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"And you may ask yourself..." I really like Talking Heads - when first introduced to their stuff I thought the lead singer's voice was rubbish, but lyrically they are as good as REM or Devo.
Things to ask yourself today:
Why hasn't the Australian media reported that the US has been found to have used mustard gas, blister agents and other nerve agents during the seige of Fallujah?
Answer: because the Commonwealth Government doesn't spend all that advertising money just to tell you about Medicare and other such dross. It spends that money to buy leverage. the days' of "D-notices" are long gone - now government just quietly relies on the implicit pressure it can apply by the threat of the withdrawal of tens of millions of dollars of ad-spend.
Why didn't the Australian media notice that the recent burning skyscrapers (that were the "foreign disaster" stories recently) didn't fall over like the WTC towers did?? (In fact, no steel-framed skyscraper in the world has ever fallen down as a result of fire).
Answer: see above.
Let's get on with it...
Federal Reserve Open Market Operations
The Fed's Open Market Operations desk performed 2 repurchase operations.
- a $9.25billion, overnight repurchase with $9.024billion in T-backed collateral ; and
- a $6billion, 14-day repurchase with $5.821billion in T-backed collateral .
With that much repo-juice in the tank, there ought to have been fireworks at 10 a.m.; instead, the market gained about 2 points (on the S&P) after 10 a.m. before reversing hard and dropping 11.5 S&P points (and about 100 Dow points) over the following 2 hours. At that stage Crude Oil was within half a dollar of its recent 20-year high - if you listen to journalists. In fact, it actually was the 20-year high: the April05 contract, whose previous high was $53 exactly, set on October 27th 2004 (when the front month set a contract high of $55.67: Oil is still in backwardation, where out-month prices are lower than front-month prices).
Anyhow... Oil's front month burst through the contract high like it wasn'tthere, and triggered some breakout-nuffies' buy signals. It spiked towards - then through - the $55 level, before someone large stuck their foot on its neck. That was the point at which equities started to get some traction (upwards), and as oil fell almost $2 in 2 hours, the Dow rallied 75 points and the S&P gained 8.
Major US Indices
Considering the damage that could've been done, the Dow was lucky beyond measure. The "nuffie killing" snap-back in Crude helped the Dow claw its way from a 45-point intrasession decline to an eventual closing gain of 21.06 points (0.19%), closing out the day at 10833.03 points.
Dow internals weren't flash - within the blue-chip index, 13 stocks rose, the biggest gainers being Boeing (BA, +3.83% to $57.42) and Wal Mart (WMT, +1.75% to $52.86), which accounted for 22 Dow points between them. Losers in the Dow numbered 17 and were led by Home Depot (HD, -0.65% to $39.72) and International Business Machines (IBM, -0.55% to $92.41), with these two stocks contributing 6 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the losers by 263.5m shares to 91.9m.
The broader S&P500 added 0.39 points (0.03%), closing at 1210.47. Over at Times Square, the Nasdaq Composite shed 9.1 points (0.44%), to close at 2058.4, while larger-cap technology issues fared worse with the Nasdaq100 losing 13.39 points (0.88%), to end at 1511.89 points.
NYSE Volume was chunky, with 1.62 billion shares changing hands, while Nasdaq Volume was solid but unspectacular, with 1.92 billion shares traded. I jsut noticed why Nasdaq volume has had an artificial boost since the start of the year; the Nasdaq100 tracking stock (the QQQQ - formerly the QQQ) has switched home exchanges to the Nasdaq. that adds roughly 100 million units a day to Nasdaq turnover, and it is almost always the highest-turnover stock in the entire US market.
| Major Market Statistics | |||
| Index | Close | Gain(Loss) | % |
| DJIA | 10833.03 | 21.06 | 0.19% |
| S&P500 | 1210.47 | 0.39 | 0.03% |
| Nasdaq Composite | 2058.4 | -9.1 | -0.44% |
| Nasdaq100 | 1511.89 | -13.39 | -0.88% |
| NYSE Volume | 1.62bn | - | - |
| Nasdaq Volume | 1.92bn | - | - |
Bellwethers
My 9-stock "bellwethers" group fell by an average of 0.34%; Citigroup is moving in the right direction, but too slowly for comfort, and that March $47.50 put option is still under the price paid for it ($45).
That said, the Apple March $42.50 puts (listed as $85s until Friday - AAPL had a stock split over the weekend) mentioned in Friday's missive as a target for a Monday purchase, rose a healthy $110 (over 100% for the session) to $190.
- General Electric (GE) -$0.05 (0.14%) to $35.55;
- Citigroup (C) -$0.16 (0.33%) to $47.97;
- Wal Mart (WMT) +$0.91 (1.75%) to $52.86;
- I.B.M. (IBM) -$0.51 (0.55%) to $92.41;
- Intel (INTC) -$0.02 (0.08%) to $24.50;
- Cisco Systems (CSCO) +$0.06 (0.34%) to $17.80;
- eBay (EBAY) -$0.58 (1.38%) to $41.49;
- Fannie Mae (FNM) -$1.10 (1.85%) to $58.51; and
- Freddie Mac (FRE) -$0.55 (0.86%) to $63.20.
Market Breadth & Internals
NYSE advancing Issues exceeded decliners by 1751 to 1535 for a single-day A/D reading of 216; and Nasdaq losers exceeded gainers by 1645 to 1461. The 10-day moving average of the A/D line rose to 207.5 on the NYSE, while the 10dma of the Nasdaq A/D fell to -68.5.
On the NYSE declining volume was greater than volume in advancing issues by 821.5 to 772.4 million shares; On the Nasdaq declining volume exceeded volume in advancing issues by 1250.2 to 638.5 million shares.
198 NYSE-listed stocks rose to new 52-week highs, and 23 posted fresh 52-week lows, while on the Nasdaq there were 100 stocks that hit new 52-week highs, and 49 which fell to fresh 52-week lows.
| Market Breadth Statistics | ||
| NYSE | Nasdaq | |
| Advancers | 1751 | 1461 |
| Decliners | 1535 | 1645 |
| Advancing Volume (m) | 772.43 | 638.49 |
| Declining Volume (m) | 821.54 | 1250.2 |
| New Highs | 198 | 100 |
| New Lows | 23 | 49 |
Market Sentiment
| Market Sentiment Statistics | |||
| Index | Close | Gain(Loss) | % |
| CBOE Volatility Index | 12.93 | 0.47 | 3.77% |
| CBOE Nasdaq Volatility Index | 18.76 | 0.61 | 3.36% |
| Equity Put-Call Ratio | 0.69 | 0 | 0% |
| 10-day PCR | 0.616363636363636 | 0.02 | 2.73% |
| SPX-VIX Ratio | 93.6 | -3.5 | -3.6% |
Bond Market Analysis
The short position in the March05 30-year bond future gained two ticks ($62.50 per contract) for the session, as the bond closed at 112&22/32. This trade is getting a little long in the tooth - rememebr that the profit-protection stop is a way up at 114, locking in $3000 of profits (per contraact) since the trade was entered in early February.
The yield on the benchmark 30-year Treasury bond was basically unchanged at 4.737%, while the 5-year yield crept back above 4%.
| Treasury Yields | |||
| Index | Close | Gain(Loss) | % |
| UST 13wk (yld) | 2.692 | 0 | 0% |
| UST 2Y (yld) | 3.55 | 0.01 | 0.28% |
| UST 5Y (yld) | 4.007 | 0.013 | 0.33% |
| UST 10Y (yld) | 4.383 | 0.004 | 0.09% |
| UST 30Y (yld) | 4.737 | 0 | 0% |
The Banks Index declined 0.21 points (0.21%), at 99.98; within the index,
- MBNA Corp (KRB) -$0.31 (1.21%) to $25.36;
- US Bancorp (USB) -$0.29 (0.98%) to $29.45;
- National City Corp (NCC) -$0.26 (0.72%) to $35.69;
- Wachovia (WB) -$0.35 (0.66%) to $52.58; and
- Bank Of America (BAC) -$0.24 (0.52%) to $46.33.
The Broker-dealer Index dipped 0.84 points (0.56%), closing at 149.17; the ticket clippers lined up as follows -
- E*Trade (ET) -$0.33 (2.42%) to $13.32;
- Ameritrade (AMTD) -$0.16 (1.45%) to $10.86;
- Charles Schwab (SCH) -$0.12 (1.1%) to $10.81;
- Lehman Brothers (LEH) -$0.77 (0.84%) to $91.00; and
- A G Edwards (AGE) -$0.35 (0.79%) to $43.69.
The Philadelphia SOX (Semiconductor) index shed 5.59 points (1.27%), closing at 434.42
- Altera (ALTR) -$0.65 (3.09%) to $20.41;
- Infineon Tech (IFX) -$0.22 (2.12%) to $10.17;
- Micron Technology (MU) -$0.23 (2.01%) to $11.19;
- Linear Technology (LLTC) -$0.79 (1.99%) to $38.93; and
- National Semiconductors (NSM) -$0.40 (1.96%) to $20.00.
Gold & Silver Markets
I have said recently that Gold can go nowhere (at least, not upwards) without a significant contribution from the US dollar (i.e., the US dolalr must start to fall again before gold can get upwards traction).
Gold fell by $3.60 (0.83%) to close at $430.5 per ounce.
The Gold Bugs Index slid 3.04 points (1.43%), closing at 210.19
- Harmony Gold (HMY) -$0.31 (3.68%) to $8.11;
- Golden Star (GSS) -$0.09 (3.02%) to $2.89;
- Meridian Gold (MDG) -$0.43 (2.32%) to $18.13;
- Iamgold (IAG) -$0.16 (2.26%) to $6.93; and
- Coeur d'Alene (CDE) -$0.09 (2.26%) to $3.90.
Silver fell by $0.08 (1.07%) to close at $7.24 per ounce. The Gold and Silver Index (XAU) lost 1.03 points (1.05%), to 97.09 points.
- Durban Rooderpoert Deep (DROOY) -$0.07 (7.53%) to $0.86;
- Harmony Gold (HMY) -$0.31 (3.68%) to $8.11;
- Meridian Gold (MDG) -$0.43 (2.32%) to $18.13; and
- Newmont Mining (NEM) -$0.62 (1.41%) to $43.48.
| Precious Metals and Indices | |||
| Index | Close | Gain(Loss) | % |
| Gold | 430.50 | -3.60 | -0.83% |
| Silver | 7.24 | -0.08 | -1.07% |
| PHLX Gold and Silver Index | 97.09 | -1.03 | -1.05% |
| AMEX Gold BUGS Index | 210.19 | -3.04 | -1.43% |
Oil Market
Oil was firmer, rising by $0.39 per barrel, closing at $53.49 per barrel - although it hit a new contract high of $55.20 intraday before some obvious shenanigans took it down over $1.50 from its high. The Oil and Gas Index (XOI) posted a rise of 20.2 points (2.36%), ending the day at 877.63
- Unocal (UCL) +$6.60 (12.34%) to $60.10;
- Sunoco (SUN) +$3.50 (3.56%) to $101.80; and
- Kerr Mcgee (KMG) +$2.66 (3.37%) to $81.65.
The Oil service stocks (OSX) Index posted a rise of 3.31 points (2.37%), ending the day at 142.82
- Varco International (VRC) +$1.51 (4.09%) to $38.46;
- Rowan Companies (RDC) +$1.11 (3.58%) to $32.10; and
- Tidewater (TDW) +$1.41 (3.48%) to $41.97.
| Energy Complex | |||
| Index | Close | Gain(Loss) | % |
| Reuters CRB | 307.52 | 0.87 | 0.28% |
| Crude Oil Light Sweet | 53.49 | 0.39 | 0.73% |
| Heating Oil | 1.483 | -0.02 | -1.56% |
| Natural Gas | 6.61 | -0.12 | -1.78% |
| Unleaded Gas | 1.5 | 0.02 | 1.34% |
| AMEX Oil Index | 877.63 | 20.2 | 2.36% |
| Oil Service Index | 142.82 | 3.31 | 2.37% |
Currency Markets
| Currency Prices | |||
| Index | Close | Gain(Loss) | % |
| US Dollar Index | 83.32 | 0.27 | 0.33% |
| Euro | 1.3102 | -0.0028 | -0.21% |
| Yen | 105.32 | 0.63 | 0.6% |
| Sterling | 1.9064 | -0.0063 | -0.33% |
| Australian Dollar | 0.7816 | -0.001 | -0.13% |
| Swiss Franc | 1.1809 | 0.0067 | 0.57% |
| Canadian Dollar | 0.8035 | -0.0036 | -0.45% |
