11/19/14…what do you get if you take the ‘key’ out of Keystone?

Quote of the Day from the Friars Club Encyclopedia of Jokes: “Life is not for everyone.”

– Michael O’Donoghue

Bloomberg Quote of the Day: “Be kind whenever possible. It is always possible.” – Dalai Lama

Bloomberg Top Stories:

*Dollar Strengthens to Seven-Year High as Treasuries Drop, Stocks Advance – not much!

*Putin Said to Surprise With Anti-Corruption Crackdown to Counter Sanctions – not again!

*Rejection of Keystone Bill Sets Up 2015 Showdown in Republican U.S. Senate – OK corral?

*Yellen Inherits Greenspan’s Conundrum as Long-Term Interest Rates Decline – thanks, AG!

*Five Feet of Snow Buries Part of New York State; at Least Five Are Dead – incredible!

*French Prosecutors Begin Investigation Into Insider Trading at BNP Paribas – TB is shocked!

*Russia Blames Ukraine Conflict on Security Needs as Death Toll Tops 4,000 – sure they do!

*Apple-Google Evidence in Employee Poaching Case Triggers Antitrust Frenzy – finally?

*Wages Poised to Rise as Signs Emerge Showing Improving U.S. Labor Market – but wages???

Tuesday’s Market Summary

Just another screwy day…true all indices up from 0.2% (Dow Utilities) to 0.27% (both Nasdaq’s). Volume was up to 3.4B shares – both pretty typical of Tuesday before options expiry. A/D’s and Breadth (especially the latter) were good. New highs climbed back to 304 while new lows were stable at 117. The VIX traded in a tight range (13.13-13.99), but note all in bear territory before closing at 13.86 -.13. Nothing to see here…again!

Total NYSE Volume was higher at 3.41B shares vs 3.13B vs 3.2B vs 3.46B vs 3.25B. Average volume since 9/30 is 3.6B shares and now falling, or about 600M more than the 12-month average. Shares traded on the NYSE floor – affectionately referred to by TB as REAL volume came back to a slightly above average 731 vs 694M vs 705M vs 708M vs 718M. For comparison purposes, for the prior 12 months it is a historically weak 712M shares…but since 10/1: 825B shares (but falling) – including that HUGE 1.22B share day – highest since 9/19, followed by two more 1B plus days leading to options expiry!. The lowest was 10/6’s 696M share session. April 30 – September 30 we had just SEVEN 800M shares…since 10/1: 16, and FIVE 900M+ days.

A/D’s were positive: NYSE: +1.6x vs -1.3x vs +1.1x vs -1.8x vs +1.2x; Nasdaq +1.5x vs -1.9x vs -1.1x vs -2x vs +1.6x. Breadth was solid: NYSE +2x! vs 1:1 vs +1.5x vs -2x vs 1:1; Nasdaq +2x! vs -1.7x vs +1.4x vs -1.2x vs +1.6x. New 52 Week Highs continued their rise to 304 vs 242 vs 207 vs 249 vs 276 – their range for the year is 39-612!!! New Lows steady at 117 vs 115 vs 127 vs 146 vs 113. The 2014 range is 24-1043!!! S&P VIX traded in a tight range of 13.13-13.99 (Monday’s close), then settled at 13.86 -.13 – still well in bear territory. This is its 16th sub-15 close since peaking on 10/15. Heading back toward those bearish extremes that had a high of 31.06 (highest since 11/28/11!!!)? You decide. The average of the past 12 months is 13.97, with a low of 10.28!…high close of 26.25 on 10/15/14!

U.S. bond market closed slightly better. The recent 12 month low yields (10’s 2.09%; 30’s 2.87%; and long TIP 0.83%), 10’s closed at 2.32% +3/16; 30’s 3.04% +3/8; and the long TIP 1.00%! +1/2. Overnight back to weak: 10’s 2.36% -3/8; 30’s 3.08% -3/4; and long TIP 1.04% -15/16.  

Libor update: 0.232% 3 mos.; 0.326% 6 mos., both steady and just above new record lows! The Fed Funds rate has averaged 0.09% and is steady at 0.09-0.10%. T-Bills: 0.3%, one-month, 0.02% 3 mos, 0.13% one year???

Foreign bond yields little changed, Greece lower but still above 8%; watch Japan! (Benchmark is 10yr): Germany 0.83% +4; UK 2.13% +1; France 1.18% +3; Italy 2.32% –; Spain 2.12% +1; Portugal 3.12% –; Greece 8.01% -7: 10/16’s close was 8.54%! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.47% -3.

Gold closed strong again with a new high of $1204.10, highest since 10/30 and closed at $1197.10 +$13.60. Still following thru on Friday’s ‘positive key reversal for 2nd time in six sessions. 11/7’s low was $1130.40, a new recent low!). The recent intraday high of $1255.60, highest since 9/10/14, was rejected. The last 15 sessions have had prints below $1200 first time since 12/31/13 Last close above $1300 was on 8/15. 7/17’s session high was $1346.60, highest since March 19th!!! Res is at $1200 (psychological), then the 40 day at $1205, the 50 day $1210, then the 200 day at $1278, all declining. The 12-month high is $1392.60 on 3/17, highest high since 9/4/13. $1130.40. 11/7’s low was $1130.40! Overnight, slightly weaker in a narrow insides session at it $1194.60 -$2.50. Silver holding above $16, also highest since 10/31 and back from 11/5’s low of $15.12, more than a five year low.

Crude closed lower at $74.61 -$1.03 but the worst part was it had a negative ‘key reversal’. Will that kill it again. Just three days ago it set a new recent low of $74.07, lowest since 9/17/10!!! 10/25’s high was $84.83. There have been 33!!! handles since peaking at $107.73 on June 13th, highest since 9/19/13. 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 ($83.20!), then the 50 day ($85.11), and lastly the 200 day (97.03), all continuing to plunge and accelerating to the downside. If it fails here we are now looking at $70! The recent range is now $74.07-$112.24 since 3/1/12. Overnight it is slightly better at $74.79 +.18 with a low of $74.88. CAUTION!

European equities mostly higher, Asia weaker: UK -0.1% vs +0.5% vs -0.1% vs -0.1% vs -0.1%; France +0.6% vs +0.7% vs – vs +0.4% vs -0.4% vs -1.1%; Germany +0.7% vs +1.2%! vs – vs +0.1% vs -0.2% vs -1.3%; Japan -0.3% vs +2.2%! vs -3%!!! vs +0.6% vs +1.1%! Hang Seng -0.7% vs -1.1%! vs -1.2%! vs +0.3% vs +0.3%; Korea – vs +1.2%! vs -0.1% vs -0.8% vs -0.3%; India -0.5% vs -0.1% vs +0.5% vs +0.4% vs -0.2%. U.S. equity futures little changed in another narrow range session: DOW +3 (range 33!); SPX +0.30 (4!); NDQ -5.50 (18).

 

Some random thoughts:

…yesterday was long so let’s keep it short today…k? The Keystone Pipeline is a myth on so many fronts, but some Dems had to vote for it or risk losing constituents. Here goes:

  1. Those 42k jobs? Sure, but only in construction phase. PBS interviewed the CEO of the company…when questioned about them being ‘temporary’ with only 50 long-term jobs created, he stumbled…tried to say they will keep those 42k of workers! Get real!
  2. Yes there are serious environmental concerns but the sponsors are also correct about offsetting risks of rail transport.
  3. Now the biggie: supposedly this will solve most of our oil importing problems…make us self-sufficient (sic). Really: where does the pipeline lead? Follow the crude…to Oklahoma! Where are the refineries…northeast…capische? That oil will be shipped overseas…why? Because law requires that oil only be carried on U.S. flag ships. When was the last time you saw a U.S. flag oil tanker?

That’s it…you decide…and meanwhile the Senate is back in gridlock! Hmmmm.

TB

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