2/4/14…we the people???

Quote of the Day from the Friars Club Encyclopedia of Jokes: “According to the latest statistics, millions of Americans aren’t working. And there are plenty more if you count the ones with jobs.” – anon

Bloomberg Quote of the Day: “Pleasure in the job puts perfection in the work.” – Aristotle…that’s why TB sings: “I owe, I owe, so off to work I go…”

Bloomberg Top Stories:

*Stocks in Europe Fall with Asia as S&P Futures Rise; Treasuries Drop – sort of!

*Emerging-Markets Selloff Is Overdone, UBS CEO Sergio Ermotti Says – TB says NO!

*UBS Advances as Earnings Beat Estimates After Decline in Litigation Costs

*Plunging Stocks Push S&P 500 Volatility to Biggest Gain EVER to Start Year – !!!

*Russia Scraps Bond Sale for Second Week a Borrowing Cost Surges to Record – !!!

*Ten Banks Have Handed Evidence to U.K. Regulator on Currency Trading Probe

*Petrobras Oil Boom Is Stock Bust as Spending Drains Cash

*Second Winter Storm of Week Bound for U.S. Northeast Bringing Icy Snowfall

*Senators to Vote on Farm Law Keeping Their Crop Insurance Benefits Secret – !!!

Monday’s Market Summary:

An even bigger volume day and a huge selloff! 4.7B shares vs 4.04B …which may be a tie for third – or fourth – highest ever. Real Volume also high but lower than Friday, possibly due to the snowstorm but that makes it even more upsetting. Upsetting, why? Because of a massive selloff that struck every index – even Utilities weren’t immune this time!

Yesterday, a chart showed the performance of the major indices plus financials will keep adjusting February – but not the others – until the selloff is terminated. Good luck!

 

Index

February

January

3 mos.

12 mos.

Returns

Mo. to date

1/31/14

1/31/14

1/31/2014

Dow 30

-2.1%

-5.3%

0.5%

12.1%

Transports

-3.2%

-1.5%

3.4%

24.5%

Dow Utilities

-0.9%

3.2%

0.3%

6.7%

S&P 500

-2.3%

-3.6%

1.2%

17.8%

Composite

-2.6%

-1.7%

4.6%

29.1%

NDQ 100

-2.3%

-2.0%

4.2%

27.4%

Russell 2k

-3.2%

-2.8%

3.2%

24.1%

NYSE Fin

-2.5%

-4.3%

-1.3%

11.3%

 KBW Banks

-2.7%

-2.8%

4.7%

23.0%

 NDQ Banks

-3.1%

-3.2%

3.3%

24.6%

The Dow, which at monthend was trapped mid-way between the 200 day m/a (support) at 15460, and the 50/40 day (now resistance) 16180/16148, blasted through the support and worse, closed below it: 15372.80!!! This is just one point above the close on 10/17/13! Pfizer was the only member that closed up – just 1.3 Dow points. Among losers: GS/MMM -27.6; UTX -24.8; IBM -24.3; DIS -16.8…the smallest loss was CSCO -2.3!!! Based on the trendline from last April critical support is 15k and obviously also psychological support. Below that is a plunge to 14500! Fibonacci followers will note 15129 – the 23.6% retrace from the high. 29 losers in a 30 point index is not a positive, nor is a 326 point loss! How about the S&P? -491:9…even worse! It closed at 1741.89 -40.70. Support at the 1st Fib retrace at 1711 and then the 200 day: 1707. How about those high flying Dow Transports? All 20 members DOWN: 4 lost more than 20 points; 6 more than 10; the ‘best’ performer was JBLU at MINUS 1. Need we drill further?

New 52 week highs declined further to 91 vs 135 vs 162 vs 76 where it sat for three days, while new lows nearly doubled again to 216 vs 135 vs 70 vs 135! vs 71 vs 148. Volatility (VIX) surged by 16.5%! to 21.44 +3.03!!!, just .04 off the session high not seen since 6/24/13, and the highest close since 12/28/12!!! Troubling! Advance/Declines and Breadth were VERY negative: -5.6x/-6.1x and -16.2x!!!/-9.6x!!!. Ouch!!!  

Dow 30 -2.1% vs -0.9% vs +0.7% vs -1.2%! vs +0.6% vs -0.3% vs -2%!!! vs -1.1%!Dow Transports -3.2%!!! vs -0.2% vs +1.6%! vs -1.2% vs +1.1% vs -0.8% vs -4.1%!!!Russell 2000 -3.2% vs -0.3% vs +1.5%! vs -1.3% vs +1.2% vs -1.4%! vs -2.4%!!!; Dow Utilities -0.9% vs +0.8% vs +1.6%!!! vs -0.2% vs +0.5% vs +0.2% vs -1%; S&P 500 -2.3% vs -0.7% vs +1.1% vs -1% vs +0.6% vs -0.5% vs -2.1% vs -0.9%; Nasdaq Composite -2.6% vs -0.7% vs +1.8%! vs -1.1% vs +0.4% vs -1.1% vs -2.2%! NDQ 100 -2.3% vs -0.5% vs +1.9% vs -1.1% vs -0.1% vs -0.9%! vs -2%!!!

*NYSE Volume surged to a huge 4.7B shares!!! vs 4.04B vs 3.5B vs 3.95B vs 3.43B vs 3.99B vs 4.64B. The 2014 low is 2.76B. The record high (?) is the 4.97B shares of 12/20/13 and Q3 end of quarter while 11/29’s 1.59B is weakest of 2013). REAL NYSE Volume slipped to a still very high 922M shares vs 952M(highest since 12/20) vs 655M vs 736M vs 622M (lowest since 1/3/14) vs 780M vs 919M. It has now been above 700M eleven times since 12/20! The 12-month low is 272M on 12/24. The average since 12/20 is just 672M shares. The 12 month is 722M shares. Last year there were just TEN 1B+ share sessions! There have now been 43 800M+ shares since 12/31/12: 18 up, 23 down, three mixed.

*New 52 week highs have ranged from 33-864. They declined to a weak 91 vs 135 vs 162 vs 76 vs 75 vs 74 vs 81 vs 211 vs 440 vs 498. 74 is the recent low eclipsing 201! Recent high is a super-strong 890!!! New lows surged to 216 vs 135 vs 70 vs 135 vs 71 vs 148 vs 110 vs 62 vs 46 vs 37. Recent high is 353; low 20!!!  

Advance/Declineswere negative: -5.6x! vs -1.7x vs +3.2x vs -3.3x! vs +3x vs -2.8x vs -6.3x! (recent range -17.5x to +6x) on NYSE and -6.1x!!! vs -2.3x vs +3x vs-3.2x! vs +2x vs -3.4x vs -4.6x!!!(new recent low -6.1x!!! to +3.8x). Breadth was much worse: -16.2x!!! vs -2.5x vs +3.2x vs -3.5x! vs +5.3x!!! vs -2.5x vs -13x!!! vs -3.2x(recent -18.6x!!! to +7.2x!!!) on NYSE and -9.6x!!! vs -1.5x vs +4.9x!!! vs -2.6x vs +2.2x vs -3.9x vs -4.6x!!! (recent -12.8xto +6.5x). 

NYSE Financials -2.5% vs -0.7% vs +1.1% vs -1.2% vs +1.2%. BofA most active per usual: -2.5x! vs -1.1% vs +1.5% vs -0.2%? vs +2.6%. Closed $16.35 -.40. The high print was $17.42 on 1/15/14 – highest since 5/10/10!!!C off most actives but -2.3%! vs -1% vs +0.5% vs -2.9%!Brokers -3.6%!!! vs -1.4% vs +1.1% vs +1.4% vs -2.1%;KBW Banks -2.7x vs -1.3% vs +1.1% vs -1.3% vs +0.9%.Nasdaq Banks -3.1%! vs -1.3% vs +1.1% vs -1.5%! vs +0.1%. Other notable financials: GS -2.6%; MS -1.9%; UBS -3.3%; WFC -2%; USB -2.4% – a bloodbath! 2 weeks ago all at their 12 mo. highs!

Volatility (S&P VIX) exploded with a range of 18.34-21.48 and closed just .04 of the high, which was the highest since 6/24/13, at 21.44 +3.00 highest since 12/28/12! Look at the 40/50 day (14.38/14.18) and the 200 day, 14.49!!! 12/26’s 11.69 was lowest since 3/15/13!!! The recent range is now11.83-21.48!!! It peaked at 22.79 on 12/28/12…the range since 12/31/12 is 11.05 (3/14) to 21.92 (6/24)!

Bonds closed very strong with the curve flattening, long end back to before mid-Oct. when the storm hit, while 10’s closed lowest since 10/31/13! Weaker overnight: 30 yr 3.57% -5/8 – the high was 3.97% on 12/31; the 10 yr 2.61% -5/16, recent high 3.03%! Long TIP 1.28% -3/4. The (record?) low of 0.36% was set on 4/5. The recent high yield: 1.64%! Libor update: 0.236% 3 mos,0.333% 6 mos. BOTH just above NEW record lows 0.234%!!! and 0.332% respectively!). NOTE that the Fed Funds rate has averaged 0.08% since 5/22/13 and is currently 0.06%!!! Foreign bond yields slightly higher, after sharp declines yesterday: Germany 1.65 +1; UK 2.70% +1 – recent high 3.03%!; France 2.24% +2; Italy 3.79% +2; Spain 3.75% +1; Portugal 5.01% +3; Greece 8.21% +4. Recent range 7.51%-12.57%. Japan: 0.60% –. Yen slighltly weaker but after trading to 101.20 overnight, now 101.42. Recent range 101.20-105.44-weakest since 10/1/08!!!

Gold shot up closing at $1259.90 +$20.10! Last Thursday’s session low was $1237.50, lowest since 1/23! Monday’s intraday high was $1280.10, highest since 11/18!!! Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!!  Recent high is $1375.40 back on 9/19. Psych levels: $1200 sup; $1300 res, with major sup at the 40 day ($1235) and the 50 day ($1237). The 200 day is $1319 and major res. Overnight it is weaker at $125160.20 -$8.30.

Crude took a header and closed at $96.43 -$1.06. Thursday’s intraday high was $98.59 – highest since 1/2/14! 1/14’s low was worst since 5/2/13: $91.24! Note 12/27 was first time above $100 since 10/21! The record high of $114.83 was on 5/2/11, the low since on 10/4/11 is $74.95: $93.60 is the midpoint!!! Recent rally high and close are $110.70 and $110.53 respectively. It closed at the 40 day m/a (96.43), but above the 50 day m/a ($96.02)! RES at the 200 day ($99.16!!!) –  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 at $96.74 +.31.

Overnight markets:

Global equity markets lower, especially Asia for a second day! UK -0.3% vs -0.2% vs -1.5%!!! vs -0.4% vs +0.2%; France – vs -0.1% vs -1.6%!!! vs -0.4% vs -0.1%; Germany -0.9% vs -0.1% vs -2%!!! vs -0.4% vs +0.2%; Japan -4.2%!!! vs -2%!!! vs -0.6% vs -2.5% vs +2.7%; Hang Seng -2.9% vs closed vs -0.5% vs +0.8% vs -0.1%; Korea -1.7% vs -1.1% vs closed for 2 days vs +1.3%;India – vs -1.5%! vs +0.2% vs -0.7% vs -0.2%. U.S. stock futures higher but in a narrow range: DOW +71; SPX +11.50; NDQ +18.50.

 

 

Some random thoughts:

How many of you listened to the reading of the Constitution at the Super Bowl? Really listened! Did you hear the part about the Constitution not being a sacred document that it could be changed by the will of the people? Contrast this to the ‘strict constructionists’ in the Supreme Court. What you didn’t hear was a corporation being defined as a human being, which the ‘SC’s on the bench decided it was? How could they do that, and by doing so increased the cost of the presidency by a billion dollars!

TB will guarantee you that is not what they wanted or meant. People enriching themselves, like Karl Rove, and other political  hacks, that don’t give a damn about America. We are fast evolving to a duopoly: the haves and the have nots! But it is the middle class and lower that has drunk the ‘kool-aid’ of the extreme right.

The U.S. is the longest surviving democracy in the history of the world. If we keep heading in the direction we are going it won’t survive and that would be a pity for Jefferson’s ‘great experiment’. Is that what you want for your kids?

Twice before the country has been threatened. First, the divisive Civil War, then the robber barons which led to the struggle for labor unions and eventually to the biggest mistake this country ever made: prohibition. That gave birth to organized crime which has plagued us since.

Now its survival is being threatened again. This time by the greediest people on the planed who take cover in ‘libertarianism’ – they are the antithesis of the term. How can one bill themselves as a libertarian and intentionally inflict pain on the rest of America?

You may disagree with this but if it at least gives you pause, then is was worth it. It is up to you to decide…you who have become the white minority…do you really think you can keep it going while oppressing the majority? All in the name of reducing the budget and scope of government. A pity…will the U.S. see 300 years…as a democracy? Up to you!

Have a great day!

TB 

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