2/10/15…kids, the word for today is: volatility! Can u spell it?

TB’s Wine Quote of the Day: “Show me a man who doesn’t like wine, and I’ll show you a man I don’t trust.” – TB…well not quite, but you get the point.

Bloomberg Quote of the Day:: ”I want to put a ding in the universe.” – Steve Jobs…that he did!


O
vernight Global Markets:

Global equity markets mixed: UK -0.3% vs -0.8% vs -0.2% vs -0.2% vs -0.6%; France -+1% vs 1.3%!!! vs –0.3% vs -0.1% vs -0.3% vs +1.1%; Germany +0.7% vs -1.8% vs –0.6% vs -0.1% vs -0.4%; Japan -0.3% vs +0.4% vs 0.8% vs -1% vs +2% vs -1.3%; Hang Seng – vs -0.6% vs -0.4% vs +0.4% vs +0.5%; Korea -0.6% vs -0.4% vs +0.1% vs -0.5% vs +0.6%; India +0.5% vs -1.7%!!! vs -0.5% vs -0.1% vs -0.4%. U.S. equity futures higher after gapping up on the open: DOW +81 (range 48 +23 gap); SPX +9.30! (18 +1) NDQ +20.50 (26 +8). Talk about volatile!

Global Money Markets: Libor: 0.256% 3 mos; 0.362%; 6 mos – still inching up!…but remain near their recent record lows! The Fed Funds rate has averaged 0.09% and remains 0.12-0.14% – 0.14% is the 9-month high! T-Bills: 0.01%, 1 mo; 0.02%, 3 mos; 0.08% 6 mos; 0.23% 1-yr – 0.25% is the 12-month high!

U.S. Treasury Bonds are weak again, following a feeble attempt to come back on Monday: 10’s 2.00%! -3/16; 30’s 2.58% -5/8; Long TIP: 0.71%! -9/16.

European Bonds mixed – this time Greece plunging but not quite offsetting Monday’s thrashing: Germany 0.36% +1; UK 1.66% +5; France 0.67% -1; Italy 1.62% -4?; Spain 1.55% -1; Portugal 2.47% -2; Greece 9.90% -55 vs 10.47% +69 – incredible volatility!!! Recent range is: 7.03% to 10.79%!!! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.38%! +4!; low is 0.19%!

Dollar Index gave up ground intraday after rallying on Greece, but bounced back o/n to 94.75 +.30. 1/26’s 95.527 was highest since 9/30/03! Euro ditto: 1.1284 +.0002. 1/26’s 1.1098 – an 11-year low!!! Sterling 1.5226 –.0001; topped out at 1.5352 on 2/6, after bottoming out 1/26 at $1.4952, with critical support at $1.48, a double-bottom from 3/29-31/2013! Yen weaker again at $119.08 +0.12, broke through the 40/50 day – 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 desperately trying to hold Monday’s gains, but unsuccessfully: $1237.20 -$4.30. On 1/25 The 200 day ($1233) is major support. Silver slightly weaker at $16.92 -.16. Friday’s low was $16.54. Crude is barely trading at $52.17 -.69 with resistance at $53.94 so a lot ‘could’ happen but probably won’t Caveat emptor!

Monday’s Market Summary:

Try as they could, they couldn’t put the rally together again. Three attempts failed with all indices closing weak: Best was NDQ 100 -0.2%; Worst was a tie with Dow Transports and Utilities, -1%; Russell 2000 -0.7%, the rest were off 0.4-0.5%. Save your breath!

Much ado about a December revision which was a strong number and combined with January’s relatively weak number produced the biggest three month gain since 2011. So…what…what about hours worked? FLAT! Hourly Earnings? FLAT. Question; with a weak Euro, strong Dollar, Europe in deflation, do YOU really think the Fed will tighten?

Updating the ytd scoreboard: Dow 30 -0.5%; Dow Transports -3.3%; Dow Utilities -1.7%!!!; S&P 500 -0.6%; Nasdaq Comp -0.2%; NDQ 100 -0.5%; Russell 2000 -0.7%. Look at Financials -2.7%: KBW Banks -4.6%! Nasdaq Banks -3.7%. Philly Gold/Silver +13.8%!!! (just threw that in as a teaser for any Gold Bugs out there…

Volume retraced to 3.44B shares; A/D’s and Breadth were negative for a 2nd day; New 52 week highs more than halved, new lows stagnant and weak. The S&P VIX closed higher for a 2nd day at 18.55 +1.26 – and yes, that IS bearish!

Total NYSE Volume more than reversed Friday’s surge to 3.44B shares vs 4.24B vs 3.8B vs 4.12B shares from 4.6B vs 3.98B – ytd low is 2.7B on Jan. 2; while 12/24’s 1.4B shares is the 12-month low. Shares traded on the NYSE floor also reversed to 776M shares (just 690M at the bell!) vs 927M vs 794M vs 900M vs 981M (2nd highest of ’15) – 1.22B on 1/30 is highest since 8/8/11!!! – 646M is the ytd low while 12/24’s 349M is the 12-month low…average is 743M shares! Since 1/5 the average is 865M shares. The Dec. ave peaked at 979M shares on Dec. 22nd.

Advance/Declines were negative for the 12th time in 20 sessions! NYSE: -1.4x vs -1.7x vs +3.1x! vs -1.8x vs +3.8x!; Nasdaq -1.7x vs -1.2x vs +2.8x vs -1.6x vs +2.7x. Breadth was similar: NYSE -1.3x vs -1.2x vs +4.2x! vs -1.9x vs +7.4x!!! vs +4.5x! Nasdaq -1.4x vs -1.2x vs +3x! vs +1.04x vs +3.8x! New 52 Week Highs were crushed to 108! vs 250 vs 242 vs 215 vs 290 – their range for the last 12 mos. is 39-612!!! New Lows inched up to a weak 54 vs 44 vs 56 vs 58 vs 55 vs 162 vs 275 – 2015 high is 386 (12/16’s high was 712!!!) The 12-month range is 24-1043!!! S&P VIX jumped with a range of 18..21-19.28!, before closing at 18.55 +1.26 – oh yeah…that IS bearish. The recent high is 12/16’s 25.20, second only to 10/17’s (31.06!) – highest since 11/2/11!!! Average of the past 12 months is 14.59 and slowly climbing, with a low of 10.28!…high close was 26.25 on 10/15/14!

U.S. Bond Market was weaker again but volatile all day in a narrow range – at least compared to recent moves: 10’s 1.98% -3/16 (1.64% low yield); 30’s 2.55% -1/2 (2.22% new low!); Long TIP 0.70% -3/16 (0.49% new low!).

Gold traded in a narrow ‘inside’ session closing at $1240.80 +$6.90 following Friday’s debacle. Friday’s low was $1228 before bouncing but still ended with a $28.10 loss!!! It was also the lowest close since 1/12/15. It had been morose for a week since the biggest daily gain to the high since 2012 ($28.10) on 1/30. It peaked at $1307.80 on 1/22. Friday’s close was $19 BELOW the 200 day ($1253). 11/7’s low, $1130.40 is the current 12-month low! 7/17’s session high was $1346.60, highest since March 19th!!! RESISTANCE is the 200 day, $1253, with support at the 40 day $1233, and the 50 day at $1227. The 12-month high is $1392.60 on 3/17/14, highest high since 9/4/13. Silver had a nothing session, closing at $17.03 +.33. The 200 day ($18.41) is resistance as is the 50 day, $16.76, then the 50 day, $16.81. $14.12 is the recent low (12/1/14), first time in more than five years!

Crude closed higher for a 2nd straight, but meaningless session at $52.86 +$1.17. 1/28’s low was $44.08, lowest since 3/09. $50-52 is now resistance/support. 12/17’s high was $58.98. Consider: 10/25/14’s high was $84.83. There have been 64!!! 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. SUP at the 40 day ($50.83!!!), RES is the 50 day ($53.94), and lastly the 200 day ($84.55). The range is now $43.58-$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%!!!). Recall TB’s prediction of a bounce at $43.83? WILL it test that $32.40 March ’09 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 of decline!!!

Have a great day!

TB

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