Interdum stultus opportuna loquitur...

Monday, November 15, 2004

Monday = Up Day (Goldfish Alert!!)

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Economic Statistics

The Empire State Manufacturing Index came in at 19.76, which fell short of the consensus guess (20) and is well down on the 27.26 level it showed in September.

Also, there was a 3-month and 6-month Treasury auction.

The 3-month auction (for $19billion) went quite well, with a bid-to-cover ratio of 2.07 - up from 1.89 last week. The yield on this tranche was 2.075% - in other words, just 7.5 basis points above Fed Funds.

The 6-month tranche - for a smaller $17 billion - was softer, with a bid-to-cover of only 1.79. The yield was 2.28% - 28 basis points above Fed Funds.

Federal Reserve Open Market Operations

The Fed's Open Market Operations desk performed 2 repurchase operations last night:

  • a $5billion, overnight repurchase with $4.925billion in T-backed collateral ; and
  • a $4billion, 52-day repurchase with $2.854billion in T-backed collateral.

It wasn't quite enough to provide any grease for the market's wheels though; with a market this overbought, that amount of repo grease is only enough to keep the market in place.

Major US Indices

The Dow Jones Industrial Average advanced 11.23 points (0.11%), closing out the day at 10550.24 points. With 25 minutes to go in the session it was down 11 points.

The broader S&P500 shed 0.36 points (0.03%), closing at 1183.81.

Over at Times Square, it's starting to get frothy (like it hasn't been since 2002!!). The Nasdaq Composite added 8.75 points (0.42%), to close at 2094.09, while larger-cap technology issues fared worse with the Nasdaq100 adding 2.55 points (0.16%), to end at 1560.96 points.

NYSE Volume was slightly above average, with 1.45 billion shares traded. Nasdaq Volume was chunky, with 1.88 billion shares crossing the tape.

Nasdaq Composite2094.098.750.42%
NYSE Volume1.45bn--
Nasdaq Volume1.88bn--
US 30-yr yld4.9%-0.02%-0.35%

Market Breadth & Internals

On the NYSE advancing Issues exceeded decliners by 1855 to 1478 for a single-day A/D reading of 377; Nasdaq gainers trumped losers by 1734 to 1370.

NYSE advancing volume exceeded volume in decliners by 772.58 to 664.19 million shares; Nasdaq advancing volume was greater than volume in decliners by 767.3 to 308.99 million shares.

333 NYSE-listed stocks rose to new 52-week highs, and 2 posted fresh 52-week lows, while on the Nasdaq there were 221 stocks that hit new 52-week highs, and 25 which fell to fresh 52-week lows.

The NYSE new highs/new lows stats are really showing some fearsome exuberance; it's not clear to me why "investors" think that anything in the second-term agenda is remotely positive.

Eveybody is warbling about the partial privatisation of Social Security as if it's going to be some massive source of inflows into the market.

Partial privatisation of Social Security is - repeat after me - impossible, because SocSec is not a sheme where you contribute for your own retirement... it's a Ponzi Scheme where current contributions are used to pay the retirement benefits of past contributors. No ifs, no buts. And with demographic trends making that nigh-impossible, there is no way that any of the Social Security Trust Fund will be invested in the stock market. No Way. "Investors" ought to get that through their thick heads.

Also, it takes almost nine minimum-wage taxpayers' worth of contributions, to fund the retirement allowance of one Social Security beneficiary. With the US generating far more low-paid work than high paid, the sums simply don't add up.

Advancing Volume (m)772.58767.3
Declining Volume (m)664.19308.99
New Highs333221
New Lows225

Market Sentiment

Frothy, frothy, frothy.

If tonight is not the top of the recent rally, then we might as well throw out our charts and data, and invest on the flip of a coin. the Put-Call ratio is at ludicrously low levels - it's as if the options market is telling people that calls are a ticket to Easy Street.

The November options expire this Friday, and the $38 QQQ puts are a fair chance to expire worthless unless the maret reverses rapidly (which is not beyond the realms of possibility). Thankfully, the TLT WK ($89 puts over the Lehman 20-yr Treasury iShares) will more than cover any loss on the QQQs.

Timing is everything - and the time for this little bull run is finished, as far as I can see. That reminds me - Bull Run is also the alternate name given to Mannassas, which was the site of two of the bloodiest battles of the Civil War.

CBOE Equity Call Volume (000)1008.31152.8917.87%
CBOE Equity Put Volume (000)397.76-140.45-26.1%
CBOE Volatility Index13.380.050.38%
CBOE Nasdaq Volatility Index18.5-0.32-1.7%
Equity Put-Call Ratio0.39-0.23-37.3%
10-day PCR0.55-0.0366-6.19%
SPX-VIX Ratio88.48-0.36-0.4%


Bonds rose at the long end, with the yield on the benchmark 30-year Treasury bond shedding 1.7 basis points to 4.895%. It ought to break through 5% this week, which should make people sit up and take note.

UST 2Y (yld)2.8550.041.35%
UST 5Y (yld)3.5270.0220.63%
UST 10Y (yld)4.18600.1%
UST 30Y (yld)4.8950.0020.04%

The Banks Index dipped 0.15 points (0.14%), closing at 103.58; within the index,

  • the Derivative King - JPMorganChase shed $0.01 (0.03%) ending the day at $39.16; and
  • Citigroup lost $0.40 (0.85%) ending the day at $46.67

The Broker-dealer Index added 0.14 points (0.1%), to end the session at 145.6; the ticket clippers lined up as follows -

  • Merrill Lynch posted a rise of $0.21 (0.37%) to end the session at $57.16
  • Morgan Stanley Dean Witter gained $0.07 (0.13%) to end the session at $53.20
  • Goldman Sachs lost $0.04 (0.04%) closing at $104.62
  • Lehman Brothers added $0.47 (0.56%) at $84.47

The Philadelphia SOX (Semiconductor) index rose 5.76 points (1.36%), at 429.57

  • Triquint posted a rise of $0.06 (1.49%) closing at $4.10
  • Micron Technology added $0.11 (0.92%) at $12.12
  • Intel rose $0.08 (0.34%) ending the day at $23.77
  • Altera gained $0.22 (0.95%) to end the session at $23.27
  • JDS Uniphase gained $0.09 (2.86%) ending the day at $3.24

Gold & Silver

Gold weakened by $1.5 (0.34%) to $437 per ounce. The good news for gold bugs is that it managed to trade above $440 an ounce briefly during the session. the bad news is that it fell sharply thereafter.

The Gold Bugs Index lost 4.9 points (2.03%), ending the day at 236.96 points.

Silver fell by $0.07 (0.92%) to close at $7.55 per ounce. The Gold and Silver Index (XAU) lost 1.5 points (1.38%), closing at 107.09 points.

PHLX Gold and Silver Index107.09-1.5-1.38%
AMEX Gold BUGS Index236.96-4.9-2.03%


Oil lost ground yet again, shedding $0.66 per barrel, closing at $46.76 per barrel. It's getting to the stage where it's oversold, and I am looking for some cheap-ish options over one of the Oil EFTs - of which more tomorrow.

The Oil and Gas Index (XOI) dipped 12.49 points (1.75%) to 701.27, and the Oil service stocks (OSX) Index slid 3.84 points (3.22%), ending the day at 115.36 points.

Reuters CRB284.53.751.34%
Crude Oil Light Sweet46.76-0.66-1.39%
AMEX Oil Index701.27-12.49-1.75%
Oil Service Index115.36-3.84-3.22%


The high for the Euro last night was 1.2999... that's not an accident. It's pretty clear that a load of nuffie ForEx traders think that the Euro is going to be "taken down" - either by the BoJ (who have been involved, make no mistake) or the ECB.

There's been plenty of central wanker waffling about "co-ordinated intervention" to stem the rise of the Euro.

Why? Didn't we spend trillions of dollars supposedly preventing central planning from trying to dominate our economic lives? What the f%$k was th Cold War about? That wax model of Lenin in Red Square must be grinnning from ear to ear - looks like he won!

US Dollar Index84.070.350.42%
Australian Dollar0.77260.00370.48%
Swiss Franc1.17910.00750.64%
Canadian Dollar0.833-0.0051-0.61%

European Markets

France's benchmark CAC-40 Index declined 14.14 points (0.37%), at 3820.97 points; the German DAX-30 Index dipped 9.01 points (0.22%), to end the session at 4134.34; in the UK, the FTSE-100 Index added 9.2 points (0.19%), to 4803.1 points.


Tonight's Pivots (US Market)

R2105961189.81573.5112 27/32
R1105801187.71568.5112 23/32
Pivot105531184.11560112 15/32
S11053711821555112 11/32
S2105101178.41546.5112 3/32