12/18/13…’Bowled’ over?

TB’s Quote of the Day…from Rotary this morning: “I asked the clerk where I could find the self-help books. She said if she did that it would defeat the purpose.” – George Carlin

Joke of the Day from the Friar’s Club Encyclopedia of Jokes: Take an interest in your husband’s activities: hire a detective.” – unattributed

Bloomberg Quote of the Day: “You cannot shake hands with a clenched fist.” –Indira Gandhi…no but you won’t get sucker-punched either!

Bloomberg Top Stories:

*Stocks Climb Before Fed Decision as Pound Strengthens – futures up but not big!

*Builders Began Construction on the Most U.S. Homes in More Than Five Years – oh?

*Fed Said to Delay Limits on U.S. Bank Leverage Until Global Accord Reached-yawn!

*U.K. Unemployment Unexpectedly Declines to 7.4%, lowest since 2009 – note that annual pay growth ‘picked up’ to 0.9%!!! No mention of THEIR participation rate!

*Stocks Climb Before Fed Decision as Pound Strengthens on Unemployment Data

*UBS to Credit Suisse Payout Prospects Diminish as Regulators Tighten Leash – !

*Wall Street Bond Trading Cheapest Since 2007 as Average Hits Record – low commish!

*Turkey Raids Shift Focus to Politics From Fed as Lira Weakens, Stocks Fall

*BlackRock to Third Point Blindsided as Turkey Holdings Plummet on Probe – !!!

*Lennar Says Fourth-Quarter Profit Gains on Increased Sales at Higher Price

*U.S. Gasoline Prices Seen Reaching Low for Year as Supply Expands- $2.84 here!

*Gold Mines Turn to Dust as South African Jobs Vanish in Decline of Century – !!!

*At 61 She Lives in Basement as 87-Year-Old Dad Tours World in Retirement-hmmm?

*NSA Fallout Tests Obama Alliance With Tech Chiefs Seeking Data Spying Fix-big time!

*Pussy Riot With Greenpeace likely to Get Amnesty in Russian Bill – making nice!

*South Sudan Forces Loyal to Ex-Vice President Take Towns as Strife Weakens

Tuesday’s Market Summary:

“…second verse, same as the first…” – From Henry the Eighth by Herman’s Hermits. Another boring day and Mondays best performer, Dow Transports fell 0.4% vs +0.9%. Meanwhile, Dow Utilities were up a weak 0.1% but followed a 0.7% gain, yesterday second place, today the only index in the green! Also, Monday, the Dow had a ‘dead cat’ bounce off Friday the 13th ’s bust, lowest weekly close in SIX WEEKS!  Yesterday, it had an ‘inside’ day…didn’t even make an attempt! Friday’s options expiry – rock and roll!!!

The VIX added to the gains since Wednesday’s gains closing at 16..25 +.22 AND with a high of 16.67 obliterating Monday’s 16.08 – and again highest since 10/16!!! NYSE Volume rose slightly again but remains at a WEAK 3.25B shares vs 3.13B vs 3.12B vs 3.48B vs 3.08B. The 12-month low of 1.59B shares was 10/29! Real NYSE Volume slipped to a still below average 668 shares vs 681M vs 633M vs 753M vs 741M vs 633. Note that is a bad sign of absence of retail buyers…like the department stores of late!

Advance/Declines and Breadth were slightly negative. New 52 week highs fell back to 164 vs 223 vs 113 vs 83 vs 112, while new lows were stable at 135 vs 133 vs 166 vs 353!!! vs 239 vs 123.

Bonds closed slightly higher but still going nowhere and remain near the high yields of August and November: 30yr 3.92-3.93%! FOMC meeting and statement tomorrow! Could be good for bonds…or bad! Gold failed to continue its two up days and close lower on an inside session making the chance of a yearend rally even more remote, after failing after Tuesday’s rally to $1267.50, highest since 11/20! Seven days ago it printed a new low of $1210.10! 12/4’s ‘positive key reversal’ off that low has been rejected as was the prior one! Crude also closer lower in a narrow trading range, after Friday’s print of 96.26, lowest since 12/3! Ten days ago it had a new low of $91.77 – lowest since 6/3! Gas is now $2.84 in Minneapolis!

The Nasdaq 100 lost 6.5 points vs -19 points vs -4 vs -9 vs -45. Breadth was slightly negative at -1.1 vs +2.1 vs 1:1 vs -7:3 vs -11:1!!! Four members lost more than one index point, while two lost a point or more: MSFT -2.5 vs +1.4 vs -3.9 vs -2.9 vs -3.7 vs +4.2 vs +2.3 vs +2.7; APPL -2 vs +2.5 vs -4.9 vs -0.7 vs -3.4; CELG -0.9; FB +1.7; CSCO +1.1 vs +2.1 vs -1.3 vs -1.8. OK so TB was wrong on FB – so far, new high!  

Dow 30 -0.1% vs +0.8% vs +0.1% vs -0.7% vs -0.8%; Dow Transports -0.4% vs +0.9% vs +0.4% vs flat vs -1.6%; Russell 2000 -0.1% vs +0.6% vs +0.3% vs +0.2% vs -1.6%; Dow Utilities +0.1% vs +0.7% vs -0.2% vs -0.1% vs -0.9% vs -1.1%; S&P 500 -0.3% vs +0.6% vs flat vs -0.4% vs -1.1%; Nasdaq Composite -0.1% vs +0.6% vs +0.1% vs -0.1% vs -1.4%! vs -0.2%; NDQ 100 +0.7% vs -0.1% vs -0.3% vs -1.3%! vs -0.1%.

*NYSE Volume rose slightly to a still weak 3.25B shares vs 3.16B vs 3.06B vs 3.37B vs 3.48B. The record high (?) is 4.82B shares on Q3 end of quarter while 11/29’s 1.59B is weakest of 2013, replacing 1.96B as the low). REAL NYSE Volume fell slightly and remains at a below average 668M shares vs 681M vs 633M vs 753M shares – highest since 11/26 – vs 741. The average for last week was better but still below average at 691M shares. Since 11/11 the high is 828M shares on 11/26! The 12-month average is 722M shares. The average since 10/31 is just 688M shares. This year there have been just NINE 1B+ share sessions! There have been 38 800M+ shares in 2013: 16 up, 19 down, three mixed.

*New 52 week highs have ranged from 33-864. They fell sharply to 164 vs 223 vs 83! vs 112 vs 199 vs 322. Recent high is a super-strong 890!!! New lows were stable at 135 vs 133 vs 353 vs 239. Recent low is 35!  

  1. Advance/Declines were barely negative: –1.1x vs +2x vs +1.3x vs -1.4x vs -4x! (recent range -17.5x to +6x) on NYSE and -1.2x vs +2.1x vs +1.4x vs -1.1x vs -3.3x! (recent -4x!!! to +3.8x). Breadth was mixed: -1.3x vs +2.4x vs 1.2x vs -1.4x vs -6x!!! (recent -18.6x!!! to +7.2x!!!) on NYSE and +1.1x vs +2.8x vs +1.2x vs -1.3x vs -3.6x! (recent -12.8x to +6.5x).  
  2. NYSE Financials were off 0.5% vs +1.2%! vs +0.1% vs -0.4% vs -1.3%! BofA most active: -0.5% vs +0.7% vs -0.5% vs flat vs -2%!!!, closing at $15.16 -.08. 11/25’s 12-month high was $15.98, highest since 6/1/10. Brokers -0.3% vs +0.3% vs +0.1% vs +0.3% vs -1%; KBW Banks -0.8% vs +0.7% vs -0.2% vs +0.5% vs -1.4%! Nasdaq Banks -0.7% vs +1.4%!?! vs -0.2% vs +0.6% vs -1.2% vs -0.9%.
  3. Volatility (S&P VIX) rose again to a very high 16.67 before closing at 16.25 +.22; the session low was15.81…looks like a perfect setup for option expiry. It is well above the 40/50/200 day m/a’s: 13.46/14.19/14.34!!! 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. It peaked at 22.79 on 12/28/12…ytd the range is 11.05 (3/14) to 21.92 (6/24)!

Bonds closed slightly better but have done nothing for the past two sessions. Still unable to recover from last Wednesday’s pounding – the fourth time since last August when the ‘tapering talk’ began – closing at 3.87% +3/8 on the 30 yr while the 10 yr closed at 2.84% +3/8. Waiting for the FOMC statement! Overnight weaker with the 10 yr Treasury at 2.85% -3/32 (recent range 1.63% to 2.99%), and the 30 yr 3.88% -3/16 (recent range 2.67% to 3.92%). The long TIP is 1.54% -3/16 The (record?) low of 0.36% was set on 4/5. NOTE recent high yield: 1.63%! Libor update: 0.245% 3 mos, 0.347% 6 mos. (both near record lows!). Foreign bond yields little changed and mixed: Germany 1.82% -1; UK 2.88% +1; France 2.44% +1; Italy 4.05% +1; Spain 4.11% +3; Portugal 6.00% +1; Greece 8.55% -2. Recently: 7.71% – 12.57%. Japan 0.65% –. Off a high of 0.69%!

Gold lost again in another nothing session. The chances of a yearend rally remain slim to none following last Thursday’s low of $1222.60, again negating a positive ‘key reversal’! It closed at $1230.10 -$14.30! This, five days after trading to $1267.50, highest since 11/20. 12/6’s low was $1210.10, lowest since 6/28. Recent high is $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 ($1278!) and the 50 day ($1282!). Major resistance at $1375, the 9/19 high. The 200 day is a $1370. Overnight it is now $1231.70.+$1.60 after trading down to $1228.

Crude closed slightly lower at $97.22 -.26, also in a nothing session two days after trading to $96.26, lowest since 12/3. Note the double top at the high of $98.75 not seen since 10/22. On 11-27 it printed a new low of $91.77, lowest since 6/3!!! The record high of $114.83 was on 5/2/11, the low since on 10/4/11 was $74.95: $93.60 is the midpoint!!! It has lost momentum from 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 remains above the 40 day m/a ($95.56) and the 50 day (96.78), both are dropping AND major support! The 200 day is $98.71, and 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 slightly higher at $97.33 +.11.

Overnight markets:

Global stocks higher: UK +0.3% vs -0.4% vs +1% vs +0.2% vs -0.5%; France +0.7% vs -1% vs +1.3% vs +0.3% vs -0.1%; Germany +1.1% vs -0.4% vs +1.7% vs +0.1% vs -0.4%; Japan +2%! vs+0.8% vs -1.6% vs +0.4% vs -1.1%; Hang Seng +0.3% vs -0.2% vs -0.6% vs +0.1% vs -0.5% vs -1.7%; Korea +0.5% vs +0.2% vs -0.1% vs -0.3% vs -0.5%; India +1.2% vs -0.2% vs -0.3% vs -1% vs -1.2% vs -0.4%; (10am EST) U.S. stock futures higher in a very narrow range: DOW +43; SPX +5; NDQ +7.

Some random thoughts:

How do you know when not to trust Paul Ryan…when he is smiling! His obvious goal is to be the GOP candidate for President in 2016 and I firmly believes he would have been elected last time if he were the candidate for the Oval Office. His Senate co-partner in the ‘accord’, Patty Murray (D) Washington, made nice but face it little was accomplished in this ‘deal’ – except ‘perhaps’ removing the threat of another government shutdown in February. In other words, Congress doing what it does best: kick the can down the road!

Well, after the handshakes…and Sunday’s talk shows, Ryan made it clear that they would extract a ‘ransom’ for their benevolence. One can only wonder…and wait!

A friend sent TB an article where the author managed an interview with former Senator Alan Simpson at the Bush Library where he was a guest speaker, along with former Clinton advisor Erskine Bowles.

Simpson said that despite being appointed by Obama, when they delivered their preliminary findings to him he didn’t want to hear them…not before the election and after the election he would only consider the ‘tax increase’ portion.

TB had already read that when they planned to deliver the final report to Obama, he left the country, leaving it to Joe Biden, who then had to present it to Congress. This fatal error, doomed it to failure as the panel of representatives from both sides of the aisle perused it and made it meaningless.

This is not all bad, because while the results are valid and were a wake-up call, implementing them at that time would have hurt the economy (and with it our glorious congressional incumbents from getting re-elected in their gerrymandered districts).

But the impasse, since…filled with rancor and acrimony…has worsened the situation. What has the House accomplished during that time? 40 or so bills passed to kill Obamacare (with a promise to repeal – and ‘replace’ but even that word fell off in the later bills which were passed with all GOP votes and zero Democrats)

TB did vote for Obama – twice – but has been disappointed in his leadership, or lack thereof. He does have a partial defense though and that is the stubbornness of the GOP Senate and their obscene use of the filibuster on his nominees. More than any other president. True, the Dems did it and the GOP created the ‘nuclear option’ (aka: common sense), which was enough to sober the Dems. But there was at least ideological as they were judicial appointees, the GOP style was to make up for Mitch McConnell’s failure ‘to make Obama a one-term president, and now it is to prevent him from doing anything, the people and the economy be damned! Now the very same senators who were in favor of ending the filibuster for nominees, which they dare to claim are for important legislation which is not even part of the ‘option.’, are damning Harry Reid (who TB is not a fan of), for invoking it! Shame on them. Shame on us.

Happy 2014…expect more of the same…even if it is less,

TB

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