6/20/14…say it isn’t so, Scott…

Quote of the Day from the Friars Club Encyclopedia of Jokes: “I don’t deserve this, but then, I have arthritis and I don’t deserve that either.” – Jack Benny, accepting an award.

Bloomberg Quote of the Day: “There is more to life than increasing its speed.” – Mahatma Gandhi

Options Expiration…a quadruple witching and market is set for a big move either way!

Bloomberg Top Stories:
*Siemens Group Boosts Alstom Energy Offer to $19.9B, Challenging CE – will it raise?
*European Stocks Advance Amid Offers as Rand Gains; Gold Drops With Gilts
*Netflix Rallying 21% With Tesla as Biggest Losers of ’14 Come Roaring Back – real or???
*Portugal’s Espirito Santo Family Seen Loosening Grip on 94-Year-Old Bank
*Draghi’s Market Calm Has Germans Fretting Over Bubble Risks – as is TB…VERY!!!
*Yellen Policy Affirmed as Long-Term Job Seekers’ Success Puts Cap on Wages – ‘nuf said!
*Home Sales in U.S. Seen Dropping For First Time in Four Years – trees don’t grow to the sky!
*American Apparel Advances as Oracle Shares Decline – shed a tear for poor Larry!
*BMW’s Mini, Beloved by Women in China, Seeks a Few Good Men as Customers
*High Times Magazine Starts Investment Fund to Cultivate Marijuana Business – shun it or buy it with Bitcoins!
*Obama Sending Advisors to Give Iraqi Shiites Chance to From New Government – a bad idea!
*Republican Presidential Field Sifts With Walker’s Campaign-Finance Probe – a crook! LMAO!!!
*Israel Keeps Up Pressure on Hamas in West Bank Hunt for Abducted Teenagers – sad!
*Honeymoon Murder Accused Dewani Is Ruled Fit for Trail After Evaluation
*Bruce Springsteen’s Warning Heeded by Scientist Searching Sun for Storms – solar storms!?!

Thursday’s Market Summary:

An incredibly boring session…unless you were following gold! Not only did it close up $41 but it was the first time above $1300 since April 15th (you don’t think all those rich folks had to sell it to pay their tax bill do you?). Stock on the other hand were boring…oh wait, TB forgot Dow Utilities which tacked on another 1% gain which followed a 2% and is not up nearly 18% year to date! Whoopee!!! Bonds were crushed in the very long end losing more than Wednesday’s gains but 10’s only gave back little more than half, closing at 2.63%! Crude continues to bore after that one day surge on the Iraqi upheaval and has now given most of that back….in just one week!
As for the rest of the indices they ranged from +0.1% on the Dow, S&P, Russell 2000 and Transports to DOWN 0.1% on both Nasdaq indices…a perfect setup to today’s options expiry!!!

Total NYSE Volume was slightly lower at a blah 2.94B shares vs 3.07B vs 2.96B vs 2.91B vs 2.58B vs 3.03B vs 2.67B vs 2.69B vs 2.8B vs 2.84B vs 3.1B – that is one big string of weak sessions! Real trades on the floor of the NYSE, however, rose to 649M shares still 55M below the 12-month average of 714M shares – and THAT was only due to 150M shares on the close!!! This vs 628M vs 600M vs 604M vs 575M vs 621M vs 532M vs 557M vs 608M. May 1st on the average is an extremely weak 639M shares with a range of 915 to 532M. That is weak!.
A/D’s were minimal and MIXED: NYSE +1.3x vs +2.7x vs +1.6x vs 1:1 vs +1.3x; Nasdaq -1.2x vs +1.7x vs +2.1x vs +1.2x vs +1.04x. Breadth was similar: NYSE +1.3x vs +4.3x!!! vs +2.2x vs +1.04x vs +2.2x; Nasdaq 1:1 vs +2x vs +2.7x vs +1.5x vs +1.8x. New 52 Week Highs surged again to a strong 425 vs 328 vs 255 vs 251 vs 171 vs 186 vs 193 vs 256 vs 515 – recent low 71!!! New Lows were slightly higher and continue to creep up at 42 vs 40 vs 38 vs 34 vs 36 vs 30 vs 25 vs 24 vs 25 – recent range is 24-214.
S&P VIX was little changed at a bullish (overly???) 10.75 +.14, again ahead of and due to today’s options expiration. The range was 10.42-10.82 – first time when the high end has been below 11 that TB can find…EVER!!! Hello…the long-term average is ‘20’!!! Do you feel lucky, punk?

Overnight markets:

Bonds closed weak giving back all and more than Wednesday’s gains which were due to the Fed statement…in the long bond while 10’s, and long TIPS held some of them. 10 yr closed at 2.63% -3/8. 30 yr closed 3.47% -1-1/4! The long TIP, which hit a low of 0.978% on 5/29, closed 1.12%-1 point! Overnight weak again – reversing ALL gains!!! 10’s 2.64% -3/16; 30’s 3.48% -1/4; and long TIP 1.08% -7/16! 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: 0.231% 3 mos.; 0.323% 6 mos., both remain just off their record lows, set recently: 0.227% and 0.320% respectively! NOTE the Fed Funds rate has averaged 0.08% since 5/22/13 and remains at 0.09% -0.10%. Foreign bond yields higher across the board, again following US Treasuries: Germany 1.34% +2; UK 2.77% +4; France 1.79% +2; Italy 2.94% +3; Spain 2.72% +1; Portugal 3.48% +2; Greece, which took out the old lows is now 5.84% +8! The recent high on selloff was 6.75%. Highly volatile!!! Recent range is 5.42% to 12.57%. Japan: 0.58% –.

Gold took off like a Banshee hitting $1321.00, highest since 4/15 when it plunged and closed at $1313.70 – first not only $1300 print but close above it since 4/14! Three days ago it surged in the overnight market to a new high of $1285.10 – highest since 5/27 when it began its devastating plunge. 6/9’s $1240.20 was lowest since 1/31/14!!! It hit $1304.10 on 5/22 – the last time it saw $1300! It took out all three key moving averages which are very tight and went from major resistance to critical support in just one day!!! 200 day $1290, then the 50 day $1285, and the 40 day $1280 – but before that is the psychological $1300 level It has fared poorly since the ‘key reversal’ on 3/17, after printing the recent high of $1392.60, highest high since 9/4/13! Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Overnight it is unchanged at $1313.70 and traded in a range of $1306.80-$1321.40 – just a hair above yesterdays high!…a caution flag?

Crude had its four straight lower high and lower low after peaking at $107.69 last Friday – highest since 9/19/13 – falling to $105.32 before coming back to close at $106.43 +.46 – leaving just one close below $106 since rally began a week ago over Iraq – that is still highest since 9/19/13 – a huge down day. 6/5’s low of $101.60 was lowest since 5/16. 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: 50 day ($102.84) then the 40 day ($102.69), and 200 day $100.12 – not 40/50 are both rising and converging! The recent range is $85.61-$112.24 since March 1, 2012. Overnight it is weaker again at $106.49 +.06 – a narrow inside session.

European equity markets slightly higher for a third session, Asia little changed and mixed – also for a third straight session: UK +0.3% vs +0.7% vs +0.3% vs +0.1% vs -0.3%; France – vs +1%! vs – vs +0.2% vs –0.6%; Germany – vs +0.9% vs +0.2% vs +0.3% vs -0.3%; Japan -0.1% vs +1.6%! vs +0.9% vs +0.3% vs -1.1%!; Hang Seng +0.1% vs -0.1% vs -0.1% vs -0.4% vs -0.1%; Korea -0.9% vs +0.1% vs -0.6% vs +0.4% vs +0.1%; India -0.4% vs -0.2% vs +1.3%! vs -0.2% vs -1.4%!!! U.S. Stock Index Futures little changed and quiet ahead of options expiry: DOW +14 (range 27); SPX +2.10 (4!); NDQ +3.75 (7!!!).

Some random thoughts:

…just as during Prohibition, the GOP continues to shoot itself in the foot. It now appears that lily-white tea-partier, Scott Walker, the Wisconsin governor who survived a recall did it illegally…fundraising. Another 2016 presidential hopeful bites the dust. Are they laying it in Hillary’s lap? To reiterate, TB is not a Democrat but he sure as hell is no Republican…he gave up that sorry party when Dubya was nominated and elected – thanks to a right-wing (extremist?) Supreme Court.

This too matches Prohibition when the later to become Supreme Court Justice Hugo Black voted repeatedly against illegal search and seizure and did so even after joining the High Court. The issue? Illegal search and seizure and on an individual’s right to choose, Roe v Wade. This was all news to TB when he read Last Call. The lessons of history will repeat themselves if we do not learn from them. History? Do we still teach it?

Have a nice relaxing weekend and don’t be fooled by today’s quadruple witching!

TB

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