Interdum stultus opportuna loquitur...

Tuesday, August 24, 2004

Much Ado About Not Much...

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Ahhh - the sickly-sweet smell of rotting hope. Sniff that in, ladies and gentlefolk.

Last night's apparent "positives" - an afternoon recovery, a close above the zero line for the Dow - really are the proverbial "lipstick on a pig". The major brokerages continue to "dance with him what brung ya", doing the bidding of the powers that be and providing intraday support whenever the market attempts to follow the path of least resistance (i.e., dowwards).

In a sense they are lucky that most large-scale market participants are taking the week off; it is hard to perform a distribution when there are big players looking to get the hell out. If they can't muscle this market up - above 10150 on the Dow is absolutely required by tomorrow or the next day - then this thing is going to accelerate to the downside.

Anyhow... the bias change that I mentioned yesterday would have come in handy if I had stayed awake: despite the fact that the market basically meandered around the zero line for most of the session, the market felt what I like to call "slippery" during declines, and advances were grinding, hard won affairs... until lunchtime, when volume was so light that the merest ikling of a "house intervention" rattled stops and wafted the market back towards the previous closing level.

Just give me a sec - I need to get something off my chest.

Everybody who knows me, knows I loathe brokerage anaysts with a passion usually reserved for people who hurt cats. Today we had some absolute pearlers:

  • Goldman Sachs referred to Caterpillar (CAT) as "a buying opportunity". I have always hated that kind of language - becasue everything is a buying opportunity: the critical question is whether it can bexpected to go up after you buy it - that is, whether or not it's a profit opportunity. I have no view on CAT, but I wish that brokerage analysts wouldn't deliberately try to sound like wankers.
  • CSFB cut its target price on Broadcom (BRCM) to $38 from $54... after the stock had fallen from $46 to $28. It's still trading at something like 70x earnings, so no guesses where it's headed.
  • UBS cut its price target for CSCO to $20 from $21... after the stock had fallen from $29 to $18 and change.

Honestly... it rivals the moron from Dow Jones Newswires who claimed that equities "usually rise when oil softens". What the...? These dickheads who want to paint any excuse for a rally are really doing their readership a disservice.

Ah well... things could be worse. The omens are very positive at present (for me, not the market). Yesterday both of my eggs were "double yolkers"; I have not even seen a double-yolked egg since I was about 14.

The Dow Jones Industrial Average gained 25.58 points (0.25%), closing out the day at 10098.63 points; the broader S&P500 Index gained 0.51 points (0.05%), finishing the session at 1096.19.

Over at Times Square, the Nasdaq Composite lost 1.81 points (0.1%), to close at 1836.89, while the larger-cap stocks were also pretty flat with the Nasdaq100 Index losing 1.12 points (0.08%), to end at 1369.78 points. The real damage was done in the Semiconductor index (SOX) which got absolutely hammered.

The broader stock market measures lagged the blue-chip Dow: NYSE Composite Index lost 2.93 points (0.05%), closing at 6382.51, while the broadest measure of US equities, the Wilshire 5000 gained a scant 6.53 points (0.06%), finishing the session at 10638.36.

Dow Jones Industrial Average10098.6325.580.25%
S&P500 Index1096.190.510.05%
Nasdaq Composite1836.89-1.81-0.1%
Nasdaq100 Index1369.78-1.12-0.08%
NYSE Composite6382.51-2.93-0.05%
Wilshire 500010638.366.530.06%
NYSE Volume1.09bn--
Nasdaq Volume1.31bn--
US 30-year bond yield5.07%0%0%

NYSE Volume was below average, with 1.09 billion shares traded, while Nasdaq Volume was about average, with 1.31 billion shares crossing the tape.

On the NYSE advancing Issues outpaced decliners by 1854 to 1476, while Nasdaq gainers outpaced losers by 1665 to 1399. NYSE advancing volume outpaced volume in decliners by 532.3 to 525.4, and Nasdaq declining volume outpaced volume in advancing issues by 704.3 to 509. There were 89 stocks which posted new 52-week highs, and 17 posting new 52-week lows on the NYSE, and 35 stocks which posted new 52-week highs, and 46 posting new 52-week lows on the Nasdaq.

Advancing Volume (m)532.3509
Declining Volume (m)525.4704.3
New Highs8935
New Lows1746

Bonds were basically flat, with the benchmark US 30-year bond yield adding 2/32nds, with its yield pretty much unchanged at 5.07%. Elsewhere on the yield curve, the 2-10year strip rose in price by 1/32nd across the board.

The Banks Index gained 0.36 points (0.37%), finishing the session at 97.84; within the index,
  • the Derivative King - JPMorganChase gained $0.04 (0.1%) to close at $38.59; and
  • Citigroup gained $0.10 (0.22%) to close at $45.92

The Broker-dealer Index lost 0.13 points (0.1%), finishing the session at 123.83; the ticket clippers lined up as follows -

  • Merrill Lynch lost $0.28 (0.55%) to close at $51.04
  • Morgan Stanley Dean Witter lost $0.37 (0.74%) to close at $49.83
  • Goldman Sachs gained $0.03 (0.03%) to close at $87.53
  • Lehman Brothers gained $0.55 (0.76%) to close at $73.17

The Philadelphia SOX (Semiconductor) index got smacked losing 9.82 points (2.52%), finishing the session at 380.27

  • Triquint lost $0.08 (1.9%) to close at $4.12
  • Micron Technology lost $0.26 (2.14%) to close at $11.90
  • Intel lost $0.22 (1.01%) to close at $21.67
  • Altera lost $0.79 (3.86%) to close at $19.66
  • JDS Uniphase lost $0.05 (1.58%) to close at $3.12

Other indices popular with the beta-chasers were mixed, with the

  • Biotech Index up 3.04 points (0.62%), finishing the session at 490.91
  • the Hi-Tech Index down 2.97 points (0.7%), finishing the session at 421.95

Gold weakened by another $7.60 (1.92%) to $402.90 per ounce (spot) which contributed to the Gold Bugs Index losing 5.5 points (2.68%) to 199.35; silver was hit harder, falling 18 cents (2.82%) to $6.56 an ounce. The Gold and Silver Index (XAU), lost 2.14 points (2.28%), finishing the session at 91.66.


Oil lost ground, shedding 84cents per barrel, and pressuring the Oil and Gas Index (XOI) which lost 5.09 points (0.82%), finishing the session at 618.23 while the Oil service stocks (OSX) Index lost 0.22 points (0.21%), finishing the session at 105.11

CRB Index274.27-3.37-1.21%
US Dollar Index89.560.370.41%

The US dollar index continues its bounce, adding 0.37 (0.41%) and rising to 89.56; there is still a slightly inexplicable lack of Yen weakness on this bounce (which is only a bounce - no country in history has had external and internal imbalances the like of the United States without dire consequences for the currency).

Swiss Franc0.7855-0.0025-0.32%
British Pound1.7914-0.0149-0.84%

Europe was as flat as a pancake by the close: France's benchmark CAC-40 Index gained 4.69 points (0.13%), finishing the session at 3594.38. The German DAX-30 Index lost 1.14 points (0.03%), finishing the session at 3771, and in the UK, the FTSE-100 Index gained 2.2 points (0.05%), finishing the session at 4407.5