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Federal Reserve Open Market Operations
The Fed's Open Market Operations desk performed 1 repurchase operation.
- a $3billion, 4-day repurchase entirely in T-backed collateral.
Major US Indices
The DJIA advanced 92.81 points (0.86%), closing out the day at 10841.6 points; within the blue-chip index, 26 stocks rose, the biggest gainers being Exxon Mobil (XOM +3.48% to $63.26) and Home Depot (HD +2.42% to $40.58). Losers in the Dow numbered 4 and were led by Walt Disney (DIS -0.92% to $27.89) and Microsoft (MSFT -0.47% to $25.25); Volume traded was tilted in favour of the gainers by 270.3m shares to 96.1m.
The "journo justification" for the move was that GDP grew by 3.8% as compared with the consensus guess of 3.6%. Don't believe that explanation for a second; first, the markets didn't react that favourable when the data was actually released (the upmove accelerated in the afternoon) and second 0.2 percentage points of excess growth is simply not that exciting. And if a third "leg" is required, look at volume. If the GDP numbers were so damn good, why was volume relatively tame?
This was "short week shenanigans", but it was fun to watch.
The broader S&P500 advanced 11.17 points (0.93%), at 1211.37. Over at Times Square, the Nasdaq Composite rose 13.7 points (0.67%), to close at 2065.4, while larger-cap technology issues fared worse with the Nasdaq100 adding 9.19 points (0.61%), to end at 1526.9 points.
NYSE Volume was moderate, with 1.52 billion shares changing hands, while Nasdaq Volume was 10% lower than you would expect on such a rally day, with 1.78 billion shares traded.
I mentioned in the last Sentiment Brief (which was sent at the end of January),
"The next synchronisation of daily and weekly charts (which will likely occur this week) will see both charts hit overnought, which will be a terrific shorting opportunity."
The Dow was at 10427 at the time (the blue dot on the chart), and the weekly chart had pulled back to neutral (but the daily chart was by then deeply oversold and ripe for a bounce). True to form, the daily bounced - hard - the following week, but not quite enough to push the weekly to overbought (that happened the following week).
Dow Jones Industrial Average - Weekly Chart Click on Image to Enlarge
I only mention this in order to attempt to lay out a potential for next week; the weekly chart is now overbought and shows something ominous; a nascent divergence between price action and my favourite divergence indicator (the RoC indicator). The index made a new weekly closing high for the year (and exceeded the weekly closing high of 10834 from December 19th 2004), but the RoC failed to confirm either. That is, the RoC is lower now than it was at the end of January when the weekly was expected (by me) to rise to overbought, and is lower than when the old weekly closing high was set.
Similarly, the RoC on daily charts failed to confirm the new closing high for the year - however today was the first day that the index hit overbought on the %R (and it's 4 days from hitting overbought on the smoothed %R).
I don't rule out one last attempt to generate some upward thrust, but on the balance of probabilities weakness should re-exert itself this coming week. Weekly charts are now solidly overbought, daily charts are "freshly" overbought, and the 15-minute intraday chart looks ridiculous. The market has added over 200 points in three sessions - from a low of 10609 on Tuesday to a high of 10845 Friday.
Another "hmmmm..." indicator is that Citigroup - the most managed stock in the entire spectrum of 1929-style "corners" that can be seen these days - has not participated in the bounce off this week's lows in any meaningful way. The same can be said for other heavily manipulated stocks - IBM, CSCO, GE and INTC.
If you prefer a Dow-Theoretic view of the world, the Dow Transports is nowhere near it's previous weekly closing high (which was set in early December 04 - before the Industrials). That's another tick in the "non-confirmation" column in the ledger.
Call me a masochist, but on Monday (after the opening orgasm) I will also be calling for the purchase of puts (again) in AAPL. One level out of the money (which currently would be $85 March puts); the stupid thing is behaving like a 1999 IPO, the iPod is simply not that impervious to competition. the miniMac is just not that good a machine, and their "computer in a screen" suffers when you look at it front-on, because the screen looks tiny (it's nottiny, but it looks tiny). Apple will disappoint.
| Index | Close | Gain(Loss) | % |
| DJIA | 10841.6 | 92.81 | 0.86% |
| S&P500 | 1211.37 | 11.17 | 0.93% |
| Nasdaq Composite | 2065.4 | 13.7 | 0.67% |
| Nasdaq100 | 1526.9 | 9.19 | 0.61% |
| NYSE Volume | 1.52bn | - | - |
| Nasdaq Volume | 1.78bn | - | - |
Bellwethers
My 9-stock "bellwethers" group rose by an average of 0.56%; note yet again that Citigroup is not participating. Smart money drives C, and that smart money is not buying the holiday-week shenanigans.
- General Electric (GE) +$0.07 (0.2%) to $35.62;
- Citigroup (C) -$0.02 (0.04%) to $48.28;
- Wal Mart (WMT) +$0.03 (0.06%) to $51.49;
- I.B.M. (IBM) +$0.16 (0.17%) to $92.80;
- Intel (INTC) +$0.39 (1.65%) to $24.09;
- Cisco Systems (CSCO) +$0.02 (0.12%) to $17.20;
- eBay (EBAY) -$0.13 (0.31%) to $42.24;
- Fannie Mae (FNM) +$0.75 (1.32%) to $57.70; and
- Freddie Mac (FRE) +$1.14 (1.88%) to $61.64.
Market Breadth & Internals
NYSE advancing Issues exceeded decliners by 2573 to 761 for a single-day A/D reading of 1812 - simply insane! Nasdaq gainers trumped losers by 2041 to 1089. The 10-day MA of the advance decline line spiked upwards to +357 for the NYSE and to basically zero for the Nasdaq.
NYSE advancing volume exceeded volume in decliners by 1208.3 to 301.9 million shares - a tilt of just over over 4:1; again, that is just madness. Nasdaq advancing volume was greater than volume in decliners by 961.4 to 763.2 million shares.
351 NYSE-listed stocks rose to new 52-week highs, and 22 posted fresh 52-week lows, while on the Nasdaq there were 124 stocks that hit new 52-week highs, and 40 which fell to fresh 52-week lows.
| NYSE | Nasdaq | |
| Advancers | 2573 | 2041 |
| Decliners | 761 | 1089 |
| Advancing Volume (m) | 1208.29 | 961.43 |
| Declining Volume (m) | 301.89 | 763.18 |
| New Highs | 351 | 124 |
| New Lows | 22 | 40 |
Market Sentiment
| Index | Close | Gain(Loss) | % |
| CBOE Volatility Index | 11.49 | -0.08 | -0.69% |
| CBOE Nasdaq Volatility Index | 17.34 | -0.27 | -1.53% |
| Equity Put-Call Ratio | 0.67 | 0.13 | 24.07% |
| 10-day PCR | 0.61 | -0.05 | -8.24% |
| SPX-VIX Ratio | 105.43 | 1.6944 | 1.63% |
Bond Market Analysis
Bonds rose at the long end, with 10-year and 30-year Treasuries rising (the March05 30-year T-bond futures rose 10/32, closing at 114 & 2/32). The yield on the benchmark 30-year Treasury bond shedding 2.1 basis points to 4.642%.
| Index | Close | Gain(Loss) | % |
| UST 13wk (yld) | 2.675 | 0 | 0% |
| UST 2Y (yld) | 3.5 | 0.03 | 0.86% |
| UST 5Y (yld) | 3.901 | 0.01 | 0.15% |
| UST 10Y (yld) | 4.272 | -0.009 | -0.21% |
| UST 30Y (yld) | 4.642 | -0.021 | -0.45% |
The Banks Index gained 0.71 points (0.71%), ending the day at 100.09; within the index,
- Wachovia (WB) +$1.04 (1.98%) to $53.51;
- Bank Of NY (BK) +$0.53 (1.77%) to $30.39;
- M&T Bank Corp (MTB) +$1.63 (1.65%) to $100.20;
- MBNA Corp (KRB) +$0.35 (1.39%) to $25.54; and
- Comerica (CMA) +$0.73 (1.28%) to $57.68.
The Broker-dealer Index rose 2.75 points (1.89%), to 148.28; the ticket clippers lined up as follows -
- E*Trade (ET) +$0.48 (3.7%) to $13.46;
- Jeffries Group (JEF) +$1.07 (2.87%) to $38.33;
- Lehman Brothers (LEH) +$2.08 (2.31%) to $92.30;
- Bear Stearns (BSC) +$1.96 (2.03%) to $98.61; and
- Raymond James (RJF) +$0.58 (1.95%) to $30.38.
The Philadelphia SOX (Semiconductor) index advanced 9.55 points (2.2%), closing at 443.7
- KLA-Tencor (KLAC) +$1.96 (4.01%) to $50.81;
- Broadcom (BRCM) +$1.20 (3.79%) to $32.88;
- Taiwan Semiconductors (TSM) +$0.34 (3.74%) to $9.43;
- Marvell Tech Group (MRVL) +$1.35 (3.74%) to $37.49; and
- Teradyne (TER) +$0.44 (2.85%) to $15.86.
Gold & Silver Markets
Gold rose $1.30 (0.3%) to close at $436.20 per ounce. The Gold Bugs Index rose 0.74 points (0.34%), ending the day at 215.36
- Gold Fields (GFI) +$0.31 (2.62%) to $12.15;
- Harmony Gold (HMY) +$0.20 (2.39%) to $8.57;
- Eldorado Gold (EGO) +$0.05 (1.65%) to $3.08;
- Freeport McMoran (FCX) +$0.64 (1.58%) to $41.10; and
- Agnico Eagle (AEM) +$0.12 (0.83%) to $14.62.
Silver fell by $0.09 (1.15%) to close at $7.31 per ounce. The Gold and Silver Index (XAU) gained 0.35 points (0.36%), closing at 98.88 points.
- Gold Fields (GFI) +$0.31 (2.62%) to $12.15;
- Harmony Gold (HMY) +$0.20 (2.39%) to $8.57;
- Freeport McMoran (FCX) +$0.64 (1.58%) to $41.10; and
- Agnico Eagle (AEM) +$0.12 (0.83%) to $14.62.
| Index | Close | Gain(Loss) | % |
| Gold | 436.20 | 1.30 | 0.3% |
| Silver | 7.313 | -0.085 | -1.15% |
| PHLX Gold and Silver Index | 98.88 | 0.35 | 0.36% |
| AMEX Gold BUGS Index | 215.36 | 0.74 | 0.34% |
Oil Market
Oil was firmer, rising by $0.08 per barrel, closing at $51.49 per barrel. The Oil and Gas Index (XOI) added 15.51 points (1.83%), to 863.09
- Exxon Mobil (XOM) +$2.13 (3.48%) to $63.26;
- Marathon Oil (MRO) +$1.44 (3.19%) to $46.63; and
- Unocal (UCL) +$1.43 (2.7%) to $54.43.
The Oil service stocks (OSX) Index posted a rise of 1.69 points (1.2%), closing at 142.74
- Varco International (VRC) +$1.24 (3.44%) to $37.25;
- Global Industries (GLBL) +$0.34 (3.42%) to $10.29; and
- Halliburton (HAL) +$1.21 (2.78%) to $44.75.
| Index | Close | Gain(Loss) | % |
| Reuters CRB | 300.23 | 2.19 | 0.73% |
| Crude Oil Light Sweet | 51.49 | 0.08 | 0.16% |
| Heating Oil | 1.4541 | -0.0099 | -0.68% |
| Natural Gas | 6.715 | 0.411 | 6.52% |
| Unleaded Gas | 1.2545 | -0.0255 | -1.99% |
| AMEX Oil Index | 863.09 | 15.51 | 1.83% |
| Oil Service Index | 142.74 | 1.69 | 1.2% |
Currency Markets
| Index | Close | Gain(Loss) | % |
| US Dollar Index | 82.64 | -0.26 | -0.31% |
| Euro | 1.3241 | 0.0041 | 0.31% |
| Yen | 105.2 | -0.18 | -0.17% |
| Sterling | 1.9192 | 0.0093 | 0.49% |
| Australian Dollar | 0.7862 | -0.0002 | -0.03% |
| Swiss Franc | 1.1619 | -0.0066 | -0.56% |
| Canadian Dollar | 0.8072 | 0.0003 | 0.04% |
European Markets
France's benchmark CAC-40 Index added 56.9 points (1.43%), ending the day at 4034.57; the German DAX-30 Index advanced 44.35 points (1.03%), to end the session at 4348.64; and in the UK, the FTSE-100 Index rose 34.7 points (0.7%), at 5006.8
| Index | Close | Gain(Loss) | % |
| CAC-40 | 4034.57 | 56.9 | 1.43% |
| DAX-30 | 4348.64 | 44.35 | 1.03% |
| FTSE-100 | 5006.8 | 34.7 | 0.7% |
