10/16/14…a tale of three worlds…plus stocks: in their own world!

Quote of the Day from the Friars Club Encyclopedia of Jokes: “Never go to a doctor whose office plants have died”                          – Erma Bombeck

Bloomberg Quote of the Day: “Success is liking yourself, liking what you do, and liking how you do it.” – Maya Angelou

Due to lateness…no headlines today. TB
Wednesday’s (and prior two weeks) Market Summary:

…what’s a bear to do? Go away for two weeks, enjoy a cruise and then spend four days in Istanbul…or is it Constantinople…dunno…
TB didn’t miss a single thing…same old, same old…market rallied (occasionally) on light to medium volume, then plunges on big volume (Wednesday was troubled with Dow Transports up slightly (0.2%), but the rest down…hello??? What about the Russell 2000 Small Cap – can’t explain that outlier as it ROSE 1%??? Worst performer, just to confuse even more was Dow Utilities -1.3%, followed closely by The Dow itself, -1.1%! S&P 500 was off 0.8%, then the two Nasdaqs, -0.3% and 0.6% respectively! Oh, almost forgot, NYSE Financials plunged 1.7%…and look at the financial components: NYSE Brokers -1.5%; KBW Banks -3.3%@!!! (didn’t TB warn you of this?); and Nasdaq Banks -2.1%!!! So, you say…just one day…ah, but sadly NO!…and TB hasn’t heard any fat lady singing yet…even in Venezia! – but that’s another story.

Before we look at the skeleton, here are the ytd price changes (PRICE ONLY!!!): Dow -2.6%! Dow Transports +7.3% (less than half of 9/30 gains – +8.3% adding dividends)! Dow Utilities…now the unchallengeable leader for the year +13.9%!!! (adding in dividends, UP 17.1%!!!); Russell 2000 despite yesterday’s nice move, DOWN 6.9% for 2014!!! What about the other leader you say? NDQ 100 is now up just 6.4% this year but still up 18.2% for the last 12 months. Lastly, the ‘health’ index…NYSE Financials…recall that they peaked in June 2007 well before the crisis began…a warning shot across the bow! For the 12 months they are now up just 6% since 9/30/13 – and to show the damage of the past two weeks, now DOWN 1% for the year! That includes those niggardly dividends that TB loathes…the only reason to buy ANY bank stock!

Total NYSE Volume exploded to 6.06B shares…and that isn’t the worst part: average volume for the first 11 days of October ran 3.5B, capped off by yesterday’s 6.06B shares, or about 500M more than the recent average. To show that the ‘drought’ of trading has ended one needs to look at shares traded on the NYSE floor – affectionately referred to by TB as REAL volume: since 4/30 the average Has run just 687M shares…for October it is 893M shares!!! For comparion purposes, for the prior 12 months it was a historically weak 706M shares…but for the last 11 days 893M shares capped off by yesterday’s HUGE 1.22B shared day – highest since 9/19 and the low was 10/6’s 696M share session. Since April 30th we ‘had’ had just SEVEN sessions of more than 800M shares…for October? NINE…think about that: one day missed by just 10M shares. Crazy! Crazy bearish! Yesterday at the bell, volume was 992M SHARES…steady selling all day! The 12-month high is 2.06B shares on 9/20/13!

A/D’s were mixed (?) with NYSE slightly negative and Nasdaq slightly positive (sic): NYSE: -1.1x vs +1.6x vs -3.6x -7.2x!!! vs +4x! vs -3.4x; Nasdaq +1.2x vs +1.6x vs-2.7x vs -5.8x vs +2.5x vs -4.2x! Breadth was similar: NYSE -1.4x vs +1.6x vs -5.8x! vs -12.3x!!! vs +3.8x vs -4.7x!!! Nasdaq +1.03x vs +1.1x -7.2x!!! vs -4.4x! New 52 Week Highs slumped to 40 on 10/1 from a weak 90 on 9/30 and haven’t been above 77 since ending at 49 yesterday – their range for the year is 39-580!!! New Lows surged to 1043!!! From 639 – lowest for October is 176 – 2014 range is now 24-1043!!! S&P VIX has gone from ‘put’ protection being cheap on 9/18 at 12.03 to 26.25 yesterday – EXTREMELY bearish as indicated by the high of 31.06 – highest since 11/28/11!!! The average of the past 12 months is 13.83, with a low of 10.32! ose again to a bearish 16.74 +.46 – highest since 8/1! The range was 16.08–17.56!!!

U.S. bond market continued its rally to new 12 month low yields: 10 yr 2.14%; 30 yr 2.92%! The long TIP closed at 0.86% (isn’t that a new record low???) Very strong overnight to more new 12-month lows: 2.09% +7/16; 30’s 2.87% +15/16; and long TIP 0.83% +1-1/16!!!
Libor update: 0.229% 3 mos.; 0.320% 6 mos., both at new record lows! The Fed Funds rate has averaged 0.09% and is now 0.08-0.10%. T-Bills range from 0.02%, one-month, to just 0.10% one year!!! Foreign bond yields continued their rally to new lows yesterday – but PIIGS were weak and weaker overnight (Benchmark is 10yr): Germany 0.80%! +4; UK 2.05%!!!! +10; France 1.24%! +12; Italy 2.58% +16! Spain 2.18% +8! Portugal 3.54% +28!!!; Greece 8.69% +108!!! – low was 5.42%; Crisis high: 12.57%. Japan: 0.48% –.

Gold closed slightly higher $1244.10 +$10.50, gapping up to its highest since 9/11/13 in quiet trading with a session high of $1247 after gapping up by $8 on the open from $1235.90 to 1243.70, its session low. Only two prints below $1200 since 12/31/13 – back to back and rejected! Last close above $1300 was on 8/15. 7/17’s session high was $1346.60, highest since March 19th!!! SUP/RES is the 40 day at $1240, then RES at the 50 day $1253, and the 200 day at $1284. 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 lower at $1236.70 -$7.40 in a very narrow range. Silver back with a ’17’ handle after falling to $16.64 on 10/3 – lowest since 2/9/2010 and very close to $15.73, a multi-decade low!!!

Crude closed little changed at $81.78 -.06 but only after putting in a low of $80.01, lowest since 6/27/13! There have been 27!!! handles since peaking at $107.73 on June 13th at $107.73 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 ($91.70), then the 50 day ($92.730), and lastly the 200 day (98.93). The range is now $80.01-$112.24 since 3/1/12. Overnight it is WEAK with a new low of $70.78, not 28 handles!!!! Lowest since 6/27/13! Currently it is $81.17 -.63

European equity markets weak, led by Japan: UK -0.7% vs -2.8%!!! France -1.1% vs -3.6%!!! Germany -0.4% vs -2.9%!!! Japan -2.2%!!! vs -2.4%!!!; Hang Seng -1%! vs -1! Korea -0.4% vs -0.7%; India -1.3% vs closed vs -0.1%. U.S. equity futures slammed again: Dow -97 (range 108!!!); SPX -3.70 (42!); NDQ -22 (80!!!). Market as of 11am EDT: Dow -47 (low was -158!); SPX -13 (low -39); Transports UP 74??? (-95!!!); Composite -14.50 (-82); NDQ 100 -35 (-46); Russell 2000 UP 4.64 (-14!); Dow Utilities -4.20 (-10).


Some random thoughts:

Thoughts from the trip to Venice, Croatia, Montenegro, Albania, Greece, and Turkey. We had great weather and met some wonderful people…on the cruise and in the ports. We flew from Athens to Istanbul…light years away.

Venice was beautiful as always and unlike the hot, humid summer months was a nice 70 with not so many tourists. We skipped Harry’s Bar having our Bellini’s from the bottle we took back to the ship. George Clooney asked TB where to have his wedding and the obvious answer to TB was at the Cipriani…and that is where he went…still looking for that invitation…must have been an oversight, right? Only disappointment to TB was his favorite ‘wine bar’, the Do Mori, which dates back to 1620. A small featureless place that was suggested by Berkeley wine merchant Kermit Lynch years ago…and the best TB has ever found…wonderful, innovative antipasti, and reasonable wine drunk with the locals who come in for their shot of Prosecco before going back to work in the produce and fish markets. Alas, no more…some jerk…sent it to Zagat and when we got to the place not only was it wall to wall Americans, but about 30 were standing outside. PASS!!!! Never, never, tell Zagat about any place you like…like Gordon’s Wine Bar in London! As TB likes to say: you can always return but you can never go back.

Our ship was wonderful…Windstar’s Star Pride – just 198 passengers and 130 crew to serve your every need. From the first day they knew your name and at the end of nine days you knew them well…about their lives and families. Having served on a destroyer (USS INGERSOLL DD-652), in Viet Nam with 300 of his closest friends, and then taking a Greek island cruise on an older ship with about 300 passengers, TB has shunned these 2,000-4,000 passenger ships. Crystal Concordia proved TB’s point. The service and food was great…no kids…they gravitate with their parents and the ‘lively set’ to the BIG ships…so be it…we were in port early and had more time their…Hvar, Dubrovic, Kotor, Butrint, Zakynthos, Delphi (Glalazidhi), and Hydra (personal favorite), before getting to Athens. Two of our oldest (relationship, not years), friends joined us on the cruise and we all had a great time.

A spectacular treat was passing through the Corinth Canal which cuts off Pelopennesius from the rest of Greece. This six mile canal is the most spectacular in the world. Whereas the Suez is wide and long, and Panama is narrow and with locks, this one can no longer accommodate wide ships (more than 67 feet which was our size). It takes about an hour and a half to pass through (literally), towed by a tug with less than six feet on each side and high cliffs…thankfully no boulder throwing kids were up there! Highly recommended! This was followed up by a feast of an entire suckling pig, lobster, crab, paella with shrimp and mussels, lamb chops, steak and much more…they couldn’t give away the chicken with all those choices…served al fresco after completing the canal.

Flying to Istanbul was to an entirely new world…our hotel was right across from Hagia Sophia, and near the Blue Mosque, the Hippodrome, and Topkapi Palace. Our guide, provided by Sea Song was Berna, a wonderful woman who had lived in New York for 21 years…we didn’t hold that against her. She was charming and besides the listed sites above took us to the Summer Palace, Sulliman Mosque, and a Greek Orhtodox church that was chock full of icons. Her explanations were interesting and enlightening. We also had dinner with friends one night who happened to be there too! We did in four days what would have taken at least a week on our own! Sea Song was the tour agency…and also highly recommended.

America is not well regarded these days in Turkey…but not the American people. There is much mistrust of our government (and the European nations too), as to our motives…can you blame them after what we did to Iraq? Obama is better liked than Dubya, and our Congress is a joke to them too. Berna said that beggars were totally eliminated in Turkey until the refugees flocked in from Syria…and a lot of Kurds. It is sad and their government’s inability to make a decision on what to do with the ‘allies’ isn’t helping…can’t say as we can blame them though….it is a fine line and one that could have serious repercussions for the country…and just how much will WE support them?

A great trip but it is great to be back to where we can read the signs again. Have to sort through 750 pictures…many redundant of course. If one picture is worth a thousand words, what is…oh, nevermind!

Have a great day!



1 Comment »

  1. traderbill said

    thank you, correction today on gold…even more interesting!

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