Interdum stultus opportuna loquitur...

Monday, August 15, 2005

USRant: It Wasn't ME Who Murder'd Sleep...

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

Sleep that knits up the ravel'd sleeve of care. The death of each day's life, sore labor's bath, Balm of hurt minds...".. no wonder Macbeth blathered on and on about it when he couldn't sleep. It's enough to drive you batty. As soon as this is finished I am going to try and get a few more hours' sleep.

Still, there are compensations when the US markets are open - a chance to show off a bit in 'quasi-real-time', as the intra-session posts indicate. Tagging the intraday low (albeit getting in late), and later positing the existence of an impending intraday high - pre-empting a reversal divergence - was a bit of fun. 

As I mentioned a few sessions back, if you're going to rely solely on the CCI being extremely overbought, you've got to use wide stops; notice also that while the Nasdaq100 CCI was over 300, the Dow and S&P CCI didn't even get to my definition of extreme (i.e., +200). 

If I had waited instead for the divergence that emerged on the CCI right at the day high, it would have been an even better string of posts. Chalk it down to lack of sleep. Check out the chart though...

Dow 15-minute

AS you can see, at the time that I intimated that the intraday top was forming, the Dow CCI was not even in 'extreme' territory; as such there was no basis to be declaring a top in any damn thing. An hour later (with me, finally asleep), the Dow breached Friday's high but in the process it had generated a CCI divergence - on two levels. First, in comparison with the prior swing high, and second, in comparison with last Friday's high. That was the session high candidate as determined by the method I advocate...

Interesting that he pullback from that two-tier divergence was not more pronounced... yet another indicatio nthat da Boyz intend to gut Oil this week.

Federal Reserve Open Market Operations

The Fed's Open Market Operations desk performed 1 repurchase operation - a $9.5billion, overnight repurchase entirely in T-backed collateral undertaken at a -5.5 basis point premium to the Fed Funds Rate (FFR).

AS I mentioned in the 12:30 a.m. missive, that's a lot of money, but the premium prevented a 10 a.m. (NY time) moonshot.

Major US Indices

After a weak opening, the Dow Jones Industrial Average rallied pretty strongly from about 10:30 NY time, rising almost 100 points in the following 4 hours. By the close it was showing a gain of 34.07 points (0.32%), closing out the day at 10634.38 points. It was Monday  - what else did you expect?

The index actually opened soft, dipping to 10557.87 (10550-ish) at 10:30 a.m. - perhaps reacting to the travesty of Tim not winning Big Brother. 

OK... Big Brother "electoral fraud" didn't cause it... but it should have.

After breaking Friday's low and encouraging "breakout" traders to have a dip on the short side (all the better to take their money off them). the signs of an impending reversal were there for all to see - as I posted at 12:31 a.m. Australian time.

From there, the thing rose pretty strongly - pausing at 10600-ish for a bit, and then again at 10625-ish (the two-bar pullbacks on the chart above), before rising to the 'next 50' and hitting an intraday high of 10655.08 (10650-ish). 

Within the blue-chip index, 19 stocks rose, the biggest gainers being Walt Disney (DIS, +1.59% to $26.17) and Honeywell (HON, +1.51% to $38.87), which accounted for 8 Dow points between them. Losers in the Dow numbered 10 and were led by Alcoa (AA, -1.62% to $29.24) and Exxon Mobil (XOM, -1.03% to $60.42), with these two stocks contributing -9 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the gainers by 189.4m shares to 60.6m.

The broader S&P500 gained 3.48 points (0.28%), ending the day at 1233.87. Within the index, gainers numbered 335, while 146 S&P500 stocks fell for the day. Volume was tilted 1.6:1 in favour of the winners with 832.33 million units traded in the winners as compared with 518.31 million traded in the losers .

Over at Times Square, the Nasdaq Composite advanced 10.14 points (0.47%), to close at 2167.04, while larger-cap technology issues fared better with the Nasdaq100 adding 8.96 points (0.56%), to end at 1600.71 points. Within the tech benchmark, gainers numbered 63, while 29 Nasdaq100 stocks fell for the day. Volume was tilted 1.4:1 in favour of the winners with 308.75 million traded in the winners compared to 228.05 million in the losers .

NYSE Volume was solid but unspectacular, with 1.55 billion shares changing hands, while Nasdaq Volume was below its recent average, with 1.38 billion shares traded.

Major Market Statistics
Dow Jones Industrial Average10634.3834.070.32%
Nasdaq Composite2167.0410.140.47%
NYSE Volume1.55bn--
Nasdaq Volume1.38bn--


My 9-stock "bellwethers" group rose by an average of 0.05%

  • General Electric (GE) -$0.04 (0.12%) to $34.21;
  • Citigroup (C) +$0.17 (0.39%) to $43.79;
  • Wal Mart (WMT) +$0.40 (0.82%) to $49.10;
  • I.B.M. (IBM) +$0.31 (0.38%) to $82.50;
  • Intel (INTC) +$0.22 (0.84%) to $26.53;
  • Cisco Systems (CSCO) -$0.09 (0.51%) to $17.71;
  • eBay (EBAY) +$0.27 (0.66%) to $41.23;
  • Fannie Mae (FNM) -$0.57 (1.11%) to $50.60; and
  • Freddie Mac (FRE) -$0.55 (0.89%) to $61.37.

Market Breadth & Internals

NYSE advancing Issues exceeded decliners by 1916 to 1345 for a single-day A/D reading of 571; Nasdaq gainers trumped losers by 1762 to 1294. The 10-day moving average of the A/D line rose to 81.2 on the NYSE, while the 10dma of the Nasdaq A/D rose to -96.9.

NYSE advancing volume exceeded volume in decliners by 892.9 to 616.7 million shares; Nasdaq advancing volume was greater than volume in decliners by 822.7 to 485.8 million shares.

120 NYSE-listed stocks rose to new 52-week highs, and 18 posted fresh 52-week lows, while on the Nasdaq there were 98 stocks that hit new 52-week highs, and 38 which fell to fresh 52-week lows.

Market Breadth Statistics

Advancing Volume (m)892.92822.7
Declining Volume (m)616.74485.82
New Highs12098
New Lows1838

Market Sentiment Statistics
CBOE Volatility Index12.23-0.51-4%
CBOE Nasdaq Volatility Index15.04-0.59-3.77%
Equity Put-Call Ratio0.57-0.5-46.73%
10-day PCR0.6100%
SPX-VIX Ratio100.94.314.46%

Bond Market Analysis

Bonds fell at the long end, with the yield on the benchmark 30-year Treasury bond rising 3.2 bps to 4.473%. The 30-year bond futures dipped 10/32 to 115-21/32 after its explosion upwards on Friday. 

The middle of the yield curve was broadly lower in price: five year yields rose to 4.145%, and ten-year yields rose to 4.27%.

Spreads between short-dated (2-yr) Treasuries and high-grade corporate bonds of similar maturity profiles were 2.0 bps tighter at -6.0 basis points; spreads between longer dated Treasuries and their corporate AAA counterparts rose to 46.0 bps for 10-year AAA, and 77.0 bps for 20-years.

Credit spreads (spreads between corporate bonds of the same maturity profile but different creditworthiness) were broadly tighter with the AAA-A spread on 20-years 3.0 bps tighter at 36.0 basis points and the 10-year AAA-A spread 8.0 bps tighter at 6.0 bps.

Treasury Yields
UST 13wk (yld)3.42700%
UST 2Y (yld)4.04-0.06-1.46%
UST 5Y (yld)4.1450.0360.88%
UST 10Y (yld)4.270.0320.76%
UST 30Y (yld)4.4730.0320.72%

The Banks Index rose 0.75 points (0.76%), to end the session at 99.64; within the index,

  • PNC Financial Services (PNC) +$1.32 (2.36%) to $57.32;
  • Washington Mutual (WM) +$0.57 (1.37%) to $42.28;
  • Suntrust Banks (STI) +$0.88 (1.24%) to $71.92;
  • Comerica (CMA) +$0.71 (1.18%) to $60.95; and
  • Bank Of America (BAC) +$0.49 (1.15%) to $43.18.

The Broker-dealer Index added 0.61 points (0.36%), at 171.98; the ticket clippers lined up as follows -

  • Bear Stearns (BSC) +$1.76 (1.76%) to $101.65;
  • Morgan Stanley (MWD) +$0.75 (1.42%) to $53.60;
  • Goldman Sachs (GS) +$1.02 (0.9%) to $114.67;
  • Merrill Lynch (MER) +$0.42 (0.72%) to $58.74; and
  • Ameritrade (AMTD) +$0.13 (0.64%) to $20.43.

The Philadelphia SOX (Semiconductor) index posted a rise of 4.93 points (1.07%), to 467.76

  • Teradyne (TER) +$0.76 (5.05%) to $15.81;
  • Broadcom (BRCM) +$1.05 (2.51%) to $42.85;
  • Freescale Semiconductors (FSL-B) +$0.60 (2.47%) to $24.91;
  • National Semiconductors (NSM) +$0.51 (2.16%) to $24.10; and
  • Micron Technology (MU) +$0.24 (2.16%) to $11.35.

Gold & Silver Markets

Gold fell by $3.80 (0.85%) to close at $444.40 per ounce. No real reason for it - maybe some of last week's newcomer-nuffies got a bit scared and stale; the USD rose a little, but not enough to explain Gold's behaviour.

The Gold Bugs Index slid 1.91 points (0.88%), ending the day at 215.72

  • Golden Star (GSS) -$0.10 (2.97%) to $3.27;
  • Meridian Gold (MDG) -$0.58 (2.83%) to $19.92;
  • Iamgold (IAG) -$0.18 (2.48%) to $7.08;
  • Glamis Gold (GLG) -$0.47 (2.4%) to $19.14; and
  • Kinross Gold (KGC) -$0.13 (1.95%) to $6.52.

Silver fell by $0.05 (0.71%) to close at $7.04 per ounce. The Gold and Silver Index (XAU) lost 0.92 points (0.92%), at 99.04 points.

  • Meridian Gold (MDG) -$0.58 (2.83%) to $19.92;
  • Kinross Gold (KGC) -$0.13 (1.95%) to $6.52;
  • Goldcorp (GG) -$0.34 (1.86%) to $17.92; and
  • Barrick Gold (ABX) -$0.43 (1.56%) to $27.08.
Precious Metals and Indices
PHLX Gold and Silver Index99.04-0.92-0.92%
AMEX Gold BUGS Index215.72-1.91-0.88%

Oil Market

Oil lost ground, shedding $0.66 per barrel and closing at $66.20 per barrel (it fell as low as $65.35 after popping upward to $67 earlier in the session). As I mentioned in Friday's message (about losing a beautifully-crafted USRant that explained in detail why...) Oil should finish this week below $60. There was always going to be a pop today... another load of fish landed, and ready to be gutted; dumbasses thinking they can trade commodities based on TV stories about gas pump prices. Here's a hint for folks who are tempted to trade 'news': Germany invaded Poland in 1939. As far as 'news' goes, that's about as useful in an analysis of commodity prices as any piece of news provided by a TV journalist. 

The Oil and Gas Index (XOI) dipped 9.36 points (0.93%), ending the day at 996.47

  • Amerada Hess (AHC) -$2.20 (1.7%) to $127.28;
  • Royal Dutch Shell (RD) -$0.93 (1.43%) to $64.25; and
  • Occidental Petroleum (OXY) -$1.11 (1.33%) to $82.57.

The Oil service stocks (OSX) Index lost 1.97 points (1.17%), at 166.05

  • Global Industries (GLBL) -$0.31 (2.66%) to $11.35;
  • GlobalSantaFe (GSF) -$1.06 (2.26%) to $45.94; and
  • National Oilwells/Varco (NOV) -$1.21 (2.01%) to $58.86.
Energy Complex
Reuters CRB311.67-5.46-1.72%
Crude Oil Light Sweet66.2-0.66-0.99%
Heating Oil1.8962-0.01-0.49%
Natural Gas9.54-0.05-0.5%
Unleaded Gas1.9621-0.04-2.13%
AMEX Oil Index996.47-9.36-0.93%
Oil Service Index166.05-1.97-1.17%

Currency Markets

USD Exchange Rates
US Dollar Index87.320.340.39%
Australian Dollar0.7689-0.0029-0.38%
Swiss Franc1.25530.00810.65%
Canadian Dollar0.8335-0.0019-0.23%