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Well, I said yesterday that the mad dash skyward wasn't anything to be trusted: to recap -
Do not take this as a portent of good things, dear Reader; markets that are in 'good shape' do not behave like this. As I said above - I'm glad we were stuck with a buying bias, because standing in the road of that train would have gotten us seriously scorched... but price action like we saw today is actually a symptom of a market that is a hair-s breadth from falling completely to pieces.
With our RantRadar still stuck on a buying bias, the relative calm of the early part of the session was a boon (considering what happened later). By the 2-hour mark we'd clocked up 3 trades for a total of 1.5 points - the last trade of the night being a long off 1194.25 at just after 1:15 a.m. Australian time. (The first two trades were exited with the barest of gains - one tick each). With the one-point daily target reached, the rest of the session was just for watching - thank Crom we didn't have to try and scalp our point on the long side after the thing developed downside traction.
With yesterday's wild ride (upwards) and today's wild ride (downwards), the indices have gone precisely nowhere in net terms despite an aggregate Dow-point swing of 341 points (from yesterday's low of 10233 up to today's high of 10433, and down again to todays low of 10252... I haven't even counted the drop from yesterday's open to the low, or the bounce from today's low to the close).
And yet take a look at Oil ... Oil has dropped like a stone.
All the dickhead journalists who ascribed yesterday's market rise to a $1 fall in the oil price, will be standing holding their dicks today - if a $1 fall in the price of crude was such a good thing, how come another $1 fall wasn't simply more of a good thing? Simple, dickheads: the market rise yesterday had nothing - precisely nothing - to do with the price of Crude. It was a short-squeeze undertaken with the (almost neutral) Beige Book as the starting point: oil was already down $1 when that happened.
In a way, I'm glad that yesterday's short-squeeze happened: as I had said the previous day, I would have preferred for 1200 to be tagged by the futures - it had seemed to have 'unfinished business' to the upside.
From here's it's very much a crap-shoot as to the direction of the markets. As reprised above, markets that behave like this are not healthy in any sense of the word - this sort of manic depression doesn't generally end well. The sub-10k level for the Dow will almost certainly have to wait until next week - and as we all know, weekends can be a very significant interruptor of bear trends.
Federal Reserve Open Market Operations
The Fed's Open Market Operations desk performed 2 repurchase operations.
- a $7billion, 14-day repurchase entirely in T-backed collateral undertaken at the Fed Funds Rate (FFR); and
- a $4.5billion, overnight repurchase entirely in T-backed collateral, undertaken at a 3.1 basis point discount to the Fed Funds Rate (FFR).
Major US Indices
After opening with small gaps down across the board, US stock indices clawed their way to fresh bounce highs in the first 15 minutes of traded - but from there it all went pretty horribly wrong. By the close, the Dow Jones Industrial Average had lost 133.03 points (1.28%), closing out the day at 10281.1 points. The index hit an intraday high of 10432.78 at 10:52 a.m. NY time (on a tease-break of the first hour high... he usual trap). From there, it fell like a waterfall, dropping to 10252.13 (10250-ish) by 3:30 p.m. NY time. Not quite an exact mirror image of yesterday's 190-point intraday reversal, but pretty damned close.
Within the blue-chip index, 5 stocks rose, the biggest gainers being Home Depot (HD, +0.79% to $39.57) and Coca Cola (KO, +0.72% to $42.10), which accounted for 5 Dow points between them. Losers in the Dow numbered 23 and were led by Pfizer (PFE, -8.64% to $21.90) and Mcdonalds (MCD, -3.83% to $32.40), with these two stocks contributing -27 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the losers by 441.4m shares to 72.2m.
The broader S&P500 shed 17.96 points (1.5%), to 1177.8. Within the index, gainers numbered 82, while 399 S&P500 stocks fell for the day. Volume was tilted 4.4:1 in favour of the losers with 1888.44 million units traded in the losers as compared with 431.58 million traded in the winners .
Over at Times Square, the Nasdaq Composite shed 23.13 points (1.11%), to close at 2068.11, while larger-cap technology issues fared better with the Nasdaq100 losing 14.02 points (0.89%), to end at 1555.59 points. Within the tech benchmark, gainers numbered 33, while 63 Nasdaq100 stocks fell for the day. Volume was tilted 2.1:1 in favour of the losers with 596.58 million traded in the losers compared to 280.80 million in the winners .
NYSE Volume was super-chunky, with 2.65 billion shares changing hands, while Nasdaq Volume was chunky, with 1.87 billion shares being shifted from one online brokerage account to another (and back again, in all likelihood).
| Major Market Statistics | |||
| Index | Close | Gain(Loss) | % |
| Dow Jones Industrial Average | 10281.1 | -133.03 | -1.28% |
| S&P500 | 1177.8 | -17.96 | -1.5% |
| Nasdaq Composite | 2068.11 | -23.13 | -1.11% |
| Nasdaq100 | 1555.59 | -14.02 | -0.89% |
| NYSE Volume | 2.65bn | - | - |
| Nasdaq Volume | 1.87bn | - | - |
Bellwethers
My 9-stock "bellwethers" group fell by an average of 1.78%, but that's tilted somewhat by the carnage in eBay which lost almost 7%.
- General Electric (GE) -$0.53 (1.54%) to $33.88;
- Citigroup (C) -$0.55 (1.23%) to $44.34;
- Wal Mart (WMT) -$0.39 (0.85%) to $45.60;
- I.B.M. (IBM) -$1.00 (1.19%) to $83.17;
- Intel (INTC) -$0.07 (0.3%) to $23.62;
- Cisco Systems (CSCO) -$0.27 (1.57%) to $16.93;
- eBay (EBAY) -$2.86 (6.81%) to $39.15;
- Fannie Mae (FNM) -$0.38 (0.83%) to $45.20; and
- Freddie Mac (FRE) -$1.03 (1.72%) to $58.97.
Market Breadth & Internals
NYSE declining Issues beat out advancers by 2453 to 826, for a single-day A/D reading of -1627; and Nasdaq losers exceeded gainers by 2039 to 947. The 10-day moving average of the A/D line fell to -532.2 on the NYSE, while the 10dma of the Nasdaq A/D fell to -357.8.
On the NYSE declining volume was greater than volume in advancing issues by 2207.9 to 399.8 million shares; On the Nasdaq declining volume exceeded volume in advancing issues by 1328.7 to 534.6 million shares.
45 NYSE-listed stocks rose to new 52-week highs, and 159 posted fresh 52-week lows, while on the Nasdaq there were 59 stocks that hit new 52-week highs, and 101 which fell to fresh 52-week lows.
| Market Breadth Statistics | ||
| NYSE | Nasdaq | |
| Advancers | 826 | 947 |
| Decliners | 2453 | 2039 |
| Advancing Volume (m) | 399.81 | 534.58 |
| Declining Volume (m) | 2207.91 | 1328.7 |
| New Highs | 45 | 59 |
| New Lows | 159 | 101 |
| Market Sentiment Statistics | |||
| Index | Close | Gain(Loss) | % |
| CBOE Volatility Index | 16.11 | 2.53 | 18.63% |
| CBOE Nasdaq Volatility Index | 16.35 | 0.74 | 4.74% |
| Equity Put-Call Ratio | 0.95 | 0 | 0% |
| 10-day PCR | 0.73 | 0 | 0% |
| SPX-VIX Ratio | 73.1 | -14.94 | -16.97% |
Bond Market Analysis
Bonds rose at the long end, with the yield on the benchmark 30-year Treasury bond shedding 0.9 bps to 4.68%. The 3-year bond futures dipped to 112-12/32 during the session, which is just 3 ticks above the initial entry for the last Rant bond-bounce long. From there it rose - as if on command - to a high of 113-5/32 before closing at 113-3/21. I'm not claiming any of that secondary bounce for the RantRecord: I forgot to send out the e-mail to precisely time the re-entry - although I did say yesterday...
The pullback I promised in the Bonds happened right on cue. After closing the 30-year bond futures long at 113-7/32, the Bond stayed subdued thereafter. In fact, the trade was cashed in just 2 ticks from the day's high in the bonds - which is pretty shit-hot exiting. The bonds closed at their session lows, some 14/32 below our exit... so we can reload at some later time. $625 in profits with little risk... nice.
The middle of the yield curve was mixed: five year yields rose to 4.325%, and ten-year yields fell to 4.459%.
Spreads between short-dated (2-yr) Treasuries and high-grade corporate bonds of similar maturity profiles were 13.0 bps wider at 19.0 basis points; spreads between longer dated Treasuries and their corporate AAA counterparts rose to 59.0 bps for 10-year AAA, and 85.0 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 14.0 bps tighter at 32.0 basis points and the 10-year AAA-A spread 13.0 bps tighter at 0.0 bps.
| Treasury Yields | |||
| Index | Close | Gain(Loss) | % |
| UST 13wk (yld) | 3.76 | 0.003 | 0.08% |
| UST 2Y (yld) | 4.21 | -0.01 | -0.24% |
| UST 5Y (yld) | 4.325 | 0.007 | 0.16% |
| UST 10Y (yld) | 4.459 | -0.004 | -0.09% |
| UST 30Y (yld) | 4.68 | -0.009 | -0.19% |
The Banks Index dipped 0.59 points (0.61%), to 95.87; within the index,
- Golden West Financial (GDW) -$1.43 (2.43%) to $57.44;
- Mellon Financial (MEL) -$0.75 (2.33%) to $31.44;
- Citigroup (C) -$0.55 (1.23%) to $44.34;
- US Bancorp (USB) -$0.35 (1.22%) to $28.37; and
- Comerica (CMA) -$0.65 (1.17%) to $54.73.
The Broker-dealer Index lost 2.01 points (1.15%), at 173.2; the ticket clippers lined up as follows -
- Bear Stearns (BSC) -$2.97 (2.8%) to $103.18;
- A G Edwards (AGE) -$0.91 (2.19%) to $40.72;
- Ameritrade (AMTD) -$0.43 (2.12%) to $19.81;
- Morgan Stanley (MWD) -$0.99 (1.86%) to $52.14; and
- Goldman Sachs (GS) -$2.20 (1.82%) to $118.75.
The Philadelphia SOX (Semiconductor) index gained 0.41 points (0.09%), to end the session at 439.81
- Xilinx (XLNX) +$0.67 (3.03%) to $22.81;
- Linear Technology (LLTC) +$0.84 (2.39%) to $35.96;
- Broadcom (BRCM) +$0.72 (1.65%) to $44.30;
- Novellus Systems (NVLS) +$0.22 (1.03%) to $21.58; and
- Maxim Integrated (MXIM) +$0.35 (0.88%) to $40.18.
Gold & Silver Markets
Gold fell by $2.60 (0.56%) to close at $463.20 per ounce. It's lost over $10 in a week.
The Gold Bugs Index shed 8.25 points (3.68%), to 216.01
- Hecla Mining (HL) -$0.25 (6.51%) to $3.59;
- Kinross Gold (KGC) -$0.43 (6.19%) to $6.52;
- Agnico Eagle (AEM) -$0.75 (5.45%) to $13.00;
- Golden Star (GSS) -$0.14 (5.22%) to $2.54; and
- Eldorado Gold (EGO) -$0.14 (4.56%) to $2.93.
Silver rose $0.02 (0.2%) to close at $7.66 per ounce.
The Gold and Silver Index (XAU) lost 3.01 points (2.87%), to end the session at 101.99 points.
- Kinross Gold (KGC) -$0.43 (6.19%) to $6.52;
- Agnico Eagle (AEM) -$0.75 (5.45%) to $13.00;
- Freeport McMoran (FCX) -$1.90 (4.05%) to $45.02; and
- Durban Rooderpoert Deep (DROOY) -$0.05 (3.85%) to $1.25.
| Precious Metals and Indices | |||
| Index | Close | Gain(Loss) | % |
| Gold | 463.20 | -2.60 | -0.56% |
| Silver | 7.66 | 0.02 | 0.2% |
| PHLX Gold and Silver Index | 101.99 | -3.01 | -2.87% |
| AMEX Gold BUGS Index | 216.01 | -8.25 | -3.68% |
Oil Market
Oil lost ground, shedding $1.49 per barrel, closing at $60.02 per barrel (the session low was $59.32 a barrel - amazing stuff, but still annoyingly above the Rant forecast level of $57-ish, issued ages ago.).
The Oil and Gas Index (XOI) lost 44.49 points (4.65%), to 912.63
- Sunoco (SUN) -$4.54 (6.44%) to $65.97;
- Marathon Oil (MRO) -$3.74 (6.23%) to $56.28; and
- ConocoPhillips (COP) -$3.80 (6.17%) to $57.75.
The Oil service stocks (OSX) Index lost 4.55 points (2.88%), at 153.45
- Global Industries (GLBL) -$0.64 (5.08%) to $11.96;
- Rowan Companies (RDC) -$1.44 (4.65%) to $29.53; and
- Transocean (RIG) -$2.41 (4.32%) to $53.39.
| Energy Complex | |||
| Index | Close | Gain(Loss) | % |
| Reuters CRB | 331.4 | -2.6 | -0.78% |
| Crude Oil Light Sweet | 60.02 | -1.49 | -2.42% |
| Heating Oil | 1.8966 | -0.05 | -2.49% |
| Natural Gas | 12.977 | -0.57 | -4.22% |
| Unleaded Gas | 1.6358 | -0.06 | -3.42% |
| AMEX Oil Index | 912.63 | -44.49 | -4.65% |
| Oil Service Index | 153.45 | -4.55 | -2.88% |
Currency Markets
| USD Exchange Rates | |||
| Index | Close | Gain(Loss) | % |
| US Dollar Index | 89.77 | -0.11 | -0.12% |
| Euro | 1.2023 | 0.0028 | 0.23% |
| Yen | 115.325 | 0.01 | 0.01% |
| Sterling | 1.7744 | 0.0087 | 0.49% |
| Australian Dollar | 0.7529 | 0.0023 | 0.31% |
| Swiss Franc | 1.2876 | -0.0067 | -0.52% |
| Canadian Dollar | 0.8487 | -0.0022 | -0.26% |
