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I did my exercise this morning after getting up at 6 a.m., then after a shower I thought "I'll just shut my eyes for a half-hour..." woke up at 10:30. Driving almost 1500 km (two trips in three days) will do that to ya...
Federal Reserve Open Market Operations
The Fed's Open Market Operations desk performed 1 repurchase operation.
- a $7billion, overnight repurchase entirely in T-backed collateral.
It was enough to give an tradable move starting at 10 a.m., with the S&P futures rising almost 5 full points before reversing hard. If a trader can't make money given the correct directional bias and an entry time and a 5-point move, then they're in the wrong game.
That said, the move lasted about half an hour and from there the market declined inexorably, with the S&P closing at its low for the day and the Dow closing so close to its low as to make no odds.
Major US Indices
The Dow Jones Industrial Average shed 107 points (0.98%), closing out the day at 10805.62 points. The index hit an intraday high of 10923.18, and fell as low as 10802.06 during the session. Within the blue-chip index, 6 stocks rose, the biggest gainers being Du Pont (DD, +1.30% to $54.47) and Merck (MRK, +0.32% to $31.83), which accounted for 6 Dow points between them. Losers in the Dow numbered 24 and were led by Exxon Mobil (XOM, -3.66% to $60.79) and McDonald's(MCD, -2.84% to $32.53), with these two stocks contributing -24 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the losers by 316.2m shares to 96.5m.
The broader S&P500 declined 12.42 points (1.02%), closing at 1207.01. Over at Times Square, the Nasdaq Composite shed 12.26 points (0.59%), to close at 2061.29, while larger-cap technology issues fared better with the Nasdaq100 losing 6.67 points (0.44%), to end at 1521.98 points.
NYSE Volume was chunky, with 1.7 billion shares changing hands, while Nasdaq Volume was chunky, with 1.91 billion shares being shifted from one online brokerage account to another (and back again, in all likelihood).
| Major Market Statistics | |||
| Index | Close | Gain(Loss) | % |
| Dow Jones Industrial Average | 10805.62 | -107 | -0.98% |
| S&P500 | 1207.01 | -12.42 | -1.02% |
| Nasdaq Composite | 2061.29 | -12.26 | -0.59% |
| Nasdaq100 | 1521.98 | -6.67 | -0.44% |
| NYSE Volume | 1.7bn | - | - |
| Nasdaq Volume | 1.91bn | - | - |
Bellwethers
My 9-stock "bellwethers" group fell by an average of 0.15%. The Citigroup March $47.50 puts are clawing their way back to respectability, while the AAPL March $85 puts (now renamed to $42.50s after Apple's stock split) have gone absolutely berserk; from last Monday (entry day) price of $80, to closing today at $320 (and trading as high as $390). Following the usual paradigm, one half of the position should have been exited when the profit was 100% of the stake (I forgot to post that, but that's always the plan, as I've written before).
- General Electric (GE) -$0.32 (0.89%) to $35.74;
- Citigroup (C) -$0.59 (1.22%) to $47.88;
- Wal Mart (WMT) +$0.03 (0.06%) to $52.45;
- I.B.M. (IBM) +$0.22 (0.24%) to $92.35;
- Intel (INTC) +$0.04 (0.16%) to $24.84;
- Cisco Systems (CSCO) +$0.41 (2.26%) to $18.53;
- eBay (EBAY) -$0.95 (2.33%) to $39.90;
- Fannie Mae (FNM) -$0.39 (0.68%) to $57.10; and
- Freddie Mac (FRE) +$0.68 (1.05%) to $65.45.
Market Breadth & Internals
NYSE declining Issues beat out advancers by 2700 to 682, for a single-day A/D reading of -2018; the market is becoming manic-depressive. Nasdaq losers exceeded gainers by 2059 to 1047. The 10-day moving average of the A/D line fell to 1.3 on the NYSE, while the 10dma of the Nasdaq A/D fell to -171.6.
On the NYSE declining volume was greater than volume in advancing issues by 1318.8 to 377.3 million shares; On the Nasdaq declining volume exceeded volume in advancing issues by 1215.2 to 658.8 million shares.
125 NYSE-listed stocks rose to new 52-week highs, and 33 posted fresh 52-week lows, while on the Nasdaq there were 81 stocks that hit new 52-week highs, and 71 which fell to fresh 52-week lows.
| Market Breadth Statistics | ||
| NYSE | Nasdaq | |
| Advancers | 682 | 1047 |
| Decliners | 2700 | 2059 |
| Advancing Volume (m) | 377.26 | 658.83 |
| Declining Volume (m) | 1318.79 | 1215.23 |
| New Highs | 125 | 81 |
| New Lows | 33 | 71 |
| Market Sentiment Statistics | |||
| Index | Close | Gain(Loss) | % |
| CBOE Volatility Index | 12.7 | 0.44 | 3.59% |
| CBOE Nasdaq Volatility Index | 17.8 | 0.07 | 0.39% |
| Equity Put-Call Ratio | 0.87 | 0.19 | 27.94% |
| 10-day PCR | 0.69 | 0.04 | 6.15% |
| SPX-VIX Ratio | 95 | -4.9 | -4.91% |
Bond Market Analysis
Bonds got absolutely thrashed at the middle and long end, making me really annoyed that the recent short bond futures trade was exited (albeit having almost quadrupled the stake required to take the position). After rising just enough to trigger my trailing stop, the March contract has plunged over 3 points in two sessions.
I mentioned on Monday that the next move in 5-year yields would be up - and they haven't disappointed, with the 5-years now yielding 4.14%; that's a huge move in just two sessions. Meanwhile the 10-year yield spiked another 21 basis points to a closing yield over 4.5% (only just, though), and the 30-year is just one bad session away from testing a 5% yield again.
| Treasury Yields | |||
| Index | Close | Gain(Loss) | % |
| UST 13wk (yld) | 2.692 | 0 | 0% |
| UST 2Y (yld) | 3.64 | 0.07 | 1.96% |
| UST 5Y (yld) | 4.141 | 0.167 | 4.2% |
| UST 10Y (yld) | 4.514 | 0.21 | 4.88% |
| UST 30Y (yld) | 4.82 | 0.202 | 4.37% |
The Banks Index shed 1.54 points (1.52%), ending the day at 99.69; within the index,
- North Fork Bancorp (NFB) -$0.94 (3.16%) to $28.84;
- Golden West Financial (GDW) -$1.60 (2.62%) to $59.41;
- BB&T Corp (BBT) -$0.97 (2.38%) to $39.73;
- M&T Bank Corp (MTB) -$2.42 (2.31%) to $102.15; and
- Fifth Third Bancorp (FITB) -$1.01 (2.21%) to $44.69.
The Broker-dealer Index slid 1.5 points (0.98%), to 150.87; the ticket clippers lined up as follows -
- E*Trade (ET) -$0.43 (3.18%) to $13.08;
- Legg Mason (LM) -$1.50 (1.84%) to $79.85;
- Ameritrade (AMTD) -$0.20 (1.8%) to $10.92;
- Goldman Sachs (GS) -$1.76 (1.56%) to $110.87; and
- Lehman Brothers (LEH) -$1.16 (1.25%) to $91.95.
The Philadelphia SOX (Semiconductor) index lost 1.11 points (0.25%), at 434.33
- Freescale Semiconductors (FSL-B) -$0.53 (2.86%) to $18.00;
- Altera (ALTR) -$0.46 (2.21%) to $20.37;
- Marvell Tech Group (MRVL) -$0.46 (1.21%) to $37.50;
- Advanced Micro Devices (AMD) -$0.18 (1.05%) to $16.94; and
- Applied Materials (AMAT) -$0.16 (0.95%) to $16.66.
Gold & Silver Markets
Gold rose $1.40 (0.32%) to close at $442.9 per ounce. The renewed weakness in the USD has provided the catalyst - nothing more.
Gold Bugs Index gained 1.01 points (0.45%), ending the day at 224.72
- Golden Star (GSS) +$0.11 (3.46%) to $3.29;
- Goldcorp (GG) +$0.33 (2.2%) to $15.32;
- Harmony Gold (HMY) +$0.17 (1.95%) to $8.87;
- Gold Fields (GFI) +$0.21 (1.68%) to $12.71; and
- Hecla Mining (HL) +$0.08 (1.33%) to $6.08.
Silver rose $0.08 (1.1%) to close at $7.62 per ounce. The Gold and Silver Index (XAU) gained 0.56 points (0.55%), ending the day at 102.83 points.
- Placer Dome (PDG) +$0.45 (2.59%) to $17.81;
- Goldcorp (GG) +$0.33 (2.2%) to $15.32;
- Harmony Gold (HMY) +$0.17 (1.95%) to $8.87; and
- Gold Fields (GFI) +$0.21 (1.68%) to $12.71.
| Precious Metals and Indices | |||
| Index | Close | Gain(Loss) | % |
| Gold | 442.90 | 1.40 | 0.32% |
| Silver | 7.62 | 0.08 | 1.1% |
| PHLX Gold and Silver Index | 102.83 | 3.88 | 3.92% |
| AMEX Gold BUGS Index | 224.72 | 9.06 | 4.2% |
Oil Market
Oil was firmer, rising by $0.24 per barrel, closing at $54.77 per barrel, however the more interesting feature is the willingness of someone - someone with a lot of money - to keep smacking oil down when it tests previous highs. It's not made up of little one-lotters taking a punt on the short side, either. By the looks of the parcel sizes, the trades that took place at the offer - i.e., buying at market - near the high was a lot of small (nuffie) traders trying to buy a breakout. The trades that took place at the bid - selling at market - were much larger lots.
I don't think that it's a bet by large traders that oil is near a local top. Instead, my guess is that large traders knew they could trigger some nuffie-stops and get an intraday cascade down - which would enable better entries for large traders.
Sure enough, oil cascaded from a test of the old contract high (at $55.63 - the print high for the session) to $54.20 before rising a tad to the closing print.
The Oil and Gas Index (XOI) dipped 23.23 points (2.62%), at 862.91
- Amerada Hess (AHC) -$4.24 (4.14%) to $98.11;
- Exxon Mobil (XOM) -$2.31 (3.66%) to $60.79; and
- Marathon Oil (MRO) -$1.63 (3.37%) to $46.79.
The Oil service stocks (OSX) Index lost 3.98 points (2.78%), to 139.09
- Baker Hughes (BHI) -$1.75 (3.75%) to $44.93;
- Rowan Companies (RDC) -$1.14 (3.57%) to $30.81; and
- Smith International (SII) -$2.29 (3.56%) to $62.05.
| Energy Complex | |||
| Index | Close | Gain(Loss) | % |
| Reuters CRB | 313.84 | 1.19 | 0.38% |
| Crude Oil Light Sweet | 54.77 | 0.24 | 0.44% |
| Heating Oil | 1.5196 | 0 | -0.24% |
| Natural Gas | 6.84 | -0.06 | -0.87% |
| Unleaded Gas | 1.5175 | -0.02 | -1.19% |
| AMEX Oil Index | 862.91 | -21.28 | -2.41% |
| Oil Service Index | 139.09 | -5.07 | -3.52% |
Currency Markets
There were some signs of an intraday reversal in the USDX, but it didn't amount to much; once the foot was stuck on Crude Oil's neck, the dollar tried to rally at the same time, but without much real success.
| Currency Prices | |||
| Index | Close | Gain(Loss) | % |
| US Dollar Index | 81.51 | -1.23 | -1.49% |
| Euro | 1.3387 | 0.0044 | 0.33% |
| Yen | 103.99 | -0.61 | -0.58% |
| Sterling | 1.924 | -0.0038 | -0.2% |
| Australian Dollar | 0.7921 | -0.0055 | -0.69% |
| Swiss Franc | 1.1586 | -0.0038 | -0.33% |
| Canadian Dollar | 0.829 | 0.0045 | 0.55% |
