11/14/13…would you invest in this company?

Today’s Quote from the Friars Club Encyclopedia of Jokes: “I wouldn’t mind being the last man on earth – just to see if all of those girls were telling the truth.” – Ronnie Shakes

Bloomberg Quote of the Day: “War never slays a bad man in its course, but the good always.” – Sophocles – better to be a ‘dead’ vet?

TB’s Quote of the Day: “It takes less time to do a thing right than to explain why you did it wrong.” – Henry Wadsworth Longfellow

Bloomberg Top Stories:

*Yellen Says U.S. Economy Must Improve Before Fed Moves to Taper Stimulus–warning!

*More Americans File Claims for Jobless Benefits Than Economists Forecast – but down

*Stocks Rise as Yen Slips on Bets Fed Will Maintain Stimulus; Silver Gains

*Treasuries Not Good Enough as Swaps Collateral Under CFTC Rules Proposal – !!!

*Gold Head for Biggest Advance in Three Weeks on U.S. Unemployment Claims – ???

*Wal-Mart Cuts Profit Forecast for Second Time This Year as Sales Decline – awww!

*Inflation Vacuum Puts Linkers on Course for First Losses – think about that!

*Obama Seen Forced to Go to Congress to Ask for Changes in Health-Care Law-right!

*Camp Nears Decision Moment on Biggest Revisions to Code Since 1986 – heed!

*Philippine Typhoon Survivors Flee Tacloban as Aid Still Held to a Trickle

*Generics Delayed by Drugmaker Protections U.S. Wants in Pacific Pact

Wednesday’s Market Summary:

A rally of sorts but given the weakness of late (especially the two Nasdaq indices and the Russell 2000 small cap which all rose by more than 1%). Dow Transports were up for a third straight session: +0.6% vs +0.7% vs +0.5%. NYSE Financials rose 0.8% mainly due to brokers which gained 1.3%. All this, on higher but below average volume of 3.35B shares vs 3.12B vs 2.53B, while REAL NYSE Volume only came up to 678M shares vs 652M from 538M shares – lowest since August 5th !

Twitter (TWTR) still on track to fulfill TB’s expectations closing down (only one day closed higher but it is going sideways…what happens when the underwriters no longer have to support it?), $42.60 -.70.

The Nasdaq 100 rose 1.2% vs +0.1% vs -0.1% vs +1.4%, and with 9:1 advancing! Compare to +1.5:1, +1.1:1, +9:1, and -13:1…warning signals? Eight members gained more than a point and none lost anywhere near a point: MSFT +6 vs -1.8 vs -1.3 vs +1.9 vs -4.7 vs +11.3!!! vs +5.2 vs +1.2; vs +1.2; GOOG +5.1; FB +3.4; AMZN +2.7 vs -2 vs +1.7 vs +2.8 vs -5.2 vs -1.2; QCOM +2.3; MDLZ +1.4; CSCO +1.2 vs +1.3; GILD +1.2; Apple not a leader for a second day gaining just 0.1% vs +0.1% vs -1.1 vs +6.6 vs -6.7 vs -3.9 vs -0.9 vs +5.4.

Advance/Declines and Breadth were positive – especially Breadth! New 52 week highs rose to 331 vs 226 vs 254 vs 253 vs 206 vs 228, while new lows rose to 102 vs 93 vs 64 (never short a thin market) vs 103 vs 109 vs 85. VIX declined, closing at 12.52 -.30, only the 5th close below 13 since 10/18. Tomorrow’s  options expiration could be exciting – stocks were weak until the afternoon, surging into the close. TB’s portfolios showed losses in income stocks which all came back in the afternoon…fundamentals? Hardly!

Bonds rallied by about ½ point from 10’s out the curve, including long TIPS. They were up more than a quarter over night but only the 30 yr remains positive since weekly jobless claims declined slightly. Gold closed lower again but on a narrow inside session, at the weakest since JULY 10th, but above Tuesday’s low of $1260.50, at $1268.40 -$2.80 and now off $40 in FIVE sessions! Crude also closed slightly lower at $93.88 -.16 also on an inside session. Tuesday’s session low was $92.86 – lowest since June 24th!. Gas here $2.89 yesterday!

Dow 30 +0.5% vs -0.2% vs +0.1% vs +1.1% vs -1%; Dow Transports +0.6% vs +0.7% vs +0.5% vs +1.1% vs -1.4%; Russell 2000 +1% vs flat vs +0.1% vs +1.9% vs -1.8%; Dow Utilities +0.2% vs -0.8% vs -0.1% vs -0.2% vs -0.9% vs +1.3%; S&P 500 +0.8% vs -0.2% vs +0.1% vs +1.3% vs -1.3% ; Nasdaq Composite +1.2% vs flat for 2 days vs +1.6% vs -1.9%; NDQ 100 +1.2% vs +0.1% vs -0.1% vs +1.4% vs -1.9%…hmmm.

*NYSE Volume rose slightly but to a still below average 3.35B shares vs 3.12B vs 2.53B shares vs 3.82B vs 4.14B. 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 rose slightly to a still below average 678M shares vs 652M vs 538M, lowest since August 5th vs a strong 820M shares from a super strong 910M vs 704M, lowest since 10/14 (2.06B shares on the Sept. expiry was 3rd highest ever: 6/30/06 3.38B; 7/12/02 2.29B while 482M on 7/3 on a shortened trading session is the 2013 low). The 12-month average is 724M shares. The average since 6/28’s 1.75B share day, is just 700M shares, ranging from 482M to 2.025B shares on 9/20. There have been just EIGHT 1B+ share sessions! There have been 37 800M+ shares in 2013: 16 up, 19 down, and two mixed.

*New 52 week highs have ranged from 33-864. They surged to 331 vs 226 vs 254 vs 253 vs 206. Recent high is a super-strong 890!!! BUT new lows rose to 102 vs 93 vs 64 vs 103 vs 109 vs 85…a setup for tomorrow’s expiry???  

  1. Advance/Declines were positive: +2.2x vs -1.7x vs +1.1x vs +1.3x vs -3.5x (recent range -17.5x to +6x) on NYSE and +2.3x vs -1.2x vs 1:1 vs +3x vs -3.4x  (recent -4x!!! to +3.8x). Breadth was better +4.3x vs -1.5x vs +1.3x vs +2.7 vs -6.4x!!! (recent -18.6x!!! to +7.2x!!!) on NYSE and +5.5x vs +1.2x vs +1.2x vs +3.8x vs -4.7x!!! (recent -12.8x to +6.5x).  
  2. NYSE Financials rose by 0.8% vs -0.7% vs +0.1% vs –1.3% vs +0.5%. BofA most active rising 2.2%??? vs -0.6% vs +0.6% vs +1.2%! vs +0.2%, closing at $14.64 +.32, yo-yoing again, right ma?. It has struggled since hitting $15.03 on 8/1 – highest since Jan. 14 and major res. Brokers +1.3% vs -0.2% vs +0.8% vs -1.9% vs +1.2%; KBW Banks +0.9% vs -1.1% vs -0.2% vs -1.1% vs +0.3%; Nasdaq Banks +0.9% vs -0.7% vs -0.9% vs -0.9% vs +0.5%.
  3. Volatility (S&P VIX) declined closing At 12.52 -.30…setting up for Friday? Only the 5th day below 13 since 8/13! Note in August it surged back on the expiry! The recent range is 11.83-21.01!!! Since March 11th the average has been just 14.47…way below the five year average of 23.32~~~ and the 200 day: 14.39!!! It peaked at 22.79 on 12/28/12…ytd the range is 11.05 (3/14) to 21.92 (6/24)!

Global stocks higher after being weak for two days; India up for the first time in eight sessions!!! UK +0.4% vs -1.4% vs -0.4% vs +0.3% vs -0.7%; France 0.7% vs -0.6% vs -0.3% vs +0.5% vs -1.5%!!! vs +1.2%!; Germany +0.7% vs -0.6% vs -0.3% vs +0.2% vs -0.8% vs +1.3%!; Japan +2.2%!!! vs -0.2% vs +2.3%!!! vs +1.3% vs -1%; Hang Seng +0.8% vs +1.4% vs -0.6% vs -0.7% vs flat; Korea +0.2% vs -1.6% vs +0.9% vs -0.4% vs -1%; India +1% vs -0.4% vs -1% vs -0.9% vs -0.8% vs -0.4% vs -0.4% vs -1.3%! U.S. stock futures little changed in – you guessed it – another very narrow trading range: DOW +6; SPX +2; NDQ -8.50 – opened higher…but

Bonds rallied by about ½ point from 10’s to 30’s and the long TIP after being destroyed on Friday! Overnight another rally! Hoop-de-doo: 10 yr Treasury 2.71% +1/8 (recent range 1.63% to 2.99%), and the 30 yr range 2.67% to 3.90%, 3.79% +9/16. The long TIP is 1.48% +1/2. The (record?) low of 0.36% was set on 4/5. Recent high yield: 1.63%! Libor update: 0.238% 3 mos, 0.353% 6 mos. Both slightly lower and barely above the new record lows!!! Foreign bond yields lower: Germany 1.71% -2; UK 2.78% -2; France 2.18% -2; Italy 4.07% -4; Spain 4.08% -1; Portugal 5.82% +1; Greece 8.25% -11 vs 8.36% vs 8.19% vs 8.02% Recent range: 7.71% – 12.57%. Japan 0.59% flat.

Gold traded in a very narrow ‘inside’ range closing at $1268.40 -$2.80 a day after trading at the lowest level since 10/11 and well below $1300 following Thursday’s NEGATIVE key reversal (higher high, lower low, close below prior days low) putting in a high that day of $1326, between the 30/50 day m/1’s, with a lower high and lower low at $1260.50, lowest since July 10th! 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 ($1316) and the 50 day ($1322). Major resistance at $1375, the 9/19 high. The 200 day is at $1413. Overnight it is $1282.00 +$13.60.

Crude also had an ‘inside’ session closing at $93.88 +.84, Wednesday’s session low was $92.86, not seen since June 24th! 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 ($99.74/101.41), finally leveling out, and major resistance! The 200 day ($98.64) 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 weaker but trading in a narrow range at $93.24 -.64, with a session low of $93.19.

Some random thoughts:

Trivia factoid: what is the oldest continuously operating company in the world? The Zildjian Company, founded in 1618 in the Ottoman Empire by an alchemist trying to turn lead into gold. In 1624, they changed to producing noisemaking devices to scare enemies in combat. Today, the make percussion equipment: cymbals, drumsticks, etc. having relocated to the U.S. in the 1800’s. A woman on the board is the 14th generation of ownership…now on to an unrelated and more important issue, but one whose longevity is in question:

Would you invest in this company? A company that provides services and contracts for various operations that is more than 230 years old, owned by the ‘employees’ who elect the board to run the company. As late as 2000, the company was thriving but then it slipped and the board voted to increase debt and to increase sales cut prices. Unfortunately, due to competitors rigging debt, etc. the entire world went into a slump, but the board decided to cut advertising expenditures, defer maintenance of equipment, and lay off employees…remember they are the owners!, and focus on reducing debt. Sales refused to rebound, both current and former employees (owners) were irate, yet the board could not achieve majority consensus due to a few hardheaded members that only focused on the debt.

They are asking for outside investors to come in…but with non-voting stock…would you invest in this country? Hint: you are already one of the owners!

The company is the United States of America…you own it…now fix it…but you had better overthrow the board or you will lose everything. What about your kids futures?

Until tomorrow…

TB

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