1/16/15…buying Crude?…use Bitcoins?

TB’s Wine Quote of the Day: “Give me wine to wash me clean of the weather-stains of cares.”      – Ralph Waldo Emerson…I always liked and respected that man…TB

Bloomberg Quote of the Day: “A single lie destroys a whole reputation for integrity.”

– Baltasar Gracian…so what does that tell us about elected officials? TB

Volatility Alert: Options expiry ahead…be alert for abrupt changes of direction

Overnight Global Markets:

European equity markets mixed with small changes; Asia WEAK, ex-India (note how we have transported our VOLATILITY to them): UK -0.1% (still the weakest link) vs +0.6% vs -2.8%!!! vs +0.3% vs +0.1%; France +0.3% vs +1.1% vs -1.5%! vs +1% vs +1%; Germany -0.1% vs +1.1% vs -1.4%! vs +0.9% vs +1.2%; Japan -1.4% vs +1.9% vs -1.7% vs -0.6% vs closed; Hang Seng -1% vs +1% vs -0.4% vs +0.8% vs +0.5%; Korea -1.4%! vs unched vs -0.2% vs -0.3% vs -0.2%; India +0.2%? vs +2.7%!!! vs -0.3% vs 0.6% vs +0.5%. U.S. equity futures WEAK ahead of options expiration – gapped down on open and unable to close gap – not a good sign: DOW -95! (range 113!!! Plus remaining gap 8); SPX -10.90 (17 +1); NDQ -30.70 (37 +11!)

Global Money Markets: Libor: 0.254% 3 mos.; 0.359% 6 mos. – hovering near their recent record lows! The Fed Funds rate has averaged 0.09% and is now 0.12-0.14% – which remains the 9-month high. T-Bills: 0.01%, 1 mo.; 0.02%, 3 mos; 0.07% 6 mos.; 0.15% 1-yr. back from 0.25% – the 12-month high, set on 12/22/14!

U.S. Treasury Bonds: pulling back but remain exceptionally strong this week, which has brought new 12-month low yields. Currently: 10’s 1.77% -7/16; 30’s 2.40% -3/4; Long TIP: 0.60%!!! -3/4. Note these yields are still LOWER than yesterday morning!

European Bonds: yields lower across the board, except the volatile Greece (did you or do you believe the rally made sense? Not TB! New 12-month lows for the rest!!! Germany 0.44% -3; UK 1.47%! -4; France 0.62%! -5; Italy 1.67%! -7; Spain 1.51%! -6; Portugal 2.51%!!! -9!; Greece 9.26% +40!!! vs 8.52%(low yield yesterday but backed up into close) – look at the last 23 days range: 7.03% to 10.29%!!! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.23% -1.

Dollar Index: a new high o/n, $92.576 – highest since 12/30/05! Euro: traded down to $1.1568 o/n, also a 9-year low; Sterling $1.5184, having stalled with a double top at $1.5269 the last two sessions following Jan.8’s 9-year low ($1.5035), weakest since 9/30/13: $1.4834; Yen slowly getting stronger, currently 116.48 -.29 – yesterday’s 115.86, best since 12/17/14’s 115.57 – it has been weak since Oct. ‘14: 105.23…recent best was 2/4/14 @ 100.76!!! Record low, 12/30/11: 75.35!!! Perhaps TB should now include the Ponzi…er…Bitcoin, right you libertarians? TB has a Bloomberg terminal. So, he decided to see a chart on it. He was denied access until he can prove he is an accredited investor…now does that sound even vaguely like a marketable instrument???

Commodities: Gold is slightly lower o/n at $1262.00 -$2.80, not surprising given yesterday’s $30 rally. Silver after eking out a slight new high is barely holding $17, having traded down to $16.89 earlier, now $17.02 -.08 – that’s the difference between an ‘industrial’ commodity and an ‘hedge’ commodity. Crude still struggling after yesterday’s failed attempt to breakout ($51.27 high!). Currently $47.53 +$1.28, range $45.95-$47.92. Note Tuesday’s low was $44.20, lowest since 4/21/09!!! $32.40-.70 is the 12/19/08 and 1/20/09 low is final support! It had BETTER hold!

Thursday’s Market Summary:

(Be sure to look at o/n U.S. Equity futures above…a 2nd straight ‘E’ ticket ride!!!)

Yesterday marked the FIFTH straight down day for U.S. stocks? Just three up sessions in 2015 and two of those were minor! Daily changes w/ytd in ( ): Russell 2000 -1.9% (-4.2%); Nasdaq Comp -1.5% (-3.5%); NDQ 100 -1.3% (-3.1%); SPX -0.9% (-3.2%); Dow 30 -0.6% (-2.8%); Dow Transports -0.4% (-5.3%). The ubiquitous Dow Utilities? UP 0.6% (+2.7%). Note that the other best performer last year, Transports, is the worst ytd! But here is THE WORST sector: Nasdaq Financials -0.7% (-5.1%): NYSE Brokers -2.1% (-7.7%!); KBW Banks -1.8% (-10.6%!!!); Nasdaq Banks -1.1% (-8.6%). There are only two other indices that are in the black ytd: Philly Gold/Silver +5.4% (+12.3% – but STILL -14.1% for the past 12-mos.; and Nasdaq REITs up 6% ytd!

Within the banking (and faux bank) sector, these high(low?)lights: BAC -5%, most active NYSE stock as usual, (-16.8%!); C, 2nd : -4.1% (-13.3%); JPM: -3.9% (-12.9%) – this despite Jamie’s rah-rah that all is well; GS: (bank? Not!) -1.4% (-8.4%), WFC: -1.1% (-6.5%); USB-1.1% (-7.8%); 8 bank average: -1.8% (-10.0%). How about the troubled Banco Santander (SAN)? -0.2% BUT -17.2% for dubious honors…reportedly Soros bought a bunch of it last week and got crushed…that make you feel better?

Also suffering due to the Crude collapse, TSLA: traded down to $185 on 1/14, for a loss from the 9/4/14 high, $291.42, of 35% – should use the high close of $286.04, but someone paid that price right so this is for their benefit (sic).

But hey, today is options expiry so things might get better…right?

Total NYSE Volume was slightly lower at 4.18B shares, again due to volatility, not momentum vs 4.37B vs 4.1B vs 3.45B vs 3.35B – 12/24’s 12-month low was 1.4B shares. Shares traded on the NYSE floor slightly lower at a still high 879M shares vs 929M – 2nd highest ytd – vs 778M shares vs 732M vs 848M vs 778M vs 942M – highest since 12/19. 12/24’s 349M was the 12-month low…average is 736M shares! Since 1/5 the average is 845M shares; for the past four days: 866M shares, even higher than for the first week of 2015: 829M – mostly to the downside. The average for Dec. peaked at 979M shares on Dec. 22nd and had declined steadily.

Advance/Declines were negative for a 5th session! NYSE: -1.9x vs -1.5x vs -1.1x vs -1.7x vs -1.7x; Nasdaq -3.5x!!! vs -1.7x vs -1.1x vs -1.6x vs -1.9x; Breadth was worse: NYSE -2.3x vs -2.1x vs -1.8x vs -2.2x vs -2.4x; Nasdaq -4.9x!!! vs -2x vs -1.6x vs -1.4x vs -1.7x; New 52 Week Highs rose to 260 vs 211 vs 350 (note these are HIGHS, not CLOSES!) vs 286 vs 178 – their range for the last 12 mos. is 39-612!!! New Lows slipped to a still high 282 (note higher than new highs) vs 386 vs 157 vs 286 vs 118 vs 78 (12/16’s high was 712!!!) The 12-month range is 24-1043!!! S&P VIX had a range of 20.86-23.36, following that negative key reversal for stocks! Yesterday’s high was highest since 12/16’s 25.20, which was highest since 10/17(31.06!) and that was the highest since 11/2//11!!! Options expiration today promises to be a very bumpy ride…especially with the three day weekend! Average of the past 12 months is 14.43 slowly and steadily climbing, with a low of 10.28!…high close was 26.25 on 10/15/14!

U.S. Bond Market not only closed strong but obliterated the previous 12-month low yields. Especially noteworthy was the long TIP: (10’s 1.72% vs 1.85% +1-3/16!!! 30’s 2.36% vs 2.47% +2-3/8!!!, long TIP 0.57% vs 0.66% +3-1/8…took it a while but made up for it in spades!!! The score is now 11 rally days in the last 15.

Gold traded up to $1264 early yesterday, then made a run to $1267.20, highest since 9/8/14 and closed at $1264.80 +$30.30!!! It is safe to say that it is out of the woods, unlike Crude! Note that it took out the 200 day ($1255) as easily as BofA plunged through $16 – strange bedfellows, no? With the 200 day out of the way and now first support, $1290 is next resistance, the 9/24/14 high! 11/7’s low was $1130.40, the current 12-month low! There hasn’t been a close above $1300 since 8/15. 7/17’s session high was $1346.60, highest since March 19th!!! MAJOR SUP at the 200 day $1255, then the 40 day $1204, followed by the 50 day at $1196 – incredible change in just ONE day! You snooze, you lose. The 12-month high is $1392.60 on 3/17/14, highest high since 9/4/13. Silver, however is at a wall with just a slight higher high to $17.24 but has been bogged down there for three days, with major res ahead at $17.55. $14.12 is the recent low (12/1/14), not seen in more than five years!

Crude, ran up to $51.27, highest since 1/5, then went back down to close at a weak $46.25 -$2.23!!! The pain trade is still not over so $50-52 remains formidable resistance. Tuesday’s low was $44.20, lowest since 3/09. 12/17’s high was $58.98 Consider: 10/25/14’s high was $84.83. There have been 63!!! handles since peaking at $107.73 on June 13th, highest since 9/19/13, and if is off 57% since then! The record high of $147.27 was on 9/30/08. RES at the 40 day ($59.46!!!), then the 50 day ($62.98!!!), and lastly the 200 day ($88.90) – all declining so fast now that we see new handles at least every other day…unheard of! The range is $44.20-$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%!!!). TB’s bet? $43.83, or else…that is the June 2009 low if that fails, a test of that $32.40 low…by the way the decline from the 9/20/08 high to the low took EXACTLY 6 months – we are now in the 7th month!!!

Note: check out TB’s new wine blog: traderbillonwine.com

Have a great day!  Sit back and watch the fools trade on options expiration!

TB

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