11/5/13…my party right or wrong?

Today’s Quote from the Friars Club Encyclopedia of Jokes: “It’s not that I am afraid to die, I just don’t want to be there when it happens.” – that is so…Woody Allen!

Bloomberg Quote of the Day: “Three may keep a secret, if two of them are dead.” – Benjamin Franklin

Bloomberg Top Stories:

*Goldman to BofA Said to Continue Trading With SAC Capital After Plea Deal – hello, doesn’t anyone remember that E.F. Hutton went out of business over…check kiting???

*Yen Strengthens as Stocks in Europe Drop; Pound Rallies on U.K. Services

*EU Weighs Probe of German Exports on Concern Surplus Is Hindering Recovery

*Bond Liquidity Drought Allayed in Fed-Fueled Trading Surge – oh really?

*BlackBerry’s Comeback Under Chen Hampered as Smartphone Maker Burns Cash

*Bernanke giving Second Chance to Home Shoppers With Bond Pledge

*Cohen’s Dream of Soros Status Dies as SAC Guilty Plea Mars Trading Record – memo to Cohen: you are no George Soros…just a schemer, again, its about the money!

*Pritzker Billionaire Brothers Turn From Family Feuding to Deal Bankrolling

*U.S. Elections From New York to Detroit Pose First Test Following Shutdown – maybe!

*New Jersey Mall Shooting Suspect Is Found Dead From Self-Inflicted Injury – why??? 

*Iran Culture Minister Says Government Should End Ban on Facebook, Twitter – Wow!!

Monday’s Market Summary:

Stocks rallied again…sort of with both Dow Transports and the Russell 2000 small cap leading the way +1.2% but a tepid response in the rest…as it should be as volume plunged to 3.17B shares, well below average, from an average 3.67B shares as once again we had a rally on low volume while selloffs are on higher volume…if you can’t figure that out TB can’t really help you! The rest were up from just 0.2% to 0.4% while NYSE Financials were flat!

The Nasdaq 100 was up just 0.2% by a weak 1.4:1. Just THREE members gained more than 1 point while THREE lost more than a point: AAPL +5.4 vs -1.9 vs -2.1 vs +6.4 vs +2.6 vs -4.7 vs +5.7 vs +3.8 vs -1.2 vs +10 vs +3.5; MSFT +1.2; vs +1.2; TSLA +1.4; FB -2.5; GILD -2.2; BIDU -1…this on a rally day??? Is that all there is?

Advance/Declines were both positive? New 52 week highs rose to 268 from 194 vs 252 vs 394 vs 460 vs 380 vs 500, while new lows fell back to 59 vs 84 vs 79 from a weak 46 vs 29 vs 31 vs 34 vs 29! VIX declined for a second day closing at 12.93 -.35. This is the first close below 13 since 8/13!!! Options expiration on the 15th – a setup? Hmmm.

Bonds closed little changed since plunging on Friday. Gold rose slightly closing at $1314.70 +$1.50 on a narrow inside session. Crude was flat, $94.62 +.01, but only after putting in another session low of $94.06, lowest since June 26th!!!.

Dow 30 +0..2% vs +0.5% vs –0.5% vs -0.4% vs +0.7%; Dow Transports +1.2%! vs +1%! vs –0.5% vs -0.6% vs +0.2%; Russell 2000 +1.2%! vs -0.4% vs 0.5% vs -1.2%! vs +0.4%; Dow Utilities +0.2% vs +1%!!! vs -0.6% vs -0.6% vs +0.2%; S&P 500 +0.4% vs +0.3% vs -0.4% vs -0.5% vs +0.6%; Nasdaq Composite +0.4% vs +0.1% vs -0.3% vs -0.6% vs +0.3%; NDQ 100 +0.2% vs +0.1% vs -0.2% vs -0.2% vs +0.3%.

*NYSE Volume plunged to a weak 3.17B shares vs 3.67B vs 3.83B vs 3.53B vs 3.3B. The record high (?) is 4.82B shares on Q3 end of quarter while 2.52B is 4th weakest of 20131.96B is the low). REAL NYSE Volume also plunged to the lowes since 10/14 at 658M shares vs 810M shares vs 892M vs 687M vs 683M (2.06B shares also on Sept. 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 722M shares. The average since 6/28’s 1.75B share day, is just 698M shares, ranging from 482M to 2.025B shares on 9/20. There have been just EIGHT 1B+ share sessions! There have now been 35 800M+ shares in 2013: 15 up, 18 down, and two mixed.

*New 52 week highs have ranged from 33-864. They rose to 268 vs 194 vs 252 vs 394 vs 460 vs 380. Recent high is a super-strong 890!!! New lows fell to 59 vs 84 vs 79 vs 46 vs 29.

  1. Advance/Declines were positive: +2x vs -1.2x vs -1.5x vs -2.4x vs +1.6x (recent range -17.5x to +6x) on NYSE and +1.9x vs +1.4x vs -1.6x vs -2.8x vs +1.5x (recent -4x!!! to +3.8x). Breadth was similar: +3x vs +1.2x vs -1.8x vs -1.8x vs +1.8x (recent -18.6x!!! to +7.2x!!!) on NYSE and +1.5x vs +1.1x vs -1.1x vs -2.8x vs +1.4x (recent -12.8x to +6.5x).  
  2. NYSE Financials were flat vs +0.1% vs -0.8% vs -0.5% vs +0.1%. BofA 2nd most active up just 0.1% vs +0.4% vs -1.4% vs +0.1% vs +0.3%, closing at $14.04 +.02. It has struggled since hitting $15.03 on 8/1 – highest since Jan. 14 and major res. Brokers +0.5% vs +1% vs -0.9% vs -0.5% vs +0.4%; KBW Banks -0.1% vs +0.2% vs -1.1% vs -0.2% vs +0.1%; Nasdaq Banks +0.2% vs -0.2% vs -1.1% vs -0.2% vs -0.2%.
  3. Volatility (S&P VIX) declined for a second day for the lowest close since 8/13, but could be a setup for options expiry on the 15th!, 12.93 – .35. Note in August it surged back on the expiry!The recent range is now 11.83-21.01!!! It peaked at 22.79 on 12/28/12. It is still BELOW the 40 day (14.87), the 50 day (15.13) and the 200 day (14.39)…ytd the range is 11.05 (3/14) to 21.92 (6/24)!

European stocks weaker, Asia mixed: UK -0.6% vs +0.6% vs +0.1% vs -0.4% vs +0.2%; France -0.9% vs +0.5% vs -0.3% vs +0.4% vs +0.1%; Germany -0.5% vs +0.4% vs -0.1% vs +0.1% vs flat; Japan +0.2% vs closed vs -0.9% vs -1.2% vs +1.2% vs -0.5% vs +2.2% vs -2.8%!!!; Hang Seng -0.7% vs -0.3% vs +0.2% vs -0.4% vs +2%!!!; Korea -0.6% vs -0.7% vs +0.5% vs -1.4%! vs +0.4%; India -1.3%! vs closed vs +0.2% vs +0.6% vs +0.5%. U.S. stock futures weaker in another extremely narrow range: DOW -50; SPX -5; NDQ -9.25.

Bonds closed slightly better but are giving back the gains overnight: 10 yr Treasury 2.62% -3/16 (recent range 2.99% to 1.63%!!!), and the 30 yr range 2.67% to 3.90%, 3.71% -5/32. The long TIP is 1.43% -3/8. The (record?) low of 0.36% was set on 4/5. Recent high yield: 1.63%! Libor update: 0.238% 3 mos, 0.352% 6 mos. Both are at new record lows!!! Banks remain cautious and loaded with cash!!! Foreign bonds weaker, ex-Portugal, especially Greece which was at recent lows: Germany 1.71% +4; UK 2.70% +8; France 2.19% +4; Italy 4.15% +4; Spain 4.06% +6; Portugal 6.05% -2; Greece 7.88% +18! vs 7.73%!. Friday’s low of 7.71% was another new low! Recent range now: 7.71%-12.57%. Japan 0.59% unched.

Gold closed slightly higher in a narrow inside session, closing at $1314.70 +$1.50. The recent low is $1251 on 10/15 – lowest since 7/10. Recent high was $1375.40 on 9/19.  6/27’s intraday low was $1179.40 – lowest since at least 2011 and critical support. $1300 remains psychological support with major res now at the 40 day ($1321) and the 50 day ($1336). Major resistance at $1375, the 9/19 high. The 200 day is at $1424. Overnight it is little changed at $1315.40 -.60 and remains weak.

Crude closed flat but only after falling to $94.06, lowest since 6/27. closing at $94.62 +.01. It has shown no sign of strength since 9/18’s surge to $108.49. 9/19’s session high was $108.99! Recent rally high and close are $110.70 and $110.53 respectively. It is way below the 40/50 day m/a’s ($101.74/103.13), both falling fast again, and still major resistance! The 200 day ($98.71) is also major resistance. 4/18’s low of $85.61 was lowest since 12/11! The recent range is $85.61-$112.24 since March 1, 2012. Overnight is slightly lower at $94.43 -.17…in a narrow inside session.

Some random thoughts:

Have just gotten to a perplexing part of It’s Even Worse Than It Looks. This is where they discuss the options to fix it and they are few and frustratingly difficult. The problem being that both parties are obsessed with controlling the government – especially the GOP at any cost, including their own raison d’etre.

The first, fix proposed was one favored by George Will of all people – the recurring theme of term limits. Despite there being no proof that they solve anything, and that the Supreme Court has ruled them unconstitutional without a Constitutional amendment which neither party wants, this comes up again and again. (TB favors instead removing retirements as in no way did the founding fathers anticipate people making careers in Congress…nor did they wish them! The real downside is opportunists who would then use that as a stepping stone to becoming…drum roll please…lobbyists, etc. Furthermore, as the Tea Party has shown, it would only deepen the gap between the two parties.

Full public funding of elections. Simple, how can you do that when most people get their information from the internet and the Roberts Supreme Court has allowed anonymous contributions to organizations which are only trying to inform the electorate. Truly sick!

Third party? Pullease…90% of the electorate considers themselves republican or democrat. True, third parties serve to educate and have been successful in changing direction but only through pressure on the two key parties. That is as it should be.

IRV – instant runoff voting whereby you rank choices which, with open primaries could be successful in tight elections. As of now, due to redistricting, the only thing a candidate, in most cases has to do, is win the primary, and that is done with party  support (note how the GOP ‘primaried’ Sen. Robert Bennett, out of the race, a true conservative whose crime was not strictly adhering to the party line…is this what we want, robots?

Expanding the vote. The GOP has consistently tried to make voting more difficult and in doing so has reduced participation. Despite no evidence of any malfeasance by voters (it is the parties who manipulate elections, not convicted felons trying to register), they want voter ID laws and make registration and voting as difficult as possible. Making you vote in the district you live when you may work a long distance and thus not be able to make it back to the polls before they close or simply decide it is too difficult. Same day registration is an option practiced here in Minnesota and a few other states. Before the vote is counted the voter is vetted…true some may get by but there is no evidence of it being meaningful…how many convicted felons really want to vote?

On line registration. Again, opposed by the GOP because the fear having more registered voters. Yet, these last two options have significantly increased voter participation with little evidence of fraud.

Why is the GOP so concerned with limiting access. Don’t we want an informed electorate? One that is involved? Not if it comes with the risk of losing control…yet that is exactly what is happening. Today there are mayoral elections in several major cities, governors in  New Jersey and Virginia, and some key ballot issues which will test the mettle of the voters. Will they care…if so, will they still care in November 2014 and the primaries leading up to it? You decide…but don’t answer off the top of your head. Educate yourself…there is plenty of sound information out there, not Rovian blather that demeans our system of government. Don’t you owe it to your country to rely on facts rather than innuendo and disinformation?

Did I anger you? Maybe so, but maybe you will start thinking like an American rather than a partisan foil for a system in decline.

Have a great day!

TB

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