Note - from June 24th 2009, this blog has migrated from Blogger to a self-hosted version. Click here to go straight there.
Economic Statistics
The Mortgage Bankers Association's Purchase Application index fell hard, down 6% for the week. The refinancing component rose 1.1% for the week to 1,720.5.
The US Trade Deficit was wider than expected by over 10%: it came in at $60.3 billion, fully 7.7% than October's upwardly revised deficit of $56.0 billion, and 11% above the consensus estimate of $54.5 billion. In fact the actual outcome was outside the range of estimates ($52.7- $57.5 billion)
Exports fell 2.3%, while imports rose 1.3%. So much for "weaker dollar closes trade gap"... the US has a particularly egregious violation of the Robinson-Metzler-Bickerdycke criterion (which concerns the relationship between import and export elasticities of demand and supply... its riveting, I tell ya). Seems that whether the currency goes up or down, the US trade deficit gets worse.
The Energy Information Administration released its weekly report on crude oil inventories, showing a surprise 3-million barrel drawdown (to about 288 million barrels). Distillate stocks actually rose by a little over a million barrels. The oil market didn't like the report, and oil prices rose sharply... until someone who was swinging a decent amount of cash, just shorted the crap out of crude in the futures, driving the price down $1.30 in half an hour. The chart can be seen in the Oil market commentary below.
Federal Reserve Open Market Operations
The Fed's Open Market Operations desk performed 1 repurchase operation last night:
- a $2.75billion, overnight repurchase with $2.75billion in T-backed collateral .
With that little repurchase dough on offer, there was no benefit in trying to get a long-side trade done at 10 a.m. NY time... in fact the market continued to struggle (in the light of the trade balance and housing market data) until almost a full hour later.
Major US Indices
Boy, last night was all over the map.
I had flagged 1175 as a likely downside objective some time ago, and last night the market got down to 1176.75. Close enough, I think. I also thought (the night before last) that 1187 should have provided a platform for a launch to 1200 (if conditions were right - that is, if the Fed provided sufficient repo grease). That didn't happen two sessions ago (insufficient repo) and it didn't happen last night until after the lows were plumbed. But when the reversal came, it was a doozy. By the close the market had the shorts by the danglies and was squeezing the life out of them.
S&P Futures Intraday 5 minute chart
The DJIA added 61.56 points (0.58%), closing out the day at 10617.78 points; the broader S&P500 posted a rise of 4.71 points (0.4%), closing at 1187.7. Over at Times Square, the Nasdaq Composite added 12.91 points (0.62%), to close at 2092.53, while larger-cap technology issues fared better with the Nasdaq100 adding 12.38 points (0.8%), to end at 1565.78 points.
NYSE Volume was chunky, with 1.56 billion shares changing hands, while Nasdaq Volume was super-chunky (over 2 bill), with 2.25 billion shares being shifted from one online brokerage account to another (and back again, in all likelihood).
| Index | Close | Gain(Loss) | % |
| DJIA | 10617.78 | 61.56 | 0.58% |
| S&P500 | 1187.7 | 4.71 | 0.4% |
| Nasdaq Composite | 2092.53 | 12.91 | 0.62% |
| Nasdaq100 | 1565.78 | 12.38 | 0.8% |
| NYSE Volume | 1.56bn | - | - |
| Nasdaq Volume | 2.25bn | - | - |
Bellwethers
My 9-stock "bellwethers" group rose by an average of 0.84% with the biggest contributions being from the tech (CSCO, EBAY and INTC) thanks to INTC's earnings report being well received (well, it as well received after someone sat on the oil price).
- IBM (IBM) +$0.21 (0.22%) to $95.21;
- Fannie Mae (FNM) -$0.12 (0.17%) to $70.33;
- Ebay (EBAY) +$2.41 (2.3%) to $107.25;
- Cisco Systems (CSCO) +$0.29 (1.56%) to $18.93;
- Wal Mart (WMT) +$0.49 (0.91%) to $54.08;
- Intel (INTC) +$0.62 (2.75%) to $23.16;
- General Electric (GE) +$0.28 (0.79%) to $35.68;
- Citigroup (C) -$0.15 (0.31%) to $48.07;
- Freddie Mac (FRE) -$0.37 (0.52%) to $70.62;
Market Breadth & Internals
On the NYSE advancing Issues exceeded decliners by 1970 to 1365 for a single-day A/D reading of 605 (boy, did that ever look different at 11 a.m. NY time); Nasdaq gainers trumped losers by 1639 to 1489.
Advancing volume exceeded volume in decliners by 926.46 to 606.46 million shares on the NYSE; Nasdaq advancing volume was greater than volume in decliners by over 2:1... 859.49 to 336.18 million shares.
44 NYSE-listed stocks rose to new 52-week highs, and 11 posted fresh 52-week lows, while on the Nasdaq there were 43 stocks that hit new 52-week highs, and 34 which fell to fresh 52-week lows
| NYSE | Nasdaq | |
| Advancers | 1970 | 1639 |
| Decliners | 1365 | 1489 |
| Advancing Volume (m) | 926.46 | 859.49 |
| Declining Volume (m) | 606.46 | 336.18 |
| New Highs | 44 | 43 |
| New Lows | 11 | 34 |
Market Sentiment
The big intraday turnaround (which looks like a "key reversal") sparked some late-day call buying - most of the put buying was performed during the collapse that started at about 10 a.m. and took the market to the session low.
The volatility indices are still way too low, but they've been like that for five months. It appears that the general view is that downside doesn't exist.
| Index | Close | Gain(Loss) | % |
| Equity Call Volume (000) | 2572.24 | 141.44 | 5.82% |
| Equity Put Volume (000) | 2089.48 | 503.34 | 31.73% |
| CBOE Volatility Index | 12.56 | -0.67 | -5.06% |
| CBOE Nasdaq Volatility Index | 19.28 | -0.33 | -1.68% |
| Equity Put-Call Ratio | 0.81 | 0.16 | 24.49% |
| SPX-VIX Ratio | 94.56 | 4.6 | 5.11% |
Bond Market Analysis
Bonds rose pretty much along the curve, as the weak housing data and the relatively poor trade balance numbers combined to weigh on bondies. At the long end, the yield on the benchmark 30-year Treasury bond shed 1.1 basis points to 4.771%.
| Index | Close | Gain(Loss) | % |
| UST 13wk (yld) | 2.305 | -0.01 | -0.43% |
| UST 2Y (yld) | 3.198 | -0.003 | -0.09% |
| UST 5Y (yld) | 3.703 | -0.02 | -0.64% |
| UST 10Y (yld) | 4.238 | -0.035 | -0.82% |
| UST 30Y (yld) | 4.771 | -0.049 | -1.02% |
The Banks Index declined 0.6 points (0.59%), to end the session at 101.12; within the index,
- State Street (STT) -$0.87 (1.81%) to $47.08;
- Wells Fargo (WFC) -$0.83 (1.34%) to $61.18;
- M&T Bank (MTB) -$1.34 (1.29%) to $102.51;
- MBNA Corp (KRB) -$0.34 (1.22%) to $27.61; and
- Wachovia (WB) -$0.50 (0.95%) to $51.99.
The Broker-dealer Index lost 0.34 points (0.23%), ending the day at 146.07; the ticket clippers lined up as follows -
- A G Edwards (AGE) -$0.40 (0.96%) to $41.25;
- Goldman Sachs (GS) -$0.90 (0.86%) to $103.27;
- Bear Stearns (BSC) -$0.61 (0.6%) to $101.14;
- Lehman Bros (LEH) -$0.35 (0.39%) to $89.05; and
- Legg Mason (LM) -$0.20 (0.29%) to $69.06.
The Philadelphia SOX (Semiconductor) index added 5.64 points (1.42%), closing at 401.83
- Altera (ALTR) -$0.03 (0.17%) to $18.07;
- K L A-Tencor (KLAC) +$2.03 (4.79%) to $44.45;
- Novellus Systems (NVLS) +$0.98 (3.8%) to $26.79;
- National Semiconductor (NSM) +$0.46 (2.81%) to $16.85; and
- Intel (INTC) +$0.62 (2.75%) to $23.16.
Gold & Silver Markets
Gold rose $4.00 (0.95%) to close at $426.7 per ounce. Something about how a country can't continue to simply print fiat dollars while importing 85% of the worlds capital, perhaps.
Gold Bugs Index dipped 0.96 points (0.46%), closing at 205.77
- Iamgold (IAG) -$0.17 (2.66%) to $6.23;
- Eldorado Gold (EGO) -$0.06 (2.13%) to $2.76;
- Golden Star Resources (GSS) -$0.08 (2.11%) to $3.71;
- Hecla Mining (HL) -$0.12 (2.11%) to $5.58;
- Coeur d'Alene (CDE) -$0.07 (1.9%) to $3.61;
Silver rose $0.12 (1.83%) to close at $6.73 per ounce. The Gold and Silver Index (XAU) gained 0.01 points (0.01%), at 95.02 points.
- Freeport McMoran (FCX) +$0.49 (1.39%) to $35.80;
- Newmont Mining (NEM) +$0.33 (0.78%) to $42.77;
- Kinross Gold (KGC) +$0.03 (0.44%) to $6.84;
- Goldcorp Inc (GG) +$0.01 (0.07%) to $13.99;
| Index | Close | Gain(Loss) | % |
| Gold | 426.7 | 4 | 0.95% |
| Silver | 6.73 | 0.121 | 1.83% |
| PHLX Gold and Silver Index | 95.02 | 0.87 | 0.92% |
| AMEX Gold BUGS Index | 205.77 | 1.02 | 0.5% |
Oil Market
Oil was firmer, rising by $0.55 per barrel, closing at $46.45 per barrel. There were some real shenanigans in the oil market at about 11 a.m. NY time... with no repo grease worth talking about, stocks were bereft of a catalyst... and lo, all of a sudden the waters parted and someone did a big dump right on the oil price. In 40 minutes front-month crude fell over a dollar, bottoming intraday at $45 exactly.
Crude Oil Futures Intraday 5 minute chart
The Oil and Gas Index (XOI) gained 10.58 points (1.51%), ending the day at 713.44
- Repsol Ypf S.A. (REP) +$0.79 (3.25%) to $25.13;
- Kerr Mcgee (KMG) +$1.43 (2.52%) to $58.19;
- ChevronTexaco (CVX) - the company who named an oil tanker after Condoleeza Rice - up $1.09 (2.12%) to $52.49;
- Global Industries Ltd (GLBL) +$0.33 (4.37%) to $7.89;
- Noble Corp (NE) +$2.08 (4.33%) to $50.17;
- Transocean Inc (RIG) +$1.53 (3.77%) to $42.08;
| Index | Close | Gain(Loss) | % |
| Reuters CRB | 281.75 | 2.75 | 0.99% |
| Crude Oil Light Sweet | 46.45 | 0.55 | 1.2% |
| AMEX Oil Index | 713.44 | 10.21 | 1.45% |
| Oil Service Index | 122.47 | 2.98 | 2.49% |
Currency Markets
| Index | Close | Gain(Loss) | % |
| US Dollar Index | 82.2 | -0.87 | -1.05% |
| $/€ | 1.3263 | 0.0158 | 1.21% |
| ¥/$ | 102.41 | -0.88 | -0.85% |
| $/£ | 1.8911 | 0.0132 | 0.7% |
| $/AUD | 0.7673 | 0.0058 | 0.76% |
| $/CHF | 1.1671 | -0.0163 | -1.38% |
| $/CAD | 0.8325 | 0.0128 | 1.56% |
European Markets
France's benchmark CAC-40 Index lost 32.85 points (0.85%), at 3816.14; the German DAX-30 Index lost 49.19 points (1.16%), to 4208.82; and in the UK, the FTSE-100 Index declined 35.1 points (0.73%), ending the day at 4783.6 points.
| Index | Close | Gain(Loss) | % |
| CAC-40 | 3816.14 | -32.85 | -0.85% |
| DAX-30 | 4208.82 | -49.19 | -1.16% |
| FTSE-100 | 4783.6 | -35.1 | -0.73% |
Tomorrow's Pivots (US Futures Market)
| Dow | S&P500 | Nasdaq | Bonds | |
| R2 | 10704 | 1197.63 | 1588 | 113 20/32 |
| R1 | 10652 | 1192.67 | 1577.5 | 113 11/32 |
| Pivot | 10577 | 1184.73 | 1562.5 | 112 28/32 |
| S1 | 10525 | 1179.77 | 1552 | 112 19/32 |
| S2 | 10450 | 1171.83 | 1537 | 112 4/32 |
