10/3/13…Wall Street has the answers…sure it does! REVISED

…forgot to update market commentary…mea culpa!

Today’s Quote from the Friars Club Encyclopedia of Jokes: “An alcoholic is someone you don’t like, who drinks as much as you do.” – Dylan Thomas

Bloomberg Quote of the Day: “We would often be sorry if our wishes were granted.” – Aesop…so true…so true! TB

Bloomberg Top Stories:

*First-Time Jobless Claims in U.S. Increased Less Than Forecast Last Week – so???

*Blackstone Opens Europe Spigot as Sales of Distressed Bank Assets Pick Up

*S&P 500 Futures Decline With Bonds, Yen as Emerging-Market Stocks Advance

*U.S. Stock-Index Futures Decline as Government Slowdown Enters Third Day

*Icahn Chasing Higher Price in Dell LBO Shows Rise of Appraisal Arbitrage

*Goldman Sachs Said to Make $1.5 Million Error Underwriting Ford Bond Sale

*Pound Rally Moves Beyond Reason to Morgan Stanley on Bank of England Bets

*Lilly Says 2014 Sales Goal Challenging as $5 Billion Stock Buyback Planned

*Economist Cao Confronts Poisoned China Air With Carbon Remedy at Tsinghua

*WTI Crude Discount to Brent Seen Climbing From 3-Year Low

*Cyber Drug Bazaar’s Alleged Boss Combined EBay Style With Hitmen, Hackers

*Bitcoin Led by Winklevil Captivates Twitter Dreamers as Regulators Rush In – these two brothers blew it on Facebook and don’t a clue what they are doing or repercussions!

*White House Meeting Fails to Break Congress Stalemate That Led to Shutdown

*Buffett Says Cnogress to Approach Point of Idiocy on Budget, Not Cross It

*Kerry Says U.S. Must Test Sincerity of Iran Offer on Nuclear Program Talks

*Letta Breaks Berlusconi in Grip on Italy Politics Before bid to Fight Ouster  

Volume steady near 3.2B shares for a third straight session. All indices were flat to down slightly except Dow Utilities which closed up 0.1%. NYSE Financials closed flat.

The Nasdaq 100 gained just 0.2 points vs +35 vs -12 vs -3.7 vs +25.5 points with just 5 members moving by more than a point. Decliners won by 1.5:1. Let’s look again at the leaders and their changes over the past 13 sessions that they were leaders: MSFT +2.5 vs +2 vs +3.9 vs +2.1 vs -2.5 vs -6.9 vs +2.2 vs +3 vs +1 vs -1.4 vs +2; PCLN +1.3 vs +1.3; APPL +1.3 vs +9.1 vs +4.9 vs -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; 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; AMZN +5.4 vs -1.4 vs +2.2 vs -2 vs +1.7, vs n/a, vs +3.2, +3.3; GOOG +2.9 vs -2.3, n/a -4.1, +1.2,-1.2, +4.2; AMGN -1. Advance/Declines were negative yet Breadth was slightly positive? New 52 week highs fell sharply while new lows rose moderately but remain weak. VIX REVERSED yet again and is back ABOVE 16 following Monday’s high of 17.49!!! Go figure

 

Bonds closed slightly better but were thinly traded most likely due to the debt ceiling talks or lack threof. Crude strong with the highest close sine 9/20 even though it only closed slightly higher than Monday but the new double bottom at $101.05 held – lowest since 7/5! Gold also rallied nearly offsetting Tuesdays loss after putting in a new low of $1276.80. Anybody’s guess.

Dow 30 -0.4% vs +0.4% vs -0.8% vs -0.5% vs +0.4%; Dow Transports -0.4% vs  +1.4% vs -0.2% vs -0.6% vs +0.4%; Russell 2000 -0.5% vs +1.4% vs -0.2% vs -0.6% vs +0.4%; Russell 2000 -0.5% vs +1.3% vs flat vs -0.4% vs +0.5%; Dow Utilities +0.1% vs +0.4% vs flat vs -0.7% vs -0.2% vs 0.7%; S&P 500 -0.1% vs +0.8% vs -0.6% vs -0.4% vs +0.4%; Nasdaq Composite -0.1% vs +1.2% vs -0.3% vs -0.2% vs +0.7%; NDQ 100 flat vs +1.1% vs –0.4% vs -0.1% vs +0.8%.

*NYSE Volume was little changed for a 3rd day at 3.18B shares vs 3.16B vs 3.28B vs 2.96B vs 2.79B (Record high (?) 4.82B shares on options expiry while 2.52B is 4th weakest of 20131.96B is the low). REAL NYSE Volume however fell to the HEX – 666M shares from a near average 717M vs 878M – 1st time above 800M in a week – vs 636M vs 603M. (2.06B shares also on expiry was 3rd highest ever (6/30/06 3.38B; 7/12/02 2.29B while 482M on 7/3 in a shortened trading session is the 2013 low). The 12-month average is 719M shares. The average since 6/28’s 1.75B share day, is just 692M shares, ranging from 482M to 2.025B shares on 9/20. There have been just EIGHT 1B+ share sessions! There have been 33 800M+ shares in 2013: 13 up, 18 down, and two mixed.

*New 52 week highs have ranged from 33-864. They dropped sharply to 297 vs 424 vs 181 vs 186 vs 271. New lows rose to 64 vs 48 vs 64 vs  51 vs 44 – weak!

  1. Advance/Declines were negative: -1.3x vs +2.6x vs -1.5x vs -2x vs +1.8x(recent range -17.5x to +6x) on NYSE and -1.5x vs +2.6x vs -1.2x vs -1.6x vs +1.5x (recent -3.5x to +3.8x). Breadth however was positive? +1.4x vs +3.7x vs -2.2x vs -2.7x vs +1.4x (recent -18.6x!!! to +7.2x!!!) on NYSE and +1.2x vs +3.4x vs -1.7x vs -1.2x vs +1.9x (recent -12.8x to +6.5x)  
  2. NYSE Financials were flat following the first meaningful gain in more than a week: flat vs +0.9% vs -0.7% vs -0.4x vs +0.1%. BofA most active and back above $14, +1.2% vs +0.7% vs -0.7% vs -1% vs -0.4%, closing at $14.06 +.12 – back from the lowest levels since 8/30! It has struggled since hitting $15.03 on 8/1 – highest since Jan. 14 and major res. Brokers -1% vs +0.6% vs -0.7% vs -0.1% vs -0.1%; KBW Banks -0.5% vs +0.9% vs -0.3% vs -0.3% vs +0.7%; Nasdaq Banks -1.1% vs +1.2% vs +0.3% vs -0.3% vs +0.3%.
  3. Volatility (S&P VIX) rose again to over 16 just a day after reversing from the highest close since 8/30, closing at 16.60 +$1.06. Range was at 16.13-16.84 vs 15.47 -16.46 vs last Friday’s low 12.52. A gap remains from Friday at 14.62-16.16!!! 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. 54), the 50 day (14.21) and the 200 day (14.46)…ytd the range is 11.05 (3/14) to 21.92 (6/24)!

Global stocks higher, ex-France/Japan; UK +0.5% vs -0.6% vs -0.4% vs -0.8% vs -0.8%; France -0.2% vs -0.8% vs +0.6% vs -1.3% vs –0.2%; Germany +0.2% vs -0.6% vs +0.4% vs -1.1% vs -0.3%; Japan -0.1% vs -2.2% vs +0.2% vs -2.1%!!! vs -0.3%; Hang Seng +1% vs +0.6% vs closed vs -1.5% vs +0.4%; Korea flat for a 2nd day vs +0.1% vs -0.7% vs +0.2%; India +2% vs closed vs +0.7% vs -1.8% vs -0.8% vs +0.2% vs -0.3%. U.S. equity futures little changed and back in a very narrow trading range: DOW -5; SPX -0.10; NDQ +3.50.

Bonds closed a tad better and remain at levels near the sharp break that began on 8/30! Overnight they are the exact opposite of yesterday: 10 yr Treasury 2.63% -1/8 (recent range 2.99% to 1.63%!!!), and the 30 yr range 2.67% to 3.90%, 3.72% -1/4.. The long TIP is 1.37% -5/16. The (record?) low of 0.36% was set on 4/5. Recent high yield: 1.63%! Libor update: 0.243% 3 mos, 0.366% 6 mos.  Both again setting new record lows: 6 mos. 3.666%, and the 3 mo. 0.243% respectively. Foreign bond yields slightly higher: Germany 1.82% +1; UK 2.72% +1; France 2.36% +2; Italy 4.39% +3; Spain 4.27% +3; Portugal 6.65% +1; Greece 9.10% +3 vs 8.98% vs 8.85%!!! -21!!! vs 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%-12.57%. Japan 0.63% flat.

Gold rallied yesterday nearly offsetting Tuesday’s $40 loss but only after putting in a low of $1276.80– lowest since 8/8 – then closing above $1300 at $1320.70 +$34.60 and continues to oscillate there. Overnight it is weaker but holding above $1300 at $1310.80 -$9.90 with a low of $1302. Recent high was $1375.40 on 9/19 while 9/10’s high was $1391.40.  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 ($1352) and the 50 day ($1344) are MAJOR RESISTANCE. The 200 day is at $1468.

Crude closed strong breaking the EIGHT days of straight down days closing at $104.10 $2.06 – highest since 9/20. Wednesday’s intraday low was $101.06, creating a new double bottom and major support – lowest close since 7/5!!! 9/18’s session high was $108.49 from $104.94! Just 16 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 ($106.19-.05), and crossed! The 200 day ($97.82) 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 little changed at $104.08 -.02 with a low of $103.45.

Some random thoughts:

Can you imagine Obama having Lloyd Blankfein of Goldamn Sachs fame being brought down to D.C. to talk along with other financial ‘luminaries’ on the impact of the debt crisis? Well he did…Blankfein must be shaking his head…not that long ago he was called before a joint subcommittee where he was made to look like a fool by his Harvard Law ‘numero uno’ of one year, Sen. Carl Levin. He left with people laughing at him and his firm…or angry with it…one of his subordinates went down, and GS returned to business as usual. Now he is called in as an expert.

This defines the Obama Administration’s major flaw: listening to Wall Street instead of telling them what to do AND where to go!!! Sick!

Have a great day!

TB

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