Quote of the Day from the Friars Club Encyclopedia of Jokes: “Golf is a lot like business. You drive hard to get in the green, and then wind up in the hole.” – Anon
Bloomberg Quote of the Day: “Art is never finished, only abandoned.” – Claude Monet
Friday’s Market Summary:
A bloodbath…and you were warned. Now here’s another warning: if you think the market is going to go down further, bear in mind that Friday is options expiration – the final quadruple witching of the year! Anything can happen. Most likely case is a ‘rebound’ ahead of it to ‘square’ positions, then its anyone’s guess. We have been disappointed several times in selloff’s that don’t even reach 20%, let the required 25% for a correction. Solution: hands in pockets! Off keyboard!
Worst performer was the Russell 2000 small cap down 2%! This was followed by the Dow 39 -1.8%, then the S&P 500 -1.6%; both Nasdaq’s were off about 1.2%, while Dow Transports and Utilities (?) both declined 1%. Bonds rallied large with the 30-year closing at a new 12-month low of 2.74%, while the 10-year and long TIP closing right on their respective lows ((2.09%/0.83%)!!! Gold was boring, closing only slightly lower, but Crude tanked to another new 5+ year low, closing just above it at $57.52!!! Ah, but cheap gas will keep the economy going! Wanna bet?
Back to stocks: A/D’s and Breadth were very negative; new 52 week lows sunk (stunk?) to and extremely weak 111 from 201, while new lows nearly doubled to a huge 603!!! THAT’S Bearish! Worse, Volatility was sharply higher…on a down day! This plus high volume plus new highs/lows plus A/D’s-Breadth…what does it spell? Trouble ahead! It was the 2nd worst week of the year for stocks (see details below…downright scary!). Will you have a good or a bad year? The next week could decide!
Total NYSE Volume rose to 4.16B shares vs 3.93B vs 4.05B vs 3.95B vs 3.72B. Average volume since 9/30 remains about 3.6B shares or about 600M more than the 12-month average. Shares traded on the NYSE floor (aka REAL) also sharply higher at 941M shares – highest since 11/21 (options expiry!) vs 824M shares vs 913M (1st 900M day since October!) vs 834M vs 770M, For comparison purposes, for the prior 12 months it is a historically weak 722M shares, but since 10/1: 819B shares – including a 1.22B (and two more 1B+ share sessions) – highest since 9/19,. The lowest was 11/1’s 619M share session. April 30 – September 30 we had just SEVEN 800M shares…since 10/1: now at 22 – just one in Nov, and now SEVEN 900M+ days: that is now FOUR 800M days and TWO 900M day for Dec.
A/D’s were very negative: NYSE: -3.8x!!! vs +1.4x vs -4.6x!!! vs +1.5x vs -2.3x; Nasdaq -2.4x vs +1.5x vs -4.6x!!! vs +2.1x vs -2.9x. Breadth was worse: NYSE -4.7x!!! vs +1.2x vs -15.5x!!! (Unbelievable!) vs +1.4x vs -3.8x!!! Nasdaq -2.6x vs +2.2x vs -2.5x vs +2.1x vs -3.3x. New 52 Week Highs nearly halved to an extremely weak 111!!! vs 201 vs 215 vs 207 vs 386! – their range for the year is 39-612!!! New Lows tried to double to 603!!! vs 364 vs 460 vs 467! vs 416. The 2014 range is 24-1043!!! S&P VIX added a full point to its already bearish close ending up at 21.08 with a high of 21.86 – highest since 10/17! During the ‘rally’ it only made it to 15.94 – this despite the early rally! We are now nearing those bearish extremes that had a high of 31.06 (highest since 11/28/11!!!), and now a big possibility with options expiry this Friday! The average of the past 12 months is 14.03, with a low of 10.28!…high close of 26.25 on 10/15/14!
U.S. bond market closed strong at or through the old 12-month lows! Note on 12/2, the 30 yr bottomed at 3.01%. Updating the recent 12 month low yields (10’s 2.09%; 30’s 2.74%! and long TIP 0.83%), 10’s closed at 2.09%! +11/16; 30’s 2.74%!!! NEW LOW +1-5/16, and the long TIP 0.83%!!! +9/16. Overnight back to weak!?! 10’s 2.11% -1/4; 30’s 2.76% -1/2; long TIP 0.84% -1/2…hmmm.
Libor update: 0.243% 3 mos.; 0.341% 6 mos. Both higher but still near their recent record lows! The Fed Funds rate has averaged 0.09% and is currently 0.09-0.11% – back from 0.13%, a 9-month high. T-Bills: 0.01%! one-month; 0.02% 3 mos; 0.19%!!! – why is it rising?
Foreign bond yields slightly, ex-PIIGS, which have been hurting – even Greece, which is back from 8.9%! (Benchmark is 10yr): Germany 0.63%! +1; UK 1.82%! +3; France 0.90%! +1; Italy 1.98%??? -8?; Spain 1.78% -9!!!; Portugal 2.90% -4; Greece 8.58%! vs 8.88%!!! vs 8.70%! vs 8.24%! vs 7.71% vs 7.03%, -25!!! Not for the faint of heart! 10/16’s close was 8.54%! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.37%!!! -2.
Gold closed slightly weaker but still holding safely above $1200 closing at $1222.00 -$3.10 – in an ‘inside’ session. Last week’s intraday high was $1238.00 – highest since 10/22/ This is its SIXTH straight $1200+ close since 12/5the selloff began. Well above the 40/50 day again for just the 6th time since 10/21! 11/7’s low was $1130.40, a new 12-month low!). This was only the 2nd time in 31 sessions without a print below $1200. Last close above $1300 was on 8/15. 7/17’s session high was $1346.60, highest since March 19th!!! Support is at $1200 (psych) and the 40 day ($1199!), the 50 day $1204, RES at $1256, the 10/21 high, then the 200 day $1269 – all have bottomed! The 12-month high is $1392.60 on 3/17, highest high since 9/4/13. 11/7’s low was $1130.40! Overnight it is weaker at $1212.50 -$10.00! – with a session low of $1206.50. There have now been 14 highs above $1200 since 10/31. Silver starting to crack – breaking $17 and now at $16.91 -.14, following its $17.27 high! This after a $14.12 recent low, not seen in more than five years!
Crude really took it Friday, first diving to $57.34, lowest since 5/18/09!, then closed barely above $57.52 -$2.43!!! – that is it’s 7th straight ‘lower low’ and close! Consider: 10/25’s high was $84.83. There have now been 47!!! handles since peaking at $107.73 on June 13th, highest since 9/19/13. The record high of $147.27 was on 9/30/08, the low since on 5/15/09 is $56.07: $89.85 is the average! Recent rally high and close are $110.70 and $110.53 respectively. RES at the 40 day ($74.49!), then the 50 day ($76.79!), and lastly the 200 day (94.22!), all STILL increasing their rate of decline! We are now headed for $50!!! The recent range is now $59.32-$112.24 since 3/1/12. Overnight, it had another hughe new low of $56.25 (now its 48th handle), but bounced and is now $58.02 +.21. Ouch! 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%!!!).
Overnight Global Markets:
European equities mixed and little changed and remain EXTREMELY weak – now four days! Asia slammed (led by Japan), Korea and India little changed: UK -0.3% vs -1.5%! vs -0.8% vs +0.1% vs -1.5%!!! vs -0.9%; France +0.1% vs -1.5%! vs -0.4% vs +0.1% vs -1.8%!!! vs -0.9% vs +1.3% vs -0.9%; Germany +0.1% vs -1.4%! vs +0.1% vs +0.6% vs -1.6%!!! vs -0.5% vs +1.3%; Japan -1.6%!!! vs +0.7% vs -0.9% vs -2.3%!!! vs -0.7%; Hang Seng -1%! vs -0.3% vs -0.9% vs +0.1% vs -2.3%!!! Korea -0.1% vs +0.3% vs -1.5%!!! vs -1.3%! vs -0.4%; India -0.1% vs -0.9% vs -0.8% vs +0.1% vs -1.2%! vs -1.2%! U.S. equity futures higher – another ‘dead cat bounce’? DOW +77 (40); SPX +11.30 (20); NDQ +26.25 (31). Note these merely offset most of the declines at this time last Friday!
Some random thoughts:
…the U.S. used to be an ‘egalitarian’ country…with the Democratic Party exhibiting that the most. Now both parties…or at least the leaders of the Dems…have abandoned that in favor of the wealthy – especially Wall Street. TB can understand one not calling themselves a Democrat (he refuses to do so), but how can anyone who ‘works’ for a living call themselves Republicans? The joke, folks, is on you! If you needed proof…since Bush 43 took office…look at how the party has intervened to prevent jobs growth and forced us to let our infrastructure rot. TB used to watch the GOP National Convention just to see all those smiling ‘average Joe’s’ sucking up the party line while they were in fact, being mocked. That Romney clip that he didn’t know was being filmed told the whole two-faced story. A travesty!
Equal time you say: Ok, yesterday on Bill Moyers was an interview with John H. MacArthur, publisher of Harper’s magazine. He homed in on the Clinton’s (both Bill and Hillary separately), and Obama, who can now only be called ‘two-faced’. The ‘great black hope’ (for both blacks and whites), let us down. His promise to change the way government does business was hypocritical. First, he had no plan (Lawrence Lessig), secondly he, the Daley’s, and Rahm Emanuel, were his closest advisors. Recall that William Daley, left Citigroup to become Chief of Staff (receiving a $10 million kiss goodbye, which was said to be necessary to get people to leave the private sector). Then in a musical chairs move (he was removed and replaced by Jack Lew, and ultimately Rahm Emanuel who ‘quit’ to run for mayor of Chicago…sweet!). Emanuel won, and replaced Richard M. Daley (the other son of legendary Chicago mayor Richard J. Daley)…isn’t nepotism great?
Now that you have the players, recall that Bill Daley, was Clinton’s Secretary of Commerce…you do remember NAFTA don’t you? That was a bill of goods crammed down the throats of the American people (sorry, TB didn’t realize the repercussions either), that shifted jobs to Mexico. Oh, and the outsourcing continued…India…then China…and guess what is next because they are ‘slightly’ cheaper? Viet Nam and Cambodia! Bill Clinton, friend of the people, not! Oh, and let’s not forget Hillary who preached for equal pay for women and increasing the minimum wage, THEN voted against them as a Senator! The point is they all speak out of both sides of their mouths…
Lee Iacocca wrote a book a decade or more ago, Where are the Leaders? It was short because he couldn’t come up with any! Flummoxed! We are still asking that question today, and may be into and after the next election.
Neither party gives a damn about the working people, only those who pump millions into their coffers (which thanks to the GOP just became easier). Jamie Dimon must be laughing his ass off over the budget ‘deal’ that was just passed…bipartisan by the way. Let’s get this straight: Obama, over the objections of key democrats, urged them to pass the bill. This despite allowing the wealthy to contribute even more to political campaigns and worse, castrating Dodd-Frank! How could a Democrat do this? Simple if you are in bed with the Daley’s. Now do you understand why the last three Defense secretaries, all said that they were overridden by Obama’s insiders?
Now for a positive: TB has followed closely the rising star, Elizabeth Warren, who first designed a consumer financial protection agency, was nominated to head it and had to withdraw after Jamie Dimon, blackballed her. But this woman has guts. She ran for and surprisingly became a U.S. Senator where she has become a thorn in the side of both parties. Is she our last hope? TB thinks so! She is articulate, assertive but not vindictive, and is a populist…something the Democratic Party has forgotten. At this point at least, TB believes she should be the first woman president. If we continue the status quo…it won’t matter who is elected as we morph from ‘egalitarian’ (already done), to an oligarchy, over the dead bodies of our nations founders!
Listen to this segment from Bill Moyers and see if you agree: democrats-bow-wall-street
Wow! Chuck Todd is no wimp! He took on Dick Cheney yesterday and made him look like a zealot…correction, Cheney did that to himself. He even contradicted Bush 43’s statement in his book that he wasn’t aware of the details of the prisoner detainment…I believe that. Meanwhile, Cheney used the feeble excuse that two presidential legal advisors said what they did was not torture. I agree that had we had another attack after 9/11 there would have been hell to pay, but we turned ourselves into the kind of ‘animal’s some Japanese became in WWII. By the way, if you doubt this, see Unbroken, premiers on Christmas Day…don’t recommend you see it then!
Lastly, somehow, David Koch (the guy who gives libertarians a bad name), allowed himself to be interviewed on the Barbara Walters The Ten Most Interesting People of 2014, last night.
“I’m basically a libertarian, and I’m a conservative on economic matters, and I’m a social liberal,” Koch told ABC News’ Barbara Walters during an interview for her special “ Now he has not only denigrated libertarians, but ‘social liberals’.
TB write this as a former Republican, now a man without a party. Have a great week!