5/21/14…we have temperature regulators…where are market regulators?

Quote of the Day from the Friars Club Encyclopedia of Jokes: “If nobody ever said anything unless he knew what he was talking about, a ghastly hush would descend upon the earth.”
-Alan Herbert…shhhh…I’m thinking!

Bloomberg Quote of the Day: “I generally avoid temptation unless I can’t resist it.” – Mae West

Bloomberg Top Stories”
*BOE Says Arguments for Rate Increase Gain Ground Among Some Policy Makers
*Stocks in U.S. Rise, Treasuries Fall Before Fed Minutes; Oil, Dollar Gain
*U.S. Futures Advance With Italian Bonds as Pound Strengthens, Oil Climbs
*JPM Ex-CEO for China Investment Bank Was Arrested – by anti-graft agency…NO!
*BNP Declines to Seven-Month Low as U.S. Said to Seek $5 Billion Settlement
*German Unease with Draghi ECB Simmers as Anti-Euro Party Gains Before Vote
*Fuld Was Top CEO Last Time the Fed Raise Rates ad New Neutral Era Beckons
*Rush of Swiss-Bank Settlements Seen After Credit Suisse Reaches U.S. Deal – a joke???
*Iceland Said to Be Close to Talks With Hedge Funds on Failed Bank Claims
*Google Says It Needs $30 Billion Cash Overseas for Possible Acquisitions
*Netflix Enters Germany, France in Biggest Online Streaming Move Since 2011
*China’s Sao Paulo Banks Shows No S&P Boost Needed With Gain -gung hay fat choi!
*Iranian Hotels Fill Up as Rouhani’s Rapprochement Yields Tourism Dividend
*Russia Signs Gas Accord With China Paving Way for Supplies for 30 Years
*U.S. Moves Marine Contingent to Italy as Precaution for Libya Evacuation
*Ukraine Border Troops Set to Pull Back to Russian Bases by Start of June
*Merkel Is Said to See Russia Respecting Obstacle-Free Election in Ukraine – no need to!
*World Cup Soccer Exposes Brazil’s Bigger Challenge: by Mohamed El-Erian – hmmm

Tuesday’s Market Summary:

Another puzzler day but this time yesterday’s goat, Dow Utiities was the only positive in an otherwise bleak market. It rose just 0.2% vs -1.5% but remains far and away 2014’s winner. The Russell 2000 fell 1.5% to be the new goat while all others (except NDQ 100 -0.4% but with 3:1 declining) were off 0.7% to 0.9%(Transports)

Total NYSE Volume rose somewhat to a still weak 2.97B shares vs 2.64B shares!!! …that’s from 3.18B (remember it was an options expiration!) from an average 3.53B – on a ‘down’ day! vs 2.81B vs 2.86B vs 2.98B vs 3B! Real trades on the floor of the NYSE however also recovered a tad to 649M shares – at the bell it was just 500M shares with 149M at the close…this after plunging to 584M shares – second lowest of 2014…1/3’s 544M…note 12/31’s was 568M shares. This vs 775M vs 750M (the 12-month average is 750M…consider the average since 5/4 was just 661M shares with now just two sessions registering more than 700M shares (April 30th’s 908M – monthend!). Since 3/31’s (quarterend) 2.0B shares and one of the highest ever there have been exactly FIVE 800M share days and just that one 908M share day on 4/30. Repeating: every day trades ‘at the close’ ran 50M shares with 50-100M posted after the close…that is pathetic!
A/D’s were very negative: NYSE -2.4x vs +1.8x vs +2.1x vs -2.3x vs -2.1x; Nasdaq -3.1x vs +2.2x vs +1.5x vs -2.1x vs -2.8x. Breadth worse: NYSE -4.1x! vs +1.6x vs +1.5x vs -4x!!! vs -2.1x; Nasdaq -3.1x! vs +3x! vs +1.5x vs -2.5x vs -3.3x. New 52 Week Highs fell back to a weaker 111 vs 143 vs 71!!! vs 107 vs 208 vs 233 vs 93!!! New Lows gained to 118 vs 72 vs 180 vs 102 vs 62 vs 65 vs 214!!! Wake up, bulls!!!
Lastly volatility…S&P VIX remains bullish…gut rose .54 to 12.96 with a range of 12.32-13.30!
It printed 13.66 intraday Friday…are we having fun yet?

Overnight markets:

Bonds rose slightly after being higher intraday on equities weakness. Is 2.5% on the 10 year the new normal? Could be but with LOTS of volatility. Yield changes from Tuesday’s close: the 10 yr closed at 2.51% +5/16 vs 2.54% vs 2.52%; 30’s 3.38% +1/16 vs 3.39% vs 3.35%. The long TIP was as low as 1.00% last Thursday, and closed Tuesday at 1.08 – vs 1.08% vs 1.02% having given back 1-5/8 or most of its 3-1/2 point gain last week! Overnight weaker again: 10’s 2.54% -1/4; 30’s 3.42% -5/8; and long TIP 1.10% -1/2. Cycle highs: 30 yr high was 3.97% on 12/31; the 10 yr recent high 3.03%! Long TIP was 1.64%. The (record?) low of 0.36% was set on 4/5/13.
Libor update: 0.228% 3 mos.; 0.323% 6 mos., both just off their record lows, set recently: 0.227% and 0.32% respectively! NOTE the Fed Funds rate has averaged 0.08% since 5/22/13 and is 0.07% -0.09%. Foreign bond market yields mixed with emerging markets rallying??? Germany 1.42% +3; UK 2.65% +4; France 1.84 +1; Italy 3.18% -7! Spain 3.00%! -9!!! Portugal 3.81%! -13!!! Greece which bottomed at 5.83% on 2/24 looks bad again, with a huge rally now 6.34% -30!!! vs 6.64% vs 6.75% vs 6.62% vs 6.16%. Highly volatile!!! Range is 5.77% to 12.57%. Japan: 0.59% +1.

Gold closed modestly higher at $1294.60 +$1.20 but the high failed to reach $1300: $1297.20, this after hitting $1309.20 last Wednesday. It remains below the 40/50/200 days and the psych support level of $1300 with first res at the 40 day $1297, then the 200 day $1299, and the 50 day $1307. Following the ‘key reversal’ on 3/17 after printing new recent high of $1392.60, highest high since 9/4/13 – which ended in an outside day and nearly a negative key reversal! Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Overnight weaker again and still avoiding $1300, now $1289.80 -$4.80 – session high $1296.30.

Crude reversed and closed a tad lower at $102..33 -.28, while Monday’s session high was $103.09 – highest since 4/22! – still nothing to see here. 3/2’s session low was $97.37, lowest since 2/4! 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. It remains well above all three moving averages with support at the 40 day ($101.57) then the 50 day ($101.08), and 200 day $100.34. The recent range is $85.61-$112.24 since March 1, 2012. Overnight $103.13 +.80, high $103.29 – can it hold gains and break out? Recent history sadly says …no!.

European equity markets slightly higher but treading water for a week, Asia mixed: UK +0.1% vs -0.5% vs -0.3% vs -0.1% vs –; France +0.2% vs -0.2% vs +0.1% vs +0.1% vs -0.2%; Germany +0.5% vs -0.2% vs -0.1% vs -0.3% vs –; Japan -0.2% vs +0.5% vs -0.6% vs -1.4%! vs -0.8%; Hang Seng – vs +0.6% vs – vs -0.1% vs +0.7%; Korea +0.1% vs -0.1% vs +0.1% vs +0.2% vs – ; India -0.3% vs +0.1% vs +1%! vs +0.9% vs +0.4%. U.S. Stock Index Futures rallying: DOW +58 (range 77!); SPX +6.30 (9); NDQ +6.50 (16). U.S. markets opening strong: Dow +93; TRANS +56; S&P +10; Nasaq Comp +18; NDQ 100 +14; Russell 2000 +7; Dow Utilities +1.70

Some random thoughts:

…today TB is going to a meeting of former securities regulators on how to prepare for an SEC examination. He will not be passive…but an active participant challenging them on the dysfunctional SEC, FINRA and more…update tomorrow…if he isn’t in jail! LOL

Déjà vu all over again: per Bloomberg, in 2006 Lehman’s Richard Fuld was on Barron’s list of the 30 most respected corporate titans…how things do change…never trust a list…especially if your name is on it!

Never let the bastards get you down…et tu, Brute!

Have a great day!

TB

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