7/2/14…it’s about nothing…

Quote of the Day from the Friars Club Encyclopedia of Jokes: “My wife likes to talk to me during sex. In fact, the other day she called me from a motel.” – Scott Record

Bloomberg Quote of the Day: “Trying to define yourself is like trying to bite your teeth.”
– Alan Watts

Bloomberg Top Stories:
*Stocks Rise on ADP Employment Data as Treasuries Decline; Copper Advances
*Dimon’s Cancer Diagnosis Draws Support; Questions from JPMorgan Investors
*Companies in U.S. Added Most Workers in June Since November 2012, ADP Says
*BNP’s Growth Plan at Risk as Record Penalties Seen Marring U.S. Expansion
*Tyson in Deal to Buy Hillshire for $8.55 Billion After Pinnacle Withdraws – why did they?
*Dow Approaches 17,000 as Record Transports Join Small Caps in Bull Signal – low volume!
*Hackers Find Open Back Door to Power Grid as Renewable Energy Proliferates
*Puerto Rico’s Downgrade Shows Restructuring Law Can’t Contain Fiscal Rot
*Corruption in China Military Begins With Paying Off Recruiters to Join Up – can’t happen here!
*Ukrainian Talks Convene in Berlin as Poroshenko Resumes Offensive in East
*Record Unanimity on Votes Masks Deep Divisions on Roberts’s U.S. Top Court
*Iraq Receives Second Shipment of Russian Jets to Fight Islamist Militants – watch closely!
*Internet Spy Program Needs Narrowing to Target Terrorists, U.S. Panel Says

Tuesday’s Market Summary:

An “honest to god” rally. This time led by the Russell 2000 and the two Nasdaq indices. The rest were up 0.7-0.8% except Dow Utilities which suffered a rare negative 0.9%! Volume was slightly higher overall but lower and below average on floor-traded shares.

Note we will get payrolls report tomorrow due to the Fourth of July holiday!

Total NYSE Volume rose slightly to a still weak 3.15B shares vs 3.02B in contrast to Friday’s strong 4.25B vs 2.78B vs 3.1B – Friday was almost the same as the 4.22B on the prior Friday’s options expiration! Real NYSE Volume dropped to a well below average 686M shares with 125M of that at the closing bell vs a still strong 792M vs 1.49B shares – compare to options expiry’s 1.722B shares – vs 592M vs 653M while the 12-month average was steady at a very weak 707M – note the effect of losing those higher volume days just before yearend are dropping off Since 4/30 the average volume has been just 686M shares ranging from 531M to 1.72B.

A/D’s were were positive: NYSE +2x vs +1.5x vs +2x vs +1.1x vs +2.2x; Nasdaq +2.7x vs +1.3x vs +1.7x vs -1.1x vs +1.7x. Breadth was even better: NYSE +2.1x vs +1.2x vs +1.3x vs +1.02x vs +2.2x vs -3.5x! Nasdaq +3.7x! vs +1.7x vs +1.5x vs +1.1x vs +2.4x. New 52 Week Highs surged to 580! vs 392 vs 301 vs 221 vs 214 – recent range now 71-580!!! New Lows slumped to a very weak 34 vs 42 vs 51 vs 64 vs 52 – recent range is 24-214.
S&P VIX dropped to 11.15 -.42 – well into bullish territory and for the first time in 7 sessions the high end of the range was below ‘12’: 10.92-11.42 – note the ‘10’ handle on the low end! Recent low is 10.34 on June’s options expiration!

Overnight markets:

Bonds closed weaker – especially the long TIP. Note that the 30 yr while off slightly in June is up 5.24% ytd and now 8.10% for the 12 months! 10 yr closed at 2.57% -5/16. 30 yr closed 3.40% -11/16. The long TIP, which hit a low of 0.978% on 5/29, closed 1.04% -1-3/16! Overnight weaker following ADP: 10’s 2.59% -1/4; 30’s 3.43% +1/2; and long TIP 1.07% -11/16. 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: 0.235% 3 mos.; 0.328% 6 mos., both remain near their record lows, set recently: 0.222% and 0.320% respectively! NOTE the Fed Funds rate has averaged 0.09% since 5/22/13 and is back to 0.09-0.10% where it has been for weeks! Foreign bond yields little changed except Italy, Spain, and Portugal which are rising: Germany 1.25% –; UK 2.69% -1; France 1.71% –; Italy 2.86% +3; Spain 2.69% +6!; Portugal 3.60% +3; Greece 5.85% +1. The recent high on selloff was 6.75%. Highly volatile!!! Recent range 5.42% to 12.57%. Japan: 0.55% –.

Gold closed higher at $1326.60 +$4.60 and after trading up to $1334.90 – a slightly higher high and highest since 3/24! This is the 9th straight close above $1300 since 4/14! 6/9’s $1240.20 was lowest since 1/31/14!!! It remains above all three key moving averages which are nearly locked: 200 day $1289, then the 50 day $1287, and the 40 day $1285 – nearly locked! Key is the psychological $1300 level. It is coming back from a selloff that has been in place since 3/17 when it set the recent high of $1392.60, highest high since 9/4/13! Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Overnight is higher at $1327.70 +$1.10.

Crude did the opposite: it plunged to $104.60 intraday – still lowest since 6/12 before coming back to close at $105.34 -.03 (5th straight close below $106). 6/20’s run to $107.73 – highest since 9/19/13, a huge down session – has left it in limbo and showing signs of more weakness to come. 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: 40 day $103.81, 50 day $103.18, then the 200 day $100.03. The range is $85.61-$112.24 since March 1, 2012. Overnight it is slightly lower at $105..07 -.27 in another narrow range session and extremely vulnerable!

Global equity markets higher; India and Korea strong: UK +0.3% vs -0.1% vs +0.1% vs — vs -0.5%; France – vs -0.3% vs – vs +0.1% vs -0.7%; Germany +0.2% vs +0.2% vs +0.1% vs – vs -0.4%; Japan +0.3% vs +1.1%! vs +0.4% vs -1.4% vs +0.3%; Hang Seng +1.6% vs closed vs -0.1% vs +1.5% vs -0.1%; Korea +0.8% vs -0.2% vs +0.7% vs -0.3% vs +0.7% vs -0.6%; India +1.3% vs +0.4% vs +1.3% vs +0.2% vs -1% vs -0.2% vs +1.4%; U.S. Stock Index Futures slightly higher in another narrow range session: DOW +16 (range 25); SPX +1 (4!!!); NDQ +3? (3!!!).

Some random thoughts:

Nothing to say as there is nothing new to comment on…only more of the same.

Have a terrific day…and never short a thin market…but don’t go long either!

TB

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