1/6/15…hope you didn’t blow 2015 yesterday!

Quote of the Day from the Friars Club Encyclopedia of Jokes: “He’s never been very successful. When opportunity knocks, he complains about the noise.” – anon

Bloomberg Quote of the Day: “Feel the fear and do it anyway.” – Susan Jeffers
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 equity markets mixed; Europe slightly higher ex-UK, Asia pounded – if you took the advice of the ‘eggspurts’ and bought international, you are screwed! UK -0.3% vs -1.5% vs -0.2% vs +0.3% vs -1.1%; France +0.4% vs -2.6% vs -0.3% vs +0.6% vs -1.2%; Germany +0.9% vs -2.3% vs -0.6% vs closed vs -1.2%; Japan -3%!!! vs -0.2% vs closed 2 days vs -1.6%! Hang Seng -1%! vs -0.6% vs +1.1%! vs +0.4% vs -1.1% vs +1.8%; Korea -1.7%!!! vs.-0.6% vs +0.6% vs closed vs -0.6% vs -1%; India -3%!!! vs -0.2% vs +1.4%!!! vs +0.4% vs flat. U.S. equity futures disoriented with Dow and Nasdaq up, especially the latter while S&P is slightly weaker? ‘Splain it to me, Lucy? DOW +17 (range 83); SPX -37!!! (37); NDQ +3 (12) – WTF???
Global Money Markets: Libor: 0.256% 3 mos.; 0.365% 6 mos., still not that far off their recent record lows! The Fed Funds rate has averaged 0.09% and is now 0.12-0.14% – 0.14% remains the 9-month high. T-Bills: +0.01%, one-month; 0.02%, 3 mos; 0.20% – 0.25% is recent high!
Bonds: Holy Cow! U.S. Treasuries are going to the moon, Alice…the moon! More 121-month low yields overnight! 10’s 1.96%!!! +5/8; 30’s 2.53%!!! +1-9/16!; Long TIP: 0.65%!!! +1-1/2! Takes out the ‘blip’ on 10/15!
European Bonds also STRONG – to new 12-month lows, PIIGS rebounding from weakness Monday, ex-GREECE (Benchmark is 10yr): Germany 0.44%!!! -7!; UK 1.58%!!! -8!; France 0.72%!!! -8!; Italy 1.78% -5; Spain 1.56% -5; Portugal 2.50% +1; Greece 9.43 +7; look at the last 15 days range: 7.03% to 9.32!!! 10/16’s close was 8.54%! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.28%!!! -4.
Dollar: slightly better and continuing to gain against the Euro: $1.1899 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: Gold continues to rally ($1210.50 +$6.50), while Crude hit another low and is not far off it overnight ($49.05 -.99, low $48.47, and yet another handle, making it 59 since the highs!!!, Silver inching up, now $16.27.

Monday’s Market Summary:

The last…indeed the VERY last thing you want to see on a sell-off day is higher and well above average volume, yet that is what we got. All major indices broke through BOTH their 40 and 50 day moving averages except the Russell 2000 which closed slightly above the 40 day, while Dow Utilities continue to hold tight. A/D’s and Breadth were pathetically negative; New 52-week Highs were stable while New Lows nearly tripled to a solid 143! The big concern however is the S&P VIX which hit 21.29 intra-day before settling at 20.07, +12.8%…since 12/24 it is up 37%!
Worst performer was Dow Transports -2.7%, Dow -1.9%; SPX -1.8%; the rest ranged from -1.5% (Russell 2000) to -1.2% (Dow Utilities). NYSE Financials dove 2.1%: NYSE Brokers -2%; KBW Banks -2.9%!!! Nasdaq Banks -2.3% – didn’t TB tell you this was coming? Look at the individual stocks: BAC -2.7%; JPM -3.1%; C -3.2%; GS -3.1%; WFC -2.8%…even USB -2.4%. Kablooie!

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 to new 12 month lows, while Crude continued its plunge hitting $49.68 before closing just below $50. Gold took off again continuing to produce ranges of $13-22 and close above $1200 for only the first time since 12/3! Dollar remains strong while the Euro continues to sink, now $1.19.

Total NYSE Volume surged by 1B shares –finally some volume…the bad news of course is they were selling it all the way into the close. 3.77B shares vs 2.7B 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), surged to a solid 845M shares, highest since 12/19, vs 646M vs 670M vs 539M vs 552M vs 446M vs 349M (the 12/24/14 low for the year) Dec. options expiry was 2.49B – 3-year high!!!. For comparison purposes, for the prior 12 months it remains at a historically weak 732M 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.!!!…This first 800M share day in Jan.

A/D’s were very negative: NYSE: -3.3x! vs +1.2x vs -2.2x vs -1.4x vs +1.4x; Nasdaq -2.4x vs -1.3x vs -1.3x vs -1.6x vs +1.1x; Breadth was much worse: NYSE -7.3x!!! vs 1:1 vs -3x! vs -1.6x vs +1.5x; Nasdaq -4x!!! vs -1.32x vs -2x vs -1.7x vs 1:1. New 52 Week Highs were steady at 144 vs 148 vs 321 vs 257 vs 414 – their range for the last 12 mos. is 39-612!!! New Lows nearly tripled to 143 vs 52 vs 88 vs 95 vs 90 (12/16’s high was 712!!!) The 2014 range is 24-1043!!! S&P VIX exploded to the upside with a range of 19.69-21.29 before settling at 20.07 +2.28 or 12.8%. Since 12/24 it has risen 37% but the bulls persist…why???? Making another run at 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 14.22 slowly and steadily climbing, with a low of 10.28!…high close was 26.25 on 10/15/14!

U.S. bond market closed STRONG for a SIXTH straight session and took out the 12-month low yields from 12/16…look: 10’s 2.04!!! +11/16; 30’s 2.61%!!! +1-3/4 and long TIP 0.71%!!! +1-5/16…still going like the Energizer bunny!
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 closed slightly weaker but from a STRONG close Friday, 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 in a range of $1207.50 to $1177.80, creating a positive key reversal…which haven’t serve us well…as it continues to see-saw driving players crazy as it alternates between up and down but finally closed above $1200 at $1204.00 +$+17.80. 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 had a range between $13 and $21 every day, each in the opposite direction of the prior session! 12/3 was the last time it closed at or above $1200 since 12/15 – the prior ‘positive key reversal’ – can it hold this time? 12/22’s low was $1172.20, lowest since 12/1! 12/30 was first print above $1200 since 12/22 and this is only the second 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! 42 of the last 43 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 SUP again at the 40 day $1192, and the 50 day $1193, with major res at the 200 day $1258. 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! Today however, it is back at $16.20.

Crude struck its FIFTH straight new low with a $49.68 print, still lowest since 4/30/09!!!, closing very weak at $50.04 -$2.65. As it has been following a 7-day high of $58.91 Consider: 10/25’s high was $84.83. There have now been 58!!! handles since peaking at $107.73 on June 13th, highest since 9/19/13, and if off 54% 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 ($65.32!!!), then the 50 day ($68.33!), and lastly the 200 day ($91.01) – all continuing to plunge! It cut through $50 like buttah and all bets on a rally are off the table…how low can it go? The recent range is now $49.68-$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: traderbillonwine.com

Have a great day! If you lost money on the first two days of 2015, don’t blame TB…and it looks like there is more to come…the correction TB has waited for…hopefully to put value back in equities! -3 in Minneapolis as we speak!

TB

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