Interdum stultus opportuna loquitur...

Saturday, July 02, 2005

USRant: Pre-Holiday Torpor Again...

Note - from June 24th 2009, this blog has migrated from Blogger to a self-hosted version. Click here to go straight there.

The Fourth of July is a fiction invented by folks like Abraham Lincoln - the date itself has nothing whatsoever to do with the founding of the United States. Still, the people have as mush idea of their own history as they do of the history of Iraq or Afghanistan. They seem to enjoy the idea, and will wave flags and blather on like retards about Liberty. The Founding Fathers would not recognise their brainchild today - it has transmogrified from a torchbearer for individual liberty to a global incubus that tries to satisfy its resource-hunger by military means. Tom Paine, Thomas Jefferson and the other freethinkers would be members of a 'terrorist organisation', because they would be railing against the Madness of King George again.

I note with some mirth that - if my memory serves - Bush II Caligula is the third President named George; the only other two have been his Daddy and George Washington... thus Bush II Caligula is the United States' third George, or George III - the same guy that the Founders fought against. George the Turd, PUS. It fits, don't you think?

Numbers are funny things. For example, did you realise that in the name MCI Worldcom, the MCI bit is 1101, expressed in Roman numerals? 1101 in binary notation, converts to 13 under the decimal system. Unlucky for some (e.g., shareholders).

Also of note is the fact that Texas has a law called the Food Disparagement Act. I kid you not. It is a crime in the State of Texas to 'dis' beef. When laws like that are on the books, the system is basically owned by industrial money. Even worse, the legislature is completely brazen about it - basically showing the public that it doesn't give a flying shit about anything except campaign contributions. The electorate is supposed to shut up and accept it like a herd of feedlot cattle. the sooner Texas is reclaimed by Mexico the better - if it had already happened Bush would be in Vincente Fox's office and there would be 100,000 fewer dead civilians in Iraq.

Federal Reserve Open Market Operations

The Fed's Open Market Operations desk did not enter the market at all last night. Perhaps nobody was at work  - what with Monday a holiday and all.

Major US Indices

The Dow Jones Industrial Average gained 28.47 points (0.28%), closing out the day at 10303.44 points. The index opened at its low (i.e., unchanged), and rose to above 10300 within in the first minute of trade. From there it had no intention of going very far. Just after 10:30 there was a break of the first-hour high, - yet anther 'tease tick' to get breakout traders to jump n the long side. that topped out within five minutes, and set the intraday high of 10343.79. The afternoon was mind-numbing stuff, with the Dow trading in a range of about 20 points for the entire afternoon.

Within the blue-chip index, 21 stocks rose, the biggest gainers being General Motors (GM, +1.91% to $34.65) and Home Depot (HD, +1.52% to $39.49), which accounted for 10 Dow points between them. Losers in the Dow numbered 9 and were led by Boeing (BA, -2.00% to $64.68) and Pfizer (PFE, -1.74% to $27.10), with these two stocks contributing -14 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the gainers by 181.8m shares to 156.3m.

The broader S&P500 advanced 3.11 points (0.26%), ending the day at 1194.44. Within the index, gainers numbered 316, while 179 S&P500 stocks fell for the day. Volume was tilted 1.1:1 in favour of the losers with 747.81 million units traded in the winners as compared with 707.83 million traded in the losers .

Over at Times Square, the Nasdaq Composite advanced 0.41 points (0.02%), to close at 2057.37, while larger-cap technology issues fared worse with the Nasdaq100 losing 2.99 points (0.2%), to end at 1490.53 points. Within the tech benchmark, gainers numbered 39, while 61 Nasdaq100 stocks fell for the day. Volume was tilted 2.4:1 in favour of the losers with 402.21 million traded in the losers compared to 169.20 million in the winners .

NYSE Volume was chunky, with 1.61 billion shares changing hands, while Nasdaq Volume was modest, with 1.24 billion shares being shifted from one online brokerage account to another (and back again, in all likelihood).

Major Market Statistics
Dow Jones Industrial Average10303.4428.470.28%
Nasdaq Composite2057.370.410.02%
NYSE Volume1.61bn--
Nasdaq Volume1.24bn--


My 9-stock "bellwethers" group rose by an average of 0.27%

  • General Electric (GE) +$0.09 (0.26%) to $34.74;
  • Citigroup (C) -$0.07 (0.15%) to $46.16;
  • Wal Mart (WMT) +$0.08 (0.17%) to $48.28;
  • I.B.M. (IBM) +$0.47 (0.63%) to $74.67;
  • Intel (INTC) +$0.19 (0.73%) to $26.21;
  • Cisco Systems (CSCO) -$0.09 (0.47%) to $18.99;
  • eBay (EBAY) -$0.13 (0.39%) to $32.88;
  • Fannie Mae (FNM) +$0.41 (0.7%) to $58.81; and
  • Freddie Mac (FRE) +$0.61 (0.94%) to $65.84.

Market Breadth & Internals

NYSE advancing Issues exceeded decliners by 2064 to 1188 for a single-day A/D reading of 876; Nasdaq gainers trumped losers by 1654 to 1338. The 10-day moving average of the A/D line rose to 301.6 on the NYSE, while the 10dma of the Nasdaq A/D rose to 30.8.

NYSE advancing volume exceeded volume in decliners by 994.9 to 598.7 million shares; On the Nasdaq declining volume exceeded volume in advancing issues by 696.5 to 527.5 million shares.

194 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 36 which fell to fresh 52-week lows.

Market Breadth Statistics

Advancing Volume (m)994.9527.53
Declining Volume (m)598.72696.46
New Highs19481
New Lows3336

Market Sentiment Statistics
CBOE Volatility Index11.4-0.64-5.32%
CBOE Nasdaq Volatility Index14.27-0.19-1.31%
Equity Put-Call Ratio0.760.1116.92%
10-day PCR0.720.011.24%
SPX-VIX Ratio104.85.835.89%

Bond Market Analysis

Bonds fell hard again at the long end - the third strike of the match as I mentioned yesterday and the day before. The long bond dropped over a point, to 107-20 (its low was 107-16), giving the short from 119-03 a profit of 47 ticks ($1468.75 per $1553 margin, or 94.5% in 4 sessions - excluding re-entries) and a maximum positive excursion of 51 ticks ($1593.75 per $1553 margin, or 103%). Since the trade was up 100% or more at one stage, it can safely be assumed that one half of the position has been taken off in accordance with my usual approach - meaning that the rest of the ride is free on the second half-position.

The yield on the benchmark 30-year Treasury bond rose 7.9 bps to 4.298%.

The middle of the yield curve was broadly lower: five year yields rose to 3.825%, and ten-year yields rose to 4.049%.

Spreads between short-dated (2-yr) Treasuries and high-grade corporate bonds of similar maturity profiles were 7.0 bps tighter at -5.0 basis points; spreads between longer dated Treasuries and their corporate AAA counterparts fell to 50.0 bps for 10-year AAA, and 100.5 bps for 20-years.

Credit spreads (spreads between corporate bonds of the same maturity profile but different creditworthiness) were broadly wider with the AAA-A spread on 20-years 16.0 bps tighter at 21.0 basis points and the 10-year AAA-A spread 2.0 bps tighter at 5.0 bps.

Treasury Yields
UST 13wk (yld)3.0900%
UST 2Y (yld)3.730.113.04%
UST 5Y (yld)3.8250.12.68%
UST 10Y (yld)4.0490.1042.64%
UST 30Y (yld)4.2980.0791.87%

The Banks Index shed 0.15 points (0.15%), to end the session at 98.91; within the index,

  • MBNA Corp (KRB) -$0.39 (1.49%) to $25.77;
  • Bank Of America (BAC) -$0.63 (1.38%) to $44.98;
  • Wachovia (WB) -$0.43 (0.87%) to $49.17;
  • US Bancorp (USB) -$0.15 (0.51%) to $29.05; and
  • Wells Fargo (WFC) -$0.31 (0.5%) to $61.27.

The Broker-dealer Index posted a rise of 0.96 points (0.6%), to end the session at 160.65; the ticket clippers lined up as follows -

  • A G Edwards (AGE) +$0.56 (1.24%) to $45.71;
  • Jeffries Group (JEF) +$0.44 (1.16%) to $38.33;
  • Morgan Stanley (MWD) +$0.56 (1.07%) to $53.03;
  • E*Trade (ET) +$0.10 (0.71%) to $14.09; and
  • Ameritrade (AMTD) +$0.13 (0.7%) to $18.74.

The Philadelphia SOX (Semiconductor) index rose 0.29 points (0.07%), at 419.36

  • Broadcom (BRCM) +$0.57 (1.6%) to $36.10;
  • National Semiconductors (NSM) +$0.26 (1.18%) to $22.29;
  • Intel (INTC) +$0.19 (0.73%) to $26.21;
  • Taiwan Semiconductors (TSM) +$0.06 (0.66%) to $9.18; and
  • Advanced Micro Devices (AMD) +$0.11 (0.63%) to $17.45.

Gold & Silver Markets

I should have stuck with my previous thinking - that Gold bulls would have to get stale somewhere along the line. I mentioned yesterday the bull's nervousness about what happened last  time Gold popped its head above $440 - without paying attention to the fact that Gold had done so during the session. In that light, nuffie-nervousness makes far more sense.

The pop above 90 in the USDX didn't help, it must be said.

Gold fell by $8.00 (1.83%) to close at $428.80 per ounce.

Gold Bugs Index added 0.51 points (0.25%), at 202.07

  • Eldorado Gold (EGO) +$0.11 (4.12%) to $2.78;
  • Freeport McMoran (FCX) +$0.49 (1.31%) to $37.93;
  • Hecla Mining (HL) +$0.03 (0.66%) to $4.59;
  • Harmony Gold (HMY) +$0.05 (0.58%) to $8.61; and
  • Gold Fields (GFI) +$0.06 (0.53%) to $11.41.

Silver fell by $0.18 (2.55%) to close at $6.87 per ounce. The Gold and Silver Index (XAU) gained 0.37 points (0.4%), to end the session at 93.38 points.

  • Durban Rooderpoert Deep (DROOY) +$0.03 (3.41%) to $0.91;
  • Freeport McMoran (FCX) +$0.49 (1.31%) to $37.93;
  • Anglogold Ashanti (AU) +$0.36 (1.01%) to $36.09; and
  • Barrick Gold (ABX) +$0.25 (1%) to $25.28.
Precious Metals and Indices
PHLX Gold and Silver Index93.380.370.4%
AMEX Gold BUGS Index202.070.510.25%

Oil Market

Oil was firmer, rising by $2.20 per barrel, closing at $58.75 per barrel (the session high was $59 even in the August contract - round numbers rule again).

The Oil and Gas Index (XOI) rose 21.49 points (2.42%), ending the day at 910.29

  • Amerada Hess (AHC) +$4.34 (4.07%) to $110.85;
  • Marathon Oil (MRO) +$2.17 (4.07%) to $55.54; and
  • Sunoco (SUN) +$4.19 (3.69%) to $117.87.

The Oil service stocks (OSX) Index gained 1.35 points (0.92%), to end the session at 147.5

  • Global Industries (GLBL) +$0.19 (2.24%) to $8.69;
  • Rowan Companies (RDC) +$0.60 (2.02%) to $30.31; and
  • Smith International (SII) +$1.16 (1.82%) to $64.86.
Energy Complex
Reuters CRB308.541.630.53%
Crude Oil Light Sweet58.752.23.89%
Heating Oil1.71110.074.34%
Natural Gas7.1710.182.59%
Unleaded Gas1.68450.117.09%
AMEX Oil Index910.2921.492.42%
Oil Service Index147.51.350.92%

Currency Markets

USD Exchange Rates
US Dollar Index90.131.041.17%
Australian Dollar0.7519-0.0106-1.39%
Swiss Franc1.29750.01631.27%
Canadian Dollar0.805-0.0113-1.38%