2/12/15…wait…weren’t falling gas prices to BOOST retail sales?

TB’s Wine Quote of the Day: “Penicillin cures, but wine makes people happy.”               – Alexander Fleming

Bloomberg Quote of the Day: “Don’t watch the clock ; do what it does. Keep going.”     – Sam Levenson

***Retail Sales in U.S. declined by 0.8% in Jan., following a 0.9% decline in Dec. Consensus was for a 0.4% decline. First back-to-back declines since 2012. Led by global equities surges, U.S. Futures were strong overnight but gave back most of the gains and still slipping!

Overnight Global Markets:

Global equity markets strong ex–U.K. again/Korea: UK +0.1% vs -0.3% vs -0.8% vs -0.2% vs -0.2%; France +1.1% vs +1% vs 1.3%!!! vs –0.3% vs -0.1%; Germany +1.6%!!! vs +0.7% vs -1.8% vs –0.6% vs -0.1%; Japan +1.9%!!! vs -0.3% vs +0.4% vs 0.8% vs -1%; Hang Seng +0.4% vs – vs -0.6% vs -0.4% vs +0.4%; Korea -0.2% vs -0.6% vs -0.4% vs +0.1% vs -0.5%; India +1% vs +0.5% vs -1.7%!!! vs -0.5% vs -0.1%. U.S. equity futures gapped up on open but faded fast following Retail Sales: DOW +33 (range 115 +49 gap!!!); SPX +6.10 (19 +7) NDQ +22.50 (39 +3). Talk about volatile!

Global Money Markets: Libor: 0.258% 3 mos; 0.377%; 6 mos – oops!…but not far off 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; 0.01%, 3 mos; 0.07% 6 mos; 0.22% 1-yr – 0.25% is the 12-month high!

U.S. Treasury Bonds began the session weak but have now turned slightly positive with little reaction to the weak Retail Sales number? 10’s 2.00% +1/8; 30’s 2.58% +1/8; Long TIP: 0.74% +3/8. Let us pray!

European Bond yields lower ex-UK, led by Greece – DUH!: Germany 0.35% -1; UK 1.70% +3; France 0.66% -2; Italy 1.64% -5; Spain 1.61% -3; Portugal 2.46% -8!; Greece 9.85% -41 after surging late yesterday to 10.25% – before that it had been 9.90% -55 vs 10.47% +69 – incredible volatility!!! Would you have the guts to try to trade that? Not TB! Recent range is: 7.03% to 10.79%!!! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.39% +1; low is 0.19%!

Dollar Index modestly lower overnight after solid gains yesterday. Now 94.46 -.52. 1/26’s 95.527 was highest since 9/30/03! Euro slightly higher: 1.1361 +.0002. 1/26’s 1.1098 – an 11-year low!!! Sterling 1.5370 –.0048; took out the prior high of 1.5352 from 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 $119.39 –0.42, broke through the 40/50 day Weds. – 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 still struggling: $1226.40 +$6.80. The 200 day ($1233) is now first resistance. Silver slightly better after trading down to $16.61 o/n; now $16.89 +.12. 1/6’s low was $16.54. Crude is bouncing following Wednesday’s trashing at a weak $49.91 +$1.07 with resistance now at $50.37. Stand clear of blast area!

Wednesday’s Market Summary:

Not going to bore you as it is meaningless and senseless to waste one’s time doing so.

Dow Utilities plunged 2.4% – talk about unstable! Russell 2000 -0.1% Dow 30 AND S&P 500 were FLAT!?! The rest up 0.3-0.4%. Financials weak again.

Volume believe it or not was slightly lower at 3.57B shares; A/D’s were slightly negative while Breadth was mixed but meaningless; New 52 week highs rose but remain feeble, while new lows rose but remain low. The S&P VIX closed lower for a 2nd session but remains bearish at 16.96 -.27 – will we have to suffeer until options expiry on 2/20???

The ytd scoreboard remains volatile (can’t recall ever seeing this before): Dow 30 +0.2%; Dow Transports -2.2%; Dow Utilities -2.0%; S&P 500 +0.5%; Nasdaq Comp +1.4%; NDQ 100 +1.4%; Russell 2000 -0.3%. Look at Financials -2.2%: KBW Banks -4.3%; Nasdaq Banks -3.8%. Philly Gold/Silver +9.6% VS 11.8%!!!

Total NYSE Volume dead in the water, which means: ignore rallies…first chance at stability and perhaps a new trend will be options expiration on 2/20 (thankfully not the 13th! 3.57B shares vs 3.63B vs 3.44B vs 4.24B vs 3.8B vs 4.12B vs 4.6B – 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 dipped to 750M shares (not even one 800M share day this week while volume at the closing bell has been around 630M every day – weak!) vs 779M shares vs 776M vs 927M vs 794M vs 900M – 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 858M shares and steadily declining! The Dec. ave peaked at 979M shares on Dec. 22nd.

Advance/Declines swung back to negative where they have been 13 of the last 22 sessions! NYSE: -1.2x vs +1.3x vs -1.4x vs -1.7x vs +3.1x!; Nasdaq -1.2x vs +1.6x vs -1.7x vs -1.2x vs +2.8x. Breadth was mixed??? NYSE -1.3x vs +1.5x vs -1.3x vs -1.2x vs +4.2x! Nasdaq +1.3x vs +2.8x -1.4x vs -1.2x vs +3x! New 52 Week Highs were slightly higher at a weak 186 vs 148 vs 108! vs 250 vs 242 – their range for the last 12 mos. is 39-612!!! New Lows inched up again to a still weak 83 vs 78 vs 54 vs 44 vs 56 – 2015 high is 386 (12/16’s high was 712!!!) The 12-month range is 24-1043!!! S&P VIX declined again, albeit meaninglessly to 16.96 -.27 – range: 16.82-17.81. 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 14.58, with a low of 10.28!…high close was 26.25 on 10/15/14!

U.S. Bond Market was weaker for a 5th straight session since setting new low yields on 2/4 – Greece is the culprit: 10’s 2.02%! -3/16 (1.64% low yield); 30’s 2.59% -1/4 (2.22% low); Long TIP 0.76% -1 point (0.49% low!).

Gold plunged for the 3rd time in four sessions closing at $1219.60 -$12.60 following Tuesday’s negative ‘key reversal’! Yesterday’s low was $1219! 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. 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 50 day, $1229, the 40 day $1233, then the 200 day at $1228. The 12-month high is $1392.60 on 3/17/14, highest high since 9/4/13. Silver too continued its slide closing at $16.76 -.11. The 200 day ($18.38) is resistance with support at the 40 day, $16.81, and the 50 day, $16.79. $14.12 is the recent low (12/1/14), first time in more than five years!

Crude closed at a weak $48.84 -$1.18! This after plummeting to $47.36, lowest since 2/5, negating the Greece rally. 1/28’s low was $44.08, lowest since 3/09. $50-52 is again resistance. 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 it is off 59% since then! The record high of $147.27 was on 9/30/08. RES again (the lower the averages fall, the more it falls every day) at the 40 day ($50.37!!!), then the 50 day ($53.13), and lastly the 200 day ($84.30). The range is $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 9th month of decline!!!

Have a great day!

TB

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