Interdum stultus opportuna loquitur...

Monday, August 22, 2005

USRant: It Just Gets Better...

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

Stay the course". I wonder who the first politician was, who used that vacuous line of bullshit. As if a course had been plotted in the first place, and as if there had been periodic checks to ensure that (a) the project was proceeding as plotted; and (b) the original course was producing the outcomes that were desired.

Well, if the original plot was to drive up oil prices so that bag-of-meat Dick Cheney and his crew of energy industry vampires could wallow in more corruptly-acquired money, it's working just fine.

If the original plot was to destroy what was left of the pretence that the US is a benevolent presence in world affairs, that box can be ticked as well.

If the original plot was to drive the US towards a Police State, that's another objective achieved. 

Few folks bother to recall that the US always heads towards a Police State every time it goes to war. Kent State was not the first act of domestic repression; Lincoln suspended habeas corpus and imprisoned thousands of anti-war demonstrators, and in both WWI and WWII 'suspicious foreigners' were rounded up and put in concentration camps - including a couple of hundred thousand Japanese (the overwhelming majority of whom had no ties to the espionage community).

There's a video circulating now of some police in Utah doing a "Rodney King" to a bunch of kiddies at a Rave. Stay the course.

Iraq's oil output stopped completely over the weekend because the Yanks Army can't keep the fucking power on (after the Yank Air Force blew the infrastructure to kingdom come). Stay the course.

The Defence Department says that if the new tranche of Abu Ghraib photos are released, there is a risk of domestic riots - the photos are required to be released pursuant to a court order (as if the US government gives a fuck about courts if they aren't packed with pet judges). Just stay the course, Comrade Citizen, and shut the fuck up.

What was "the course", exactly? Does it end in a Yalie homosexual frat party where they wipe their asses with copies of the Bill of Rights, then dig up Jefferson and piss in his skull? After all, Jefferson was the 'spiritual leader' of the 1770's version of al-Qaeda (although Jefferson's movement wasn't a Mossad front); we can't have terrorists being vindicated by history. (Note to the Ballarat City Council: pull down that Eureka Stockade monument to terrorism, too: I've already rung the 'report anything suspicious' hotline).

Federal Reserve Open Market Operations

The Fed's Open Market Operations desk performed 1 repurchase operation - an $8.75billion, overnight repurchase entirely in T-backed collateral undertaken at a 1.1 basis point discount to the Fed Funds Rate (FFR).

I guess they were relying on the usual Monday orgasm to provide the upside traction - obviating the need to dish out repurchase dough at steeper premia.

Major US Indices

The Dow Jones Industrial Average gained 10.66 points (0.1%), closing out the day at 10569.89 points. The Monday Orgasm drove the Dow up to 10641.15 after 35 minutes of trade... and then? And then it all went pear-shaped.

With no real news to speak of (but with Crude Oil briefly popping above $66), the markets turned, and apart from the Dow they did so with a vengeance.

I say 'apart from the Dow', even though the Dow well over 100 points from high to low (10523.96). The thing is, the Dow was held up - in part, by buying in P&G after a story over the weekend in Barrons which shilled for PG's upcoming merger with Gillette - trying desperately to make folks believe that this merger is not a dick thing for management... they should just change the title of Barron's to "This Time It's Different" magazine, or "Whoring for Wall Street, Weekly".

Anyhow, I ignore any news that is generated by the financial whore-press, so I didn't even know about the story. 

The technical signals, on the other had, were two in number and perfect in outcome. The first was a big-enbough-to-short overbought on the Dow's CCI: at +218, it was high enough to use as sole basis for a short so long as you're prepared to carry reasonably wide stops. It was followed, the very next bar, by a 'microdivergence' - although a  much more obvious 'classical' divergence was evident on the Nasdaq100 (there's another hint: look across the indices for confirmation).

Dow 15-minute chart 

The second technical signal was a 'proper' divergence on the Dow at the low of the day, which enabled a nice ride back up to the close. It was 'confirmed' (although no confirmation is required) by the TICK.

I've written about the TICK here before - basically, if you get a TICK reading below -800, you just enter long, and grit your teeth. The likelihood that the trade goes permanently sour is very low - and when it's an ancillary indicator on top of a divergence, just sit back and say "thank your mother for the rabbits". 

This session was true to form, with the only reading below 800 happening on the low bar of the session - just prior to a 3.5pt rise in the S&P500. Examine the chart (it's an unsightly one - I'm shopping around for a new datafeed at present)... the green baloon is the only negative TICK reading that meets the criteria: worth waiting for.

S&P500 5-minute intraday chart

Within the blue-chip index, 16 stocks rose, the biggest gainers being Intel (INTC, +1.60% to $26.06) and Procter & Gamble (PG, +1.14% to $55.16), which accounted for 8 Dow points between them. Losers in the Dow numbered 14 and were led by Walt Disney (DIS, -0.92% to $25.73) and Pfizer (PFE, -0.74% to $25.36), with these two stocks contributing -3 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the gainers by 182.7m shares to 140.3m.

The broader S&P500 advanced 2.02 points (0.17%), to 1221.73. Within the index, gainers numbered 287, while 195 S&P500 stocks fell for the day. Volume was tilted 1.2:1 in favour of the winners with 716.99 million units traded in the winners as compared with 606.48 million traded in the losers .

Over at Times Square, the Nasdaq Composite advanced 5.85 points (0.27%), to close at 2141.41, while larger-cap technology issues fared worse with the Nasdaq100 adding 1.87 points (0.12%), to end at 1575.59 points. Within the tech benchmark, gainers numbered 55, while 36 Nasdaq100 stocks fell for the day. Volume was tilted 1.4:1 in favour of the winners with 291.14 million traded in the winners compared to 202.02 million in the losers .

NYSE Volume was chunky, with 1.6 billion shares changing hands, while Nasdaq Volume was about average, with 1.35 billion shares being shifted from one online brokerage account to another (and back again, in all likelihood).

Major Market Statistics
Dow Jones Industrial Average10569.8910.660.1%
Nasdaq Composite2141.415.850.27%
NYSE Volume1.6bn--
Nasdaq Volume1.35bn--


My 9-stock "bellwethers" group rose by an average of 0.01%

  • General Electric (GE) +$0.02 (0.06%) to $33.97;
  • Citigroup (C) +$0.04 (0.09%) to $44.20;
  • Wal Mart (WMT) +$0.09 (0.19%) to $46.67;
  • I.B.M. (IBM) -$0.16 (0.19%) to $82.60;
  • Intel (INTC) +$0.41 (1.6%) to $26.06;
  • Cisco Systems (CSCO) -$0.13 (0.73%) to $17.69;
  • eBay (EBAY) -$0.86 (2.15%) to $39.15;
  • Fannie Mae (FNM) +$0.03 (0.06%) to $50.86; and
  • Freddie Mac (FRE) +$0.72 (1.18%) to $61.60.

Market Breadth & Internals

NYSE advancing Issues exceeded decliners by 2065 to 1216 for a single-day A/D reading of 849; that's a high degree of bullish breadth given the lackluster performance of the major stock indices. Nasdaq gainers trumped losers by 1773 to 1267. The 10-day moving average of the A/D line rose to 13.9 on the NYSE, while the 10dma of the Nasdaq A/D rose to -113.0.

NYSE advancing volume exceeded volume in decliners by 911.6 to 653.7 million shares; Nasdaq advancing volume was greater than volume in decliners by 825.4 to 466.5 million shares.

82 NYSE-listed stocks rose to new 52-week highs, and 25 posted fresh 52-week lows, while on the Nasdaq there were 63 stocks that hit new 52-week highs, and 46 which fell to fresh 52-week lows.

Market Breadth Statistics

Advancing Volume (m)911.59825.38
Declining Volume (m)653.68466.48
New Highs8263
New Lows2546

Market Sentiment Statistics
CBOE Volatility Index13.470.050.37%
CBOE Nasdaq Volatility Index15.96-0.2-1.24%
Equity Put-Call Ratio0.74-0.1-11.9%
10-day PCR0.6300%
SPX-VIX Ratio90.7-0.19-0.21%

Bond Market Analysis

Bonds fell at the long end, but not by much. The yield on the benchmark 30-year Treasury bond rose 0.5 bps to 4.426%.

The middle of the yield curve was mixed: five year yields fell to 4.075%, and ten-year yields rose to 4.219%.

Spreads between short-dated (2-yr) Treasuries and high-grade corporate bonds of similar maturity profiles were 2.0 bps tighter at -7.0 basis points; spreads between longer dated Treasuries and their corporate AAA counterparts fell to 51.0 bps for 10-year AAA, and 81.5 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 17.0 bps wider at 34.0 basis points and the 10-year AAA-A spread 7.0 bps looser at 2.0 bps.

Treasury Yields
UST 13wk (yld)3.42200%
UST 2Y (yld)400%
UST 5Y (yld)4.075-0.004-0.1%
UST 10Y (yld)4.2190.0080.19%
UST 30Y (yld)4.4260.0050.11%

The Banks Index posted a rise of 0.26 points (0.26%), at 99.91; within the index,

  • Suntrust Banks (STI) +$0.84 (1.18%) to $72.04;
  • BB&T Corp (BBT) +$0.31 (0.76%) to $41.31;
  • Northern Trust (NTRS) +$0.32 (0.63%) to $50.81;
  • National City Corp (NCC) +$0.22 (0.61%) to $36.42; and
  • Regions Financial (RF) +$0.20 (0.6%) to $33.28.

The Broker-dealer Index advanced 0.44 points (0.26%), to end the session at 170.63; the ticket clippers lined up as follows -

  • Raymond James (RJF) +$0.37 (1.26%) to $29.72;
  • Jeffries Group (JEF) +$0.38 (0.95%) to $40.28;
  • Lehman Brothers (LEH) +$0.94 (0.89%) to $106.05;
  • Morgan Stanley (MWD) +$0.25 (0.48%) to $52.29; and
  • A G Edwards (AGE) +$0.20 (0.45%) to $44.41.

The Philadelphia SOX (Semiconductor) index rose 5.45 points (1.18%), ending the day at 467.72

  • Marvell Tech Group (MRVL) +$1.59 (3.6%) to $45.79;
  • Texas Instruments (TXN) +$0.79 (2.54%) to $31.95;
  • Linear Technology (LLTC) +$0.72 (1.93%) to $38.08;
  • Applied Materials (AMAT) +$0.35 (1.93%) to $18.52; and
  • Intel (INTC) +$0.41 (1.6%) to $26.06.

Gold & Silver Markets

Gold rose $0.80 (0.18%) to close at $439.90 per ounce.

The Gold Bugs Index shed 0.93 points (0.44%), closing at 208.14

  • Iamgold (IAG) -$0.27 (3.73%) to $6.97;
  • Eldorado Gold (EGO) -$0.05 (1.69%) to $2.91;
  • Golden Star (GSS) -$0.05 (1.6%) to $3.08;
  • Coeur d'Alene (CDE) -$0.06 (1.52%) to $3.88; and
  • Harmony Gold (HMY) -$0.12 (1.4%) to $8.44.

Silver rose $0.05 (0.74%) to close at $7.06 per ounce. The Gold and Silver Index (XAU) lost 0.01 points (0.01%), closing at 96.21 points.

  • Durban Rooderpoert Deep (DROOY) -$0.04 (3.81%) to $1.01;
  • Harmony Gold (HMY) -$0.12 (1.4%) to $8.44;
  • Gold Fields (GFI) -$0.08 (0.72%) to $11.08; and
  • Goldcorp (GG) -$0.07 (0.4%) to $17.40.
Precious Metals and Indices
PHLX Gold and Silver Index96.21-0.01-0.01%
AMEX Gold BUGS Index208.14-0.93-0.44%

Oil Market

Note: the Energy complex front-month has rolled forward to the October contract, with the exception of Natural Gas which is still trading on the Septembers.

Oil lost ground, shedding $0.14 per barrel, closing at $65.65 per barrel after trading as high as $66.65 after the news of Iraqi oil production stopping briefly. 

Three cheers for 'the course' - whatever the course is, let's stay it, Comrade Citizen. And do make sure you snitch on your neighbour if he does anything suspicious - like walk outside with an Arab appearance, or talk funny, or wear a jacket. Of course if he's white and wearing a lapel pin with a flag on it, just spit on him. If he represents a political party, try and do your best with whatever projectile weapon comes to hand.

The Oil and Gas Index (XOI) added 2.23 points (0.23%), to 967.07

  • Repsol YPF (REP) +$0.32 (1.1%) to $29.29;
  • Kerr Mcgee (KMG) +$0.73 (0.85%) to $86.72; and
  • ChevronTexaco (CVX) +$0.42 (0.7%) to $60.34.

The Oil service stocks (OSX) Index slid 1.29 points (0.8%), to end the session at 160.96

  • Nabors Industries (NBR) -$1.16 (1.8%) to $63.23;
  • Noble Corp (NE) -$1.06 (1.54%) to $67.83; and
  • BJ Services (BJS) -$0.81 (1.34%) to $59.74.
Energy Complex
Reuters CRB312.551.660.53%
Crude Oil Light Sweet65.65-0.14-0.21%
Heating Oil1.8489-0.01-0.39%
Natural Gas9.5640.454.97%
Unleaded Gas1.7854-0.03-1.52%
AMEX Oil Index967.072.230.23%
Oil Service Index160.96-1.29-0.8%

Currency Markets

USD Exchange Rates
US Dollar Index88.1-0.5-0.56%
Australian Dollar0.75490.00340.45%
Swiss Franc1.2703-0.0054-0.42%
Canadian Dollar0.83250.00680.82%