12/24/14…thoughts on the eve before Christmas…

Quote of the Day from the Friars Club Encyclopedia of Jokes: “Ninety-eight percent of the adults in this country are decent, hardworking Americans. It’s the other lousy two percent that get all the publicity. But then–we elected them.” – Lilly Tomlin

Bloomberg Quotes of the Day: “If you smile when no one else is around, you really mean it.” – Mickey Rooney, and…

“There are two ways of spreading light: to be the candle or the mirror that reflects it.”    – Edith Wharton


Bloomberg Top Stories:

*Jobless Claims in U.S. Decrease to Lowest Level in Seven Weeks – Christmas sales!

*Whitney’s Hedge Fund Sued by Billionaire Platt’s Bluecrest for $46 Million – ouch!

*St. Louis Police Kill Teen, Setting off New Round of Protests Near Ferguson – egad!

*Islamic State Holds Jordanian Pilot in Syria After shooting Down Warplane – bad!

*French Joblessness Rises to Record as Hollande Struggles to Revive Economy-up 0.8%

*Ruble Ends 3-Day Rally as S&P Warning Highlights Russia Sanctions Risk – rubble?

*Greeks Used to Years of Chaos Dismiss Samara’s Warnings of More to Come

*BP Said to Be in Talks for Share of Rosneft’s East Siberian Oil Producer – !

*Hamas Commandeer in Gaza Killed in Clash After Snipers Target Israeli Troops

*Gold Assets in World’s Biggest Bullion ETF Fall Most since ’13 – more to come!

*China One-Ups Warren Buffett, Bill Gates With Rail Rally

*Professional Fraudbusters Target Fake Shoes, Expired Food in China – Chu’s shoes?

*Economy Is Smoking, Market at a Record, But Are You Merry? – on stocks? Hell no!


Tuesday’s Market Summary:

An interesting session: once again stocks took off out of the chute then pressed higher and finally closed higher, but the Dow closed up 65 (0.4%) with a new record high of 18069 (+110), then slithered into the close. Ditto SPX +3.63 (+0.7%), but with a new record of 2086.73 (+8.19). Updating from yesterday: Since 12/5 – also a prior high immediately followed by a sharp drop and then a recovery, there have now been THREE attempts to break through meaningfully and all failed. Worse, since the 11/21 truly significant record high all the highs have been minimally higher: combined, just 07% – on both the Dow (+0.9%) and S&P (+0.7%). To TB THAT is not a sign of strength! Back to yesterday, not only were both Nasdaq’s off 0.3%, while the Russell 2000 small cap gained just 0.1%. Compare to Dow Transports +0.8% and the lowly Dow Utilities (to stock jocks), +0.4%. For the record Dow Utilities remain in 1st place ytd, +23.6%, with the only contender Transports, +23.6% (total returns w/divvies reinvested: Utilities +31.2%!!!; Transports +25.8% – nothing else is even close!). Now the stinker: Total NYSE Volume was a WEAK 3.0B shares! Real floor trades just 613M shares – is there such a thing as ‘winter doldrums’? TB doesn’t know when but we should have a major correction soon…wanna place a bet?). As for A/D’s only moderately positive for a 2nd day following two strong days, while Nasdaq breadth was negative! New 52 week highs bounced back to a strong 488, while new lows inched up to 91. The S&P VIX did decline again – fifth straight since the 12/16 extremely bearish high of 24.43 to 14.80 yesterday (low 14.32), but even that is still in bear territory.

Total NYSE Volume plunged to a very weak 3.0B shares, lowest in 18 sessions (typical for December after options expiry), vs 3.34B vs 5.9B vs 4.9B vs 4.93B vs 4.9B vs 4.38B. Average volume since 9/30 dip for a 2nd day, a first since 11/27’s low of 2.5B shares leaving a major dent in that nice 600M cushion over the 12 month average (3.6B shares or so), expect more of the same Shares traded on the NYSE floor (aka REAL), also plunged to a well below average 613M shares (low since 11/28!) vs 791M vs 2.49B – 3-year high!!! vs 976B  vs 1.05B. For comparison purposes, for the prior 12 months it is a historically weak 728M shares, but since 10/1: 857B shares –  including FIVE 1B+ share sessions), and since 12/1 961M shares!!! The lowest was 11/1’s 619M share session. April 30 – September 30 we had just SEVEN 800M shares…since 10/1: 22 – but just one in Nov, and NINE 900M+ days! FOUR 800M days, FOUR 900M and FIVE 1B share days in Dec.!!!

A/D’s were only moderately positive for a 3rd day following two strong days: NYSE: +1.8x vs +1.4x vs +1.8x vs +4.1x! vs +6.7x!!! vs -1.4x vs -3.1x! vs -3.8x!!!; Nasdaq +1.0x vs +1.6x vs +1.1x vs +3.2x vs 4x!!! vs -1.2x vs -2.5x vs -2.4x. Breadth was MIXED!!!better on Nasdaq only: NYSE +1.1x!?! vs +2.3x vs +8.1x!!! vs +14.3x!!! vs -1.2x vs -4.1x! vs -4.7x!!! vs +1.2x vs -15.5x!!! (Unbelievable!); Nasdaq -1.3x! vs +2.2x vs +1.4x vs +4.6x! vs 9.5x!!! vs -2.1x vs -3.3x!!! vs -2.6x. New 52 Week Highs bounced back to 488! vs 352 vs 467 vs 330 vs 118 vs 56!!! vs 78 – their range for the year is 39-612!!! New Lows inched up and are again slightly higher than ‘normal’ at 92 vs 79 vs 82 vs 73 vs 223 vs 712!!! vs 640 vs 603. The 2014 range is 24-1043!!! S&P VIX had a high of 15.21 significantly lower than Friday’s 17.20, and closed at 14.80 -.45 – compare to last Tuesday’s high 25.20, which was highest since 10/17  During the prior brief ‘rally’ it only made back down to 15.94! We remain at risk of those bearish extremes that had a high of 31.06 (highest since 11/28/11!!!). The average of the past 12 months is 14.12 and slowly climbing, with a low of 10.28!…high close of 26.25 on 10/15/14!

U.S. bond market closed very weak with the stock rally slip-sliding away from those new 12 month low yields (10’s 2.06%!; 30’s 2.69%! and long TIP 0.76%!!!), 10’s closed at 2.26% -15/16; 30’s 2.85% -2-1/4!!!, and the long TIP 0.91%!!!! -2-13/16!!! Overnight slipping further: 10’s 2.28% -1/8; 30’s 2.87% -5/16; long TIP 0.93% -1/2. Talk about volatile!!!!

Libor update: 0.255% 3 mos.; 0.354% 6 mos. Both moving higher but still not that far off their recent record lows! The Fed Funds rate has averaged 0.09% and is currently 0.13-0.14%; new 9-month high. T-Bills: 0.00%! one-month; 0.01%! 3 mos; 0.24%!!! – 0.25% is recent high!

Foreign bond yields mixed and all over the lot: (Benchmark is 10yr): Germany 0.59%! –; UK 1.88% +3; France 0.82%!!! -4!!!; Italy 1.89%! -5!; Spain 1.60%! -7!; Portugal 2.69% +1; Greece 8.20% +1; look at the last 12 days range: 7.03% to 8.88%!?! Not for the faint of heart! 10/16’s close was 8.54%! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.33%! –.

Gold closed slightly lower in an inside session at $1177.90-$1.80. Monday’s low was $1172.20, lowest since 12/1! Dragged down by Crude and now below $1200 for the 7th time since 12/2 – $1200 is now MAJOR resistance! $1200? Tell it goodbye as Harry Carey would have put it. Last week’s intraday high was $1238.00 – highest since 10/22. This is the 6th straight sub-$1200 close which ended seven straight closes above. Stuck below the 40/50 day! 11/7’s low was $1130.40, the current 12-month low!). Now 35 of the last 36 sessions with prints below $1200. Last close above $1300 was on 8/15. 7/17’s session high was $1346.60, highest since March 19th!!! MAJOR RESISTANCE now at at $1191(40 day)-1202 (psych), the 40 day ($1191!), the 50 day $1201, then the 200 day $1264. The 12-month high is $1392.60 on 3/17, highest high since 9/4/13. 11/7’s low was $1130.40! Overnight $11788.20 +0.20 in a very narrow inside session. Silver failed to hold $16, following its $17.27 high last week! $14.12 is the recent low, not seen in more than five years! Now $15.81 +.04.

Crude dove to $55.08 (but still inside Monday’s range) before coming back to close strong (?) at $57.12 +$1.86 more than erasing Monday’s downdraft but remains VERY weak, following a 3-day high of $58.91, four days after plunging to $53.60, lowest since 5/6/09! Consider: 10/25’s high was $84.83. There have been 51!!! 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 5/15/09 is $56.07: $89.85 is the average! Recent rally high and close are $110.70 and $110.53 respectively. RES at the 40 day ($69.95!!!), then the 50 day ($72.34!), and lastly the 200 day ($92.60!), all STILL increasing their rate of decline! Will it test $50? The recent range is now $53.60-$112.24 since 3/1/12. Overnight, it is weak again at $55.97 -$1.15 in yet another narrow inside session. 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 Equity Markets:

European equities mixed, Asia mixed, Japan strong on reopen: UK +0.2% vs +0.3% vs +1% vs +0.4% vs +1.6%! France -0.4% vs +1.1% vs +0.7% vs  -0.7% vs +2.9%!!!; Germany +0.6% vs +0.4% vs +1.1% vs 0.8% vs -0.9%; Japan +1.2% vs closed vs +0.1% vs +2.4%!!! vs 2.3%!!!; Hang Seng +0.1% vs -0.3% vs +1.3%! vs +1.3%! vs +1.1%! Korea +0.4% vs -0.2% vs +0.7% vs +1.7%! vs -0.1%; India -1.1% vs -0.7% vs +1.2% vs  +0.9% vs +1.6%! vs -0.3% vs -2%!!! vs -0.1% vs 0.9% vs -0.8%. U.S. equity futures slightly higher: DOW +20 (39); SPX +2.60 (4!); NDQ +7 (7!?!). Nothing to see here…


Some random thoughts:

…TB’s Christmas greeting:

T’was the eve before Christmas,

The markets were dead,

Visions of fat bonuses

In traders heads.


The shorts were in place,

Set up with care,

In hopes old St. Nicolas

Would soon be there.


Either coal in a lump,

Or profits galore,

Off to the dump,

Or to the Tesla store.


The insiders were trading,

Now a safe bet,

Since the Supreme Court decreed:

No penalty for trading for them – yet.


But most of the people,

Feel oh so sad,

Why are the bankers

Treating people so bad?

There’s Jamie and Lloyd,

And Citi too,

On Dodd-Frank this Christmas,

They came off with a coup.


So onward ye Congressmen,

There’s work to be done,

The bidding of Wall Street,

Go screw everyone!

(Except Jamie and the boys)


Ho! Ho! Ho!

Merry Christmas to all!




  1. Yarnman said

    TB–Many good wishes to you on your birthday! Yarnman

    • traderbill said

      Thanks, Yarnman…had a great birthday! My calls on market I think will prove correct. Mid-January?

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