8/14/14…what we can all learn from Sammie Davis, Jr.

Quote of the Day from the Friars Club Encyclopedia of Jokes: “Poor Hackley – half his friends deserted him the day he lost his money. The rest left as soon as they found out.” – anon

Bloomberg Quote of the Day: “Reason and judgment are the qualities of a leader.” – Tacitus

Bloomberg Top Stories:

*First-Time Jobless Claims in U.S. Rise More Than Forecast to Six-Week High – who cares?

*U.S. Stock Futures Little Changed Amid Ukraine Conflict, Earnings Reports – you expected?

*Recovery in Euro Area Unexpectedly Halts With German Economy Contracting – THAT’S news!

*Wal-Mart Cuts Full-Year Profit Forecast Amid Slow Sales, Health-Care Costs – aww, so sad!

*Rosneft Said to Ask Russia for Up to $42 Billion After Sanctions Hit Loans – sic ‘em!

*Shell Sells Two U.S. Gas Fields for $2.1 Billion Plus Shale-Field Acreage – NatGas…hmmm

*Treasury to Cut Stake in Ally Financial for First Time Since Initial Offer

*France Risks EU Clash After Scrapping Deficit Goals as Economy Stagnates – !!!

*Putin $16 Billion Pipeline Bypassing Ukraine at Risk as Conflict Escalates – more of the same

*How to Score 43% Profit Overnight in China Without Knowing What you Bought – bubblicious!

*Ukrainian Aid Supplies Moving East as Russia Convoy Said Close to Border – East?

*Death of Brazil’s Presidential Candidate Campos Resets Election Outlook

*Tens of Thousands Join Khan’s Convoy to Pakistan’s Capital to Oust Sharif

*Pilot’s Prosthetic Arm Came Off During Windy Landing in U.K.; Study Says

 

Wednesday’s Market Summary:

A rally, but still noting to shout about…particularly with options expiry just two days away!

Best Performers were the two Nasdaqs up 1%+ while weakest was Dow Utilities +0.2%. The rest were up from 0.6-0.7%. NYSE Financials up 0.8%…somehow!?! Advance/Declines and Breadth were both positive making it 3 out of 4 up sessions. Volume however stagnated at a weak 2.7B shares, while shares traded on the NYSE floor barely budged to an extremely weak 559M shares and for title of 4th worst session of 2014…Tuesday’s tied for 3rd worst! Wanna buy some shares?

Total NYSE Volume barely got out of the cellar at 2.7B shares vs 2.59B shares vs 2.76B vs 2.87B vs 3.22B vs 3.5B. Real NYSE Volume rose but so what? Nobody home: 559M (only 446M at the bell!), up from 543M – tied for 3rd lowest of 2014 vs 596M vs 629M vs 670M vs 689M vs 703M. 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 668M shares ranging from 531M to 927B….12 month high is 2.06B shares on 9/20/13!

A/D’s were positive for the 3rd time in four sessions: NYSE +2.9x vs -1.4x vs +2.8x vs +3.1x vs -1.1x; Nasdaq +2x vs -2.1x vs +2.7x vs +2.3x vs -1.8x. Breadth was similar: NYSE +2.1x vs -1.8x vs +2.9x vs +4.2x! vs -2.3x; Nasdaq +3x vs -2.1x vs +3.7x vs +2.3x vs -1.7x vs -1.1x vs -1.8x vs +2.1x vs -1.9x vs -5.6x! New 52 Week Highs bounced back but to a less than average 140 vs 96 vs 155 vs 86 vs 67 vs 49 – recent range is 46-580!!! New Lows just a tad lower at 79 vs 84 vs 64 vs 145 vs 167 – recent range is 24-260! This is a perfect set-up for options expiration! Beware! S&P VIX took a bullish dive to 12.90 -1.23!!! The range was 13.81-13.93. No ‘14’s!

Bonds closed slightly better and remain not far from their new 12-month highs set last Thursday! 10 yr closed at 2.42% +1/4; 30 yr 3.25% +5/8; the long TIP 0.93% +11/16. Overnight they are strong and back to the 12-month highs! 10’s 2.39% +5/16; 30’s 3.22% +1/2; and long TIP 0.90% +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: 0.233% 3 mos.; 0.329% 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 lower across the board…especially Portugal and Greece! Germany 1.01% -2!!!; UK 2.42% -2; France 1.40% -3; Italy 2.67% -3; Spain 2.50% -6; Portugal 3.51% -15!!!; Greece 5.93% -23!!! The recent high on selloff was 6.75%. Recently 5.42% to 12.57%. Japan: 0.50% -1.

Gold closed slightly higher at $1314.50 +$3.90, in a parallel session to Tuesday – narrow range! It is now well above all three moving averages and 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!!! First support is at the 40 day $1310, then the 50 day at $1300, and the 200 day at $1287 – these are VERY tight ranges! ALL are 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 little changed again at $1313.40 -$1.10.

Crude closed slightly higher in its fourth straight ‘nothing session’ at $97.59 +.22. This four days after trading down to $96.55 – lowest since 2/4! – NINE handles since 6/30! 7/22’s high was $105.20, still highest since 7/2. 7/15’s session low was $90.01 – lowest since 3/21. 6/20’s run to $107.73 was highest since 9/19/13 (a huge down session which put it in freefall. 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 ($99.80), then the 40 day ($102.16), and then the 50 day ($102.68)…the latter two dropping fast! The range is $85.61-$112.24 since March 1, 2012. Overnight it is weaker at $97.14 -.46, near session low of $97.07.

Global equity markets generally higher, despite slowdown??? Only China weaker: UK +0.5% vs +0.1% vs -0.1% vs +0.9% vs -0.3%; France +0.3% vs +0.6% vs -0.6% vs +1% vs +0.2%; Germany +0.3% vs +0.9% vs -0.7% vs +1.7%! vs +0.1%; Japan +0.7% vs +0.4% vs +0.2% vs +2.4%!!! vs -3%!!!; Hang Seng -0.4% vs +0.8% vs +0.2% vs +1.3%! vs -0.2%; Korea – vs +1%! vs +0.1% vs +0.4% vs -1.1%! India +0.7% vs +0.2% vs +1.4%!!! vs +0.8% vs -1%!. U.S. equity futures little change and well off their session highs: Dow +5 (range 58); SPX — (6); NDQ +3 (16)….all are just above their session lows! U.S. market opening slightly higher.

 

Some random thoughts

…Sammy Davis, Jr. was performing a show at Harrah’s Tahoe and he stopped right in the middle of his third song, saying: “sometimes you got it folks, and sometimes you don’t. Tonight I don’t…but, I would like you all to be my guests for dinner.” Now that’s class!

Note: TB warns that when he said that they hadn’t delivered the checks yet…lots of champagne and other drinks suddenly were ordered…now THAT’S NOT CLASS!

So today, with all that is going on in the world, TB hasn’t got the stamina to try to dissect it but will end with this: how can a slowdown in Europe be good for stocks…globally…bonds of course…but stocks? Says that the rallies are not on fundamentals (note lowered full-year forecasts for DEERE and now Wal-Mart (perhaps they should try paying their employees a living wage since they are their best customer…their words, not TB’s! Also note that yesterday’s ‘rally’ included BONDS, not just stocks…what happens tomorrow when the high freaks go into high gear on options expiration? Time will tell, but ‘put’ protection is again CHEAP!

Have a fun day…i.e. ignore the market! You’ll live longer!

 

TB

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