1/29/15…”it ain’t over till it’s over” TB

TB’s Quote of the Day: “If a man really wanted to make a million dollars, the best way to do it would be start his own religion.” – L. Ron Hubbard, founder of Scientology…hmmmm.

Bloomberg Quote of the Day: “Speak little, do much.” – Benjamin Franklin

Overnight Global Markets:

Global equity markets weak, ex-India, led by Asia: UK –0.5% vs -0.1% vs -1%! vs – vs +0.2%; France –0.1% vs -0.4% vs -1.5%! vs +0.4% vs +1.7%! Germany -0.1% vs +0.4% vs -1.4%! vs +0.9% vs +1.9%!!! Japan -1.1%! vs +0.2% vs +1.7%!!! vs -0.3% vs +1.1%; Hang Seng -1.1%! vs +0.2% vs -0.4% vs +0.2% vs +1.3%; Korea -0.5% vs +0.9% vs – vs +0.8% vs flat; India +0.4% vs +1% vs closed vs +0.9% vs +0.4% vs +1.9%! U.S. equity futures attempted to bounce but have given back ½ their o/n gains: DOW +54 (range 99); SPX +4.40 (15); NDQ +3.75 (21).

Global Money Markets: Libor: 0.253% 3 mos.; 0.355%; 6 mos. – still hovering near their recent record lows! The Fed Funds rate has averaged 0.09% and is 0.11-0.12%, still at the 9-month high. T-Bills: 0.01%, 1 mo; 0.01%, 3 mos; 0.07% 6 mos.; 0.15% 1-yr. – back from 0.25% – the 12-month high, like watching paint dry!

U.S. Treasury Bonds slightly weaker after closing at new lows Wednesday: 10’s 1.75% -1/4; 30’s 2.31% -9/16; Long TIP: 0.58% -11/16. These would have been new lows!

European Bonds: Yields mixed, majors to new low yields!!!…with Greece settling down – somewhat: Germany 0.35% -1; UK 1.43% -3; France 0.59% +2; Italy 1.62% +3; Spain 1.46% +3; Portugal 2.60% +5; Greece 9.87% -21!!! vs 10.15%!!! +92!!! – recent range: 7.03% to 10.29%!!! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.28% –; Llow is 0.19%!

Dollar Index stabilizing following Monday’s 95.527, highest since 9/30/03! Currently 94.43 +.04. Euro: 1.1334 +.0027, following Monday’s 1.1098 – an 11-year low!!! Sterling 1.5136 +.0007, after bottoming out on Monday at $1.4952, with critical support at $1.48, a double-bottom from 3/29-31/2013! Yen hanging in at 117.93 +.06 – support is 119, the 40/50 day m/a’s! 1/15’s 115.86 was best since 12/17/14’s 115.57 – weak since peak Oct. ‘14: 105.23; recent best 2/4/14 @ 100.76!!! Record: 12/30/11: 75.35!!!

Commodities: Gold continues to retrace, trading down to $1264 overnight, andis now $1272.50 -$14.70 – $1300? As Harry Carey would say, “tell it goodbye!” Silver broke below $18 and is now $17.53 -.56. Crude is at $44.83 +.38, in a narrow inside session.

Wednesday’s Market Summary:

The word that best describes yesterday’s markets is; HEADFAKE!!! Buyers were lured in (sucker-punched?) after the mediocre, not even a ‘dead-cat bounce’ performance on Monday. Technicals aren’t the only thing but they CANNOT be ignored! Worse, yesterday’s sharp decline was on strong volume (4B shares!), A/D’s and Breadth swung back to negative, yet new 52 week highs surged to 457 vs 374??? At the same time new lows jumped up to 187 vs 100? But here is the scary thing: S&P VIX traded from 16.92 to 20.44! The low (most positive) was right after the open. Worse, it then surged and continued to inch higher at the close which was also the HIGH – haven’t seen that before in the sell-off! Better be careful…or is that warning too late? Tomorrow is monthend! All indices were off from 0.6% (NDQ 100 but it lost 2.6% Tuesday and was the goat), Worst was the Russell 2000, -1.6% but it was BEST Tuesday: down just -0.5%/ The rest were off from 0.8% (Composite) to 1.5% (Transports). UGLY. Dow Utilities even lost 1%!

Total NYSE Volume roared back to 4B shares vs 3.31B, 2nd only to Jan.2, vs 3.4B vs 3.6B vs 4.1B – 12/24’s 12-month low was 1.4B shares. Shares traded on the NYSE floor also rose to 856M shares vs 711M – 2nd lowest of ’15; vs 796M vs 785M shares vs 890M – 976M shares is the ‘15 high. 12/24’s 349M was the 12-month low…average is 738M shares! Since 1/5 the average is 838M shares – heavily waited to the downside. The average for Dec. peaked at 979M shares on Dec. 22nd and has been declining steadily.

Advance/Declines were negative for the 8th time in 12 sessions. NYSE: -2.8x vs -1.3x vs +2.2x vs -1.2x vs +3.5x; Nasdaq -3.1x! vs -1.7x vs +1.8x vs -1.3x vs +2.7x vs -1.4x; Breadth was horrible on NYSE: NYSE -8.7x!!! vs -1.8x vs +2.7x vs -2x vs +4.2x!; Nasdaq -2.7x vs -2.4x vs +1.9x vs +1.3x vs +3.7x!!! New 52 Week Highs rose to 457 again that does NOT mean high closes – vs 374 vs 369 vs 433 vs 259 vs 200 – their range for the last 12 mos. is 39-612!!! New Lows climbed back to 187 vs 100 vs 117 vs 112 vs 122 – 2015 high is 386 (12/16’s high was 712!!!) The 12-month range is 24-1043!!! S&P VIX EXPLODED to the upside starting out at 16.92 then closing at the session high: 20.44 +3.22 – an 18.7% gain…need TB say: in bearish sentiment?reversed yet again closing at a very bearish 17.27 +1.70!!! The range was 16.67-18.41! Last Thursday’s high was 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 14.56 and steadily climbing, with a low of 10.28!…high close was 26.25 on 10/15/14!

U.S. Bond Market closed STRONG: 10’s 1.72% +15/16 (1.72% low yield); 30’s 2.29% –1/16 (new low!); Long TIP 0.55% +2-5/16!!! (also a new low!).

Gold closed lower at $1283.90 -$9.60 and the best it could do was $1294, a slightly higher high BUT the 4th straight lower low at $1280! Last Thursday’s high was $1307.80, highest since 8/19/14 – and the ONLY close above $1300 since 8/15/14! Res again at $1300-02, with support at the 200 day ($1255) again! 11/7’s low, $1130.40 is the current 12-month low! 7/17’s session high was $1346.60, highest since March 19th!!! Next support will be the 40 day $1223, followed by the 50 day at $1217. The 12-month high is $1392.60 on 3/17/14, highest high since 9/4/13. Silver, closed at $18.09 +.01; the 200 day ($18.54) remains a res. $14.12 is the recent low (12/1/14), not seen in more than five years!

Crude, which hit $51.27, highest since 1/5, came out of its ennui with a new low of $44.08 1/5, lowest since 3/09, closing at $44.45 -$1.78, as was forecast by last Thursday’s ‘negative’ key reversal! $50-52 remains formidable resistance. 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 59% since then! The record high of $147.27 was on 9/30/08. RES at the 40 day ($53.95!!!), then the 50 day ($58.01!!!), and lastly the 200 day ($86.68) – all continuing to fall and will someday be support – albeit the hard way! The range is $44.08-$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, and if not, not until the 40 day falls enough to become SUPPORT!…which may be 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 of decline!!!

Have a great day but remember: it’s a jungle out there!

TB

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