1/8/15…was it real or ‘Memorex’?

Quote of the Day from the Friars Club Encyclopedia of Jokes: “Dyslectics of the world, untie! – anon, or is it ‘nona’?

Bloomberg Quote of the Day: “Life shrinks or expands in proportion to one’s courage.” – Anais Nin…lover of Henry Miller…who did a lot of shrinking and expanding. TB

(CORRECTION: Previously TB reported that stocks (SPX) would have eight straight years IF they go higher in 2015, a record. They have had SIX straight which is the record, so one more would make it SEVEN. Note also that of the six, 2010 & 2011 were only minor gains!

Previous record was 1994-1999 – five which ended with a bang in 2000!)

Overnight Global Markets:

European equity markets in at least a ‘dead cat bounce; Asia not so much (note Nikkei over past 7 sessions – conflicted!): UK +1.2% vs -0.3% vs -1.5% vs -0.2% vs +0.3% vs -1.1%; France +1.2% vs +0.4% vs -2.6% vs -0.3% vs +0.6% vs -1.2%; Germany +1.2% vs +0.9% vs -2.3% vs  -0.6% vs closed vs -1.2%; Japan FLAT vs -3%!!! vs -0.2% vs closed 2 days vs -1.6%! Hang Seng +0.8% vs -1%! vs -0.6% vs +1.1%! vs +0.4% vs -1.1% vs +1.8%; Korea +0.1% vs -1.7%!!! vs.-0.6% vs +0.6% vs closed vs -0.6% vs -1%; India -0.3% vs -3%!!! vs -0.2% vs +1.4%!!! vs +0.4%. U.S. equity futures attempting a recovery – near session highs…will it hold? DOW +144!!! (range 126 plus 21 gap!); SPX +17 vs -37 (18 +1); NDQ +28 (30 +5). U.S. markets opening in line. Watch for major resistance at the 40/50 m/a’s!

Global Money Markets: Libor: 0.251% 3 mos.; 0.360% 6 mos., declining again! With’deflation’ in the air in Europe is that a surprise? …yet we are ‘afraid’ the Fed will tighten??? Think what that would do to Europe!!! (Note that the three dissenters at yesterday’s FOMC meeting were opposed on ‘philosophical’ not fundamental grounds.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; 0.03%, 3 mos; 0.25% – back at the recent high!

Bonds: After rebounding from session lows yesterday (which were still just a minor correction), bonds are weaker overnight – but still well above yesterday’s lows: 10’s 2.00% -5/16; 30’s 2.56% -3/4; Long TIP: 0.71% -7/8. For the life of TB, he cannot figure out the attraction to inflation protection (over the past 6+ years the return is just 3.4%!

European Bonds: slightly higher yields – ex-PIIGS with GREECE recovering about 40% of yesterday’s drubbing – note all others hit new 12-month lows Monday. (Benchmark is 10yr): Germany 0.49% +1; UK 1.63% +2; France 0.79% +1; Italy 1.89% +1; Spain 1.69% +1; Portugal 2.66% -4; Greece 10.19% -10 from 10.29% vs 9.43; look at the last 17 days range: 7.03% to 10.29%!!! 10/16’s close was 8.54%! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.28% -1.

Dollar: slightly continues to steadily climb against the Euro: $1.1754 overnight low…lowest since 6/2010!!!; Sterling $1.5044, lowest since 8/13; Yen slightly weaker for a 3rd day at 119.86, failed rally on 1/7 to 118.06 – it has been weak since 8/14: 105!

Commodities: Gold slightly weaker but session low is still $1204, leaving $1200 intact – at least for now. Ditto Silver, which remains in the mid-$16’s for a third day, currently $16.39; Crude a tad higher but first and minor resistance is $49, with yesterday’s cycle low as $46.83, which is minor support with next at $40! Major resistance at $50, the $53-59. Yesterday’s low yet another low and new handle at $46.83! Currently $48.28 +.36, don’t be fooled…this is merely a rest stop – caution!

Wednesday’s Market Summary:

Stocks jumped right out of the chute and within ½ hour appeared to have hit their peak and gave up more than half their overnight gains over the next hour and a half; then the went up to what became the session high over the next hour and the went sideways, more or less into the close. To what to we owe that secondary surge? Why to the Fed of course! It certainly wasn’t the rest of the data. Hah! TB fooled you! We’ll see about that as one of TB’s triggers occurred again as it has on all the recent rallies. All the indices were u-p from 1.2-1.3% – and you know how TB hates uniformity…it’s like coincidence! That is except Dow Transports which were up just 0.5%…hmmm, and get this: Dow Utilities rose 1%! Does that seem logical. (Not when bonds gave back less than yesterday’s gains initially and then regained most of that by the close! Think, people! You may be wrong but don’t just follow the herd because you know what you get when you do that, right?

 

Total NYSE Volume fell back to a slightly above average 3.79B shares vs 4.44B vs 3.77B vs 2.7B vs 2.55B vs 2.42B – 12/24’s 12-month low was 1.4B shares. Shares traded on the NYSE floor slid to 778M shares from 942M, highest since 12/19. vs 845M vs 646M vs 670M vs 539M – 12/24’s 349M was the 12-month low…average is 733M shares! So far this week the average is 855M but mostly to the downside.

 

A/D’s and Breadth were solid but nothing special given the negatives of late, while new 52 week highs rose only slightly and new lows gave up but remain above average!: NYSE: +3.2x vs -2x vs -3.3x! vs +1.2x vs -2.2x vs -1.4x; Nasdaq +2.1x vs -3.2x! vs -2.4x vs -1.3x vs -1.3x vs -1.6x; Breadth was similar: NYSE +2.8x vs -2.5x vs -7.3x!!! vs 1:1 vs -3x! vs -1.6x; Nasdaq +2.5x vs -3.3x! vs -4x!!! vs -1.3x vs -2x vs -1.7x. New 52 Week Highs rose again to 283 vs 206 vs 144 vs 148 vs 321 – their range for the last 12 mos. is 39-612!!! New Lows declined but remain elevated at 158 vs 223 vs 143 vs 52 vs 88 vs 95 (12/16’s high was 712!!!) The 2014 range is 24-1043!!! S&P VIX consolidated but only after trading in a range of 19.04-20.72, a day after hitting 22.90, and closed at 19.31 -1.81, or -1.8%. Could still make 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 14.24 slowly and steadily climbing, with a low of 10.28!…high close was 26.25 on 10/15/14!

U.S. Bond market consolidated after SEVEN straight rally days that took out the 12-month low yields…look: 10’s 1.97% vs 1.94!!! -1/4; 30’s 2.53% vs 2.50%!!! -5/8 and long TIP 0.68% vs 0.66%!!! -9/16…no worries!

Libor: 0.254% 3 mos.; 0.362% 6 mos., a tad better – still not that far off their recent record lows! The Fed Funds rate has averaged 0.09% and is now 0.12-0.13% – 0.14% remains the 9-month high. T-Bills: +0.01%, one-month; 0.03%, 3 mos; 0.25% – back at the recent high!

European Bonds posted slightly higher yields – led by GREECE – note all others hit new 12-month lows yesterday (Benchmark is 10yr): Germany 0.46% +2; UK 1.61% +5; France 0.75% +3; Italy 1.88% +10!; Spain 1.66% +3; Portugal 2.64% +8!; Greece 10.26%!!! vs 9.43 +78!!!; look at the last 16 days range: 7.03% to 10.26%!!! 10/16’s close was 8.54%! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.28%! –.

Gold had an inside day and closed down at $1210.70 -$8.70 a day after printing $1223.70 following a positive key reversal…and this time the close was highest since 10/29 and also the first time since then without a print below $1200! It is no longer weak, making $1200 major psychological SUPPORT again, as well as the 40/50 day! $1238 is next resistance. Until today, every session since 12/23 had a range between $13 and $21, and remains with a bias to the upside! 11/7’s low was $1130.40, the current 12-month low! 42 of the last 45 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 now at the 40 day $1195, and the 50 day $1193, with major res at the 200 day $1257 – all stable to starting to rise. 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 held above $16 with a session high of $16.58 – creating a double top and highest since 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 SEVENTH straight new low with a $46.83 print, still lowest since 4/30/09, before goming back to close at a still weak at $48.63 -$2.11. 9 days ago the high was $58.91 Consider: 10/25’s high was $84.83. There have now been 61!!! 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. Recent rally high and close are $110.70 and $110.53 respectively. RES at the 40 day ($63.82!!!), then the 50 day ($67.01!!!), and lastly the 200 day ($90.50) – all starting to rise – slightly. The recent range is now $46.83-$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

…a lot more fun too!

Good day and good luck!

TB

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