4/8/14…something’s happening here…

Quote of the Day from the Friars Club Encyclopedia of Jokes: “When you stop drinking you have to deal with this marvelous personality that started you drinking in the first place.” – Jimmy Breslin

Bloomberg Quote of the Day: “Let food be thy medicine and medicine be thy food.” Hippocrates – don’t you hate it when food tastes like medicine…oh, he created the ‘hypocritic’ oath too!

Bloomberg Top Stories:

*European Stocks Fall for a Second Day as Dollar Weakens; GoldStrengthens – sort of!

*Deutsche Bank Joins Barclays Calling for Basel U-Turn on Asset-Backed Debt but…

*Moody’s Plans to Score Leveraged-Loan Covenants Following Slide in Quality – WTF???

*U.K. Industrial Output Increases More Than Forecast as Economy Strengthens

*VIX JUMPS 19% With S&P 5000 Retreat Masking Worse Losses for Average Stock – see!

*IMF Sees U.S. Driving Global Economic Growth Amid Brail, Russia Weakness – us leading???

*BMW Weights Second North America Factory as Demand Increases in the Region

*Zell Says Last Palo Alto Apartments Will Remain Under Rent Control Program – hmmm

*S&P Trending This Way, May Go That Way, Technically Speaking – or way HFT wants it to!

*Evercore Banker Dumps Wall Street to Boost Taxes on New York Millionaires

*Ukraine Mounts Security Sweep as Russia Warns Against Military Crackdown

*Malaysian Plane Hunt Fails to Replicate Signal as Search in Ocean Narrows

*China Says It Can’t Be Contained as Hagel Seeking Cooperation in Beijing – which means?

*Koch Brothers’ Group Skips Middlemen to Place Ads in U.S. Senate Contests – the selling of America (selling out?) by the U.S. Supreme Court and of course Congress – goodbye, America!

Monday’s Market Summary:

…what it is ain’t exactly clear! “Monday, Monday, can’t help that day…”  and while it was volatile, it wasn’t “another manic Monday.” Total NYSE Volume continued to rise to a well above average 3.77B shares vs 3.6B shares from a way below average 3.03B shares. Of course the market dove after a brief foray to the upside and went out at the session lows. Is this the ‘revenge of the nerds’? – the high-freaks showing us who owns the market? Don’t know but portfolios I manage were UP most of the day, then down then back to even and then closed down – not market down but down! REAL NYSE Volume (if there is a such thing!), also surged rose to a well above average 836M shares (highest in a week) vs 781M vs a very weak 661M vs 653M vs 724M (12 mo. ave!) vs 847M vs 639M.

Also yesterday, even the Dow Utilities entered the red zone (albeit the best of the bunch at -0.4% but following two 0.4% up days that exactly offset the losses of the first two days of April. Every other index was off from 1% (Dow again!) to -1.5% (Russell 2000). Here is how the month is starting out and it isn’t pretty: Dow -1.3%; Transports -1.4%; S&P 500 -1.5%; Nasdaq Comp -2.8%!; NDQ 100 -2.5%!; Russell 2000 -3.2%!!! All indices are in the red now year to date including NYSE Financials although the two bank groups are still up about 1%. Brokers were crushed yesterday -2.1%!!! while KBW Banks fell 1.6% and Nasdaq Banks -0.7%. BofA again most active and according to Flash Boys THE most heavily traded stock and a favorite of the high-freaks: -1.9%! vs -2.5%! vs -0.5% vs -0.5% vs +0.8% to 16.41 -.31, and so-long, farewell, auf wiedersehen, goodbye, the lowest close since March 3rd!

Advance/Declines were negative again of course – especially the struggling Nasdaq…the NYSE was -2.1x vs -1.9x vs -1.5x vs +1.4x vs +2.5x, Nasdaq -3.2x vs -4.9x! vs -2.3x vs +1.3x vs +3.1x and -7.3x!!!! Breadth was very negative again: NYSE -4.4x!!! vs -1.9x vs -1.5x; Nasdaq -3.1x vs -7.3x!!! vs -2.2x. Decliners beat advancers by 3.4:1 vs 6:1 on the Composite and by 4:1 vs 97:4 on the 100!!! Not good when the Nasdaq’s are underperforming as they have all year!

New 52 Week Highs plunged by ¾ to a WEAK 56 vs 268 vs 273 vs 327 vs 306 vs 226 vs 110, while New Lows rose to a ‘fair’ 107 vs 71 vs 31 vs 18 – within 2 of their cycle low . Lastly, Volatility (VIX) rose for a THIRD straight session with a range of 14.57-16.01 – highest since 3/24, and closed at 15.57 +1.61! taking out the 200, 40, and 50 day m/a’s! This from a low of 12.60 – lowest since Jan. 22! Yellow flags turning orange and close to red!

Overnight Comments:

Bonds: closed strong again three days after the 10’s took out the 3/3 high of 2.79%! (10’s 2.70%!!! vs 2.72%, 3/3 high 2.79%; 30’s 3.56% vs 3.58% from 3.73%). Overnight the long end is slightly weaker, note short end barely budges: 10 yr 2.71% -3/32; 30 yr 3.57% -1/4; TIP 1.28% -1/4. Recent ranges: 30 yr high was 3.97% on 12/31; the 10 yr recent high 3.03%! Long TIP recent high was 1.64% The (record?) low of 0.36% was set on 4/5/13.  Libor update: 0.227% 3 mos!!! 0.326% 6 mos. –  yet another new record low for 6 mo: 3 mos  0.227%; 6 mos 0.326%! Looks like a lot of excess reserves piling into the Fed for that 0.25% rate!!! NOTE the Fed Funds rate has averaged 0.08% since 5/22/13 and is steady at 0.07% -0.09%. Foreign bond yields modestly higher across the board: Germany 1.56% +2; UK 2.70% +4, – recent high 3.03%! France 2.06% +2; Italy 3.22% +4; Spain 3.19% +2; Portugal 3.89% +4; Greece 6.07% +2. Recent range 6.03% to 12.57%. Japan: 0.61% –.

Gold closed slightly lower and back below $1300 at $1298.30 -$4.90, negating the rally just four days after trading down to $1277.40, lowest since 2/10. It has been in trouble since imploding three weeks ago, breaking all supports. Friday was the 1st close above $1300 in eight sessions! – still off $74 in 16 sessions  following the reversal! On 3/17 it printed a new recent high of $1392.60, highest high since 9/4/13 – that ended in an outside day and nearly a negative key reversal and has been down every day since!It had closed above the psychological $1300 every day since 2/12! Friday was the first close above the 200 day since 2/14, and is again first support. Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!!  Psych level: $1300 res, with technical support just below at the 200 day, $1297, with res just above at the 50 day, $1310, then the 40 day, $1324!!! Overnight bouncing back to $1314.70 and currently $1310.90.00 +$12.60! Iffy!

Crude closed lower and failed to hold $101 a day after posting a session high of $101.60. It closed at $100.44 -.70 – nothing to see here. Seven days ago it finally broke above the 40/50 and 200 day m/a’s, trading up to $102.24, highest since 3/10, then the bad April fool’s joke: two closes below par! It had been back above $100 for just six days. Last Wednesday’s session low was $98.86, lowest since 3/25! On 3/10, it had a high of $102.82 then plunged below the 200 day! 1/14’s low was worst since 5/2/13: $91.24! 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. First SUPPORT is now the 50 day ($$100.22), with res at the 200 day ($100.55), and finally the 40 day ($100.91). Then comes the psychological $101. The recent range is $85.61-$112.24 since March 1, 2012. Overnight it is higher and traded up to $101.49 and is now $101.28 +.85 – crazy!

Global equity markets weak again ex-Hong Kong: UK -0.8% vs -0.8% vs +0.4% vs -0.1% vs +0.2%; France -0.7% vs -0.8% vs +0.3% vs -0.3% vs –; Germany -0.7% vs -1.5%!!! vs +0.4% vs -0.2% vs +0.1%; Japan -1.4%! vs -1.7%! vs -0.1% vs +0.8% vs +1%; Hang Seng +1%! vs-0.6% vs -0.2% vs +0.2% vs +0.3% vs +1.3%!!! Korea +0.2% vs +0.1% vs 0.3% vs -0.2% vs +0.3%; India closed vs-0.1% vs -0.7% vs -0.2% vs +0.5%. U.S. equity futures little changed: DOW +6 (range 68); SPX +1 (10); NDQ +8 (16!) – see, even the futures guys can’t deal with the HFT boys!!!   

Spring in Minnesota…for a second day…got up to 61 yesterday!

Have a great day!

 

TB

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