11/22/13…TW3…That Was The Week That Was – remember?

TB’s Quote of the Day: “Ask not what your country can do for you; Ask what you can do for your country.” – JFK at his Inaugural, January 20th, 1961 – Senators…listen!!!

Bloomberg Quote of the Day: “I don’t care that they stole my idea. I care that they don’t have any of their own.” – Nikola Tesla…same as TB’s thoughts on opinions!!!

Bloomberg Top Stories:

*German Business Confidence Rise to 1-1/2 Year High With Recovery on Track

*European Banks’ Legal Tab Tops $77 Billion as Post-Crisis Probes Escalate-finally!

(did you know that the global loss in the crisis offset all gains ever made by banks? TB)

*Volkswagen to Invest $114 Billion in Automotive Unit Over Next Five Years

*Big Bank Penalties for Mortgage Bond Flaws Seen Justified in Investor Poll – YEP!

*Euro Strengthens as Bunds Drop After Confidence Report; Stocks Pare Gains

*Paulson Said to Tell Clients He Won’t Add More of His Money to Gold Fund – he was the contrarian…the last bull! Sign of a bottom? Perhaps! 

*Italy Faces Budget Scrutiny With Spain as Finance Ministers Poised to Meet – duh!

*Men’s Wearhouse Spurning Bid Can’t Stop Traders Betting on Deal – or as ousted founder George Zimmer would say, “I guarantee it.” Tried to stop the madness, but…

*Alydian to Seek Court-Approved Sale of Bitcoin Mining Assets – WTF – mine what?

*Wall Street Fees Paid by NYC Rise 28% as Stringer Takes on Pension Costs –  NYC had 11.6% of assets in alternative investments at 2% +20! 4% in 2006! Under Bloomberg alternative investments grew to $8 billion from $1.5B in 2002. Costs increased by an average 0.26% PER year from2001-2010!!! Per Wilshire Associates they earned 7.5% vs 7.2% for funds with over $5B in assets. Net of fees? Screwed! They have nearly 250 money managers!

*Twitter Drops After Initial Surge Amid Hype Without Profit in Global Poll – surprised?

*Day JFK Died We Traded Through Tears on NYSE When Meehan & Co. Stopped Run

*Iran Nuclear Talks Falter as Negotiators See Little Chance of Agreement – uh, yah!

*Senate Rules Shift on Nominees Puts U.S. Legislative Progress in Jeopary – lemme see, 53% elected Obama, he makes appointments of qualified people, stalled for months, then overwhelmingly approved…so a tiny minority can have power but GOP lets them! Sick!

Thursday’s Market Summary:

Oh happy day! Another record eked out for the Dow…and on what? Generally higher records? Financials thriving as the ‘unknown’ is removed from the lawsuits…well, at least JPM and that quantifies the amount. We are sick! Very! Meanwhile, as the recovery limps along…who cares about those filing for unemployment dropping more than expected for one week, how about the Philly Fed survey tanking? And this: the bond market is in disarray, the 30 year taking out the high yield from August – mortgage rates therefore rising even as the housing sector shows signs of slowing. Bernanke is upset, the Fed stating that interest rates cannot be allowed to rise that quickly, so do you really believe the QE’s are ending, and if you do, it has to be gradual, noting that the benefit has gone to housing and the stock market, not the broad economy and thus causing the wealth gap to widen. How many more protests in countries as far apart as Brazil and Switzerland do you have to see before you realize this is another problem of global proportions? We keep hearing of the stock market being at ‘fair value’ – do you really believe that, and if you do, unless you got in back in 2009-2011 do you really want to throw more money in?

The rally has to be viewed in perspective: total NYSE Volume has ranged from a very low 2.53B shares on Nov. 11, to 3.35B shares on Nov. 13, and the average since has been just  a far cry below the 3.6B or so average just before including a huge 4.14B share day on November 7th – a HUGE down day…remember: you want rallies on BIG volume and declines on low…just the opposite of what we have seen this month! Think about it!

Yesterday’s leader was the Russell 2000, small cap, +1.8%, followed by Dow Transports, both Nasdaq indices, and NYSE Financials, while the record-setting Dow and the S&P 500 were up 0.8%, even Dow Utilities were up 0.1% vs -1.4%. All on volume of just 3.25B shares, while real NYSE Volume rose slightly, but remains below average at 665M vs 622M vs 646M vs 655M vs 796M (the only time above 700M last week) – the prior Monday’s was 538M shares – lowest since August 5th !

Advance/Declines and Breadth were finally positive and solid! New 52 week highs doubled to 348 vs 170 vs 171 vs 514 vs 430 vs 444 vs 331 vs 226, but new lows also rose to 123 vs 118 vs 93 vs 56 vs 66 vs  102 vs 93 vs 64 (Vets Day – never short a thin market). VIX DECLINED and is back below 13 at 12.66 -.74, stopping the string of days above 13 at three. Before that a string of six closes below 13, including last Fridays low print of 11.99.

Bonds regained less than half of Wednesday’s loss…but at least better, small comfort. Gold took another horrendous hit losing $14.40 ($40 in two days!) to close at $1243.60,  low print was $1235.80, lowest print since July 8th. Crude on the other hand rallied by $2.11 to close at $95.44, highest since 11/1, with a high print of $95.63??? Manipulated?

The Nasdaq 100 rose by 36 points or 1.1% with 6.6:1 advancing. More than 11  members gained more than a point while just AMGN lost more than a point -2.2: APPL +4.9 va -3.6 vs -0.3 vs -5.2; INTC/GOOG +2.9; AMZN +2.6 vs -1; MSFT +2.4 vs +2.5 vs -3.4 vs -5 vs -1.1 vs -1 vs +6; BIIB +1..3; SBUX/GMCR +1.2; CSCO/CMCSA/CELG+1.1. Taking a ‘wait and see’ on TWTR.

Dow 30 +0.7% vs -0.4% vs -0.1% vs +0.1% vs +0.5%; Dow Transports +1.1% vs -0.3% vs -1% vs -0.3% vs +0.7%; Russell 2000 +1.8%! vs –0.1% vs -0.3% vs -0.8% vs +0.4%; Dow Utilities +0.1% vs -1.4% vs -0.8% vs flat vs +0.6%; S&P 500 +0.8% vs –0.4% vs -0.2% vs -0.4% vs +0.4%; Nasdaq Composite+1.2% vs –0.3% vs -0.4% vs -0.9% vs +0.3%; NDQ 100 +1.1% vs –0.3% vs -0.3% vs -1%! vs +0.2%. Caution!

*NYSE Volume rose slightly to a still very weak 3.25B shares vs 3.1B vs 3.2B vs 3.24B vs 3.15B vs 3.13B vs 3.35B. 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 rose slightly to a still well below average 665M shares vs 622M vs 646M vs 655M vs 796M vs 633M (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 721M 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 been 37 800M+ shares in 2013: 16 up, 19 down, and two mixed.

*New 52 week highs have ranged from 33-864. They doubled to 348 vs 170 vs 171 vs 514 vs 430 vs 445. Recent high is a super-strong 890!!! New lows however, rose again to 123 vs 118 vs 93 vs 56 vs 66 vs 74.  

  1. Advance/Declines were positive after three losing sessions: +2.9x vs -2x vs -2.1x vs -1.6x vs +1.9x (recent range -17.5x to +6x) on NYSE and +3.3x vs -1.2x vs -1.7x vs -1.7x vs +1.5x (recent -4x!!! to +3.8x). Breadth was similar: +2.7x vs -1.8x vs -2.2x vs -1.9x vs +2.3x (recent -18.6x!!! to +7.2x!!!) on NYSE and +5.2x vs -1.3x vs -1.6x vs -3x vs +2x (recent -12.8x to +6.5x). Observe!
  2. NYSE Financials rose 1.1% vs -0.4% vs -0.2% vs +0.6% vs +0.6%. BofA most active gained a huge 3%??? vs -0.4% vs +1.9%, and closing at $ 15.59 +.45, with a high of $15.60, highest close since 6/16/10??? Had not been above $15 since 8/10. Brokers +2.2%! vs +0.3% vs +0.3% vs -0.1% vs +0.9%; KBW Banks +1.5% vs -0.1% vs +0.1% vs -0.1% vs +0.3%; Nasdaq Banks +1.7% vs +0.1% vs -0.2% vs flat vs -0.2%. Another run in financials starting? Hmmm.
  3. Volatility (S&P VIX) delined below 13 closing at 12.66 -.74 with a low of 12.44. The recent range is 11.83-21.01!!! Since March 11th the average has been just 14.44…way below the five year average of 23.32~~~ and the 40/50/200 day: 14.51/14.40/14.36!!! It peaked at 22.79 on 12/28/12…ytd the range is 11.05 (3/14) to 21.92 (6/24)!

Global stocks mostly lower: UK -0.2% vs flat vs -0.2% vs 0.5% vs +0.5%; France +0.2% vs 0.3% vs -0.3% vs -0.9% vs +0.8%; Germany flat vs -0.2% vs -0.1% vs -0.2% vs +0.7%; Japan +0.1% vs +1.9%!!! vs -0.3% vs -0.3% vs flat vs +2%! vs +2.2%!!!; Hang Seng +0.5% vs -0.5% vs +0.2% vs +2.7%!!! vs +1.7%; Korea +0.6% vs -1.2%! vs -0.7% vs +1% vs +0.3% vs +1.9%; India -0.1% vs -2%!!! vs -1.2% vs +0.2% vs +2.2%!!!; U.S. stock futures very narrow range: DOW +9; SPX flat; NDQ +2.50

Bonds came back from the abyss…the 30 year having broken down…WEAK! Slighlty better overnight: 10 yr Treasury 2.77% +1/8 (recent range 1.63% to2.99%), and the30 yr range 2.67% to 3.92% (breakdown!), 3.87% +3/8. The long TIP is 1.54% +9/16. The (record?) low of 0.36% was set on 4/5. Recent high yield: 1.63%! Libor update: 0.237% 3 mos,0.346% 6 mos. (both at new record lows!). Foreign bond yields mixed: Germany 1.76% +2; UK 2.81% -1; France 2.21% -1; Italy 4.10% +1; Spain 4.11% +1; Portugal 5.90% -6!; Greece 8.52% +8!. Recently: 7.71% – 12.57%. Japan 0.62% -1

Gold plunged for a total loss of $40 in just two sessions trading down to $1235.80, lowest since July 8th, closing at $1243.10 -$14.40! A week ago the high was $1293.80!  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 resistance with major res at the 40 day ($1306) and the 50 day ($1310), both still dropping. Major resistance at $1375, the 9/19 high. The 200 day is a distant $1400. Overnight it is slightly higher at $1246.40 +$2.80 in a VERY NARROW INSIDE session.

Crude closed sharply higher (?) at $95.44 +$2.11 with a high of $95.63! Tuesday’s session low was $92.43, lowest since 6/4. 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 ($98.22/99.61), both still dropping rapidly and major resistance! The 200 day ($98.55) and converging with the 40 day!!! Thus very 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 it is little changed in a very narrow range at $95.24 -.20….best to avoid commodities – a plague?

 

Some random thoughts:

…TW3…That Was the Week That Was, originated in the U.K. and ran on the ‘tele’ from 1962-1963 as a comedy/satire show much like Saturday Night Live, and in the U.S. brought back as satire of the prior week in politics…funny, and thought-provoking.

This was a week to remember, the 150th anniversary of Lincoln’s Gettysburg Address, just 270 words yet arguably the most memorable in our country’s history. Then the assassination of JFK. We were so swept up in the assassination that few thought about the 100th anniversary of Abraham Lincoln’s heartfelt speech. Note that this speech was delivered in the heat of Pennsylvania with coffins on the street of unburied soldiers, and rotting corpses of dead horses…talk about setting the mood. Incidentally, but not to be overlooked, last summer was the 50th anniversary of Martin Luther King’s famous I have a Dream speech. All three great men…all three had their lives shortened by an assassin.

In 1962, the rock singer ‘Dion’ (of the Belmonts not Celine!), wrote and recorded Abraham, Martin and John (and later Bobby was added). Here are two verses…for the rest, substitute the names in 1st verse:

Anybody here seen my old friend John?

Can you tell me where he’s gone?
He freed a lot of people,
But it seems the good they die young.
I just looked around and he’s gone.

Anybody here seen my old friend Martin?
Can you tell me where he’s gone?
He freed a lot of people,
But it seems the good they die young.
I just looked ’round and he’s gone.

Didn’t you love the things that they stood for?
Didn’t they try to find some good for you and me?
And we’ll be free
Some day soon, and it’s a-gonna be one day …

Anybody here seen my old friend Bobby?
Can you tell me where he’s gone?
I thought I saw him walk up over the hill,
With Abraham, Martin and John.

Oddly, much of JFK’s dreams were to be fulfilled by his successor Lyndon Baines Johnson, who pushed most of what Kennedy wanted through Congress as part of his ‘Great Society’ plan. Thanks to his handling of the Viet Nam War and his getting legislation passed to do what emancipation was supposed to do he slipped into disfavor and by alienating the ‘Blue Dog’ republicans, he also ended the reign of Democrats in Congress. Not a big fan of LBJ but he had convictions, something sorely lacking today, as those have now morphed into ideology.

Those of us who lived through it will recall exactly what we were doing that day. TB, was walking to class at Santa Monica City College when a girl ran past him hysterically screaming, “they shot JFK!” TB turned around and went to the College Inn and sat with friends listening to the radio for details (also remember thinking ‘I hope he dies’, not because of dislike but knowing that if he survived he would be incapacitated, throwing the country into turmoil…very regrettably).

The country survived and thrived ‘off and on’ for decades, but have we lost our vision, the American Dream? Do we still care for our fellow citizens…even when much of their problems were caused by greed – both individually and from business…but the latter amplified it into a financial meltdown, not just here but globally…caused by the greed and deception of just a few people who were allowed to practice their black magic by the government and the heads of heir companies. We still live in that world, with sympathy waning by the day…how un-American can we be?

Yesterday, Senate Majority Leader Harry Reid, dropped the so-called ‘nuclear option’, which was just plain common sense to allow the Senate to ‘do the people’s business.’ The misstatements by both sides are an abuse. What a way to honor the deaths of two great men. They should be ashamed. But that topic will be saved for Monday’s blog.

Have a thoughtful weekend,

TB

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