1/21/15…so what do we do following SOTU?

TB’s Wine Quote of the Day: “A gourmet is a man who, when invited for an evening of wine, women, and song, asks: “What kind of wine?” – anon…aka: wine snob

Bloomberg Quote of the Day: “Giving up is the ultimate tragedy.” – Robert J. Donovan – I give up!

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

European equity markets consolidating, ex-UK; Asia mixed: UK +0.6% vs +0.7% vs +0.5% vs -0.1% vs +0.6% vs -2.8%!!! France -0.7% vs +1.4% vs +0.5% vs +0.3% vs +1.1% vs -1.5%! vs +1% vs +1%; Germany -0.7% vs +0.3% vs +0.7% vs -0.1% vs +1.1% vs -1.4%! vs +0.9% vs +1.2%; Japan -0.5% vs +2.1%!!! vs +0.9% vs -1.4% vs +1.9% vs -1.7%; Hang Seng +1.9%!!! vs +0.9% vs –1.5% vs -1% vs +1%; Korea +0.2% vs +0.8% vs +0.8% vs -1.4%! vs unched; India +0.4% vs +1.9%!!! vs +0.5% vs 0.2% vs +2.7%!!! U.S. equity futures gapped down on open and continue to fall ahead of U.S. market open: DOW -73 (range 90 +6 [gap]); SPX -5.30 (11 +1 ); NDQ -10.75 (28 +1)

Global Money Markets: Libor: 0.256% 3 mos.; 0.356%; 6 mos. – still 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; 0.03%, 3 mos; 0.08% 6 mos.; 0.16% 1-yr. – back from 0.25% – the 12-month high, set on 12/22/14!

U.S. Treasury Bonds: short end slightly weaker, 10’s and out higher and close to the new 12-month low yields. Currently: 10’s 1.79% +1/64; 30’s 2.36% +3/8; Long TIP: 0.59% +3/8.

European Bonds: higher yields ex-U.K. and Greece: Germany 0.49% +4; UK 1.46%!!! -7 – new low! France 0.69% +4; Italy 1.72% +6!; Spain 1.55% +3; Portugal 2.81% vs 2.73% +5!!!; Greece 9.21% -12!!! – recent range: 7.03% to 10.29%!!! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.23% +1 vs 0.20% – off a new low of 0.19%!!!…for TEN years???

Dollar Index was slipping from Monday’s high: 92.576 – highest since 9/19/03! Currently 92.41 -.64. Euro: traded down to $1.5092!!! another 9-year low, – at low now o/n; Sterling also weak $1.5089, negating the double top at $1.5269 last week following Jan.8’s 9-year low ($1.5035), weakest since 9/30/13; Yen finally bouncing off 118.77 overnight: 117.42 – Thursday’s 115.86 was best since 12/17/14’s 115.57 – weak since Oct. ‘14: 105.23; recent best 2/4/14 @ 100.76!!! Record low, 12/30/11: 75.35!!!

Commodities: Gold STRONG o/n: $1307 – first time above $1300 since 8/15! – now $1304.40 +$10.20…up $40 in three sessions. Support at $1302 -1296.40, the 8/28/14 high! Silver with another significant new high o/n at $18.51!! It is holding nearby at $18.47. Res at 200 day: $18.57! Crude continues to struggle and is at $47.16 +.69 in an inside session, following last 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!

Tuesday’s Market Summary:

A pretty pathetic session, but once they got to the lows around Noon EST, they brought it back to even on the Dow and +0.2% on the S&P 500. Dow Transports took honors +1%, while the goat was the Russell 2000 -0.7%. 2nd best was the NDQ 100 +0.7% while the Comp and Dow Utilities were both up 0.4%. NYSE Financials lost 0.2% but look: NYSE Brokers -3.6%!!!; KBW Banks -0.8% and Nasdaq Banks -1%. Total Volume slipped to a still above average 3.9B shares while shares traded on the NYSE floor declined to 861M shares! Note however at the bell it was just 793M shares…a lot of orders at the close – uncertain?

Total NYSE Volume was slightly lower at a still above average 3.9B shares vs 4B vs 4.18B vs 4.37B vs 4.1B – 12/24’s 12-month low was 1.4B shares. However, shares traded on the NYSE floor declined to 861M shares from 976M shares – a new 2015 high – vs 879M vs 929M vs 778M. 12/24’s 349M was the 12-month low…average is 737M shares! Since 1/5 the average is 848M 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 moderately weak leaving just one plus in six sessions! NYSE: -1.6x vs +4.4x! vs -1.9x vs -1.5x vs -1.1x; Nasdaq -1.5x vs +3x! vs -3.5x!!! vs -1.7x vs -1.1x; Breadth was similar on NYSE but even on Nasdaq: NYSE -1.5x vs +6.9x!!! vs -2.3x vs -2.1x vs -1.8x; Nasdaq 1:1? vs +3.3x! vs -4.9x!!! vs -2x vs -1.6x. NOTE that Nasdaq is still lagging the NYSE! New 52 Week Highs were steady at 327 vs 323 vs 260 vs 211 vs 350 (note these are HIGHS, not CLOSES!) – their range for the last 12 mos. is 39-612!!! New Lows slightly higher at 237 vs 216 vs 282 vs 386 vs 157 (12/16’s high was 712!!!) The 12-month range is 24-1043!!! S&P VIX had a range of 19.58-21.37, closing at 19.89 -1.06. 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 14.50 and now steadily climbing, with a low of 10.28!…high close was 26.25 on 10/15/14!

U.S. Bond Market closed strong and near last week’s new low yields: (10’s 1.79% +7/16 vs 1.72%(low yield); 30’s 2.38% +1-3/4 vs 2.36%; Long TIP 0.61% +1-13/16 vs 0.57%. The score is now 12 rally days in the last 17.

Gold surged to $1297.20, highest since 8/19/14! – closed at $1294.20 +$17.30, the high has not been seen since Sept. ‘14! Note that it took out the 200 day ($1255) easily. With the 200 day out of the way and now first support, $1300-02 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 $1208, followed by the 50 day at $1201. The 12-month high is $1392.60 on 3/17/14, highest high since 9/4/13. Silver, Ran up to $18.05 – another new recent high and closed at $18.01 +.26 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 high of $47.80 and low of $45.89 before closing weak again at $46.39 -$2.30 – third reversal without going anywhere. 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 ($58.11!!!), then the 50 day ($61.77!!!), and lastly the 200 day ($88.38) – 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 8th month!!!

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

If you caught SOTU last night you heard Obama accentuating the positive, while the GOP rebuttal became mean-spirited and negative. Same old, same old. Hang in there!

TB

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2 Comments »

  1. Yarnman said

    TB-After reading about another snafu at JPM, this one costing $1.5B for releasing GM from a secured lien in 2008 (called “paper work error”), I wonder how much longer the JPM board can tolerate JDimon. How many billions have been “lost” on his watch!!–Yarnman

    • traderbill said

      Sadly, he is like Teflon…or Timex (takes a licking but keeps on ticking). Congress blasted him (as they did Blankfein), and then other than stripping him of his title of CEO at the bank, left him alone. When there is this much corruption in a bank that goes unchecked, it has to begin with the boss…and this one learned at the knee of Sandy Weill…and look what HE did for Citi!
      P.S. It looks like you live in the Bay Area…will be out there later this year…would like to meet you, so you can express your thanks (joke!).
      TB

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