`12/10/14…kim jong Cruz??? (updated 10:15am EST)

Updates on news stories, Crude, and stocks

Quote of the Day from the Friars Club Encyclopedia of Jokes: “Why is it when we talk to God, we’re said to be praying, but when God talks to us, we’re schizophrenic?” – Lilly Tomlin

Bloomberg Quote of the Day: “Everything you can imagine is real.” – Pablo Picasso

Bloomberg Top Stories:
*Stocks in U.S. Decline as Oil Renews Selloff While Europe Equities Rebound – DUH!
*Brent Crude Falls Below $65 for First Time Since 2009!!! OPEC Demand Weakest in 12 Years!
*JPMorgan Sees Trading Revenue Drop in ‘High Teens’ in the Current Quarter – !
*OPEC Cuts 2015 Crude Forecast to 12-Year Low as Shale Takes Away Customers – and some shale oil drillers may default on bonds…Can’t sell below $48!
*Medvedev Enlists Russian Companies in Bid to Halt Ruble’s Downward Spiral
*Sony CEO Personally Approved Scenes in Film on North Korea, E-Mails Show
*Greek Bonds Extend Slump as Stocks Drop on Risk of a Change in Government – !!!
*Hedge Fund Insider-Trading Verdicts Tossed in Blow to U.S. Investigation – SICK!
*RBS Said to Withdraw From Japan Fixed-Income Trading With Loss of 200 Jobs
*Highway Funds Drop So Low in U.S. States that EVEN Republicans Seek Taxes – !!!

Tuesday’s Market Summary:

Once again, a very volatile day that started with the Dow plunging 140 points on the open, following the futures market’s lead. From their they dropped another 30 points over the next half hour before working their way back to close down 51 (session high was still off 40!). You could say it was all due to China imposing restrictions on private lending by the provinces, as it took Europe and Asia with it too…you ‘could’ say that…but you would be deluding yourself! The fact is the volume was a high 3.95B shares or nearly 400M above average (you don’t want to see this on a day like this!). Now get this: A/D’s and Breadth were moderately positive, but still weak compared to Monday’s huge negatives – but why and how so? Consider, new 52 week highs were cut by 45% to 207, while new lows rose to 467 – very high! But here is the clincher…the S&P VIX which had gotten down to a ‘bullish’ 11.82 on Friday (it’s first ‘11’ print and close!), then back up to 14.18 on Monday and again to 14.84 yesterday with a high of 16.68 – highest since 10/24! Very bearish and with options expiry – final of the year and a quadruple witching – still more than a week away! Keep those helmets on! Now get this: best performer was the Russell 2000 +1.8%??? Of course this was mainly a rebound from Monday’s 1.2% loss. Dow Utilities were next at +0.6% and remain impressive ytd; The two Nasdaq’s were up about 0.5%; S&P 500 was FLAT??? Bringing up the rear were the Dow 30 -0.3% and Dow Transports (the goat), -0.6%! Talk about bifurcated!

Total NYSE Volume nearly 4B shares; 3.95B shares vs 3.72B vs 3.36B vs 3.37B vs 3.58B vs 3.64B vs 4.14B. Average volume since 9/30 remains about 3.6B shares or about 600M more than the 12-month average. Shares traded on the NYSE floor (aka REAL) also rose to a strong 834M shares vs 770M vs 755M vs 798M vs 776M vs 809M vs 877M vs 649M (lowest since 11/11 and unusual for a monthend). For comparison purposes, for the prior 12 months it is a historically weak 719M shares…but since 10/1: 814B shares – 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 11/1’s 619M share session. April 30 – September 30 we had just SEVEN 800M shares…since 10/1: now at 19 – just one in Nov, and FIVE 900M+ days. Now three 800M days for Dec.

A/D’s were very somewhat positive (note all the ‘big’ numbers are negatives!): NYSE: +1.5x vs -2.3x vs +1.1x vs -1.7x vs +1.8x;; Nasdaq +2.1x vs -2.9x vs +1.9x vs +1.5x vs +1.6x. Breadth was identical: NYSE +1.4x vs -3.8x!!! vs 1:1 vs -2.4x vs +2.4x;; Nasdaq +2.1x vs -3.3x! vs +1.6x vs -1.5x vs +2.2x. New 52 Week Highs plunged 45% to 207 vs 386 vs 363 vs 302 vs 328 vs 197 vs 201! vs 515! – their range for the year is 39-612!!! New Lows remain VERY strong, rising to 467! vs 416 vs 283 vs 248 vs 185. The 2014 range is 24-1043!!! S&P VIX closed sharply higher with just one day printing ‘11’s. Session high was 16.68 with a (high) low of 14.84 – decidedly bearish and with a low of 14.84 – .21 above Monday’s high of 14.67! It closed at 14.89 +.68 – leaving just one session without a ‘13’ print. This 12 days after hitting a very bearish 15.74, highest since 11/4, and just 4 days ago 14.75! We may again see those bearish extremes that had a high of 31.06 (highest since 11/28/11!!!). 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 STRONG for a 2nd day! Note the 30 yr bottomed at 3.01%. The recent 12 month low yields (10’s 2.09%; 30’s 2.87%; and long TIP 0.83%), 10’s closed at 2.22%! +3/8; 30’s 2.87%! +11/16, and the long TIP 0.89%!!! +1-1/16. Overnight mostly better: 10’s 2.21% +1/16; 30’s 2.86% +1/8; long TIP 0.89% -1/16
Libor update: 0.238% 3 mos.; 0.340% 6 mos. Both slightly higher but still near their recent record lows! The Fed Funds rate has averaged 0.09% and is currently 0.11-0.13% – a 9-month high. T-Bills: 0.04% one-month; 0.03% 3 mos; 0.22% vs 0.15% one year!
Foreign bond yields mostly higher – led by PIIGS – especially Greece!!! (Benchmark is 10yr): Germany 0.69% –; UK 1.92% +4; France 0.97%! +1; Italy 2.09% +6!; Spain 1.87% +5; Portugal 2.90% +10!; Greece 8.24%!!! vs 7.71% vs 7.03% +30!!! Not for the faint of heart! 10/16’s close was 8.54%! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.39%!!! -2.

Gold rallied strong closing at $1232.00 with a session high of $1238.00 – highest since 10/22 and the first REAL $1200+ close since the selloff began. Back above the 40/50 day again for just the 4th time since 10/21! 11/7’s low was $1130.40, a new 12-month low!). The last 29 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!!! Support is at $1200 (psych) and the 40 day, the 50 day $1203, RES at the 200 day $1271 – bottomed out! The 12-month high is $1392.60 on 3/17, highest high since 9/4/13. 11/7’s low was $1130.40! Overnight it is slightly weaker at #1228.20 -$3.80 BUT with a low of 1225.30!!! A first since breaking $1200. There have now been 11 highs above $1200 since 10/31. Silver traded as high at $17.27 overnight! This following a $14.12 recent low, not seen in more than five years!

Crude dove once again to yet a new low 5+ year low (6/10), of $62.25 before closing at $63.82 +.87 – but still WEAK for a 3rd day! Consider: 10/25’s high was $84.83. There have been 44!!! 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 ($76.19!), then the 50 day ($78.68!), and lastly the 200 day (94.87!), all increasing their rate of decline! A failure here could take us to $59!!! The recent range is now $63.72-$112.24 since 3/1/12. Overnight it opened little changed, but just dove to yet another new low of 61.97 – it’s 45th handle!, and is now $62.11 -$1.71! Note that following the financial crisis it traded down to $32.40 on 12/31/08 from a high of $147.27 just three months earlier (-78%!!!).

Overnight Global Markets:

Europe slightly better, Asia mixed – Japan trashed, Korea weak! UK +0.1% vs -1.5%!!! vs -0.9% vs +0.8% vs -0.2%; France +0.1% vs -1.8%!!! vs -0.9% vs +1.3% vs -0.9%; Germany +0.6% vs -1.6%!!! vs -0.5% vs +1.3% vs -0.6%; Japan -2.3%!!! vs -0.7% vs +0.1% vs +0.2% vs +0.9%; Hang Seng +0.1% vs -2.3%!!! vs +0.2% vs +0.7% vs +1.7%!!! vs -1%! vs +1.2% vs -2.6%!!! Korea -1.3%! vs -0.4% vs -0.4% vs — vs +0.9%; India +0.1% vs -1.2%! vs -1.2%! vs -0.4% vs +0.4%. U.S. equity futures SLAMMED for a 2nd day – again no opening gap!!!: DOW -105 (130); SPX -10.20!!! (13); NDQ -8.75 (21). OUCH…again! 10:15am EST Update: Dow -120; Transports -38; SPX -12; Composite -21; NDQ 100 -14; Russell 2000 -7? Dow Utilities +4.

Some random thoughts:

…anyone remember that anti-Hitler song of the 1940’s? “we pfffft, we pffft, we pffft in the Fuhrer’s face.” Must have made him as angry as North Korea’s Kim Jong-un over Sony’s new satire ‘The Interview’ which openly mocks the ‘leader’.

Once again the ‘brilliant’ Sen. Cruz is threatening to shut down the government. The GOP is so focused on destroying any legacy Obama may have that they have no qualms about hurting the people or the country. They want to defund immigration just to stop Obama from implementing his plan. As for the ACA, it continues to be a ‘red flag’ waved in the face of an angry bull…but no matter what Congress does to stop it, Obama has the veto. How childish…and transparently political! Hopefully, the majority of Republicans will stop this but will Cruz do another of his ‘one-senator Cruzades’? Imagine…Boehner is hoping he gets enough Dems supporting the budget bill to pass it and avert a shutdown. Merry Christmas, America.

Have a great day!

TB

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