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There are some worrying signs whirling in the equities markets at the moment, it would appear that eddies are messing up the space time continuum, again. He ought to stick to The Footy Show, or at least let me on to 'Millionaire' so I can win it.
The bounce that was forecast from the deep-oversold condition has occurred, and was worth a decent slice at its recent peak. To be frank though, the market is not behaving at all well from a technical/sentiment/breadth perspective. All of the bounce happened in one or two short-squeeze ramps, both of which happened pretty much at the open and failed to sustain themselves.
But for the strange "North Korea non-testing" rally during the very thin trade on Friday afternoon, the markets would be almost 100 points lower. That's not a good sign because it means that nobody wants to be long this market per se (i.e., without a specific, short-term reason). Still, with 10100 and 10000 below (on the Dow) and 1150/1125 on the S&P and 1900 on the Nasdaq, there are some solid supprts below. Don't be surprised if 10000 is tested again soon... and don't be surprised if it bounces again. Third time's the charm though...
Federal Reserve Open Market Operations
The Fed's Open Market Operations desk performed 1 repurchase operation.
- a $5.25billion, overnight repurchase entirely in T-backed collateral.
Major US Indices
With a $5 bill repo, a tradable bounce at 10 a.m. NY time is always a likely prospect. During this session the Dow bounced over 50 points from 10 a.m.'s morning low at about 10200, to set its session high at 10263.6 points, at pretty much 11 a.m. on the nose. The S&P added about 7 points to its 10 a.m. level during the same timeframe.
From there, it went to pieces, with the markets sliding pretty much non-stop for the rest of the session.
By the close the Dow Jones Industrial Average was in the red to the tune of 91.34 points (0.89%), closing out the day at 10151.13 points. The actual session low was 10150.99, set in the final seconds of the session.
Within the blue-chip index, only 3 stocks rose, the biggest gainers being American Express (AXP, +1.14% to $51.55) and International Business Machines (IBM, +1.10% to $75.43), which accounted for 10 Dow points between them. Losers in the Dow numbered 26 and were led by Du Pont (DD, -3.19% to $47.03) and Hewlett Packard (HPQ, -2.99% to $20.47), with these two stocks contributing -16 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the losers by 332m shares to 30m.
The broader S&P500 slid 10.36 points (0.89%), to 1151.74. Within the index, gainers numbered 84, while 411 S&P500 stocks fell for the day. Volume was tilted 5.8:1 in favour of the losers with 1511.61 million units traded in the losers as compared with 262.68 million traded in the winners .
Over at Times Square, the Nasdaq Composite shed 23.34 points (1.2%), to close at 1927.44, while larger-cap technology issues fared better with the Nasdaq100 losing 16.88 points (1.17%), to end at 1420.43 points. Within the tech benchmark, gainers numbered 14, while 86 Nasdaq100 stocks fell for the day. Volume was heavily tilted (8.5:1) in favour of the losers with 713.17 million traded in the losers compared to 83.72 million in the winners .
NYSE Volume was super-chunky, with 1.95 billion shares changing hands, while Nasdaq Volume was chunky, with 1.67 billion shares traded.
| Major Market Statistics | |||
| Index | Close | Gain(Loss) | % |
| Dow Jones Industrial Average | 10151.13 | -91.34 | -0.89% |
| S&P500 | 1151.74 | -10.36 | -0.89% |
| Nasdaq Composite | 1927.44 | -23.34 | -1.2% |
| Nasdaq100 | 1420.43 | -16.88 | -1.17% |
| NYSE Volume | 1.95bn | - | - |
| Nasdaq Volume | 1.67bn | - | - |
Bellwethers
My 9-stock "bellwethers" group fell by an average of 0.50%
- General Electric (GE) -$0.20 (0.55%) to $36.18;
- Citigroup (C) -$0.16 (0.34%) to $46.62;
- Wal Mart (WMT) -$0.02 (0.04%) to $47.00;
- I.B.M. (IBM) +$0.82 (1.1%) to $75.43;
- Intel (INTC) -$0.09 (0.38%) to $23.32;
- Cisco Systems (CSCO) -$0.20 (1.14%) to $17.28;
- eBay (EBAY) -$0.41 (1.3%) to $31.14;
- Fannie Mae (FNM) -$0.89 (1.66%) to $52.64; and
- Freddie Mac (FRE) -$0.13 (0.21%) to $60.82.
Market Breadth & Internals
NYSE declining Issues beat out advancers by 2219 to 1050, for a single-day A/D reading of -1169; and Nasdaq losers exceeded gainers by 2150 to 928. The 10-day moving average of the A/D line fell to -100.0 on the NYSE, while the 10dma of the Nasdaq A/D fell to -346.4.
On the NYSE declining volume was greater than volume in advancing issues by 1.5 billion to 405 million shares; On the Nasdaq declining volume exceeded volume in advancing issues by 1.3 billion to 293.5 million shares.
35 NYSE-listed stocks rose to new 52-week highs, and 84 posted fresh 52-week lows, while on the Nasdaq there were 36 stocks that hit new 52-week highs, and 151 which fell to fresh 52-week lows.
| Market Breadth Statistics | ||
| NYSE | Nasdaq | |
| Advancers | 1050 | 928 |
| Decliners | 2219 | 2150 |
| Advancing Volume (m) | 404.99 | 293.54 |
| Declining Volume (m) | 1505.71 | 1358.02 |
| New Highs | 35 | 36 |
| New Lows | 84 | 151 |
| Market Sentiment Statistics | |||
| Index | Close | Gain(Loss) | % |
| CBOE Volatility Index | 14.96 | 0.33 | 2.26% |
| CBOE Nasdaq Volatility Index | 18.77 | 0.23 | 1.24% |
| Equity Put-Call Ratio | 0.68 | 0.1 | 17.24% |
| 10-day PCR | 0.71 | -0.01 | -0.91% |
| SPX-VIX Ratio | 77 | -2.44 | -3.08% |
Bond Market Analysis
Bonds fell at the long end, with the yield on the benchmark 30-year Treasury bond rising 1.1 basis points to 4.567%. The middle of the yield curve was broadly lower: five year yields rose to 3.954%, and ten-year yields rose to 4.267%.
Spreads between short-dated (2-yr) Treasuries and high-grade corporate bonds of similar maturity profiles were 2.0 bps tighter at 8 bps; spreads between longer dated Treasuries and their corporate AAA counterparts fell to 56.0 bps for 10-year AAA, and 79.0 bps for 20-years.
Credit spreads (spreads between corporate bonds of the same maturity profile but different creditworthiness) were mixed with the AAA-A spread on 20-years 3.0 basis points looser at 52.0 bps and the 10-year AAA-A spread 59.0 bps tighter at 2.0 basis points.
| Treasury Yields | |||
| Index | Close | Gain(Loss) | % |
| UST 13wk (yld) | 2.852 | 0 | 0% |
| UST 2Y (yld) | 3.64 | 0.02 | 0.55% |
| UST 5Y (yld) | 3.954 | 0.017 | 0.43% |
| UST 10Y (yld) | 4.267 | 0.016 | 0.38% |
| UST 30Y (yld) | 4.567 | 0.011 | 0.24% |
The Banks Index shed 0.37 points (0.38%), to end the session at 95.87; within the index,
- National City Corp (NCC) -$0.65 (1.93%) to $32.97;
- North Fork Bancorp (NFB) -$0.35 (1.26%) to $27.44;
- Wachovia (WB) -$0.64 (1.26%) to $50.26;
- Fifth Third Bancorp (FITB) -$0.42 (0.99%) to $42.12; and
- BB&T Corp (BBT) -$0.37 (0.96%) to $38.25.
The Broker-dealer Index lost 1.06 points (0.77%), ending the day at 137.14; the ticket clippers lined up as follows -
- A G Edwards (AGE) -$0.61 (1.53%) to $39.31;
- Morgan Stanley (MWD) -$0.68 (1.33%) to $50.54;
- Jeffries Group (JEF) -$0.46 (1.26%) to $36.15;
- Raymond James (RJF) -$0.31 (1.14%) to $26.79; and
- Ameritrade (AMTD) -$0.11 (1.03%) to $10.60.
The Philadelphia SOX (Semiconductor) index declined 2.82 points (0.72%), to end the session at 388.62
- Infineon Tech (IFX) -$0.35 (3.81%) to $8.83;
- Marvell Tech Group (MRVL) -$1.07 (3.04%) to $34.16;
- Teradyne (TER) -$0.29 (2.5%) to $11.29;
- Freescale Semiconductors (FSL-B) -$0.32 (1.69%) to $18.58; and
- Novellus Systems (NVLS) -$0.40 (1.65%) to $23.80.
Gold & Silver Markets
Gold rose $3.30 (0.76%) to close at $437.90 per ounce. It is being a little bit defiant of late, but never mind - when I actually declare open season on Gold (soon, soon, my precioussss) it'll drop hard. At the minute it's getting some support from USD indecision... I find it hard-ish to reconcile a call for Gold to drop $40-ish, with the USD also apparently set to break down rather than up. Although it troubles me, the boat is too loaded to one side - as the new-ish RantCharts "DBR Chart" (short for Dumb Bull Ratio) makes perfectly clear.
Too many small traders are have pulled out of the short USD camp (meaning it's likely to defy them and go lower) and too many small traders are long Gold. It's one that befuddles me a bit - it is almost axiomatic that the crowd is extremely wrong at turning points, but intermarket logic tells you that Gold and USD can't move in the same direction for long.
Gold Bugs Index shed 4.35 points (2.3%), to end the session at 184.77
- Golden Star (GSS) -$0.12 (4.58%) to $2.50;
- Hecla Mining (HL) -$0.22 (4.29%) to $4.91;
- Harmony Gold (HMY) -$0.27 (4.13%) to $6.27;
- Gold Fields (GFI) -$0.42 (4.06%) to $9.92; and
- Freeport McMoran (FCX) -$1.09 (2.93%) to $36.10.
Silver fell by $0.01 (0.07%) to close at $7.25 per ounce. The Gold and Silver Index (XAU) lost 1.53 points (1.73%), to end the session at 87.05 points.
- Harmony Gold (HMY) -$0.27 (4.13%) to $6.27;
- Gold Fields (GFI) -$0.42 (4.06%) to $9.92;
- Freeport McMoran (FCX) -$1.09 (2.93%) to $36.10; and
- Placer Dome (PDG) -$0.43 (2.86%) to $14.59.
| Precious Metals and Indices | |||
| Index | Close | Gain(Loss) | % |
| Gold | 437.90 | 3.30 | 0.76% |
| Silver | 7.25 | -0.01 | -0.07% |
| PHLX Gold and Silver Index | 87.05 | -1.53 | -1.73% |
| AMEX Gold BUGS Index | 184.77 | -4.35 | -2.3% |
Oil Market
Oil recovered from an 80c early-session fall, rallying over $1 per barrel between 12:15 and 1:28 p.m. NY time. It closed $0.08 per barrel firmer, at $54.28 per barrel. Wait til you see how groovily RantCharts will present each commodity; just the contango chart alone is well worth a look (well, it will be worth a look once I put the finishing touches on it).
The Oil and Gas Index (XOI) slid 11.57 points (1.36%), to end the session at 837.53
- Amerada Hess (AHC) -$2.58 (2.63%) to $95.50;
- Sunoco (SUN) -$2.25 (2.17%) to $101.40; and
- Occidental Petroleum (OXY) -$1.47 (2%) to $71.92.
The Oil service stocks (OSX) Index lost 2.9 points (2.09%), to end the session at 135.9
- BJ Services (BJS) -$2.19 (4.04%) to $52.00;
- Baker Hughes (BHI) -$1.36 (2.93%) to $45.12; and
- Noble Corp (NE) -$1.45 (2.62%) to $53.88.
| Energy Complex | |||
| Index | Close | Gain(Loss) | % |
| Reuters CRB | 309.78 | 1.1 | 0.36% |
| Crude Oil Light Sweet | 54.28 | 0.08 | 0.15% |
| Heating Oil | 1.515 | 0 | 0.26% |
| Natural Gas | 7.15 | 0.02 | 0.28% |
| Unleaded Gas | 1.629 | -0.01 | -0.61% |
| AMEX Oil Index | 837.53 | -11.57 | -1.36% |
| Oil Service Index | 135.9 | -2.9 | -2.09% |
Currency Markets
| USD Exchange Rates | |||
| Index | Close | Gain(Loss) | % |
| US Dollar Index | 83.98 | 0.21 | 0.25% |
| Euro | 1.2987 | -0.0012 | -0.09% |
| Yen | 106 | 0.36 | 0.34% |
| Sterling | 1.9062 | -0.0052 | -0.27% |
| Australian Dollar | 0.7781 | -0.0012 | -0.15% |
| Swiss Franc | 1.1864 | -0.0008 | -0.07% |
| Canadian Dollar | 0.8028 | -0.005 | -0.62% |
