1/20/15…too bad U.S. wasn’t open Monday…and Hong Kong was…

TB’s Wine Quote of the Day: ““An alcoholic is someone you don’t like,who drinks as much as you do.” – Dylan Thomas…or is it Thomas Dylan???

Bloomberg Quote of the Day: “Believe that life is worth living and your belief will help create fact.” – William James…TB’s namesake! …and: “Forever is composed of nows.” – Emily Dickenson

Overnight Global Markets w/Monday’s non-U.S. markets:

On Monday, Global equity markets were strong – ex-Hang Seng (reason for sell-off was reduction in allowable stocks bought on margin!), Overnight, still rallying led by Japan and India, Hong Kong ‘bouncing’? UK +0.7% vs +0.5% vs -0.1% vs +0.6% vs -2.8%!!! France +1.4% vs +0.5% vs +0.3% vs +1.1% vs -1.5%! vs +1% vs +1%; Germany +0.3% vs +0.7% vs -0.1% vs +1.1% vs -1.4%! vs +0.9% vs +1.2%; Japan +2.1%!!! vs +0.9% vs -1.4% vs +1.9% vs -1.7%; Hang Seng +0.9% vs –1.5% vs -1% vs +1% vs -0.4%; Korea +0.8% vs +0.8% vs -1.4%! vs unched vs -0.2%; India +1.9%!!! vs +0.5% vs 0.2% vs +2.7%!!! vs -0.3% vs 0.6%. U.S. equity futures opened weak following the holiday and are now rallying but off session highs: DOW +86 (range 153!!!); SPX +11.60 (22!); NDQ -30.75 (50!)

Global Money Markets: Libor: 0.257% 3 mos.; 0.355%; 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; 0.06% 6 mos.; 0.16% 1-yr. – back from 0.25% – the 12-month high, set on 12/22/14!

U.S. Treasury Bonds: back in rally mode and regaining about half Friday’s losses but remain strong and still near the new 12-month low yields. Currently: 10’s 1.83% +1/8; 30’s 2.43% +5/8; Long TIP: 0.65% +5/8.

European Bonds: On Monday, yields were mixed with biggest changes Greece, +10 and Portugal -5 and Japan to new 12-month low!!!; Overnight: yields slightly higher across the board: Germany 0.45% +2; UK 1.57% +4 – Friday low was 1.47%! France 0.65% +1; Italy 1.67% +1; Spain 1.52% +2; Portugal 2.73% +3; Greece 9.30% +17 vs 9.21% vs 8.52% (low yield Thursday but backed up into close) – recent range: 7.03% to 10.29%!!! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.20%!!! +1 – off a new low of 0.19%!!!…for TEN years???

Dollar Index was strong Monday and continue overnight: +92.885 – another new high!: 92.576 – highest since 9/19/03!!! Euro: traded down to $1.1555 Monday, a 9-year low, up a tad o/n; Sterling $1.5192, having stalled with a double top at $1.5269 last week following Jan.8’s 9-year low ($1.5035), weakest since 9/30/13; Yen back in the tank falling to 118.77 overnight (but stocks are strong!); Thursday’s 115.86 was 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?

Commodities: Gold rallied yesterday to $1283.40, and again o/n to $1294.30!!! –currently $1286.10 +$9.20. Res is at $1296.40, the 8/28/14 high and then psych res at $1300! Silver with another significant new high o/n at $18.05!! is holding nearby at $17.80! Res at 200 day: $18.57! Crude did nothing Monday and is weak again o/n at $47.21 -$1.48, low $47.05, following Thursday’s failed attempt to breakout ($51.27 high!) and Friday’s close at a still-weak $48.69. Note last 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! THAT had BETTER hold!

Friday’s Market Summary (U.S. Markets closed Monday for MLK Day):

Friday, options expiration, was the first ‘up’ day in stocks in SIX sessions. Note however that stocks opened lower, the Dow tumbling 107 points than ‘miraculously’ (?) rallied into the close to end the session UP 191 – with the ‘inflection point’ being the end of options expiration…hello!!! All indices were up at least 1% (Dow Utilities), with the Russell 2000 the winner at +1.9%! The rest were clustered between +1.1% (Dow 30) and +1.4% (Nasdaq Composite). Think the selloff is over? Think again, or at least wait and see…most likely no harm in that especially with Obama’s SOTU tonight. (note the weak recovery in bank stocks following their implosion since 12/31’s close. Interesting note: nobody TB could find made any mention of options expiry effect!!!

Total NYSE Volume was lower again Friday, surprising for an options expiration, at 4B shares vs 4.18B vs 4.37B vs 4.1B vs 3.45B – 12/24’s 12-month low was 1.4B shares. However, shares traded on the NYSE floor surged higher (that is typical!) to 976M shares – a new 2015 high – vs 879M vs 929M vs 778M shares vs 732M. 12/24’s 349M was the 12-month low…average is 737M shares! Since 1/5 the average is 858M shares, and for the week, a huge 898M shares! – still heavily waited to the downside. The average for Dec. peaked at 979M shares on Dec. 22nd and had been declining steadily.

Advance/Declines were strong following five negative sessions! NYSE: +4.4x! vs -1.9x vs -1.5x vs -1.1x vs -1.7x vs -1.7x; Nasdaq +3x! vs -3.5x!!! vs -1.7x vs -1.1x vs -1.6x vs -1.9x; Breadth was even better: NYSE +6.9x!!! vs -2.3x vs -2.1x vs -1.8x vs -2.2x vs -2.4x; Nasdaq +3.3x! vs -4.9x!!! vs -2x vs -1.6x vs -1.4x vs -1.7x. NOTE that Nasdaq is still lagging the NYSE! New 52 Week Highs rose to 323 vs 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 again to a still high 216 vs 282 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 21.09-23.43, closing at the low and off 1.30. 23.36, Thursday’s high is highest since 12/16’s 25.20, which was second only to 10/17’s (31.06!) – highest since 11/2//11!!! Average of the past 12 months is 14.47 and now steadily climbing, with a low of 10.28!…high close was 26.25 on 10/15/14!

U.S. Bond Market closed weaker – after all bonds have options too and yes, they expire – still, part of Wednesday’s surge remains intact – bullish! Especially noteworthy was the long TIP: (10’s 1.82% vs 1.72% vs 1.85%, -13/16; 30’s 2.44 vs 2.36% vs 2.47% -1-3/4, long TIP 0.66% vs 0.57% vs 0.66% -2-1/2…this is the one that remains weakest! The score is now 11 rally days in the last 16.

Gold surged to $1287.40 with a low of $1255 – right on the 200 day – then came back to close at $1276.90 +$12.10, the high has not been seen since Sept. ‘14! 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! 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 $1206, followed by the 50 day at $1198. You snooze, you lose. The 12-month high is $1392.60 on 3/17/14, highest high since 9/4/13. Silver, Ran up to $17.80 – taking out the $17.55 – closing at the high! Is this the long awaited breakout? $14.12 is the recent low (12/1/14), not seen in more than five years!

Crude, which hit $51.27 on Thursday, highest since 1/5, had a relatively quiet session before closing at $48.69 +$2.44 – just reversing Thursday’s final. 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 ($58.80!!!), then the 50 day ($62.40!!!), and lastly the 200 day ($88.65) – be careful as the averages are falling so fast that they could become support soon precipitating a rally! 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 post on his wine blog: traderbillonwine.com

Enjoy your MLK Day shortened week! Stay out of trouble…i.e. sidelined!

TB

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