2/13/15…the ‘Greece’ is off the floor, but still slippery!

TB’s Quote of the Day: “This is as good as it gets. – no, really, this IS as good as it gets.” – TB

Bloomberg Quote of the Day: “Work hard, stay positive, and get up early. It’s the best part of the day.” – George Allen – well,two out of three ain’t all bad…and it is the best time! TB

Overnight Global Markets:

Global equity markets rallying again, ex–Japan: UK +0.6% vs +0.1% vs -0.3% vs -0.8% vs -0.2%; France +0.7% vs +1.1% vs +1% vs 1.3%!!! vs –0.3%; Germany +0.6% vs +1.6%!!! vs +0.7% vs -1.8% vs –0.6%; Japan -0.4% vs +1.9%!!! vs -0.3% vs +0.4% vs 0.8% vs -1%; Hang Seng +1.1%! vs +0.4% vs – vs -0.6% vs -0.4%; Korea +0.8% vs -0.2% vs -0.6% vs -0.4% vs +0.1%; India +1% vs +1% vs +0.5% vs -1.7%!!! vs -0.5%. U.S. equity futures rallying but off their session highs: DOW +40 (range 66); SPX +4 (7) NDQ +11 (20).

Global Money Markets: Libor: 0.258% 3 mos; 0.378%; 6 mos – up slightly again…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 weaker – natch – when will they catch a break? 10’s 2.01% -1/4; 30’s 2.60% -1/2; Long TIP: 0.80%! -1/2. Let us (continue to) pray!

European Bond yields mixed with the PIGGS plunging, again led by Greece! Germany 0.34% +2; UK 1.68% +2; France 0.64% –; Italy 1.56%! -9!; Spain 1.48%! -13!!!; Portugal 2.29%! -16!!!; Greece 8.80%!!! -91!!! This after trading over 10.98% a new high on 1/30!?! Volatile!!! Would you have the guts to try to trade that? Not TB! Recent range is NOW: 7.03% to 10.98%!!! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.41%! +3; low is 0.19%!

Dollar Index dropped yesterday on the Greek accord (sic) and is trying to come back overnight after putting in a low of 93.899! Now 94.21 +.11. 1/26’s 95.527 was highest since 9/30/03! Euro slightly higher: 1.1398 +.0006. 1/26’s 1.1098 – an 11-year low!!! Sterling 1.5397 +.0075. Bottomed out 1/26 at $1.4952, with critical support at $1.48, a double-bottom from 3/29-31/2013! Yen also bouncing at 118.93 -0.86, after trading to 119.79 overnight – 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 but inching higher after that double bottom at $1217.80. Currently $1226.60 +$5.90. The 200 day ($1232) 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 continuing to rally and is now $52.58 +$1.37 with res at the 50 day $52.76 – session high is $52.88 – hmmm. 2/11’s low was $47.36, lowest since 2/5.

Thursday’s Market Summary:

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! (from yesterday yet the stock market ignored this in favor of a Greece solution???

Want TB’s real take? NEXT Friday is options expiry…sometime between now and Wednesday positions will be squared. The negativity of the S&P VIX shows just how short they are. Sooo…time to cover and guess what? The VIX declined yesterday to 15.34 – still well in bear country but the lowest since 12/29 when the market was rallying into yearend. Do not be deceived. Not saying TB will be right, just a shot across the bow to make you look before you leap – how trite is that statement!

Pretty simple to sum up yesterday’s price action. First, they shrugged off the WEAK retail sales numbers…did TB say ‘weak’? Then they decided to run it up with options being the most plausible explanation…and when that happens the flash boys go to work overstating the rally. Best? A THREE-WAY tie!?! BOTH Nasdaqs and the Russell 2000 up 1.2% – coincidence? Hmmm. Next came the S&P 500 +1%, followed closely by Dow Transports +0.8%; Dow 30 +0.6% (weak); while Dow Utitilities lost 0.3%. NYSE Financials ROSE 1.3% led by KBW Banks with a 2% gain…do YOU think Greece withdrawing from the EU is positive for anyone? Especially TBTF banks? Not hardly! Thus it amplifies the chances that this was a short-covering rally.

Volume rose just a tad to about the recent average at 3.78B shares vs 3.57B shares; A/D’s and Breadth were solidly positive (a rarity of late); New 52 week highs were STRONG – finally – at 325, while new lows plunged to 37 (looks like a setup for options expiry). The S&P VIX closed lower for a 3rd session but still bearish at 15.34 -1.12.

The ytd scoreboard remains volatile (can’t recall ever seeing this before): Dow 30 +0.8%; Dow Transports -1.4%; Dow Utilities -2.4%; S&P 500 +1.4%; Nasdaq Comp +2.6%; NDQ 100 +2.6%; Russell 2000 -0.3%. Look at Financials -1%: KBW Banks -2.4%; Nasdaq Banks -2.2%. Philly Gold/Silver +11.2%!!!

Total NYSE Volume slightly higher at 3.78B shares vs 3.57B vs 3.63B vs 3.44B vs 4.24B – 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 broke above 800M for the first time this week at 803M (BUT not retail as volume at the bell was even weaker at 643M shares – caution!) vs 750M vs 779M shares vs 776M vs 927M – 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. average peaked at 979M shares on Dec. 22nd.

Advance/Declines swung back to positive for only the 10th time in the last 23 sessions! NYSE: +3.3x! vs -1.2x vs +1.3x vs -1.4x vs -1.7x; Nasdaq +2.4x vs -1.2x vs +1.6x vs -1.7x vs -1.2x. Breadth was even better: NYSE +5x!!! vs -1.3x vs +1.5x vs -1.3x vs -1.2x; Nasdaq +2.7x vs +1.3x vs +2.8x -1.4x vs -1.2x. New 52 Week Highs were flying at a strong 325 vs 186 vs 148 vs 108 vs 250 – their range for the last 12 mos. is 39-612!!! New Lows plunged to a WEAK 37 vs 83 vs 78 vs 54 vs 44 – 2015 high is 386 (12/16’s high was 712!!!) The 12-month range is 24-1043!!! S&P VIX declined again, this time to 15.34 -1.12, 1owest since 12/29 apparently ahead of options expiry next Friday! Range: 15.28-16.47. 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 mixed. That was the 6th straight weak session since setting new low yields on 2/4 – Greece again: 10’s 1.99% +1/8 (1.64% low yield); 30’s 2.58% +1/8 (2.22% low); Long TIP 0.79% -5/8 (0.49% low!).

Gold created a ‘double bottom’ at $1217.80 yesterday before feebly managing to get back, closing at $1220.70 +$1.10 following Tuesday’s negative ‘key reversal’! It has 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 $1252. The 12-month high is $1392.60 on 3/17/14, highest high since 9/4/13. Silver put in a low of $16.61 before coming back to close at $16.79 +.03. The 200 day ($18.35) is resistance with sup/res at the 40 day, $16.84, and the 50 day, $16.80. $14.12 is the recent low (12/1/14), first time in more than five years!

Crude managed a feeble bounce to close at a still weak $51.21 +$2.37. This after plummeting to $47.36 Wednesday, 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. Support (the lower the averages fall, the more it falls every day) at the 40 day ($50.24), res at the 50 day ($52.76!!!), and lastly the 200 day ($83.78). 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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