2/17/15…don’t be fooled by Friday’s rally…it is THIS Friday that counts!

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: “I’d rather regret the things I’ve done than regret the things I haven’t done.” – Lucille Ball, and…

“Discipline is the bridge between goals and accomplishment.” – Jim Rohn…that is NOT a quote from 50 Shades of Grey!

This holiday-shortened week’s economic calendar is fairly light. The highlight of the week will be the FOMC Meeting Minutes (Wednesday). We will also get February Empire State Manufacturing (Tuesday), January Housing Starts, January PPI and January Industrial Production (Wednesday), February Philadelphia Fed Manufacturing and January Leading Indicators (Thursday). Courtesy of Economic Advisory Service

Overnight (and Monday’s) Global Markets:

Global equity markets mixed: UK +0.5% vs +0.6% vs +0.1% vs -0.3% vs -0.8%; France +0.3% vs +0.7% vs +1.1% vs +1% vs 1.3%!!! Germany -0.1% vs +0.6% vs +1.6%!!! vs +0.7% vs -1.8%; Japan -0.1% vs -0.4% vs +1.9%!!! vs -0.3% vs +0.4%; Hang Seng +0.2% vs +1.1%! vs +0.4% vs – vs -0.6%; Korea +0.2% vs +0.8% vs -0.2% vs -0.6% vs -0.4%; India closed vs +1% vs +1% vs +0.5% vs -1.7%!!! U.S. equity futures little changed after rallying early in the session – note ranges! DOW -3 (range 94!?!); SPX -1.90 (13!!!) NDQ +6.25 (20).
Global Money Markets: Libor: 0.257% 3 mos; 0.382%; 6 mos – up slightly again…but not far off their recent record lows! The Fed Funds rate has averaged 0.09% and are now 0.10-0.12% – 0.14% is the 9-month high! T-Bills: 0.01%, 1 mo; 0.01%, 3 mos; 0.00%; 6 mos; 0.21% 1-yr – 0.25% is the 12-month high!

U.S. Treasury Bonds up slightly but remain weak: 10’s 2.03% +3/16; 30’s 2.64% +1/4; Long TIP: 0.80% +7/16. Let us (continue to) pray!

European Bond yields higher on Monday AND again o/n (ex-Italy/Portugal), led by Greece, which began losing ground late Friday: Germany 0.35% +2; UK 1.70% +1; France 0.66% +1; Italy 1.62% -4; Spain 1.57% –; Portugal 2.32% -3; Greece 9.77% +46 vs 9.18% +20 vs 8.80%!!! -91!!! This after trading over 10.98% a new high on 1/30!?! Volatile!!! How can anyone trade it??? Why would they??? Guess they feel lucky! Recent range is: 7.03% to 10.98%!!! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.39% -4; low is 0.19%!

Dollar Index continued to slip on Monday and is plunging overnight, taking out support at 94. Recent low is 93.25 on 2/3. Now 93.93 -.27, low 93.80. 1/26’s 95.527 was highest since 9/30/03! Euro slightly higher at 1.1419 +.0013. 1/26’s 1.1098 – an 11-year low!!! Sterling 1.5355 -.0034. Friday’s high was 1.5440. Bottomed out 1/26 at $1.4952, with critical support at $1.48, a double-bottom from 3/29-31/2013! Yen also stable at 118.78 -0.07, after trading to 120.48 on 2/12 – 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 feebly attempted to rally Monday but is weak again o/n at $1219.30 -$7.70, again nearing that double bottom at $1217.80. The 200 day ($1251) is now first resistance. Silver also weak; now $16.66 -.63. 1/6’s low was $16.54. Crude is pretty flat at $52.86 +.08, with sup at the 50 day $52.48 – session high is $53.69! 2/11’s low was $47.36, lowest since 2/5.

Friday’s Market Summary:

An explanation for Friday the 13th’s rally: Volume took a spike up but at the closing bell shares traded on the NYSE floor stood at just 615M shares with 145M at the close. Institutions and retail buyers do not put in orders on the close (funds do for monthend and quarterend). Thus, it has to be attributed to spec buying…that and the fact that Monday was Presidents day, Tuesday could still be light, and Friday is dreaded options expiration! That about explains it and means it could be one huge head fake.

All indices advanced, led by the two Nasdaq’s, +0.8%, the rest up o.3% (Dow 30 and Transports to 0.6%, Russell 2000. Only Dow Utilities in the red, -1.6%! Hmmm

The S&P VIX closed lower for a 4th session – nearing neutral at 14.69 -.65, almost at the 200 day (14.62), and lowest close since 12/26/14. Note, even as stocks rose into yearend, it began its ascent.

The ytd scoreboard remains volatile (can’t recall ever seeing this before): Dow 30 +1.1%; Last years leaders, Dow Transports -1.2%; Dow Utilities -3.9%; S&P 500 +1.9%; Nasdaq Comp +3%; NDQ 100 +3.5%; Russell 2000 +1.5%. NYSE Financials -0.8%: KBW Banks -2.4%; Nasdaq Banks -2.3%. Philly Gold/Silver +12.1%!!!

Total NYSE Volume declined to a weak 3.52B shares vs 3.78B vs 3.57B vs 3.63B vs 3.44B – 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 left days above 800M for the week at ONE: 760M shares vs 803M vs 750M vs 779M shares vs 776M – 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 744M shares! Since 1/5 the average is 852M shares and steadily declining! The Dec. average peaked at 979M shares on Dec. 22nd.

Advance/Declines were positive for only the 11th time in the last 24 sessions! NYSE: +1.7x vs +3.3x! vs -1.2x vs +1.3x vs -1.4x; Nasdaq +1.8x vs +2.4x vs -1.2x vs +1.6x vs -1.7x. Breadth was similar: NYSE +1.9x vs +5x!!! vs -1.3x vs +1.5x vs -1.3x; Nasdaq +2x vs +2.7x vs +1.3x vs +2.8x -1.4x. New 52 Week Highs continued to increase to a strong 346 vs 325 vs 186 vs 148 vs 108 – their range for the last 12 mos. is 39-612!!! New Lows stable at a WEAK 41 vs 37 vs 83 vs 78 vs 54 – 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 14.69 -.65, 1owest since 12/26, and just a hair above the 200 day (14.62). Range: 14.69-15.64 – significantly lower. 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 closed very weak. That was the 7th straight weak session since setting new low yields on 2/4 on Greece: 10’s 2.05% -5/8 (1.64% low yield); 30’s 2.65% -1-3/8 (2.22% low); Long TIP 0.81% -7/8 (0.49% low!).

Gold created a ‘double bottom’ at $1217.80 Thursday, and did nothing Friday, closing at $1226.50 +$5.80, following Tuesday’s negative ‘key reversal’! It has been morose for two weeks 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, $1230, the 40 day $1234, then the 200 day at $1251. 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 Thursday before coming back and closed Friday at $17.29 +.50. The 200 day ($18.34) 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 continued to feebly move higher on Friday but closed at a still weak $52.78 +$1.57. 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 ($50.16), res at the 50 day ($52.48!!!), and lastly the 200 day ($83.55). 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 but beware of Friday’s options expiration!!

TB

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