2/19/15…should the Fed be audited… or Congress?

TB’s Quote of the Day: “Congress wants to audit the Fed…why? When it is Congress that needs an audit…and a shrink! TB

Bloomberg Quote of the Day: “I think a hero is any person really intent on making this a better place for all people.” – Maya Angelou

Overnight Global Markets:

Global equity markets higher ex-UK for a 2nd day: UK -0.1% vs -0.3% vs +0.5% vs +0.6% vs +0.1%; France +0.5% vs +0.7% vs +0.3% vs +0.7% vs +1.1%; Germany +0.1% vs +0.4% vs -0.1% vs +0.6% vs +1.6%! Japan +0.4% vs +1.2% vs -0.1% vs -0.4% vs +1.9%! Hang Seng closed vs +0.2% vs +0.2% vs +1.1%! vs +0.4%; Korea closed for 2nd day vs +0.2% vs +0.8% vs -0.2%; India +0.5% vs +0.6% vs closed vs +1% vs +1%. U.S. equity futures mixed: DOW -33 (range 75); SPX -4.60 (10) NDQ +2.50 (16).

Global Money Markets: Libor: 0.257% 3 mos; 0.382%; 6 mos – watch…but still not far off their recent record lows! The Fed Funds rate has averaged 0.09% and is now 0.12-0.14% – 0.14% is the 9-month high! T-Bills: 0.01%, 1 mo; 0.01%, 3 mos; 0.06% 6 mos; 0.20% 1-yr – 0.25% is the 12-month high!

U.S. Treasury Bonds are oscillating within a narrow range: 10’s 2.07% +1/16; 30’s 2.70% +3/16; Long TIP: 0.84% -3/8. Let us (continue to) pray!

European Bond yields mixed; Greece unchanged – not THAT’S news! Germany 0.39% +1; UK 1.84% -1; France 0.71% +2; Italy 1.58% -3; Spain 1.53% -4; Portugal 2.21% -8!; Greece 9.66% — This after trading at 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: 0.38% -2; low is 0.19%!

Dollar Index slightly higher overnight, currently 94.42 +.22. Recent low is 93.25 on 2/3. 1/26’s 95.527 was highest since 9/30/03! Euro slightly weaker at 1.1368 -.0030. 1/26’s 1.1098 – an 11-year low!!! Sterling 1.5411 –.0003. 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 remains weak at 119.13 +0.24, after trading to 120.48 on 2/12! 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 has arisen from the dead zone and is now $1215.00 +$14.80, session high $1222.90! with support at $1203. Wednesday’s low was $11.97.80! The 50 day ($1230) is now first resistance. Silver $16.63 +.37. Wednesday’s low was $16.23. Crude feeling pain again and is now $49.99 -$2.15, session low $49.73, with res at the 40 day $50.03. 2/11’s low was $47.36, lowest since 2/5.

Wednesday’s Market Summary:

NOTE: Minutes of last FOMC meeting were released today…they are going to go slow, especially now that Europe is in a ‘deflationary’ glidepath. Now Congress wants to audit the Fed – the only thing related to the government that did its job and performed admirably…although one can question the QE’s. Congress and two Administrations did nothing to help Main Street and continues to drag its GOP feet on everything. It is Congress that needs to be audited! Makes you wonder what the 2016 elections will be like. Might not be as pretty for the GOP. Key for the Dems is running Warren instead of Hillary Clinton…can it be done? Can she be elected? Who cares, she is HONEST!

Stock market was mixed with minimal changes except for Dow Utilities which surged 2.2%; Dow Transports were the only other one to write home about, +0.4%. The rest were from -0.1% (Dow 30), to +0.2% (Russell 2000). A/D’s and Breadth were nearly equal and of no possible interest if you want a rally or a selloff. The S&P VIX traded in a tight range of 15.44-16.74 only slightly wider than Tuesday. New 52 week highs continued to fall – another bad sign – while new lows barely climbed to a weak 45.

The ytd scoreboard remains volatile (can’t recall ever seeing this before): Dow 30 +1.2%; Dow Transports -0.6%; Dow Utilities -1.8%; S&P 500 +2%; Nasdaq Comp +3.6%; NDQ 100 +3.7%; Russell 2000 +1.7%. NYSE Financials -0.3%: KBW Banks -3.2%; Nasdaq Banks -2.7%. Philly Gold/Silver +11.2%.

Total NYSE Volume continued to slipslide to a weak 3.34B shares vs 3.35B vs 3.52B vs 3.78B vs 3.57B – 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 dropped to 730M shares (but with 145M on the close!) vs 780m vs 760M vs 803M vs 750M – 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 745M shares! Since 1/5 the average is 846M shares and steadily declining! The Dec. average peaked at 979M shares on Dec. 22nd.

Advance/Declines were boring! NYSE: +1.2x vs -1.3x vs +1.7x vs +3.3x! vs -1.2x; Nasdaq +1.1x vs +1.3x vs +1.8x vs +2.4x vs -1.2x vs +1.6x. Breadth was similar: NYSE +1:1 vs +1.3x vs +1.9x vs +5x!!! vs -1.3x; Nasdaq +1.1x vs +2x vs +2x vs +2.7x vs +1.3x vs +2.8x. New 52 Week Highs were lower again at 238 vs 297 vs 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 45 vs 39 vs 41 vs 37 vs 83 – 2015 high is 386 (12/16’s high was 712!!!) The 12-month range is 24-1043!!! S&P VIX slightly lower at 15.45 -.35, from Monday’s 1owest since 12/26, and back above the 200 day (14.65). Range: 15.44-16.74. 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 14.63, with a low of 10.28!…high close was 26.25 on 10/15/14!

U.S. Bond Market came back a bit after the FOMC minutes came out. That followed 8 straight weak sessions since setting new low yields on 2/4 on Greece: 10’s 2.09% +1/2 (1.64% low yield); 30’s 2.71% +1/4 (2.22% low); Long TIP 0.83% +13/16 (0.49% low!).

Gold took s header to $1197.80, lowest since 1/5 before coming back to close weak at $1200.20 -$8.40. It peaked at $1307.80 on 1/22. $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 $1235, then the 200 day at $1251. The 12-month high is $1392.60 on 3/17/14, highest high since 9/4/13. Silver also put in a slight new low of $16.23. It closed at $16.47 +.09. The 200 day ($18.32) is resistance with res at the 50 day, $16.80, and the 40 day, $16.87. $14.12 is the recent low (12/1/14), first time in more than five years!

Crude gave up the ghost sliding into the close at $52.14 -$1.39. This after plummeting to $47.36 last 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 is the 50 day ($51.90), then the 40 day ($50.03), with res at the 200 day ($83.08). 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 and beware of Greeks bearing gifts. Options expiration tomorrow!!

TB

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