8/6/14…only news is Ukraine…nothing to add

Quote of the Day from the Friars Club Encyclopedia of Jokes: “There are two things we’re sure of: death and taxes. Now, if only we could get them in that order! – Joey Adams

Bloomberg Quote of the Day: “We are not interested in the possibilities of defeat.” – Queen Victoria…said just before the yacht America beat them in what became the first America’s Cup!

Bloomberg Top Stories:
*Europe Stocks Drop on Ukraine; Italian Bonds Slide; U.S. Futures Decline–flight to safety!
*Italy Slips Into Recession While German Orders Drop on Eve of ECB Meeting
*U.S. Trade Deficit Unexpectedly Shrinks to Five-Month Low on Import Drop
*BofA Raises Quarterly Dividend After Federal Reserve Approves Capital Plan – lowering the bar!
*Apple IPads to Laptops Said to Be Excluded From China’s Procurement List
*Walgreen Stays in U.S. With $15.3 Billion Deal for Rest of Alliance Boots
*China Default Storm Seen as $1 Billion Private-Placement Bonds Mature – warned you!
*Russia Sanctions Threaten Hegemony as Asia Turns Refuge in Currency Market
*Espirito Santo Bailout Seen Wiping Out BES Bondholder Loss (Brazilian sub)
*Self-Storage REIT Extra Space Soars 37% as Small Places Yield Big Returns
*Statist Strongmen Putin-Xi Show History Not Dead in Clash With Capitalism
*NATO Sees Risk of Ukraine Incursion After Russian Troops Buildup on Border
*Scenes of Destruction Await Gazans as Truce Lets Displaced Return to Homes – sad!
*Ebola Claims Second Nigeria Fatality as Nurse Dies, Five People Infected
*Gay-Marriage Opponents Seek Cincinatti Redemption to Break Losing Streak – good luck!

Tuesday’s Market Summary:

Ok, let’s recap: Friday was an unmitigated disaster…Monday couldn’t even muster a hiccup and closed lower…Tuesday resumed the downdraft with a vengeance and like Friday there was not even an intraday recovery. What’s more volume came back up to average and you know what TB always says about that: higher volume on a down day (and even average volume during the summer doldrums is something to heed), is a bad thing! All indices were down with the S&P, Dow Transports, and NYSE Financials all losing more than 1%! Dow Utilities too…and the goat at -1.2%. Best performer was the Russell 2000 which has been beaten up badly, -0.3%? YTD it is off 3.6% – this small cap index which is supposed to be a proxy for the economy!?!?the Dow has now lost 0.9%! NYSE Financials are at breakeven (+0.2%)while Nasdaq Financials/Banks/Insurance are all off 4%+/-. NDQ 100 is now +7.9% while the best two are Dow Transports/Utilities +8.5%.
Advance/Declines on the NYSE have now been negative six of the past seven sessions; Nasdaq had only had three but the positive ones were so flat as to render them meaningless. Ditto Breadth (see below). New 52 week highs stagnated at a weak 54 while new lows slipped but to a still high 166 from 178. The VIX which had declined nicely the prior two sessions reversed yet again to 16.87 +1.75 and was 17.14 intraday! Options expiry in two weeks…

Total NYSE Volume came back to an average 3.44B shares vs 3.05B vs 3.79B vs 4.25B vs 3.44B. Real NYSE Volume also returned to an average 703M shares vs 676M vs 792M vs 927M vs 680M – 11 days ago it was 541M, the third lowest of 2014 (531M was the low) – that with 236M at the bell!!! 537M on 7/3 was second weakest since April 30th. There have been just four sessions above 800M since 4/28! The 12-month average remains at a very weak 703M shares. Since 4/30 the average volume has been just 673M shares ranging from 531M to 927B….12 month high is 2.06B shares on 9/20/13!

A/D’s plunged back into the red: NYSE -2.5x vs +1.6x vs -1.7x vs -6.3x!!! vs -1.6x vs -1.5x vs -1.3x – prior to that were puny positives! Nasdaq -1.4x vs +1.7x vs -1.8x vs -5.1x! vs +1.4x. Breadth was similar: NYSE -3.6x vs +2.3x vs -1.7x vs -8.4x!!! vs –1.2x vs -1.8x vs -1.4x; Nasdaq -1.8x vs +2.1x vs -1.9x vs -5.6x! vs +1.7x. New 52 Week Highs were steady for a fourth session at a very weak 54 v 57 vs 46 vs 56 vs 149 vs 181 – recent range is 46-580!!! New Lows declined but remain strong at 166 vs 179 vs 260!!! vs 234 vs 115 – recent range is 24-260! S&P VIX closed higher at 16.87 +1.75, reversing Monday’s decline with a range of 15.10-17.14!

Bonds were virtually unchanged and remain near their 12-month highs: 10 yr closed at 2.49% -1/32; 30 yr 3.29% -1/64; the long TIP 0.94%! -1/16. Overnight they are STRONG!!! … nd at new highs: 10’s 2.44% +3/8; 30’s 3.24% +13/16; and long TIP 0.90% +15/16. 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: 0.237% 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 at 0.08-0.10% where they have been for weeks! Foreign bond yields mixed…problem countries weaker – classic flight to safety! Germany 1.10% -7; UK 2.50% -8; France 1.52% -5; Italy 2.79% +5; Spain 2.57% +3; Portugal 3.76% +8; Greece 6.38%!!! +5. The recent high on selloff was 6.75%. Highly volatile!!! Recently 5.42% to 12.57%. Japan: 0.51% –.

Gold traded in a narrow range closing at $1285.30 -$2.40. This following Monday’s low of $1279.70, lowest since 6/19. Sixth straight close below the psychological $1300, five days after a negative key reversal (higher high, lower low and close below prior days low!). It remains well below the psychological support level of $1300! 7/17’s session high was $1346.60, highest since March 19th!!! 6/9’s $1240.20 was lowest since 1/31/14!!! It is well below the 50 day $1293 and the 40 day at $1303!!! 200 day is just above at $1287! Those were all critical support levels! Note the recent high of $1392.60 on 3/17, highest high since 9/4/13…that too ended the session with a negative key reversal sparking the downturn! Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Overnight it is roaring: t $1307.10 +$21.80…not only above $1300 but with a high of $1308, highest since 7/29.

Crude had another nothing day closing at $97.38 +.09 two days after trading down to $97.09!!! – lowest since 2/5. 7/22’s high was $105.20, still highest since 7/2. 7/15’s session low was $90.01 – lowest since 3/21 – EIGHT handles since 6/30! 6/20’s run to $107.73 – highest since 9/19/13, a huge down session – put it in freefall and now well below what was critical support at $99.82 – the 200 day! 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. RES at the 200 day ($99.84), then the 50 day ($103.35), and then the 40 day ($103.43)!!! The range is $85.61-$112.24 since March 1, 2012. Overnight it is $97.65 +.27 – in a 3rd straight inside session: NO CONVICTION!
.
Global equity markets WEAK!!! Ukraine worsening: UK -1.3% vs +0.4% vs +0.5% vs -0.8% vs -0.3%; France -1.3% vs +0.5% vs +0.8% vs -0.5% vs -1.1%! Germany -1.4% vs +0.4% vs – vs -1.5%!!! vs -1.2%! Japan -1.1% vs -1% vs -0.3% vs -0.6% vs -0.2%; Hang Seng -0.3% vs +0.2% vs +0.3% vs -0.9% vs +0.1%; Korea -0.3% vs -0.7% vs +0.4% vs -0.2% vs -0.3% vs +1%; India -0.9% vs +0.7% vs +1% vs -1.6%!!! vs -0.7%. U.S. equity futures also weaker: Dow -49 (range 17); SPX -6.30 (15!); NDQ -22.50 (34!). U.S. stock market opening lower.

Some random thoughts

…nothing to see here…nothing to add…late: just got back from Rotary meeting. Oh, today is TB’s 45th wedding anniversary!

TB

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