Interdum stultus opportuna loquitur...

Saturday, September 24, 2005

USRant: Lovely Rita? Well, Hardly...

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

What a boring session... unless you were a short-term oil bear who believes that the whole Hurricane-Rita-as-Oil-Despoiler malarkey is a cruel hoax. (Note - nowhere have I claimed that Rita wouldn't do damage to ordinary property and/or lives).

The US government and its stooge-infested agencies (e.g., FEMA and the Department of Fatherland Security) are thanking their lucky stars that they get another disaster so quickly after their Keystone Kops routine post-Katrina... they have been overplaying the dangers posed by Rita so that they look like they are on the job this time. When the toll from Rita is miniscule they will trumpet how great a job they did... the compliant media will pull down its pants and whore itself some more... and any genuine inquiry into the failures of the pre-and-post Katrina reaction will be squelched. Don't you just love living in a world where the vampires run the show?

But more importantly - notice what has been going on in the oil market? I've been saying for a couple of days now that the energy analysts spruiking $80 a barrel post-Rita were just setting up a shell-game so that their house traders could get short. Which thimble is the pea under...

Don't get me wrong - the price of oil is going MUCH higher in the longer tern, thanks in part to the massive disruption to global oil supplies caused by President Cheney's JINSA-inspired interference in the Levant and elsewhere. Then, with the US hurting from the twin drains of war and rising energy costs, they will get a second hit - when oil is repriced into euros by Venezuela, Iran and  the Russkies. The effect on the USD as a result of reduced USD-reserve holding requirements by foreign central banks will drive oil prices 20% higher for US consumers... regardless of what happens to the actual EURO price of oil.

I also predicted (to a littleprivate e-ail group that I used to participate in) that Russia - and possibly China - would cuddle up to the Euro-zone, in a bid to join the currency bloc (and Russia will seek to join NATO). Hasn't happened yet, but both Russia and China have warned the US against taking its 'Bomb Iran" plans to the Security Council. If Israel bombs Iran now, it will be bombing a country with whom the Russians and the Chinese now have defence assistance pacts. Not a smart move when your sugar-daddy and bodyguard is stretched thin.

Federal Reserve Open Market Operations

The Fed's Open Market Operations desk performed 1 repurchase operation - a $6.75billion, 6-day repurchase with $1.995billion in T-backed collateral undertaken at a 9 basis point discount to the Fed Funds Rate (FFR). Not big enough to cause any ructions in the equity markets - the bulk of the repurchase was in agency-backed collateral: another dime bag of crack to prevent (or attempt to forestall) the end-game for the Toxic Twins (Fanne Mae and Freddie Mac).

Major US Indices

I'm having all sorts of trouble with intraday charts - the problem started last night and is only partially resolved... so no pictures today. Suffice it to say that there was a huge CCI spike late in the session, but no obvious divergences apart from the selling divergence mentioned at the close yesterday (which worked perfectly... it did its job yesterday, and trading based on its bias yielded today's required 1-point S&P gain from a short).

The Dow Jones Industrial Average lost 2.46 points (0.02%), closing out the day at 10419.59 points. The index hit an intraday high of 10455.81 (10450-ish) at 2 p.m., having fallen to as low as 10372.06 (10375-ish) just after the open. Once I get my intraday charts fixed up, I will post today's pictures.

Within the blue-chip index, 14 stocks rose, the biggest gainers being Honeywell (HON, +2.43% to $37.48) and General Motors (GM, +2.10% to $31.07), which accounted for 12 Dow points between them. Losers in the Dow numbered 15 and were led by Alcoa (AA, -5.71% to $24.42) and Exxon Mobil (XOM, -1.77% to $63.88), with these two stocks contributing -21 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the losers by 256.1m shares to 108.5m.

The broader S&P500 posted a rise of 0.67 points (0.06%), at 1215.29. Within the index, gainers numbered 307, while 172 S&P500 stocks fell for the day. Volume was tilted 1.1:1 in favour of the winners with 992.60 million units traded in the winners as compared with 870.61 million traded in the losers .

Over at Times Square, the Nasdaq Composite rose 6.06 points (0.29%), to close at 2116.84, while larger-cap technology issues fared worse with the Nasdaq100 adding 4.39 points (0.28%), to end at 1571.75 points. Within the tech benchmark, gainers numbered 62, while 34 Nasdaq100 stocks fell for the day. Volume was tilted 1.1:1 in favour of the losers with 420.78 million traded in the winners compared to 379.89 million in the losers .

NYSE Volume was super-chunky, with 2.01 billion shares changing hands, while Nasdaq Volume was chunky, with 1.64 billion shares being shifted from one online brokerage account to another (and back again, in all likelihood).

Major Market Statistics
Dow Jones Industrial Average10419.59-2.46-0.02%
Nasdaq Composite2116.846.060.29%
NYSE Volume2.01bn--
Nasdaq Volume1.64bn--


My 9-stock "bellwethers" group rose by an average of 0.23%

  • General Electric (GE) +$0.10 (0.3%) to $33.40;
  • Citigroup (C) +$0.06 (0.13%) to $45.24;
  • Wal Mart (WMT) +$0.01 (0.02%) to $43.20;
  • I.B.M. (IBM) -$0.21 (0.27%) to $78.00;
  • Intel (INTC) -$0.18 (0.73%) to $24.38;
  • Cisco Systems (CSCO) -$0.06 (0.33%) to $18.05;
  • eBay (EBAY) +$1.06 (2.81%) to $38.78;
  • Fannie Mae (FNM) +$0.49 (1.06%) to $46.50; and
  • Freddie Mac (FRE) -$0.50 (0.88%) to $56.00.

Market Breadth & Internals

NYSE advancing Issues exceeded decliners by 1700 to 1566 for a single-day A/D reading of 134; Nasdaq gainers trumped losers by 1857 to 1155. The 10-day moving average of the A/D line rose to -357.7 on the NYSE, while the 10dma of the Nasdaq A/D rose to -228.0.

NYSE advancing volume exceeded volume in decliners by 1104.5 to 858.2 million shares; Nasdaq advancing volume was greater than volume in decliners by 947.3 to 651.8 million shares.

86 NYSE-listed stocks rose to new 52-week highs, and 122 posted fresh 52-week lows, while on the Nasdaq there were 104 stocks that hit new 52-week highs, and 95 which fell to fresh 52-week lows.

Market Breadth Statistics

Advancing Volume (m)1104.52947.25
Declining Volume (m)858.23651.78
New Highs86104
New Lows12295

Market Sentiment Statistics
CBOE Volatility Index12.96-0.37-2.78%
CBOE Nasdaq Volatility Index15.16-0.14-0.92%
Equity Put-Call Ratio0.86-0.47-35.34%
10-day PCR0.640.034.92%
SPX-VIX Ratio93.82.652.91%

Bond Market Analysis

Bonds fell sharply at the long end, as hurricane premium was diffused in the stock and oil markets. The yield on the benchmark 30-year Treasury bond rising 4.8 bps to 4.509%, and the 30-year bond futures fell to 115-5/32 (a fall of 23/32), closing just 4 ticks off its low.

The middle of the yield curve was broadly lower in price as well: five year yields rose to 4.073%, and ten-year yields rose to 4.248%.

Spreads between short-dated (2-yr) Treasuries and high-grade corporate bonds of similar maturity profiles were 4.0 bps wider at 6.0 basis points; spreads between longer dated Treasuries and their corporate AAA counterparts fell to 34.0 bps for 10-year AAA, and 69.5 bps for 20-years.

Credit spreads (spreads between corporate bonds of the same maturity profile but different creditworthiness) were broadly widerer with the AAA-A spread on 20-years rising 5.0 bps to 47.0 basis points and the 10-year AAA-A spread 4.0 bps wider at 18.0 bps.

Treasury Yields
UST 13wk (yld)3.390.010.3%
UST 2Y (yld)40.071.78%
UST 5Y (yld)4.0730.0872.18%
UST 10Y (yld)4.2480.0721.72%
UST 30Y (yld)4.5090.0481.08%

The Banks Index posted a rise of 0.17 points (0.18%), to 96.73; within the index,

  • North Fork Bancorp (NFB) +$0.68 (2.75%) to $25.39;
  • Northern Trust (NTRS) +$0.64 (1.33%) to $48.86;
  • State Street (STT) +$0.58 (1.2%) to $48.91;
  • Bank Of NY (BK) +$0.33 (1.12%) to $29.72; and
  • Regions Financial (RF) +$0.20 (0.63%) to $31.76.

The Broker-dealer Index posted a rise of 0.41 points (0.24%), closing at 174.67; the ticket clippers lined up as follows -

  • Jeffries Group (JEF) +$0.38 (0.92%) to $41.70;
  • Bear Stearns (BSC) +$0.88 (0.85%) to $104.08;
  • Goldman Sachs (GS) +$0.97 (0.82%) to $119.47;
  • Legg Mason (LM) +$0.80 (0.74%) to $108.20; and
  • Charles Schwab (SCH) +$0.10 (0.71%) to $14.15.

The Philadelphia SOX (Semiconductor) index added 3.61 points (0.79%), closing at 460.72

  • Texas Instruments (TXN) +$1.17 (3.57%) to $33.90;
  • Advanced Micro Devices (AMD) +$0.77 (3.47%) to $22.98;
  • Freescale Semiconductors (FSL-B) +$0.59 (2.64%) to $22.91;
  • Marvell Tech Group (MRVL) +$1.11 (2.55%) to $44.60; and
  • National Semiconductors (NSM) +$0.49 (1.97%) to $25.39.

Gold & Silver Markets

Gold fell by $3.10 (0.66%) to close at $463.90 per ounce. Waiting, waiting, waiting.

The Gold Bugs Index slid 1.79 points (0.75%), to end the session at 236.97

  • Harmony Gold (HMY) -$0.42 (4.04%) to $9.98;
  • Gold Fields (GFI) -$0.32 (2.33%) to $13.39;
  • Hecla Mining (HL) -$0.09 (2.15%) to $4.10;
  • Goldcorp (GG) -$0.34 (1.7%) to $19.61; and
  • Newmont Mining (NEM) -$0.57 (1.23%) to $45.63.

Silver fell by $0.08 (1.08%) to close at $7.34 per ounce. The Gold and Silver Index (XAU) lost 1.04 points (0.94%), at 109.41 points.

  • Harmony Gold (HMY) -$0.42 (4.04%) to $9.98;
  • Anglogold Ashanti (AU) -$1.31 (2.98%) to $42.62;
  • Gold Fields (GFI) -$0.32 (2.33%) to $13.39; and
  • Goldcorp (GG) -$0.34 (1.7%) to $19.61.
Precious Metals and Indices
PHLX Gold and Silver Index109.41-1.04-0.94%
AMEX Gold BUGS Index236.97-1.79-0.75%

Oil Market

Oil started ditching fear premium, shedding $2.31 per barrel, closing at $64.19 per barrel (the session low was $63.85). Looks like my head and shoulders hypothesis was a reasonable one - including even the likely bounce high for the left-hand shoulder. Find me anyone else who - when oil was down at $63-ish at the end of last week, forecast a bounce to $67-ish as a swing high and forecast the formation of a head-and-sholders.

Oil still has to fall another dollar to break the neckline on this newly developed pattern (and note: the key $62.75 level has changed because of the rollover to the new contract month... I will tell you what that new key level is tomorrow).

The Oil and Gas Index (XOI) shed 17.48 points (1.62%), closing at 1059.62

  • Marathon Oil (MRO) -$1.91 (2.71%) to $68.57;
  • Sunoco (SUN) -$2.00 (2.55%) to $76.52; and
  • ConocoPhillips (COP) -$1.47 (2.11%) to $68.29.

The Oil service stocks (OSX) Index declined 2.86 points (1.64%), to end the session at 171.14

  • Transocean (RIG) -$1.84 (2.99%) to $59.75;
  • Smith International (SII) -$0.75 (2.3%) to $31.91; and
  • Baker Hughes (BHI) -$1.23 (2.04%) to $59.17.
Energy Complex
Reuters CRB323.8-1.15-0.35%
Crude Oil Light Sweet64.19-2.31-3.47%
Heating Oil2.0087-0.05-2.65%
Natural Gas12.2-0.59-4.61%
Unleaded Gas1.9099-0.13-6.32%
AMEX Oil Index1059.62-17.48-1.62%
Oil Service Index171.14-2.86-1.64%

Currency Markets

USD Exchange Rates
US Dollar Index89.291.181.34%
Australian Dollar0.7572-0.0054-0.71%
Swiss Franc1.29220.01371.07%
Canadian Dollar0.85460.00120.14%