9/30/13…suck it up…suckers!

Today’s Quote from the Friars Club Encyclopedia of Jokes: “If there was no action around (betting), he would play solitaire – and bet against himself.” – Groucho Marx about his brother Chico

Bloomberg Quote of the Day: “A great pilot can sail even when his canvas is rent.” – Lucius Annaeus Seneca…yes, Lucas…but not if it is ‘rented’ out. TB

Bloomberg Top Stories:

*First U.S. Government Shutdown in 17 Years Seen Unavoidable Without Talks – yawn!

*Stocks Decline on Looming U.S. Government Shutdown; Yen Gains as Oil Drops

*TIPS Rally Most Since 2011 With Treasuries Gaining as Taper delay Embraced – but they are still the weakest in fixed income…don’t be fooled!

*Euro Area’s Record Jobless Seen Resisting Recovery From Recession for Now

*Fed Too Familiar With Lost Labor as Unemployment Falls Seeking New Message

*Dollar Bulls Vanish as UBS Joins Goldman Now Seeing Declines in Currency

*Banks’ Off-Balance-Sheet Risks Come Under Basel Scrutiny in Leverage Rule

*China’s September Factory Gauge Unexpectedly Misses Preliminary Estimate

*Volatility Falls to Seven Year Low as S&P 500 Taper Worries Fades – It is tracking 1954 More Than Any Other Year – not VIX but the VVIX – a measure of VIX swings!

*Kodak’s Legal Bill Includes More Than 215 Lawyers – the cost of going broke!

*Republican U.S. Federal Shutdown Tactics Fight Exposes Simmering Civil War

*Obamacare Enrolling Latinos May Also Boost Democrats 2016 Political Edge

*Iran’s Oil-Export Revival Will Need More Than a Phone Call Between Rivals

*Power Failure on Aged Train Tracks Shows Frailty of U.S. Northeast Railway

See the headline and story above on volatility and think…don’t react! Despite all the problems of the day the ‘volatitlity of volatility’ in the S&P 500 is the lowest since 1954. How can this be? TB will take a ‘WAG’ and say it is because of ‘retail’ participation, including money mangers being low with the volume ‘boosted’ by high frequency traders who are only interested in day to day volatility while the VIX measures the ratio of puts to calls…a far better measure but it loses its value as a tool when the swings are only short term in nature…see below on the daily changes in key NDQ 100 stocks if you need TB to draw you a picture…and yes it is worth a thousand words. Uptake: there is no meaningful direction even in key stocks, hence no clear trend. Only surprises (and options expiry AND quarter ends!!!) produce BIG volume while the other sizable moves to the upside are on LOW volume, get it? TB sincerely hopes you do. It’s a rigged game!

The best performers Friday – if you can call them that – were the two Nasdaq indices  -0.2% and -0.1% respectively vs -0.7% and -0.8% respectively All others declined from 0.3% (Russell 2000) to 0.7% (Dow Utilities).  

The Nasdaq 100 lost 3.7 points vs UP 25.5 points with 10 members moving by more than a point! five down and five up with decliners running 2:1. Let’s look again at the leaders and their changes over the past TEN sessions that they were leaders: APPL -2.8 vs +3.8 vs -6.1 vs -1.7 vs +19.2!!! vs -4.4 vs +6.4 vs +7.9 vs +4.2 vs -12.3 vs -6.5 – can you find Waldo???; QCOM -2.3; CSCO -2 vs n/a  vs-3.1 vs +1.4; INTC -1.9; EBAY -1; MSFT +3.9 vs +2.1 vs -2.5 vs -6.9 vs +2.2 vs +3 vs +1 vs -1.4 vs +2; CELG +1.7; FB +1.4 vs +1.5 vs +1.6 vs +1.9 vs +2.5 vs +1.2 vs n/a vs +4 vs -2.8; CMCSA +1.2; CERN +1.2; Here are others that weren’t movers yesterday: GOOG -2.3, n/a -4.1, +1.2,-1.2, +4.2; AMZN +2.2 vs -2 vs +1.7, vs n/a, vs +3.2, +3.3; GILD +1.5 va -1.4, n/a -1.7;. Advance/Declines and Breadth were negative. New 52 week fell sharply while new lows were stable. VIX rose sharply breaking 15 and closed at a weak 15.46.

Bonds gave back a bit more of their gains but still not in trouble. Crude slightly lower and still weak, the double bottom at 102.26 holding – lowest since 7/8! Gold had a fairly strong session and continues to hold above $1300.

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

*NYSE Volume rise but remains below 3B shares at 2.96B shares vs 2.79B vs 3.12B  vs 3.2B vs 3.07B from a record high (?) 4.82B shares vs 3.72B vs 3.96B (2.52B is 4th weakest of 20131.96B is the low). REAL NYSE Volume also rose but to a weak 636M shares from a way below average 603M vs 641M vs 674M vs 690M from the third highest ever, 2.06B shares (6/30/06 3.38B; 7/12/02 2.29B) vs 738M vs 820M (482M on 7/3 in a shortened 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 689M 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 fell sharply to 186 vs 271 vs 276 vs 367 vs 221 vs 590 vs 587 vs 310. New lows quiet at 51 vs 44 vs 43 vs 49 vs 168! vs 36 vs 56 vs 59.  

  1. Advance/Declines were negative: -2x vs +1.8x vs 1:1 vs +1.3x vs -1.4x vs -2.5x vs-1.4x vs +6x!!!; (recent range -17.5x to +6x) on NYSE and -1.6x vs +1.5x vs -1.1x vs +1.2x vs -1.3x vs -1.1x vs -1.2x vs +2.8x (recent -3.5x to +3.8x). Breadth was similar: -2.7x vs +1.4x vs 1:1 vs -1.1x vs -2.1x vs -4x!!! vs -1.7x vs +7.2x!!! (recent -18.6x!!! to +7.2x!!!) on NYSE and -1.2x vs +1.9x vs +1.4x vs +1.5x vs -2.1x vs -1.5x vs +1.3x vs +3x (recent -12.8x to +6.5x)  
  2. NYSE Financials were weaker at -0.4x vs +0.1% vs +0.2% vs -0.3% vs -0.8% vs -0.8% vs -0.6% vs +1.7%! BofA 2nd most active (JCP #1 again -13.7% vs +3% vs -14.6%!!! on downgrade by GS) -1% vs -0.4% vs +0.5% vs +0.1% vs -2.1%!!! vs -1.1% vs -0.7% vs +1.3%, closing at $13.94 -.14 – lowest levels since 8/30! It has struggled since hitting $15.03 on 8/1 – highest since Jan. 14 and major res. Brokers -0.1% vs -0.1% vs flat vs -0.5% vs +0.4% vs -0.5% vs -0.9%!; KBW Banks -0.3% vs +0.7% vs -0.4% vs -1.6%!!! vs +0.2% vs +0.2% vs +0.2%; Nasdaq Banks -0.3% vs +0.3% vs +0.6% vs -0.4% vs +0.7% vs -1.4%!!! vs -0.3%.
  3. Volatility (S&P VIX) dipped below 14 for a 3rd day but closed at 14.06 +.05. Range was 13.58-14.40 vs Friday’s low 12.52. On 8/30 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. 36), the 50 day (14.10) and the 50 day (14.46)…ytd the range is 11.05 (3/14) to 21.92 (6/24)!

Global stocks WEAK for a 3rd day; UK -0.8% vs -0.8% vs -0.1% vs -0.2% vs +0.3% vs -0.5% vs -0.2% vs +1.4%!!!; France -1.3% vs –0.2% vs -0.2% vs -0.2% vs +0.7% vs -0.3% vs -0.2% vs +0.9%; Germany -1.1% vs -0.3% vs -0.2% vs flat vs +0.3% vs -0.4% vs -0.2% vs +1%; Japan -2.1%!!! vs -0.3% vs +1.2%! vs -0.8% vs -0.1% vs closed vs -0.2% vs +1.8% vs +1.4%; Hang Seng -1.5% vs +0.4% vs -0.4% vs +0.1% vs -0.8% vs -0.6% vs closed vs +1.7%; Korea -0.7% vs +0.2% vs +0.5% vs -0.5% vs -0.1% vs +0.2% vs  closed vs -0.4%; India -1.8% vs -0.8% vs +0.2% vs -0.3% vs +0.1% vs -1.8%!!! vs -1.2%! vs +3.4%!!! U.S. equity futures weaker and with a broader trading range! DOW -143; SPX -15.10; NDQ -29.25. What a way to end a quarter!!!

Bonds were slightly weaker for a 2nd day following four days of rally. They are not strong but have erased the gap down from 8/30! Overnight they were stronger but are now FLAT: 10 yr Treasury closed and currently 2.2% (recent range now 2.99% to 1.63%!!!), and the 30 yr range 2.67% to 3.90%, 3.70% unched. The long TIP closed 1.36% and is now 1.38% -5/32…still weakest of the bunch! The (record?) low of 0.36% was set on 4/5. Recent high yield: 1.63%! Libor update: 0.249% 3 mos, 0.369% 6 mos.  Both just above new record low on 6 mos. 3.67%, and the 3 mo. 0.245% (0.245% and 0.382% respectively). Foreign bond yields little changed and mixed: Germany 1.79% +1; UK 2.71% +1; France 2.33% -1; Italy 4.44% +2; Spain 4.31% -5; Portugal 6.73% +1; Greece 9.22% vs 9.15%!!! -30!!! vs 9.48% vs 9.59 vs 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 closed higher and continues to oscillate following Monday’s low of $1313.40 which held as did $1300, closing at $1339.20 +$15.20. The recent low was 9/18 at $1291.50, first time below $1300 since 8/9! Overnight it is little changed at $1332.40 -$1.20. Recent high was $1375.40 on 9/19 while 9/10’s high was $1391.40. 9/17’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 ($1351) and the 50 day ($1345) are MAJOR RESISTANCE. The 200 day is at $1474.

Crude closed slightly weaker making six straight down days closing at $102.87 -.16 – with an intraday low of $102.36 so the $102.20 DOUBLE BOTTOM held – so far! That is lowest close since 7/3!!! 9/18’s session high was $108.49 from $104.94! Just 14 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 ($106.46-.33), and crossed! The 200 day ($97.57) is 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 WEAK at $101.29 -$1.58 with a low of $101.16 –lowest since July 5th! Talks with Iran most likely putting the pressure on it.

 

Some random thoughts:

How could a once-great political party implode so badly and so rapidly? Ironically, that is the party that defends Wall Street and the wealthy, yet it is bent on self-destruction thanks to fools like the Koch brothers who funded the now out of control Tea Party. If you listened to Sen. Ted Cruz yesterday and liked what he had to say…pity (or for that matter Bill O’Reilly’s God’s messenger interview…hey didn’t Lloyd Blankfein say something similar???). Meanwhile the middle class and lower in this country is growing…mostly the lower…while the wealthy takes 90% of the gains. Even the Fed which has done its best to keep the economy going (sometimes your best just isn’t good enough), has only managed to drive up asset prices which have further enriched them.

Meanwhile the entire country is being held hostage by a bunch of greedy fools, Greedy for power and have no idea what they are doing as they resort to extortion of the President…and guess what? It isn’t going to work. The GOP is dead…long live the GOP.

Oh, and the wealthy are getting even bolder. AIG’s CEO said people should stop grousing about how much CEO’s make following Steve Schwartzman’s lead from a couple of years ago justifying why HE should only pay 15% tax (thanks to the flawed ‘carried interest’ provision) and threatening that there would be no capital available if taxed more. Guess Mr. Schwartzman never took a course in Economics! Even the soft-spoken Charlie Munger, partner of Warren Buffett, said the wealthy benefited from the financial crisis while the little people just had to suck it up. This in America?? This IS America? What have we turned into…the new French aristocracy? Let them eat cake!

One last thing; the 60 Minutes segment last night on Schizophrenia! If you watched it how could you not link it to Wayne LaPierre’s blathering about putting the crazies in hospitals…well they are in jail while more and more of those out are buying guns. Part of the syndrome. When is the NRA majority going to throw this Rube out???

 

May you live in interesting times…oh you already do!!!

TB

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