5/28/14…in Flanders Fields

Quote of the Day from the Friars Club Encyclopedia of Jokes: “By trying, we can easily learn to endure adversity. Another man’s, I mean.” – Mark Twain

Bloomberg Quote of the Day: “Always work hard on something uncomfortably exciting.” – Larry Page (a Google founder) – like helping the government spy on its citizens…wait, you were already doing that! TB

Bloomberg Top Stories:
*Treasuries Advance With European Bonds While Stocks in U.S. Little Changed
*Goldman Sach’s Gary Cohn Says Inactive Trading Environment Is ‘Abnormal’ – so does TB!!!
*Nasdaq 100 Approaching 13-Year High as Technology Goes From Hated to Loved – caution!
*Credit Agricole Is Said to Accuse EU of Bias in Euribor Rate-Rigging Probe – probably!
*Glaxo Faces U.K. Criminal Probe on Bribes After Alleged Chinese Corruption
*Sun Life Hires Qatar Foundation’s Calr Bang for Investment Management Push – bang for buck?
*BlackBerry Smartphone Market Share Said Seen Falling to 0.3% by 2018, IDC Says
*Bullish Peso Options at 11-Month High Seen Bolstering Mexican Bonds
*London’s Dirty Secret Is Diesel Pollution Wore Than Beijing Airpocalypse
*How Mobsters and Church Rescued China ‘s Most Wanted After Tiananmen Revoldt
*Obama Seeks Foreign Policy Reset With Speech to Counter Leadership Doubts – won’t work!
*Ukraine Jet Fighters Patrol Donesk as Rebels Regroup From Deadliest Rout
*EU Chiefs Spar Over Jobs as Juncker Denied Quick Appointment as President
*Fluke Takes Limbaugh Slut Insult to California Race as Minister’s Daughter – Sandra Fluke

Tuesday’s Market Summary:

Another day of boredom…again…if you doubt this, look at the volume below! Russell 2000 took honors again +1.4%! vs +1.1% followed by the two Nasdaq indices. both +1.2% vs +0.7%. Next best before the mediocrity set in was Dow Utilities +0.7% vs -0.2%. The rest +0.4-0.6%/

Total NYSE Volume rose but to a still weak 2.89B shares vs 2.4B vs 2.74B vs 2.77B vs 2.97B vs 2.64B!!! …that’s from 3.18B last Friday (remember it was an options expiration!) from an average 3.53B – on a ‘down’ day! Real trades on the floor of the NYSE finally rose but to just 659M shares or about 62M below average. This vs 554M vs 577M vs 587M! The high this month is 775M while Friday’s 554M shares is the low and the average for the month is just 657M shares. Compare to even the weak 12-month average of 722M shares!
A/D’s were positive for a fourth day but… NYSE +2.2x vs +2x vs +2x vs +2.6x vs -2.4x vs +1.8x; Nasdaq +2.9x vs +2.5x vs +2.1x vs +1.5x! vs -3.1x. Breadth was similar but strong on Nasdaq: NYSE +2.1x vs +2.3x vs +1.8x vs +2.6x vs -4.1x! Nasdaq +4.3x! vs +2.5x vs +2.6x vs +2.7x vs -3.1x! vs +3x! But who cares when the volume is so low? New 52 Week Highs doubled to 336 vs 167 vs 187 vs 132 vs 111 vs 143 vs 71!!! New Lows were steady at a weak 50 vs 51 vs 62 (never short a thin market) vs 95 vs 118 vs 72 vs 180 vs 102 vs 62 vs 65 vs 214!!!
Lastly volatility…S&P VIX remains bullish…and inched up to 11.51 +.15 with an even narrower range of 11.50-11.84– note not a single ‘12’ print – for a third straight session!

Overnight markets:

Bonds closed slightly higher for a second day. The 10 yr closed at 2.51% +3/16 vs 2.53% – up and down with net zero effect. 30 yr closed 3.36% +5/8. The long TIP, as low as 1.00% a week ago, closed 1.05% +1/2. Overnight rally continuation and charging even more after stock market opening: 10’s 2.47% +3/8; 30’s 3.32% +13/16; and long TIP 1.01% +1 point! 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.; 0.322% 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 yields LOWER across the board ex-Greece: Germany 1.37% -2; UK 2.60% -4; France 1.76% -3; Italy 2.92%!!! -7!; Spain 2.80%! -8!; Portugal 3.57%!!! -7; Greece, which bottomed at 5.83% on 2/24 closed very strong Friday and is now 6.18%! +7 vs 6.10%– high on selloff was 6.75%. Highly volatile!!! Range is 5.77% to 12.57%. Japan: 0.57% -1.

Gold was pounded closing at $1265.70 -$26.20 and off a session low of $1263.40 – lowest since 2/7/14!!! This, after hitting $1309.20 a week ago. It is now way below the 40/50/200 days and the psych support level of $1300 with first res at the 40 day $1296, then the 200 day $1301, and the 50 day $1302. It has fared poorly since 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 it continues to seek a floor: $1263.10 -$2.60 – session low $1261.10.

Crude closed slightly lower at $104.11 -.24 in a parallel session. Friday’s high was $104.50 – still highest since being slammed on 4/22! 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 ($101.82) then the 50 day ($101.44), and 200 day $100.34. The recent range is $85.61-$112.24 since March 1, 2012. Overnight it is trading in a narrow range and is currently $103.54 -.57.

Global equity markets modestly higher: UK +0.1% vs +0.5% vs -0.2% vs +0.1% vs -0.5%; France +0.1% vs – vs +0.1% vs +0.2% vs -0.2%; Germany +0.1% vs +0.4% vs +0.2% vs +0.5% vs -0.2%; Japan +0.2% vs +0.2% vs +0.9% vs -0.2% vs +0.5%; Hang Seng +0.6% vs -0.1% vs +0.1% vs – vs +0.6%; Korea +1%! vs -0.6% vs +0.1% vs +0.1% vs -0.1%; India – vs -0.7% vs +1.3%! vs -0.3% vs +0.1% vs +1%! vs +0.9%. U.S. Stock Index Futures were higher overnight but in a very narrow range: DOW +29 (range 40); SPX +4 (5); NDQ +5.75 (9). Market opening mixed and changing: Dow -18; Transports +14; S&P +1.400; Composite -4.30; 100 -1.60; Russell 2000 -3.30; Dow Utilities -0.50.

Some random thoughts:

…a friend sent this yesterday and in keeping with the Memorial Day theme here it is:

Flanders Field” was written in 1915 by Lt. Col. John McCrae, M.D., a Canadian who served as a surgeon in the Great War. He wrote it after witnessing the death of a friend at Ypres, Belgium. McCrae died in France in 1918, at the age of 46, from pneumonia, an all-too-common battlefield ailment.

“In Flanders Fields”

In Flanders fields the poppies blow; Between the crosses, row on row.
That mark our place; and in the sky; The larks, still bravely singing, fly.
Scarce heard amid the guns below; We are the dead. Short days ago.
We lived, felt dawn, saw sunset glow; Loved and were loved, and now we lie

In Flanders fields.
Take up our quarrel with the foe: To you from failing hands we throw.
The torch; be yours to hold it high; If ye break faith with us who die
We shall not sleep, though poppies grow.

Quite touching, especially if you last part one of the Great Wars…part two is tonight. Very well done with cameo’s by McChrystal, Powell, and others. One of the most interesting was in WWI, Hitler was a private in the German Army…not liked and considered weird. After a trench battle he emerged and a British soldier stood facing him (not a myth…they gave his name), and had him in his sights…he couldn’t pull the trigger…think how world history would have changed. How many lives would have been saved…hopefully we can learn from the wars…always evil!

Also, a potential bombshell tonight as Brian Williams interviews Snowden…last night’s teaser was a shocker…if, that is, you believed the government that this is just a low level person. He is well-spoken, very articulate, and makes everyone involved look like fools…which is sorely needed. From the president on down! Privacy is critical to a democracy! You had better watch with an open mind!

Have a great day!

TB

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