7/9/14…it’s all on Frontline!

Quote of the Day from the Friars Club Encyclopedia of Jokes: “Freaks everywhere. I went to a church in Chicago. Church had six commandments and four do-the-best-as-you-cans.”
– Gilbert Gottfried

Bloomberg Quote of the Day: “First things first, but not necessarily in that order.” – Doctor Who

Bloomberg Top Stories:
*Stocks in U.S. Rise as Treasuries Drop Before Fed; Portuguese Bonds Tumble
*U.S. Stock Market Calm Ending as Earnings Season Ushers in More Volatility
*Espirito Santo Bonds Sink as Portuguese Bank’s Parent Misses Note Payments – oops!
*Billionaire Slim Plans America Movil Breakup Amid Mexico Antitrust Shift
*Bernstein’s Hintz Says Wall Street Won’t Get ‘Mojo’ Back in Next Two Years – hey, bulls!!!
*American Leads U.S. Airline Rally After Raising Quarterly Margin Forecast
*Ukraine Risk Premium Fades for European Natural Gas as Inventories Balloon – risk premium?
*Chinese Cash Bearing Buyers Fuel Record $22 Billion in U.S. Home Purchases
*Israel Aims to Crush Hamas Military as Rockets Reach Tel Aviv, Jerusalem
*Germany Announces Second Spying Investigating as Rift With U.S. Escalates – not more!
*Crisis Over Children Crossing U.S. Southern Border Stirs Political Tension – duh, Duh, and DUH
*Campus Sexual Assault Prevention Rules Flouted, U.S. College Survey Shows – SICK!!!

Tuesday’s Market Summary:

A second weak session led by the NDQ 100 -1.4%!; Russell 2000 -1.2%!; Dow and S&P -0.7% bad day on modestly better volume – which remains WEAK! Advance/Declines were negative for a 2nd day; Breadth even worse – especially Nasdaq. On top of that the VIX rose another 0.78 to 12.11 after being below 11 for two straight sessions! NYSE Financials were off 1.2% and look: Brokers -2.1%! vs -1.1%!; KBW Banks -1.1% vs -0.7%; Nasdaq Banks -1.1% vs -1%!. Not a pretty picture. BAC most active -2.2%!!! Bonds rallied for a second session after trading weak the three prior sessions, Gold was little changed while Crudes low and close were at the lowest levels since 6/9/14.

Total NYSE Volume was higher but again on a DOWN session at 3.22B shares vs 2.66B vs an extremely weak 1.99B vs 2.83b vs 3.15B vs 3.02B vs 4.25B (end of quarter). Real NYSE Volume rose sharply to a still below average 683M shares vs 602M vs 537M – second weakest since April 30th vs 597M vs 686M vs 792M vs 1.49B at end of quarter. That and options expiry’s 1.72B shares the only ones above 800M since 4/28! The 12-month average is at a very weak 706M. Since 4/30 the average volume has been just 679M shares ranging from 531M to 1.72B.

A/D’s were negative – especially Nasdaq: NYSE -1.5x vs -2.2x vs +1.3x vs -1.6x vs +2x; Nasdaq -3.8x vs -3.9x vs +2.1x vs -1.2x vs +2.7x. Breadth was even worse – horrible Nasdaq! NYSE -2.6x vs -3.4x vs +2.8x vs +1.05x vs +2.1x; Nasdaq -6.2x!!! vs -3.5x vs +2.2x vs -1.01x!?! vs +3.7x vs +1.7x. New 52 Week Highs were HALVED to an extremely weak 93!!! vs 187 vs 324 vs 319 vs 580 – recent range is 71-580!!! New Lows doubled to a still weak 53 vs 27 vs 26 vs 27 vs 34 vs 42 vs 51 – recent range is 24-214.
S&P VIX rose 0.78 (1.79 in 2 sessions) to close at 12.11 vs 11.33 after being below 11 once which was overly bullish! After three sessions where the top of the range was below 12, it rose for a 2nd day to 11.72 -12.51. First time in 5 session the high end of the range was above ‘12’. Last Thursday’s close was a new recent low 10.32, barely taking out 10.34 on June’s options expiration!

Overnight markets:

Bonds closed stronger for a second day. 10 yr closed at 2.56% +7/16. 30 yr closed 3.38% +1-1/8! The long TIP, which hit a low of 0.978% on 5/29, closed 1.01%!!! +1-3/8! Overnight they are slightly weaker: 10’s 2.57 -1/8; 30’s 3.39% -1/4; and long TIP 1.02% -1/4. 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: 0.234% 3 mos.; 0.331% 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 0.08-0.10% where it has been for weeks! Foreign bond yields little changed but PIIGS weaker! Germany 1.21% -1; UK 2.64% –; France 1.65% –; Italy 2.89% +5; Spain 2.75% +4; Portugal 3.79%!!! +17!!!; Greece 5.98% +7. The recent high on selloff was 6.75%. Highly volatile!!! Recent range 5.42% to 12.57%. Japan: 0.54% -1.

Gold closed almost unchanged at $1316.50 -.50 in another very narrow range session. Friday’s low of $1310.00, lowest since 6/20 while 7/1’s high was $1334.90 – highest since 3/24! This is the 13th straight close above $1300 since plunging on 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: 50 day $1290, then the 40/200 day $1288! Key is the psychological $1300 level. It appears stalled after coming back from the 3/17 selloff 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 it is higher at $1325.30 +$8.80.

Crude continued its selloff, its 8th straight decline since 6/25. The low was extended again to $103.01 – still lowest since 6/9 before coming back to close at a weak $103.40 -.13 (8th straight close below $106 and 4th below $105; and 2nd below $104!!!). 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 is now below the 40 day moving average and nearing the 50 day – both rising! 40 day $104.19, 50 day $103.37, then the 200 day $99.97. The range is $85.61-$112.24 since March 1, 2012. Overnight it is weaker again at $102.81 -.59 with a low of $102.70!!! Still in range in from the plunging 6/9 session.

Global equity markets mixed; Hang Seng slammed: UK -0.4% vs -0.6% vs -0.5% vs +0.5% vs +0.3%; France +0.2% vs -0.5% vs -1% vs +0.4% vs –; Germany +0.2% vs -0.5% vs -0.5% vs +0.6% vs +0.2%; Japan -0.1% vs -0.4% vs -0.4% vs -0.1% vs +0.3%; Hang Seng -1.6%!!! vs – vs – vs -0.1% vs +1.6%; Korea -0.3% vs +0.1% vs -0.2% vs -0.2% vs +0.8%; India -0.5% vs -2%!!! vs +0.5% vs -0.1% vs +1.3%; U.S. Stocks opening modestly higher: DOW +39; SPX +6.33; Nasdaq Composite +20; NDQ 100 +17.50; Russell 2000 +3.72; Dow Transports +55; Utilties -1.6.

Some random thoughts:

…nothing good to say today after reading a Bloomberg article yesterday on how U.S. companies are in violation of bidding rules on U.S. government contracts by bidding them through their overseas subs! This from companies who cry about paying too high a tax rate and now manufacture abroad costing U.S. jobs. Damn them!

Last two episodes of Frontline will make you sick. First, was To Catch a Trader which highlighted the insider trading scandal of which SAC’s Stevie Cohen was convicted…ah, but Raj Rajararatnam was found not guilty…money talks, right? The second, which aired Monday was on the Vatican…and more detailed than anything TB has seen…even sicker than the inside trading scandals.

If I were Pope Francis I would have a food taster before they kill me!

Have a great day!



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