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Federal Reserve Open Market Operations
The Fed's Open Market Operations desk performed 1 repurchase operation.
- a $11.25billion, overnight repurchase with $10.327billion in T-backed collateral .
That big a repo, yet the S&P fell almost 10 points between 10 a.m. and 11 a.m.; how strange. Yet again, this repurchase was performed and announced an hour after the usual time... so perhaps it's not a surprise that the repo-bounce also occurred an hour after the usual time.
Major US Indices
The Dow Jones Industrial Average slid 64.28 points (0.6%), closing out the day at 10565.39 points. The index hit an intraday high of 10630.49 - set at the open. The session low was 10534.06, set just after 11 a.m.; the Dow was the only one of the four major indices that set a new intraday low after 11 a.m.... all the others re-tested their respective lows and then techs rallied to new session highs an hour later (the Dow & the S&P didn't make new intraday highs).
Within the blue-chip index, 8 stocks rose, the biggest gainers being General Motors (GM, +3.74% to $29.69) and Intel (INTC, +0.38% to $23.50), which accounted for 9 Dow points between them. Losers in the Dow numbered 22 and were led by American International Group (AIG, -3.11% to $57.90) and Citigroup (C, -2.33% to $45.76), with these two stocks contributing -22 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the losers by 256.8m shares to 113.1m.
The broader S&P500 slid 5.87 points (0.49%), ending the day at 1183.78; during the session the front-month futures broke 1179 - which constitutes the level at which a 50-point pullback from the recent high was achieved. That's important, because if big-money traders genuinely thought the market would gain upside traction, there is no way they would still be sitting on their hands. The next important technical level is 1175, and after that the year low (1160-odd).
Over at Times Square, the Nasdaq Composite lost 0.28 points (0.01%), to close at 2007.51 - and importantly, broke 2000 during the session. Again - I keep saying this - important numbers don't break except on purpose. That said, the market closed above 2000 - which was also on pupose. Today's intraday break resulted in a load of small-lot intraday traders jumping all over the "breakout"... as usual, that just meant they were going to get torched. A close below 2000 would constitute a "bigger picture" break: the bigger picture "follow through" will never accompany an intraday break that happens at the wrong time of day.
Larger-cap technology issues fared better with the Nasdaq100 adding 0.05 points (let's call that unchanged in percentage terms), to end at 1484.45 points.
NYSE Volume was super-chunky, with 1.83 billion shares changing hands, while Nasdaq Volume was actually pretty modest, with 1.63 billion shares swapping hands.
| Major Market Statistics | |||
| Index | Close | Gain(Loss) | % |
| Dow Jones Industrial Average | 10565.39 | -64.28 | -0.6% |
| S&P500 | 1183.78 | -5.87 | -0.49% |
| Nasdaq Composite | 2007.51 | -0.28 | -0.01% |
| Nasdaq100 | 1484.45 | 0.05 | 0% |
| NYSE Volume | 1.83bn | - | - |
| Nasdaq Volume | 1.63bn | - | - |
Bellwethers
My 9-stock "bellwethers" group rose by an average of 0.21%
- General Electric (GE) +$0.13 (0.36%) to $36.01;
- Citigroup (C) -$1.09 (2.33%) to $45.76;
- Wal Mart (WMT) -$0.28 (0.54%) to $51.17;
- I.B.M. (IBM) +$0.23 (0.26%) to $89.51;
- Intel (INTC) +$0.09 (0.38%) to $23.50;
- Cisco Systems (CSCO) +$0.14 (0.79%) to $17.94;
- eBay (EBAY) +$1.12 (3.2%) to $36.13;
- Fannie Mae (FNM) -$0.13 (0.24%) to $54.88; and
- Freddie Mac (FRE) +$0.01 (0.02%) to $64.51.
Market Breadth & Internals
NYSE declining Issues beat out advancers by 2314 to 995, for a single-day A/D reading of -1319; and Nasdaq losers exceeded gainers by 1668 to 1420. The 10-day moving average of the A/D line fell to -589.6 on the NYSE, while the 10dma of the Nasdaq A/D rose to -358.3.
On the NYSE declining volume was greater than volume in advancing issues by 1204.3 to 573.9 million shares; Nasdaq advancing volume was greater than volume in decliners by 915.3 to 647.1 million shares.
55 NYSE-listed stocks rose to new 52-week highs, and 70 posted fresh 52-week lows, while on the Nasdaq there were 48 stocks that hit new 52-week highs, and 97 which fell to fresh 52-week lows.
| Market Breadth Statistics | ||
| NYSE | Nasdaq | |
| Advancers | 995 | 1420 |
| Decliners | 2314 | 1668 |
| Advancing Volume (m) | 573.93 | 915.34 |
| Declining Volume (m) | 1204.28 | 647.08 |
| New Highs | 55 | 48 |
| New Lows | 70 | 97 |
Market Sentiment
[]
| Market Sentiment Statistics | |||
| Index | Close | Gain(Loss) | % |
| CBOE Volatility Index | 13.61 | 0.46 | 3.5% |
| CBOE Nasdaq Volatility Index | 17.83 | 0 | 0% |
| Equity Put-Call Ratio | 0.71 | -0.29 | -29% |
| 10-day PCR | 0.80 | -0.02 | -2.82% |
| SPX-VIX Ratio | 87 | -3.49 | -3.86% |
Bond Market Analysis
Bonds fell moderately at the long end, with the yield on the benchmark 30-year Treasury bond rising 1.5 basis points to 4.826%.
The test of 4.25% yield on the 5-year that I've been talking about for a while, will happen tomorrow - or "good" economic data will see it postponed for a month and the 5-year yield will push back down towards 4% flat.
In other words, bond option strangles are a good idea - on the open next session I would buy a couple of strangles, each consisting of a "one-level down" put over the 10-year bond, and a "one-level-up" call over the same. That is, two front-month (April) "out of the money" options, one on each side of the market. The June 10-years closed at 109 & 2/32, which means buying a 110 strike call and a 108 strike put. The 110 call closed at 4 ticks ($125) and the 108 put closed at 5 ticks ($156.25), so those would be used as the bids to acquire the position.
This bond strategy therefore ought to cost $281.25 (plus commissions - $1 per option with my broker) and should definitely cost no more than about $300 (assuming both legs have t be chased at the open... unlikely).
If - as I suspect - the heavy data calendar for this week causes big-time bond volatility, there is a good chance that one ofthe legs will quintuple within the week, with the other becoming more or less worthless. Problem is there's no way to tell which direction bonds will break, but this strategy is a pretty low-cost way to trade "both sides of the fence" in a way that ought to do very well... unless bonds do nothing (which is unlikely).
| Treasury Yields | |||
| Index | Close | Gain(Loss) | % |
| UST 13wk (yld) | 2.757 | 0 | 0% |
| UST 2Y (yld) | 3.69 | 0.01 | 0.27% |
| UST 5Y (yld) | 4.177 | 0.007 | 0.17% |
| UST 10Y (yld) | 4.525 | 0.014 | 0.31% |
| UST 30Y (yld) | 4.826 | 0.015 | 0.31% |
The Banks Index shed 0.9 points (0.92%), closing at 97.23; within the index,
- Citigroup (C) -$1.09 (2.33%) to $45.76 (didn't I point out a couple of weeks ago that C was a big "non-confirmer" of upwards market action at the time?);
- Washington Mutual (WM) -$0.78 (1.89%) to $40.42;
- Bank Of NY (BK) -$0.46 (1.51%) to $29.93;
- Bank Of America (BAC) -$0.64 (1.42%) to $44.30; and
- State Street (STT) -$0.64 (1.42%) to $44.44.
The Broker-dealer Index declined 1.2 points (0.8%), at 148.82; the ticket clippers lined up as follows -
- A G Edwards (AGE) -$0.79 (1.75%) to $44.31;
- Morgan Stanley (MWD) -$0.77 (1.33%) to $57.01;
- Lehman Brothers (LEH) -$1.05 (1.09%) to $95.15;
- Legg Mason (LM) -$0.79 (0.94%) to $83.31; and
- E*Trade (ET) -$0.11 (0.89%) to $12.24.
The Philadelphia SOX (Semiconductor) index dipped 0.72 points (0.17%), closing at 413.41
- Advanced Micro Devices (AMD) -$0.33 (2.05%) to $15.75;
- Texas Instruments (TXN) -$0.22 (0.86%) to $25.22;
- Linear Technology (LLTC) -$0.30 (0.78%) to $38.26;
- ST Microelectronic (STM) -$0.13 (0.76%) to $16.94; and
- Xilinx (XLNX) -$0.22 (0.75%) to $28.98.
Gold & Silver Markets
Gold fell by $8.30 (1.89%) to close at $431.40 per ounce. US dollar strength = Gold weakness... Gold has no other drivers at the moment.
The Gold Bugs Index shed 6.28 points (2.89%), at 210.94
- Golden Star (GSS) -$0.16 (5.19%) to $2.92;
- Iamgold (IAG) -$0.28 (4.17%) to $6.44;
- Gold Fields (GFI) -$0.53 (4.09%) to $12.43;
- Glamis Gold (GLG) -$0.53 (3.2%) to $16.03; and
- Harmony Gold (HMY) -$0.28 (3.12%) to $8.69.
Silver fell by $0.29 (3.86%) to close at $7.10 per ounce. The Gold and Silver Index (XAU) lost 2.76 points (2.74%), closing at 97.79 points.
- Gold Fields (GFI) -$0.53 (4.09%) to $12.43;
- Placer Dome (PDG) -$0.58 (3.31%) to $16.94;
- Harmony Gold (HMY) -$0.28 (3.12%) to $8.69; and
- Newmont Mining (NEM) -$1.24 (2.77%) to $43.52.
| Precious Metals and Indices | |||
| Index | Close | Gain(Loss) | % |
| Gold | 431.40 | -8.30 | -1.89% |
| Silver | 7.10 | -0.29 | -3.86% |
| PHLX Gold and Silver Index | 97.79 | -2.76 | -2.74% |
| AMEX Gold BUGS Index | 210.94 | -6.28 | -2.89% |
Oil Market
Oil lost ground, shedding $0.10 per barrel, closing at $56.62 per barrel. The May contract (which is the new front-month as of this Wednesday) closed above $57, and the Junes closed above $58.
The Oil and Gas Index (XOI) slid 6.94 points (0.79%), closing at 868.09
- Occidental Petroleum (OXY) -$1.40 (1.89%) to $72.62;
- Unocal (UCL) -$1.09 (1.73%) to $61.80; and
- TotalFinaElf S.A. (TOT) -$1.73 (1.42%) to $120.12.
The Oil service stocks (OSX) Index declined 0.22 points (0.16%), ending the day at 138.23
- Weatherford International (WFT) -$0.57 (0.98%) to $57.83;
- Transocean (RIG) -$0.43 (0.87%) to $48.98; and
- Halliburton (HAL) -$0.38 (0.87%) to $43.54.
| Energy Complex | |||
| Index | Close | Gain(Loss) | % |
| Reuters CRB | 313.49 | -5.71 | -1.79% |
| Crude Oil Light Sweet | 56.62 | -0.1 | -0.18% |
| Heating Oil | 1.5735 | 0 | 0.11% |
| Natural Gas | 7.35 | 0.08 | 1.06% |
| Unleaded Gas | 1.595 | 0.02 | 1.24% |
| AMEX Oil Index | 868.09 | -6.94 | -0.79% |
| Oil Service Index | 138.23 | -0.22 | -0.16% |
Currency Markets
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| USD Exchange Rates | |||
| Index | Close | Gain(Loss) | % |
| US Dollar Index | 82.89 | 0.77 | 0.94% |
| Euro | 1.3164 | -0.0149 | -1.12% |
| Yen | 105.09 | 0.37 | 0.35% |
| Sterling | 1.8973 | -0.0236 | -1.23% |
| Australian Dollar | 0.7855 | -0.0093 | -1.17% |
| Swiss Franc | 1.1778 | 0.0135 | 1.16% |
| Canadian Dollar | 0.8256 | -0.0063 | -0.76% |
