1/2/15…Happy New Year and a major announcement for TB’s blog…

Quote of the Day from the Friars Club Encyclopedia of Jokes: “We have 35 million laws to enforce the Ten Commandments.” – Anon…and a lot of fat lawyers and politicians!

Bloomberg Quotes of the Day: “Everybody Talks About the weather, but nobody does anything about it.” – Charles Dudley Warner…thought that was Will Rogers?

Changes: news section has been eliminated; ALL overnight markets are now at the TOP of the report, followed by the Market Summary from the prior trading day. This should make it easier to get a quick update on the market.  Hope this meets with your approval…if not, deal with it! Comments appreciated. TB

Overnight Global Markets:

Global stock markets are mixed for a 2nd day: 12/31 and1/2/15; Japan closed: UK -0.2% vs +0.3% vs -1.1% vs -0.2 vs closed; France -0.3% vs +0.6% vs -1.2% vs -0.7% vs closed; Germany -0.6% vs  closed vs –1.2% vs -0.8% vs closed; Japan closed for 2nd day vs -1.6%! vs -0.5% vs +0.1% vs +1.2%; Hang Seng +1.1%! vs +0.4% vs -1.1% vs +1.8% vs +0.1%; Korea +0.6% vs closed vs -0.6% vs -1% vs +0.1%; India +1.4%!!! vs +0.4% vs flat vs +0.6% vs +0.1% vs -1.1%. U.S. equity futures opening higher after being slammed New Years Eve: DOW +67 (range 76); SPX +7.20 (12); NDQ +16 (14) – relax all gapped up from prior days close but remain well below Wednesday’s highs and nearer the lows…not even close to a dead cat bounce.

Global Money Markets: Libor: 0.256% 3 mos.; 0.363% +7! 6 mos. Steady and not that far off their recent record lows! The Fed Funds rate has averaged 0.09% but jumped overnight to  0.13-0.14% – 0.14% is a 9-month high. T-Bills: +0.02%, one-month; 0.03%, 3 mos; 0.22% – 0.25% is recent high!

Bonds: European bonds mixed with majors higher in yield but PIIGS lower (Benchmark is the 10 yr): Germany 0.54% –; U.K. 1.78% +3; France 0.83% +1; Italy 1.79% -7.5!; Spain 1.53% -6!; Portugal 2.45% -18!!!; Greece 8.98% -10!!!; Japan 0.31% –. U.S. bond market opening weaker: 10’s 2.19% -3/16; 30’s 2.77% -5/32; Long TIP 0.84% -5/16.

Dollar: continues to gain against the Euro: $1.2035 is overnight low…lowest since 6/10/2010!!!; Sterling $1.5413 o/n, lowest since 8/7/13!; Yen slightly better at 120.58, but close to the 12/8/14 low. A good time to take a trip, no?

Commodities: Weaker: Gold $1177.00 -$7.10, Silver $15.72 +.12; Crude $52.39 -.88 – traded down to $52.03, a new low!

 

12/31/14’s Market Summary:

It was not a good day to end the year. All indices were down with the goat being Dow Utilities once again -1.8% – that’s -3.9% in two sessions, but have no fear still far and away 2014’s winner! Next came SPX -1% and both Nasdaq’s -1% and -0.9% respectively, then the Dow 30 -0.9%, Russell 2000 -0.7% and Dow Transports -0.6%. NYSE Financials closed down 1%: NYSE Brokers -0.6%; KBW Banks -1.1%; Nasdaq Banks -0.9%. Note that most active, BofA hit a new 12-month high intraday at $18.21 THEN closed at $17.86 -.24, a 1.3% decline. JPM, the bank most everyone loves to hate, was 5th most active and lost 0.9% – also with a new 12-month high intraday…you had better believe this is telling us something. Could it be that the best performers of yore, may become the goats of the new year? Total NYSE Volume was little changed at 2.55B shares while shares traded on the NYSE floor rose to 670M shares…well below average and at the bell stood at just 466M shares! – that additional 200M shares represents mutual funds that had to rebalance to the index! A/D’s and Breadth both turned negative – especially Breadth! New 52 week highs rose to 321 from 257 while new lows remained stable for a third day at 88 after bottoming at 54. Now for the really bad news. The S&P VIX which bottomed at 14.37 on 12/24 – the low volume day of the year, had just two sessions encased in ‘14’ handles and has now risen for 4 days had a range of 15.86-19.91, which is extremely bearish and closed at 19.20 -3.26!!! A 20.6% increase and worse for the four days has increased by 33.6%!!! TB now believes the new year will start not with a ‘bang’ but with a selloff…perhaps bottoming just before options expiry on January 17th! TB is just sayin’ – as he did last year, don’t blow your entire years performance in the first month, AND watch out for rotations from the best performers to the worst. Possible!

Total NYSE Volume was steady but remains weak at 2.55B shares vs 2.42B vs 1.7B vs 1.4B (now lowest in 22 sessions – typical for December after options expiry), vs 3.34B vs 5.9B. Average volume since 9/30 which had a 600M cushion over the 12 month average (3.6B shares or so),continues to slide Shares traded on the NYSE floor (aka REAL), rose to 670M shares (at the bell just 466M shares), or 60M below the 12-month average vs 539M shares vs 552M vs 446M vs 349M (a new 2014 low and just ahead of 12/26/13’s 253M share session) vs 613M vs 791M vs 2.49B – 3-year high!!!. For comparison purposes, for the prior 12 months it remains at a historically weak 730M shares, steady only because last yearend’s lows have fallen off. Since 10/1: 830B shares and declining –  including FIVE 1B+ share sessions), and since 12/1 859M shares down from 961M on 12/23 shares!!! The lowest was 12/24’s 343M 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.!!!…but that is now history.

A/D’s for NYSE were negative for a 2nd day – a bad way to end the year: NYSE: -2.2x vs -1.4x vs +1.4x vs +2x vs 1:1 vs +1.8x vs +1.4x vs +1.8x vs +4.1x! vs +6.7x!!! Nasdaq -1.3x vs -1.6x vs +1.1x vs +1.9x vs +1.4x vs +1.0x vs +1.6x vs +1.1x vs +3.2x vs 4x!!! Breadth was worse: NYSE -3x! vs -1.6x vs +1.5x vs +1.9x vs -1.2x vs +1.1x vs +2.3x vs +8.1x!!! vs +14.3x (-15.5x on 12/16!!!); Nasdaq -2x vs -1.7x vs 1:1 vs +2.3x vs 1.5x vs -1.3x vs +2.2x vs +1.4x vs +4.6x! vs -9.5x!!!. New 52 Week Highs climbed back to 321 vs 257 vs 414 vs 381 vs 325 vs 488! vs 352 – their range for the year is 39-612!!! New Lows steady at 88 vs 95 vs 90 vs a weak 57 vs 59 vs 92 vs 79 vs 82 (12/16’s high was 712!!!) The 2014 range is 24-1043!!! S&P VIX traded up for a 4th session to 19.91!!! – highest high and close – (19.20 +3.28, or 20.6%) since 12/17 and negating the brief rally. Over the past four sessions it is up 33.6%!!! Now closing in on 12/16’s high of 25.20, which was highest since 10/17! 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 14.18 slowly and steadily climbing, with a low of 10.28!…high close of 26.25 on 10/15/14!

U.S. bond market closed slightly positive for a 4th day and still seems wanting to test those recent 12 month low yields from 12/16 (10’s 2.06%!; 30’s 2.69%! and long TIP 0.76%!!!), 10’s closed at 2.17% +1/8; 30’s 2.75% +1/16, while the long TIP continues to languish at 0.84%

Libor: 0.255% 3 mos.; 0.357% 6 mos. Steady and still not that far off their recent record lows! The Fed Funds rate has averaged 0.09% but closed 0.00-0.05% – from 0.14% the 9-month high. T-Bills closed: +0.01%, one-month; 0.04%, 3 mos; 0.21% – 0.25% is recent high!

European bond markets firm; GREECE still high but sharply lower – most likely this is due to short covering to get square (Benchmark is 10yr): Germany 0.54% –; UK 1.75%  -4; France 0.78%! -4; Italy 1.82%! -6!; Spain 1.54%! -6!; Portugal 2.62%! –2; Greece 9.09 -25!; look at the last 13 days range: 7.03% to 9.32!!! Not for the faint of heart! 10/16’s close was 8.54%! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.31% –.

Gold continued to see-saw driving players crazy as it alternates between up and down and can’t hold $1,200. It remains weak with the close, $1184.10 -$16.00, making $1200 major psychological resistance again, as well as the 40/50 day! Since 12/23 it has moved between $13 and $21 every day, each in the opposite direction of the prior session! 12/3 was the first close at or above $1200 since 12/15 and in a range of $1180.50-$1210.90 – and culminating in a ‘key reversal’ which proved to be another false positive!!! It appears this was just window dressing and position squaring for yearend. 12/22’s low was $1172.20, lowest since 12/1! 12/30 was first print above $1200 since 12/22 and first close above since 12/15! 12/9’s intraday high was $1238.00 – highest since 10/22. 11/7’s low was $1130.40, the current 12-month low!. 40 of the last 41 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 again at the 40 day $1190, and the 50 day $1195, with major res at the 200 day $1260. The 12-month high is $1392.60 on 3/17, highest high since 9/4/13. 11/7’s low was $1130.40! Silver too broke below $16 for the first time in five sessions following a high of $16.67 on 12/16, that following its $17.27 high on 12/9. $14.12 is the recent low, not seen in more than five years!

Crude struck its 3rd straight new low yet with a $52.44 print, still lowest since 4/30/09!!! It closed weak at $53.27 -.85, negating 12/30’s positive key reversal and remains VERY weak, following a 6-day high of $58.91 Consider: 10/25’s high was $84.83. There have now been 52!!! handles since peaking at $107.73 on June 13th, highest since 9/19/13,and if off 50% since then. The record high of $147.27 was on 9/30/08, the low since on 4/30/09 is $51.94: $84.15 is the average! Recent rally high and close are $110.70 and $110.53 respectively. RES at the 40 day ($66.65!!!), then the 50 day ($69.55!), and lastly the 200 day ($91.50) – all falling like a stone! Might have a nice bounce but beware of the 40/50 day res! Still likely to test $50 over the next couple of weeks! The recent range is now $52.90-$112.24 since 3/1/12. 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%!!!).

Thaaat’s All, Folks!

 

Some random thoughts:

…announcing a change of format:

Besides making it easier to get a quick read on the markets by placing overnight markets at the top, this will be the last blog with a commentary. From now on it will strictly relate to markets. Why? Since starting the project 10 years and more than 1,600 blogs ago, TB has decided it is time for a change…a radical change. While he will continue to keep this blog updated, his efforts will be focused on a new project on his other favorite topic: wine! Will give you the blog as soon as website construction is complete, and hope you will look it up and provide feedback if it is subject that interests you too. The goal is a book on wine: one that demystifies it and makes it fun again – like Sideways.

Thank you for reading and wishing you all a happy and prosperous 2015.

TB

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