Interdum stultus opportuna loquitur...

Wednesday, September 21, 2005

USRant: Something Early, For a Change...

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

Those of you who've read enough of these Rants (especially the ones that coincide with the Soviet-style intervention in  financial markets known as the FOMC meeting) will know that the expectation is always for a pre-FOMC 'ego handjob for Greensplatt' thanks to the $2 whores in the financial markets. Usually once the FOMC is finished, the market goes all squishy and gives back the whole 'Greenspan-ego pump'.

And so it was today; the early bounce I forecast yesterday happened right on cue, but then the indices couldn't muster any strength to get the Dow through 10600 decisively. Between 10 a.m. NY time and the time of the Fed announcement, all the Dow could manage to do was wander across the page with a modest downward bias. The only one of our technical plays that was on offer was fading the first-hour high, but even that was not genuinely 'there' since the first hour showed good early momentum (although that momentum was all-but-evaporated by the end of the first hour).

But who cares anyhow? Any of the long entries from yesterday (even the 'eager beaver', not-quite-right CCI divergence early in yesterday's session) made sufficient money to enable us to sit sideline and watch the FOMC shenanigans without even feeling an itch in the trigger finger. If I had been in 'gunslinger' mode I would have punted short just after 2:15 p.m. for the post-FOMC fade (after waiting for the quick-spike nuffie cleanout). That's always a very well-tilted bet (pays off about 80% of the time), but frankly I'm getting too lazy for that sort of palaver; I prefer watching the long-range scanners and only moving to the targeting computer when the target's at my 12. Remember - I've had a short bias since I forecast a swing top at 10700...

Federal Reserve Open Market Operations

The Fed's Open Market Operations desk performed 1 repurchase operation - a $5billion, overnight repurchase entirely in T-backed collateral undertaken at a 0.5 basis point discount to the old Fed Funds Rate (FFR). The new Fed Funds rate is - as we suspected - by 25 basis points. the language of the statement also implied that they are not remotely interested in the fiscal damage that will be imposed by Hurricane Katrina. Like September 11 and the Gulf War (which are totally unrelated except in the fevered minds of syphilitic neoTrotskyites), the FOMC is treating Katrina as an 'extraordinary item'. I guess that shouldn't be a surprise considering that Greenspan is such a Tory hack.

Anyhow - they kept the 'measured pace' waffle in the statement, which means more rate hikes ahead. Journalists already had the template written for the post-handjob decline.

Major US Indices

The Dow Jones Industrial Average lost 76.11 points (0.72%) after rallying early, reversing over 120 points from the early high and closing out the day at 10481.52 points. 

The index hit an intraday high of 10604.76 just before the end of the first hour (just after my NightRant post that indicated - wrongly - that this USRant would be very late), and fell as low as 10467.11 points. 

Within the blue-chip index, 4 stocks rose, the biggest gainers being Procter & Gamble (PG, +0.86% to $56.04) and American International Group (AIG, +0.27% to $60.51), which accounted for 5 Dow points between them. Losers in the Dow numbered 26 and were led by Mcdonalds (MCD, -2.63% to $32.62) and Du Pont (DD, -2.11% to $39.45), with these two stocks contributing -14 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the losers by 348.4m shares to 32.6m.

The broader S&P500 declined 9.68 points (0.79%), to 1221.34. Within the index, gainers numbered 91, while 396 S&P500 stocks fell for the day. Volume was tilted 3.2:1 in favour of the losers with 1525.04 million units traded in the losers as compared with 483.08 million traded in the winners .

Over at Times Square, the Nasdaq Composite declined 13.93 points (0.65%), to close at 2131.33, while larger-cap technology issues fared better with the Nasdaq100 losing 7.85 points (0.49%), to end at 1578.2 points. Within the tech benchmark, gainers numbered 27, while 68 Nasdaq100 stocks fell for the day. Volume was tilted 2.0:1 in favour of the losers with 503.59 million traded in the losers compared to 250.18 million in the winners .

NYSE Volume was super-chunky, with 2.32 billion shares changing hands, while Nasdaq Volume was chunky, with 1.91 billion shares being shifted from one online brokerage account to another (and back again, in all likelihood).

Major Market Statistics
Dow Jones Industrial Average10481.52-76.11-0.72%
Nasdaq Composite2131.33-13.93-0.65%
NYSE Volume2.32bn--
Nasdaq Volume1.91bn--


My 9-stock "bellwethers" group fell by an average of 1.21%

  • General Electric (GE) -$0.21 (0.62%) to $33.84;
  • Citigroup (C) -$0.21 (0.46%) to $45.15;
  • Wal Mart (WMT) -$0.80 (1.82%) to $43.21;
  • I.B.M. (IBM) -$0.73 (0.92%) to $78.70;
  • Intel (INTC) -$0.20 (0.81%) to $24.48;
  • Cisco Systems (CSCO) -$0.20 (1.1%) to $17.97;
  • eBay (EBAY) -$0.23 (0.62%) to $36.71;
  • Fannie Mae (FNM) -$0.88 (1.85%) to $46.66; and
  • Freddie Mac (FRE) -$1.59 (2.69%) to $57.50.

Market Breadth & Internals

NYSE declining Issues beat out advancers by 2259 to 1032, for a single-day A/D reading of -1227; and Nasdaq losers exceeded gainers by 1799 to 1225. The 10-day moving average of the A/D line fell to -347.6 on the NYSE, while the 10dma of the Nasdaq A/D fell to -270.7.

On the NYSE declining volume was greater than volume in advancing issues by 1818.7 to 475.6 million shares; On the Nasdaq declining volume exceeded volume in advancing issues by 1160.5 to 720.8 million shares.

239 NYSE-listed stocks rose to new 52-week highs, and 119 posted fresh 52-week lows, while on the Nasdaq there were 191 stocks that hit new 52-week highs, and 102 which fell to fresh 52-week lows.

Market Breadth Statistics

Advancing Volume (m)475.62720.83
Declining Volume (m)1818.661160.45
New Highs239191
New Lows119102

Market Sentiment Statistics
CBOE Volatility Index12.640.453.69%
CBOE Nasdaq Volatility Index15.170.332.22%
Equity Put-Call Ratio0.80.0811.11%
10-day PCR0.61-0.01-1.61%
SPX-VIX Ratio96.6-4.36-4.32%

Bond Market Analysis

Bonds rose sharply at the long end, with the yield on the benchmark 30-year Treasury bond shedding 2.4 bps to 4.519%. After trading in a mind-numbingly narrow range prior to the FOMC meeting, the 30-year T-bond futures gyrated like Isidora Duncan on crystal meth. First, a snap down to within a hair's breadth of 114 (the low was 114-04/32) to lure in a bunch of dumbass shorts; then ,a snap upward of over a point just to really kick the shit out of the newcomers. Eventually the thing closed above 115 at 115-02/32, and it's risen further in after-hours trading.  

The middle of the yield curve was mixed: five year yields rose to 4.05%, and ten-year yields fell to 4.243%.

Spreads between short-dated (2-yr) Treasuries and high-grade corporate bonds of similar maturity profiles were 11.0 bps wider at 12.0 basis points; spreads between longer dated Treasuries and their corporate AAA counterparts rose to 39.0 bps for 10-year AAA, and 76.0 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 13.0 bps tighter at 34.0 basis points and the 10-year AAA-A spread 3.0 bps tighter at 18.0 bps.

Treasury Yields
UST 13wk (yld)3.52500%
UST 2Y (yld)3.970.061.53%
UST 5Y (yld)4.050.0290.72%
UST 10Y (yld)4.243-0.004-0.09%
UST 30Y (yld)4.519-0.024-0.53%

The Banks Index shed 0.57 points (0.58%), at 97.75; within the index,

  • Fifth Third Bancorp (FITB) -$0.71 (1.83%) to $38.15;
  • Northern Trust (NTRS) -$0.58 (1.18%) to $48.78;
  • Comerica (CMA) -$0.70 (1.15%) to $60.00;
  • Wachovia (WB) -$0.52 (1.06%) to $48.43; and
  • PNC Financial Services (PNC) -$0.58 (1%) to $57.17.

The Broker-dealer Index posted a rise of 0.07 points (0.04%), at 176.48; the ticket clippers lined up as follows -

  • Raymond James (RJF) +$0.45 (1.44%) to $31.65;
  • Merrill Lynch (MER) +$0.65 (1.08%) to $60.82;
  • Legg Mason (LM) +$0.62 (0.58%) to $106.70;
  • Morgan Stanley (MWD) +$0.15 (0.29%) to $52.40; and
  • E*Trade (ET) +$0.03 (0.18%) to $16.74.

The Philadelphia SOX (Semiconductor) index dipped 1.88 points (0.4%), to end the session at 466.26

  • Applied Materials (AMAT) -$0.39 (2.23%) to $17.08;
  • Teradyne (TER) -$0.25 (1.58%) to $15.58;
  • Infineon Tech (IFX) -$0.15 (1.55%) to $9.55;
  • Broadcom (BRCM) -$0.70 (1.53%) to $44.96; and
  • Marvell Tech Group (MRVL) -$0.68 (1.47%) to $45.52.

Gold & Silver Markets

Gold fell by $0.50 (0.11%) to close at $466.80 per ounce. The session high was 471.40 - above yesterday's session high at $469.00, and the first time Gold has been in the $470s since the 1980's.

The Gold Bugs Index dipped 5.29 points (2.22%), to 233.11

  • Hecla Mining (HL) -$0.34 (8%) to $3.91;
  • Glamis Gold (GLG) -$0.76 (3.51%) to $20.90;
  • Meridian Gold (MDG) -$0.74 (3.39%) to $21.06;
  • Coeur d'Alene (CDE) -$0.13 (3.1%) to $4.06; and
  • Newmont Mining (NEM) -$1.30 (2.82%) to $44.81.

Silver fell by $0.02 (0.31%) to close at $7.38 per ounce. The Gold and Silver Index (XAU) lost 2.42 points (2.19%), to 107.85 points.

  • Durban Rooderpoert Deep (DROOY) -$0.13 (8.84%) to $1.34;
  • Anglogold Ashanti (AU) -$1.59 (3.67%) to $41.71;
  • Meridian Gold (MDG) -$0.74 (3.39%) to $21.06; and
  • Newmont Mining (NEM) -$1.30 (2.82%) to $44.81.
Precious Metals and Indices
PHLX Gold and Silver Index107.85-2.42-2.19%
AMEX Gold BUGS Index233.11-5.29-2.22%

Oil Market

Note - all the table data have rolled over to the new (November) front month, with the exception of Natural Gas; October is still the most active NatGas contract.

Oil lost ground, shedding $1.13 per barrel, closing at $66.20 per barrel; after breaking yesterday's high by a single cent (hitting $67.65), the November contract dropped like a rock, falling to exactly $65. Then, more remarks about tightness of supply from some OPEC dude put the frighteners on the market (plus there was a weensy technical bounce). Tomorrow is the release date for the latest Crude Oil inventories data; I strongly suspect that there will be a 'surprise' build in inventories... and those who bought late today will find themselves on the wrong side of the market yet again.

The Oil and Gas Index (XOI) shed 11.94 points (1.11%), at 1067.61

  • Kerr Mcgee (KMG) -$2.30 (2.36%) to $95.00;
  • Occidental Petroleum (OXY) -$1.77 (1.99%) to $87.03; and
  • Sunoco (SUN) -$1.48 (1.94%) to $74.75.

The Oil service stocks (OSX) Index shed 1.35 points (0.76%), ending the day at 175.61

  • Global Industries (GLBL) -$0.38 (2.74%) to $13.49;
  • Noble Corp (NE) -$1.22 (1.69%) to $71.16; and
  • National Oilwells/Varco (NOV) -$1.07 (1.62%) to $65.00.
Energy Complex
Reuters CRB324.22-0.27-0.08%
Crude Oil Light Sweet66.2-1.13-1.68%
Heating Oil2.0418-0.03-1.28%
Natural Gas2.492-10.13-80.25%
Unleaded Gas1.9276-0.05-2.77%
AMEX Oil Index1067.61-11.94-1.11%
Oil Service Index175.61-1.35-0.76%

Currency Markets

USD Exchange Rates
US Dollar Index88.60.180.2%
Australian Dollar0.7664-0.0004-0.05%
Swiss Franc1.28230.00360.28%
Canadian Dollar0.8542-0.0012-0.14%