitting their highs on 9/18, they are off 6.2% and 2.6% respectively! C fell 3.2% vs -1.4% Friday. WFC -1.3%; USB -1.3% vs +03% and a new high. NOTE: C/JPM/WFC hit highs in mid-July! Also, JPM fell 2.6% vs +0.5%? – what were they thinking Friday with all the bad news?
  3. Volatility (S&P VIX) ROSE SHARPLY with expiration behind us to close at 14.31 +1.19 – s 9.1% increase!!! Caution!!! Range was 14.02-14.71!!! vs Friday’s low 12.52. 15 is 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)!

European stocks higher, Asia weak (look at India!): UK +0.3% vs -0.5% vs -0.2% vs +1.4%!!! vs  +0.1%; France +0.7% vs -0.3% vs -0.2% vs +0.9% vs +0.5%; Germany +0.3% vs -0.4% vs -0.2% vs +1% vs +0.4%; Japan -0.1% vs closed vs -0.2% vs +1.8% vs +1.4% vs -0.7%; Hang Seng -0.8% vs -0.6% vs closed vs +1.7% vs -0.3%; Korea -0.1% vs +0.2% vs  closed vs -0.4% vs +1%; India +0.1% vs -1.8%!!! vs -1.2%! vs +3.4%!!! vs +0.8%. U.S. equity futures up slightly in what has become the norm: a very narrow trading range! DOW +13; SPX +1.50; NDQ +8.50.

Bonds continued to recover yesterday with solid gains, erasing and closing the gap down from 8/30! Overnight they are modestly higher: 10 yr Treasury closed 2.70%, now 2.69% +1/8 (recent range now 2.99% to 1.63%!!!), and the 30 yr range 2.67% to 3.90%, closed 3.73, now 3.72% +1/8. The long TIP closed 1.36%, unchanged. The (record?) low of 0.36% was set on 4/5. Recent high yield: 1.63%! Libor update: 0.250% 3 mos, 0.370 6 mos. Another new record low on 6 mos. 3.70%, while 3 mo. is knocking at the Jan. 2010 record lows (0.245% and 0.382% respectively). Foreign bond yields lower across-the-board: Germany 1.87% -5; UK 2.84% -7; France 2.38% -4; Italy 4.20% -6; Spain 4.23% -4; Portugal 7.01% -4; Greece 9.59% -8 vs 9.71%  +10 vs 9.57%!!! -26!!! vs 9.79% -25 vs 10.13 Recent range: 8.04% to 12.57%. Japan 0.66% -2.

Gold weak but closed little changed Monday with a low of $1313.40 but held above $1300, closing at $1327.00 -$5.50 after bouncing from Tuesday’s weak $1291, first time below $1300 since 8/9! Overnight it is sharply lower at $1310.50 -$16.50 with a low of $1305.50! 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 ($1341) were breached and are now MAJOR RESISTANCE. The 200 day is at $1482.

Crude has been pummeled the last THREE sessions closing at $103.59 -$1.08 – lowest close since 7/30!!! Wednesday’s session high was $108.49 from $104.94! Just 11 days ago it set a rally high and close of $110.70 and $110.53 respectively. It is way below the 40/50 day m/a’s ($106.67-.63), and crossed! The 200 day ($97.23) is now major 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 weaker again at $102.83 -.76 with a session low of $102.70 – yet another new recent low!!! Tell it goodbye!!!

 

Some random thoughts:

Sorry for the rant yesterday – NOT!!! The enemy of the U.S. lies within. Not since the 19th century robber barons have we sent this kind of unrelenting greed. Will leave you with that as you wonder why we continue to beat up on the worker while CEO’s become the newest members of the billionaire boys club. Ah, but boys will be boys…but isn’t Congress supposed to protect us from them…you know…we, the people…oh but that would require ‘going about the peoples business’ – not the lobbyists! Pity us!

Have a great day,

TB

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