1/5/15…oil be damned! CORRECTING o/n markets

Mea Culpa…due to the new format TB forgot to update the overnight markets section…my humblest apologies. TB

Quote of the Day from the Friars Club Encyclopedia of Jokes: “If at first you don’t succeed, try, try again. Then quit. No use being a damned fool about it.” – W.C. Fields

Bloomberg Quote of the Day: “There is no such thing as good painting about nothing.” – Mark Rothko…there are good house painters, and Seinfeld was ‘about nothing.” TB
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

This week’s economic calendar is packed with important indicators. The highlight of the week will be the December ISM Non-Manufacturing Survey (Tuesday), FOMC December 16th -17th Meeting Minutes (Wednesday) and December Employment Situation report (Friday). We will also get December Motor Vehicle Sales (Monday), November Factory Orders (Tuesday), December ADP Employment, November International Trade (Wednesday), November Consumer Credit (Thursday) and November Wholesale Trade (Friday). Courtesy of Economic Data Service

Overnight Global Markets:

Global stock markets are WEAK, especially Europe: UK -1.5% vs -0.2% vs +0.3% vs -1.1% vs -0.2; France -2.6% vs -0.3% vs +0.6% vs -1.2% vs -0.7%; Germany-2.3% vs  -0.6% vs closed vs -1.2% vs -0.8%; Japan -0.2% vs closed 2 days vs -1.6%! vs -0.5%; Hang Seng -0.6% vs +1.1%! vs +0.4% vs -1.1% vs +1.8%; Korea -0.6% vs +0.6% vs closed vs -0.6% vs -1%; India -0.2% vs  +1.4%!!! vs +0.4% vs flat vs +0.6%. U.S. equity futures also weak!!! DOW -151 (range 184!!!); SPX -21.50 (21); NDQ -29.25 (45) – OUCH! Markets as of 10:45am EST:  Dow -236!!!; Transports -142!!!; Utilities -6; S&P 500 -21; Nasdaq Composite -51!; NDQ 100 -51!; Russell 2000 -6.50 – just goes to prove that Friday’s highs didn’t even qualify as a dead cat bounce. Dow traded through the 40 day and is at the 50 day  m/a. Could be the beginning of a true correction…finally!

Global Money Markets: Libor: 0.256% 3 mos.; 0.365% 6 mos. Steady and still not that far off their recent record lows! The Fed Funds rate has averaged 0.09% and is now 0.13-0.14% – 0.14% remains the 9-month high. T-Bills: +0.01%, one-month; 0.01%, 3 mos; 0.22% – 0.25% is recent high!

Bonds: U.S. Treasuries remain STRONG: 10’sEuropean bond markets weak (but closed STRONG), led by GREECE and the rest of the PIIGS (Benchmark is 10yr): Germany 0.50%! +1; UK 1.71% -1; France 0.79%! +1; Italy 1.78%! +4; Spain 1.54%! +6!; Portugal 2.49%! +10; Greece 9.29 +30!!!; look at the last 14 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: 0.32% –.

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 $16.02; Crude $50.55 -$2.14 – traded down to $50.55, a huge new low! This makes FIFTY-FOUR handles since 10/25/14!!!

Friday’s Market Summary:

Total NYSE Volume was slightly higher at a still-weak 2.7B shares, and shares traded on the NYSE floor declined modestly to 646M shares or about 85M below average. A/D’s and Breadth were even to slightly positive on the NYSE but slightly negative on Nasdaq! New 52 week highs were halved to a weak 148 while new lows dropped to 58 – it appears the players are already setting up for options expiration on the 16th! The VIX which closed Friday at an extremely high 19.20, came in but remains high and bearish at 17.79! Caution! Little to report on the indices: Dow Utilities were once again the best performer at +0.6% while the biggest losers were Dow Transports and the Russell 2000, both down 0.5%. The rest barely (bearly?) budged at -0.2% to +0.1%.

Bonds rallied sharply – not good for stocks – closing near their 12-month highs (price), while both Gold and Crude plunged – gold continuing to see-saw while the latter hit yet another new low of $52.03 – yesterday, TB paid $1.88 for gas!
Total NYSE Volume barely higher but remains weak at 2.7V shares vs 2.55B vs 2.42B vs 1.7B vs 1.4B. 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), slipped to 646M shares vs 670M vs 539M vs 552M vs 446M vs 349M (the new 2014 low) Dec. options expiry was 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: 828B shares and declining – including FIVE 1B+ share sessions), and since 12/1 850M shares down from 961M on 12/23 shares!!! The lowest was 12/24’s 349M 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 all that is now history.

A/D’s for NYSE were slightly positive on NYSE but slightly negative on Nasdaq: NYSE: +1.2x vs -2.2x vs -1.4x vs +1.4x vs +2x; Nasdaq -1.3x vs -1.3x vs -1.6x vs +1.1x vs +1.9x; Breadth was similar: NYSE 1:1 vs -3x! vs -1.6x vs +1.5x vs +1.9x; Nasdaq -1.32x vs -2x vs -1.7x vs 1:1 vs +2.3x. New 52 Week Highs were halved to 148 vs 321 vs 257 vs 414 vs 381 – their range for the year is 39-612!!! New Lows sharply lower too at 52 vs 88 vs 95 vs 90 vs 57 (12/16’s high was 712!!!) The 2014 range is 24-1043!!! S&P VIX traded lower but remains extremely bearish AT 17.79 -1.41. Still very close to 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 14.19 slowly and steadily climbing, with a low of 10.28!…high close of 26.25 on 10/15/14!

U.S. bond market closed STRONG for a 5th day and very close to 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 2.11% +1/2; 30’s 2.69% +1-5/16!, while the long TIP finally came to life at 0.75%! +2-3/16!
Libor: 0.256% 3 mos.; 0.365% 6 mos. Steady and still not that far off their recent record lows! The Fed Funds rate has averaged 0.09% and is now 0.13-0.14% – 0.14% remains the 9-month high. T-Bills: +0.01%, one-month; 0.01%, 3 mos; 0.22% – 0.25% is recent high!
European bond markets weak (but closed STRONG), led by GREECE and the rest of the PIIGS (Benchmark is 10yr): Germany 0.50%! +1; UK 1.71% -1; France 0.79%! +1; Italy 1.78%! +4; Spain 1.54%! +6!; Portugal 2.49%! +10; Greece 9.29 +30!!!; look at the last 14 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: 0.32% –.

Gold traded down to $1167.30 as it continues to see-saw driving players crazy as it alternates between up and down and can’t hold $1,200. It remains weak with a slight gain on the close, $1186.20 +$2.10, 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!. 41 of the last 42 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 $1194, with major res at the 200 day $1259. 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! Overnight however, it is back at $16.02.

Crude struck its 4th straight new low with a $52.03 print, still lowest since 4/30/09!!! It closed weak at $52.69 -$1.43, 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 ($66.03!!!), then the 50 day ($68.94!), and lastly the 200 day ($91.26) – all continuing to plunge! Might have a nice bounce soon but beware of the 40/50 day res! Still likely to test $50 over the next couple of weeks! The recent range is now $50.55-$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%!!!).

Note: TB’s new wine blog is now posted at Trader Bill on Wine.

Have a great week! Stay out of trouble…there’s plenty of it around. Oh, and -7 in MN. Brrr!

TB

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