Interdum stultus opportuna loquitur...

Friday, October 07, 2005

USRant: Saved by the PPT...

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

Da Boyz get credit today for a genuine 'save' for this session; at 3:35 p.m. New York time, the Dow was setting a new low for the session (and at 10217, was trading below the 10250 key pivot I have identified here for six months); then 14 minutes later it was above 10300. No news, nothing across the wires to give anybody any reason to push the S&P futures up 12.75 points in less than half an hour... just a simple decision by the PPT to prevent anything else from happening for the day.

Journalists must be scratching their heads - their mantra in recent months has been 'Market Down on Higher Oil Prices" or "Market Up as Oil Fades". 

We've had a pretty big retracement in oil now (can I resist saying that it was obviously coming, and that it was forecast right here? No, I can''t resist saying that)... and yet stocks look sicker than a Kirlian photograph of Dick Cheney; I can only imagine how black and red and pus-laden and swirling that would look... kind of like if you took a snapshot of Satan's arsehole after a particularly nasty Beef Vindaloo.

Oil closed beneath the key pivot I've identified here for a couple of weeks ($62.33), and at one stage looked as though it might get under $60 for this session. Now it's dramatically oversold on daily charts, and looks ripe for a bounce back toward that neckline - but there is no way I would be trying to play Oil from the long side just yet.

Federal Reserve Open Market Operations

The Fed's Open Market Operations desk performed 2 repurchase operations:

  • a $9billion, 14-day repurchase entirely in T-backed collateral undertaken at a 3.7 basis point discount to the Fed Funds Rate (FFR); and
  • a $7billion, overnight repurchase entirely in T-backed collateral, undertaken at a 2 basis point premium to the Fed Funds Rate (FFR).
That's quite a lot of dough, but precious little discount to the Fed Funds rate; as far as market stabilisation is concerned, it did nothing worth noting.

Major US Indices

No picture today - I'm running late. To paraphrase the picture that ought to appear here... the only divergence that occurred was yet another buying divergence - and that happened with the Dow at 10250-ish (i.e., it worled just fine). Looking back, that 'non-divergence' all the way up at 10566 (when the Dow failed by 1 measly point to set a new high, but the CCI was significantly lower) looks significant, n'est-ce pas?

The Dow Jones Industrial Average slid 30.26 points (0.29%), closing out the day at 10287.1 points. The index hit an intraday high of 10369.55 (10375-ish) on a tease break of the first hour's high. During the first hour there were 3 or 4 long-side opportunities, all of which generated easy 1-point bags. Remember that we are still stuck with a short-term buying bias, unfortunately, since the Flying Spaghetti Monster is punishing me for refusing to believe He 'intelligently designed' the universe. Frankly I can't see why (or how) a deity that looks like a flying ball of fettucini bolognese would be bothered making stuff that had more structure... but that's theology for ya.

Leaving aside my 'struggle with the FSM' (and to all you Zionists out there, that is what 'Israel' actually means: 'One Who Struggles with God'... in other words it's a state of mind, not a lump of dirt - so get your head out of your collective asses)... let's move on.

After a typical 'tease break' of the first hour's high (how often have I written about those), the market did what it has been doing for the last three  sessions - turned and headed for the Mexican border.  The catalyst appears to have been further blatherings from a Fed official talking up the prospect of another 50bps of rate increases before the end of the year (a few sessions ago, the market only expected one more 25 bp increse this year).

Whatever the reason, the Dow fell 151 points from high to low (the low was 10218.09), then rallied 120 points in the last half-hour. If you think that such naledly obvious intervention by the PPT is a healthy sign, good on ya.

Within the blue-chip index, 9 stocks rose, the biggest gainers being General Electric (GE, +2.78% to $33.59) and Boeing (BA, +1.31% to $67.93), which accounted for 14 Dow points between them. Losers in the Dow numbered 20 and were led by Hewlett Packard (HPQ, -2.11% to $26.89) and Caterpillar (CAT, -1.83% to $55.19), with these two stocks contributing -13 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the losers by 290.1m shares to 191.6m.

The broader S&P500 slid 4.9 points (0.41%), to 1191.49. Within the index, gainers numbered 153, while 330 S&P500 stocks fell for the day. Volume was tilted 2.1:1 in favour of the losers with 1633.99 million units traded in the losers as compared with 770.04 million traded in the winners .

Over at Times Square, the Nasdaq Composite slid 18.94 points (0.9%), to close at 2084.08, while larger-cap technology issues fared worse with the Nasdaq100 losing 18.58 points (1.18%), to end at 1552.94 points. Within the tech benchmark, gainers numbered 23, while 74 Nasdaq100 stocks fell for the day. Volume was tilted 1.8:1 in favour of the losers with 597.56 million traded in the losers compared to 335.77 million in the winners .

NYSE Volume was super-chunky, with 2.81 billion shares changing hands, while Nasdaq Volume was super-chunky (over 2 bill), with 2.14 billion shares being shifted from one online brokerage account to another (and back again, in all likelihood).

Major Market Statistics
Dow Jones Industrial Average10287.1-30.26-0.29%
Nasdaq Composite2084.08-18.94-0.9%
NYSE Volume2.81bn--
Nasdaq Volume2.14bn--


My 9-stock "bellwethers" group rose by an average of 0.68%

  • General Electric (GE) +$0.91 (2.78%) to $33.59;
  • Citigroup (C) +$0.16 (0.35%) to $45.43;
  • Wal Mart (WMT) +$0.43 (0.99%) to $43.93;
  • I.B.M. (IBM) -$0.12 (0.15%) to $79.70;
  • Intel (INTC) -$0.31 (1.29%) to $23.76;
  • Cisco Systems (CSCO) +$0.23 (1.31%) to $17.73;
  • eBay (EBAY) -$0.75 (1.87%) to $39.44;
  • Fannie Mae (FNM) +$0.34 (0.82%) to $41.96; and
  • Freddie Mac (FRE) +$1.78 (3.12%) to $58.80.

Market Breadth & Internals

NYSE declining Issues beat out advancers by 2188 to 1081, for a single-day A/D reading of -1107; and Nasdaq losers exceeded gainers by 1974 to 1044. The 10-day moving average of the A/D line fell to -690.6 on the NYSE, while the 10dma of the Nasdaq A/D fell to -579.0.

On the NYSE declining volume was greater than volume in advancing issues by 1971.4 to 816 million shares; On the Nasdaq declining volume exceeded volume in advancing issues by 1491.5 to 601.8 million shares.

34 NYSE-listed stocks rose to new 52-week highs, and 165 posted fresh 52-week lows, while on the Nasdaq there were 61 stocks that hit new 52-week highs, and 117 which fell to fresh 52-week lows.

Market Breadth Statistics

Advancing Volume (m)816601.81
Declining Volume (m)1971.441491.5
New Highs3461
New Lows165117

Market Sentiment Statistics
CBOE Volatility Index14.960.412.82%
CBOE Nasdaq Volatility Index16.790.935.86%
Equity Put-Call Ratio0.950.089.2%
10-day PCR0.6100%
SPX-VIX Ratio79.6-2.58-3.14%

Bond Market Analysis

Bonds fell at the long end, with the yield on the benchmark 30-year Treasury bond rising 0.7 bps to 4.587%.

The middle of the yield curve was mixed: five year yields fell to 4.229%, and ten-year yields rose to 4.366%.

Spreads between short-dated (2-yr) Treasuries and high-grade corporate bonds of similar maturity profiles were 13.0 bps wider at 15.0 basis points; spreads between longer dated Treasuries and their corporate AAA counterparts rose to 46.0 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 tighter with the AAA-A spread on 20-years 10.0 bps tighter at 36.0 basis points and the 10-year AAA-A spread 8.0 bps tighter at 12.0 bps.

Treasury Yields
UST 13wk (yld)3.5120.0220.63%
UST 2Y (yld)
UST 5Y (yld)4.229-0.003-0.07%
UST 10Y (yld)4.3660.0050.11%
UST 30Y (yld)4.5870.0070.15%

The Banks Index posted a rise of 0.38 points (0.4%), closing at 94.92; within the index,

  • State Street (STT) +$1.11 (2.25%) to $50.39;
  • Golden West Financial (GDW) +$0.75 (1.32%) to $57.61;
  • PNC Financial Services (PNC) +$0.50 (0.89%) to $56.79;
  • Wachovia (WB) +$0.37 (0.8%) to $46.86; and
  • Comerica (CMA) +$0.43 (0.74%) to $58.15.

The Broker-dealer Index dipped 1.21 points (0.68%), ending the day at 176.19; the ticket clippers lined up as follows -

  • E*Trade (ET) -$0.38 (2.2%) to $16.92;
  • Charles Schwab (SCH) -$0.20 (1.43%) to $13.76;
  • Ameritrade (AMTD) -$0.28 (1.32%) to $20.93;
  • Jeffries Group (JEF) -$0.52 (1.19%) to $43.20; and
  • Raymond James (RJF) -$0.23 (0.72%) to $31.75.

The Philadelphia SOX (Semiconductor) index dipped 8.07 points (1.73%), closing at 458.35

  • National Semiconductors (NSM) -$0.86 (3.39%) to $24.51;
  • KLA-Tencor (KLAC) -$1.61 (3.33%) to $46.75;
  • Broadcom (BRCM) -$1.46 (3.08%) to $45.89;
  • Texas Instruments (TXN) -$0.86 (2.74%) to $30.53; and
  • Xilinx (XLNX) -$0.68 (2.44%) to $27.22.

Gold & Silver Markets

Gold rose $5.70 (1.21%) to close at $475 per ounce. Seems to me that this rally in Gold is losing legs (an odd thing to sayon such a big up-day, but just watch it over the next couple of sessions).

The Gold Bugs Index posted a rise of 7.62 points (3.32%), to 237.4

  • Harmony Gold (HMY) +$0.61 (5.99%) to $10.79;
  • Eldorado Gold (EGO) +$0.18 (5.54%) to $3.43;
  • Gold Fields (GFI) +$0.70 (5.07%) to $14.50;
  • Newmont Mining (NEM) +$1.87 (4.15%) to $46.91; and
  • Kinross Gold (KGC) +$0.25 (3.52%) to $7.35.

Silver rose $0.12 (1.56%) to close at $7.60 per ounce. 

The Gold and Silver Index (XAU) gained 2.98 points (2.79%), to end the session at 109.96 points.

  • Harmony Gold (HMY) +$0.61 (5.99%) to $10.79;
  • Gold Fields (GFI) +$0.70 (5.07%) to $14.50;
  • Newmont Mining (NEM) +$1.87 (4.15%) to $46.91; and
  • Kinross Gold (KGC) +$0.25 (3.52%) to $7.35.
Precious Metals and Indices
PHLX Gold and Silver Index109.962.982.79%
AMEX Gold BUGS Index237.47.623.32%

Oil Market

Oil lost another $1.43 per barrel, closing at $61.36 per barrel (it got as low as $60.70 during the session). it's now getting overdone on the sell side of the market, and needs a little bounce to clear out some nuffnuffs before it can continue to slide towards my $57-ish target.

The Oil and Gas Index (XOI) lost 21.4 points (2.15%), at 975.68

  • Amerada Hess (AHC) -$5.74 (4.66%) to $117.46;
  • Occidental Petroleum (OXY) -$2.65 (3.34%) to $76.63; and
  • ChevronTexaco (CVX) -$2.04 (3.29%) to $60.00.

The Oil service stocks (OSX) Index slid 3.39 points (2.08%), closing at 159.42

  • Global Industries (GLBL) -$0.66 (4.9%) to $12.82;
  • National Oilwells/Varco (NOV) -$2.23 (3.65%) to $58.85; and
  • Transocean (RIG) -$1.97 (3.51%) to $54.15.
Energy Complex
Reuters CRB331.23-2.02-0.61%
Crude Oil Light Sweet61.36-1.43-2.28%
Heating Oil1.9507-0.06-3.18%
Natural Gas13.36-0.76-5.38%
Unleaded Gas1.8405-0.07-3.53%
AMEX Oil Index975.68-21.4-2.15%
Oil Service Index159.42-3.39-2.08%

Currency Markets

USD Exchange Rates
US Dollar Index88.7-1.21-1.35%
Australian Dollar0.75830.00180.24%
Swiss Franc1.2708-0.0222-1.72%
Canadian Dollar0.84670.00110.13%