10/2/14…comments on Wednesday’s markets

Quote of the Day from the Friars Club Encyclopedia of Jokes: “Man is the only animal that blushes. Or need to.” – Mark Twain

Bloomberg Quote of the Day: “The best way to predict the future is to create it.” – Peter Drucker

Wednesday’s Market Summary:

…ay carumba! Dow -238, 1.5%; S&P -26, 1.3%, Dow Transports -2.5%!!! (all 20 declining!), NDQ 100 -1.6% (same as the Comp), 99:4 declining (there are 103 stocks in the 100 fyi),Russell 2000 -1.5%.Was there any bright side? Dow Utilities +0.4% – despite recent weakness still up 16.1% (total return, not just price), and now ahead of Dow Transports +15.3%. Next comes NDQ 100 +12% (Composite now up 6.9%), while S&P 500 is now up just 6.9%,Dow 30 +3.1%! The Russell 2000 small cap is now off 5.8% ytd. Remember these numbers include reinvested dividends! A/D’s and Breadth were big negatives (while any positives have been small). Recently Nasdaq stocks are being hit harder than NYSE! New 52 week highs slipped to 40 – just one above their low for the year! New lows rose to 540!!! Taking out the old high of 382! Ouch! Lastly, VIX rose again to a bearish 16.74! All this on very high volume: 4.16B!

Total NYSE Volume exploded to 4.16B shares from an average at 3.07B vs 2.91B vs 3.27B vs 3.4B. Real NYSE Volume rose only dipped to 865M from 940M (omitted yesterday) vs 654M vs 630M vs 736. There have now been just six 700M+ days in 32 sessions! There have now been just seven sessions above 800M since 4/28! The 12-month average is a historically weak 697M shares. Since 4/30 the average volume is just 668M. 12 month high is 2.06B shares on 9/20/13!

A/D’s were highly negative and sounding a warning: NYSE: -3x! vs -1.4x vs +2.7x vs -4.8x! vs +1.5x vs -2.4x vs -4.7x!; Nasdaq -3.5x! vs -1.3x vs +2.1x vs -4.2x! vs +2x vs -2.3x vs -3.9x! Breadth was even worse: NYSE -5.5x!!! vs -2.6x vs +3.3x vs -10.6x!!! vs +1.8x vs -2.5x vs -5.4x!; Nasdaq -6x!!! vs -1.1x vs +4.1x vs -6.8x!!! vs +2.4x vs -2.3x vs -4.4x! New 52 Week Highs took a header to 40 – just one off their low vs 71 vs 58 vs 46! vs 57 vs 39!!! vs 63 vs 222 – recent range is 39-580!!! New Lows charged ahead to a new high of 540!!! Eclipsing the prior 329 vs 322! vs 250 vs 382!!! from 289 vs 329! – recent range is 24-382!!! S&P VIX rose again to a bearish 16.74 +.46 – highest since 8/1! The range was 16.08–17.56!!! Only two ’12 prints in the last 23 sessions.

NOTE: all overnight numbers are very early (4am EDT)

U.S. bond market closed very strong adding to Wednesday’s gains: 10 yr 2.38% +15/16; 30 yr 3.08% +2 pts! Almost to 8/28 low of 3.075%!!! the long TIP closed at 0.98%% (record low was 0.87%!) +2-9/16!!! Only slightly weaker overnight: 2.41% -3/16; 30’s 3.11% -7/16; and long TIP 1.00% -1/2.  

Libor update: 0.235% 3 mos.; 0.330% 6 mos., both remain near their record lows, set recently: 0.235% and 0.330% respectively! The Fed Funds rate has averaged 0.09% since 5/22/13 but PLUNGED o/n and is now 0.01-0.03%!?! T-Bills range from 0.01%, one-month, to just 0.08% one year!!! Foreign bond yields rallied further late Wednesday, only slightly higher led by PIIGS! (Benchmark is 10yr): Germany 0.91%! +1; UK 2.37%! +1; France 1.25%! +1; Italy 2.29% +1; Spain 2.09% +3; Portugal 3.05% –; Greece 6.41% +7 – volatile since the recovery low of 5.42%; Crisis high: 12.57%. Japan: 0.52% -1. Bonds remain ‘risky business’!

Gold closed slightly higher in an inside session at $1215.50 +$5.00. Wednesday’s low was $1204.30 – lowest since 1/2/14. This marks it’s 31st straight sub-$1300 close. It is way below the 40/50 and 200 day m/a’s. 7/17’s session high was $1346.60, highest since March 19th!!! RES is the 40 day at $1262, then the 50 day at $1269, and the 200 day at $1283 – incredibly tight and falling! Recent high was $1392.60 on 3/17, highest high since 9/4/13. Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Overnight it is little changed at $1215.20 -.30. Silver remains with a ’17’ handle. Has a low of $17.08 – lowest since 2/26/2010!!!

Crude had a lower high and lower low (just 4 cents above the recent) closing at $90.73 -.45, Recent low is 9/18’s $90.43 – lowest since 6/28/13! There have been SEVENTEEN handles since peaking at $107.73 on June 20th. 6/20’s run to $107.73 was highest since 9/19/13 (a huge down session which put it in freefall. The record high of $147.27 was on 9/30/08, the low since on 12/30/11 is $74.95: $93.60 is the midpoint!!! Recent rally high and close are $110.70 and $110.53 respectively. RES at the 40 day ($94.22), then further Res at the 50 day ($95.41), and lastly the 200 day (99.53) – all declining, especially 40/50! The range is $85.61-$112.24 since 3/1/12. Overnight it is WEAK: new low of $89.66 -$1.07!!! Lowest since 4/24/13!

European equity markets weak, led by Japan: UK -0.5% vs -0.3% vs -0.5% vs +0.2% vs -0.1%; France -0.5% vs +1.1% vs -1.2% vs +0.9% vs +0.3%; Germany -0.5% vs +0.4% vs -1.1% vs +0.1% vs +0.5%; Japan -2.6% vs -0.8% vs +0.5% vs -0.9% vs +1.3%; Hang Seng closed for a 2nd day vs -1.3%! vs -1.9%!!! vs -0.4%; Korea -0.8% vs -0.3% vs -0.3% vs -0.1% vs -0.1%; India -0.1% vs +0.1% vs -0.1% vs +0.6% vs -1%. U.S. equity futures slightly weaker – remember these are early numbers: Dow -4 (range 26); SPX — (4); NDQ -2.75 (11).

 

Some random thoughts:

Just wanted to update markets today before leaving due to shellacking stocks took yesterday; now off to Italy, Dalmatian coast, Athens, and Istanbul. Next official commentary 10/16.

TB

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