Interdum stultus opportuna loquitur...

Tuesday, November 02, 2004

Poll-Driven Gyrations Dominate

Note - from June 24th 2009, this blog has migrated from Blogger to a self-hosted version. Click here to go straight there.

Look at Live Cattle... what a tank-o-rama! If I'd simply paid up the $2.15 required to get the Dec $89 put, I would not be kicking myself (the put closed at $5.57 last night).

The TLT WK Nov $89 Lehman iShares 20-yr Treasury put is still holding nicely, and all is right with the world.

Economic Statistics

The only numbers out last night were the normal weekly store sales numbers from ICSC/UBS (showing a 0.3% fall for the week) and the Redbook (showing a 0.6% fall month-to-date for October). These surveys measure sales at chain stores, which count for about 10% of total retail spending.

Federal Reserve Open Market Operations

The Fed's Open Market Operations desk did a $3.25billion overnight repo, all of it in Treasuy-backed collateral; not enough for any meaningful booster-shot at 10 a.m. NY time (which is now 2 a.m. when measured in proper Aussie time).

Plus, the election is clouding everything at the moment (something to reflect on the next time some dickhead tells you that the market is forward looking... at best the market looks sideways); the market opened with a surge of enthusiasm following the incessant butt-licking over the weekend by major media outlets, who fawned over Bush and spun the post-Osama polls like there was no tomorrow.

Why anybody gives a rat's - from an investment standpoint - as to which megalomaniacal crook sits in the Oval Office, is beyond me. Sure, they might bankrupt the country at slightly different rates, but at the end of the day global capital markets decide what the US can get away with.

Major US Indices

It's gotten so that the Blog-o-sphere is often getting way out in front of the major media - so much to that New York Times editor-in-cheif Howell Raines had to rabbit on about the propensity for the Internet to disseminate unverified information...

This is the same toad who presides over the firm that employs Judith Miller - the front-woman for a load of Ahmed Chalabi's bullshit. The nerve of this clot... his paper was the absolute lead organ for the ramp-up of propaganda that lied the US into war - deliberately, and like an absolute echo chamber for any and all of the "Israel-Uber-Alles" crowd in Feith's Office of Special Plans.

Plus, if he was editor of a Blog which was being challenged by some other new technology, I am sure he would be singing the praises of blogs.

Ooops... This is supposed to be about the indices.

After a first-hour orgasm that gave the market nowhere to go, the Dow wandered sideways for most of the mid-session. Then, some blogs like Matt Drudge and The Daily Kos posted stories about chatter they'd heard about exit polls in key states, showing Kerry leading.

Well, the market didn't like that... (WHY? What difference will it make to the earnings of INTC, IBM, UTX or MCD? ).

The DJIA lost over 100 points in two hours as Kerry started to firm. By the close - with the Dow futures having posted a low at exactly 10,000 - the blue-chip index closed with a loss of only 18.66 points (0.19%), closing out the day at 10035.73 points; the broader S&P500 added 0.07 points (0.01%), to 1130.58 making it six straight sessions of gains (only just).

Over at Times Square, the Nasdaq Composite gained 4.92 points (0.25%), to close at 1984.79, while larger-cap technology issues fared better with the Nasdaq100 adding 6.04 points (0.41%), to end at 1494.83 points.

NYSE Volume was chunky, with 1.67 billion shares crossing the tape, while Nasdaq Volume was above average, with 1.84 billion shares crossing the tape.

Nasdaq Composite1984.794.920.25%
NYSE Volume1.67bn--
Nasdaq Volume1.84bn--
US 30-yr yld4.84%-0.01%-0.19%

Market Breadth & Internals

On the NYSE advancing Issues exceeded decliners by 1800 to 1525 for a single-day A/D reading of 275; Nasdaq gainers trumped losers by 1560 to 1543.

NYSE advancing volume exceeded volume in decliners by 831.18 to 794.51 million shares; Nasdaq advancing volume was greater than volume in decliners by 623.54 to 353.61 million shares.

207 NYSE-listed stocks rose to new 52-week highs, and 8 posted fresh 52-week lows, while on the Nasdaq there were 116 stocks that hit new 52-week highs, and 26 which fell to fresh 52-week lows.

Advancing Volume (m)831.18623.54
Declining Volume (m)794.51353.61
New Highs207116
New Lows826

Market Sentiment

Put buying is peskily high - over 2 million - but that's to be expected as people take spreads based on the election outcome. Call buying dominated, pushing the equity only Put-Call ratio down to 0.72 - which still leaves it in no-man's land.

Volatility has picked up a little bit, again showing buyers pushing call prices up. The difference between last night and last week, is that call sellers are obliging by getting rid of larger volumes.

I've said this before, but it bears reiterating; markets don't give a damn who is in charge; the only thing that matters - for medium-to-long term investing - is the starting valuation and where you are in the cycle. the marekt's starting valuation (for the next president, whoever he is) is historically high, and all economic and demographic variables are mitigating against prosperity. The economic and social damage has been done over two generations, and there is no way that fiscal or monetary policy can extract the United States from the end-game that awaits it.

Equity Call Volume2.9m0.74m34.16%
Equity Put Volume2.07m0.45m27.87%
CBOE Volatility Index16.18-0.09-0.55%
CBOE Nasdaq Volatility Index22.971.074.89%
Equity Put-Call Ratio0.72-0.04-4.68%
SPX-VIX Ratio69.880.39080.56%


Bonds rose along the curve, with the yield on the benchmark 30-year Treasury bond shedding 0.2 basis points to 4.829%.

UST 2Y (yld)2.569-0.01-0.31%
UST 5Y (yld)3.319-0.006-0.18%
UST 10Y (yld)4.0660-0.05%
UST 30Y (yld)4.829-0.002-0.04%

The Banks Index gained 0.27 points (0.27%), at 99.84; within the index,

  • the Derivative King - JPMorganChase posted a rise of $0.01 (0.03%) closing at $38.51; and
  • Citigroup posted a rise of $0.52 (1.17%) to end the session at $44.83

The Broker-dealer Index advanced 1.45 points (1.06%), at 138.12; the ticket clippers lined up as follows -

  • Merrill Lynch rose $0.56 (1.03%) to $54.69
  • Morgan Stanley Dean Witter dipped $0.04 (0.08%) at $52.15
  • Goldman Sachs rose $0.32 (0.33%) to end the session at $98.64
  • Lehman Brothers posted a rise of $1.46 (1.79%) ending the day at $82.90

The Philadelphia SOX (Semiconductor) index posted a rise of 0.52 points (0.13%), closing at 414.23

  • Triquint gained $0.05 (1.37%) to end the session at $3.70
  • Micron Technology shed $0.17 (1.42%) closing at $11.83
  • Intel added $0.17 (0.76%) to $22.61
  • Altera added $0.44 (1.93%) to $23.27
  • JDS Uniphase advanced $0.02 (0.64%) closing at $3.15

Gold & Silver

Gold weakened by $5.8 (1.35%) to $422.40 per ounce; at one stage it traded as low as $418.00 before the pro-Kerry news gave equities some pause for thought - and Gold bugs some relief.

Again - WHY? Why would gold benefit from a Democrat administration more so that another 4 years of Bush? Do goldies think that Kerry would be even more fiscally irresponsible than Bush? That would actually require superhuman endeavour, considering that a Kerry administration would almost certainly face a hostile Congress.

What that means, is that the gold market is being bought by folks based on their political leanings rather than on investment-based arguments.

The Gold Bugs Index lost 6.4 points (2.79%), to 223 points.

Silver fell by $0.29 (3.96%) to close at $7.04 per ounce. The Gold and Silver Index (XAU) lost 2.46 points (2.41%), to 99.49 points.

PHLX Gold and Silver Index99.49-3.93-3.8%
AMEX Gold BUGS Index223-10.6-4.54%


Oil lost ground, shedding $0.80 per barrel, closing at $49.33 per barrel. The Oil and Gas Index (XOI) shed 5.99 points (0.87%), ending the day at 685.75 points.

The Oil service stocks (OSX) Index declined 2.78 points (2.38%), at 114.14

Reuters CRB280.75-4-1.4%
Crude Oil Light Sweet49.33-0.8-1.6%
AMEX Oil Index685.75-9.88-1.42%
Oil Service Index114.14-4.39-3.7%


I mentioned last week that I expected the US Dollar index to have a bounce back towards 90 - however I didn't expect it to happen yet. I think this action still qualifies as a holding pattern until the election is done and dusted.

US Dollar Index85.580.240.28%
Australian Dollar0.74720.00130.17%
Swiss Franc1.2040.00230.19%

European Markets

France's benchmark CAC-40 Index rose 31.77 points (0.85%), to end the session at 3765.84; the German DAX-30 Index gained 24.93 points (0.62%), ending the day at 4037.57; and in the UK, the FTSE-100 Index gained 19.4 points (0.42%), closing at 4693.2.