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Well, it's late again - I am having trouble adjsuting the old Circadian Rhythms to this stupid Daylight Savings malarkey. They should put a stop to it - it's taking a terrible toll on the curtains.
Still, there is some good news; my Professor Farnsworth impersonation is proceeding nicely (well, I can say "Whaaaa?" like he does... ) , and my Professor Frink impersonation is getting even better (all I have to perfect now is the glayvin, with the pausing and the talking and the dont TOUCH that, it's not a toy).
How is it that a society as mired in decay as the US, managed to produce works as culturally significant as Ren & Stimpy, Beavis & Butthead, The Tick, Futurama and The Simpsons? You might sniff, but frankly compare that to Camus, la Can or Derrida and I know who I'm watching (and it ain't the Frogs). If only Groenig was serious about changing the place - he would become an anonymous blogger.
What does this have to do with anything? I hear you ask.
Read J.S. Mill's On Liberty a couple of times, watch 'Fire Walk With Me', and join the Craft... then you will get it.
Federal Reserve Open Market Operations
The Fed's Open Market Operations desk performed 2 repurchase operations.
- a $7billion, 14-day repurchase with $4billion in T-backed collateral undertaken at a 5.9 basis point discount to the Fed Funds Rate (FFR); and
- a $5.5billion, overnight repurchase entirely in T-backed collateral, undertaken at a 3 basis point discount to the Fed Funds Rate (FFR).
Major US Indices
The CCI divergence I wrote about in the 2:44 a.m. (Oz time) post worked for the day's required one-S&P-point target (and with the little Euro scalps added in for good measure, it was a fun night). But as I wrote at the time, once the Dow got back above 10550 the divergence had to be called off.
No matter - the point was in the pocket (and the RantRecord, of course - along with the Euro scalps)... but then...
The Dow broke 10550, sure - in the most obvious tease since God got Moses to commit genocide on his behalf. ("Wipe them out, and I will give you loads of good stuff I will. You want maybe nice glass tea?")
10561 was the high, and lo, what have we on the chart? Another CCI divergence.. this time, at the same time as an extreme reading on the 'smoothed' Williams %R. Perfect.
(And no, I didn't put this second one up on the blog when it happened: I don't bloggify every signal; that would be a disadvantage to those who acknowledge that real-time commodities stuff is worth a pretty penny, and who shell out their hard-earned. If you're interested I'm sure you will be able to find out where it happens - streaming and in real time. Be forewarned.. you will not like the price of the full-bottle commodities "thingo" - the S&P point plus the two Euro scalps covers one month's subs with about $30 left over).
Anyhow - check out the chart: isn't it pretty? Notice the buy signal, which was generated when the smoothed %R hit deep oversold (that's what painted the price bar green)... when your intermediate term bias is buying (as mine is, which is giving me sweaty palms), you don't require a CCI divergence to take smoothed-%R buy signals. I've said that before.
After posting the second selling divergence at its session high, the Dow reacted badly, and dropped to break 10500 by about 10 Dow points (but 10500 on the Dow futures was only bropken by three ticks... a nuffnuff lure).
The Dow Jones Industrial Average added 49.86 points (0.48%), closing out the day at 10522.59 points. After dipping to 10470.49 just after the open, the Dow went on a rampage.
No prizes for guessing that the rampage started at 10:00 a.m., when all that juicy repo hit the market... and the decline later in the day was caused by the expiration of prior repurchase (the day's repo drives the morning move, and the expiring repo determines whether or not the morning move 'sticks').
Within the blue-chip index, 17 stocks rose, the biggest gainers being Merck (MRK, +3.77% to $29.48) and Mcdonalds (MCD, +3.01% to $33.23), which accounted for 16 Dow points between them. Losers in the Dow numbered 13 and were led by Verizon Communications (VZ, -2.03% to $30.83) and SBC Communications (SBC, -1.63% to $23.52), with these two stocks contributing -8 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the gainers by 292m shares to 209m.
The broader S&P500 advanced 5.18 points (0.43%), to end the session at 1219.94. Within the index, gainers numbered 249, while 235 S&P500 stocks fell for the day. Volume was tilted 1.4:1 in favour of the winners with 1504.80 million units traded in the winners as compared with 1069.50 million traded in the losers .
Over at Times Square, the Nasdaq Composite advanced 15.91 points (0.74%), to close at 2160.22, while larger-cap technology issues fared better with the Nasdaq100 adding 22.38 points (1.4%), to end at 1619.67 points. Within the tech benchmark, gainers numbered 70, while 26 Nasdaq100 stocks fell for the day. Volume was tilted 1.6:1 in favour of the winners with 674.70 million traded in the winners compared to 424.25 million in the losers .
NYSE Volume was super-chunky, with 2.72 billion shares changing hands, while Nasdaq Volume was super-chunky (over 2 bill), with 2.37 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 | 10522.59 | 49.86 | 0.48% |
| S&P500 | 1219.94 | 5.18 | 0.43% |
| Nasdaq Composite | 2160.22 | 15.91 | 0.74% |
| Nasdaq100 | 1619.67 | 22.38 | 1.4% |
| NYSE Volume | 2.72bn | - | - |
| Nasdaq Volume | 2.37bn | - | - |
Bellwethers
My 9-stock "bellwethers" group rose by an average of 0.57%
- General Electric (GE) +$0.17 (0.5%) to $33.98;
- Citigroup (C) +$0.34 (0.75%) to $45.45;
- Wal Mart (WMT) -$0.11 (0.23%) to $47.45;
- I.B.M. (IBM) +$1.81 (2.23%) to $82.87;
- Intel (INTC) +$0.60 (2.58%) to $23.89;
- Cisco Systems (CSCO) -$0.12 (0.68%) to $17.51;
- eBay (EBAY) +$0.47 (1.14%) to $41.55;
- Fannie Mae (FNM) -$0.29 (0.61%) to $47.06; and
- Freddie Mac (FRE) -$0.31 (0.51%) to $60.42.
Market Breadth & Internals
NYSE advancing Issues exceeded decliners by 1667 to 1577 for a single-day A/D reading of 90; Nasdaq gainers trumped losers by 1669 to 1360. The 10-day moving average of the A/D line fell to 343.1 on the NYSE, while the 10dma of the Nasdaq A/D rose to 253.3.
NYSE advancing volume exceeded volume in decliners by 1583.5 to 1108.3 million shares; Nasdaq advancing volume was greater than volume in decliners by 1506 to 846.4 million shares.
180 NYSE-listed stocks rose to new 52-week highs, and 86 posted fresh 52-week lows, while on the Nasdaq there were 182 stocks that hit new 52-week highs, and 50 which fell to fresh 52-week lows.
| Market Breadth Statistics | ||
| NYSE | Nasdaq | |
| Advancers | 1667 | 1669 |
| Decliners | 1577 | 1360 |
| Advancing Volume (m) | 1583.5 | 1506 |
| Declining Volume (m) | 1108.33 | 846.44 |
| New Highs | 180 | 182 |
| New Lows | 86 | 50 |
| Market Sentiment Statistics | |||
| Index | Close | Gain(Loss) | % |
| CBOE Volatility Index | 13 | -0.48 | -3.56% |
| CBOE Nasdaq Volatility Index | 15.65 | -0.17 | -1.07% |
| Equity Put-Call Ratio | 0.5 | -0.15 | -23.08% |
| 10-day PCR | 0.65 | -0.03 | -4.41% |
| SPX-VIX Ratio | 93.8 | 3.73 | 4.13% |
Bond Market Analysis
Bonds fell at the long end, with the yield on the benchmark 30-year Treasury bond rising 3.6 bps to 4.837%. Yields are up almost 10 basis points in the past two sessions, which is not good news for those with ARM-type mortgages (apparently almost 65% of new buyers in the last 12 months have adjustable-rate loans, and 40% have deposits of 5% or less).
The middle of the yield curve was broadly lower: five year yields rose to 4.542%, and ten-year yields rose to 4.644%.
Spreads between short-dated (2-yr) Treasuries and high-grade corporate bonds of similar maturity profiles were 8.0 bps wider at 19.0 basis points; spreads between longer dated Treasuries and their corporate AAA counterparts rose to 61.0 bps for 10-year AAA, and 75.0 bps for 20-years.
Credit spreads (spreads between corporate bonds of the same maturity profile but different creditworthiness) were mixed with the AAA-A spread on 20-years 6.0 bps wider at 41.0 basis points and the 10-year AAA-A spread 4.0 bps tighter at zero. Zero. There's zero risk spread beteween AAA and A-rated bonds. Sure...
| Treasury Yields | |||
| Index | Close | Gain(Loss) | % |
| UST 13wk (yld) | 3.847 | 0.01 | 0.26% |
| UST 2Y (yld) | 4.44 | 0.04 | 0.91% |
| UST 5Y (yld) | 4.542 | 0.045 | 1% |
| UST 10Y (yld) | 4.644 | 0.034 | 0.74% |
| UST 30Y (yld) | 4.837 | 0.036 | 0.75% |
The Banks Index shed 0.39 points (0.39%), to end the session at 99.29; within the index,
- Northern Trust (NTRS) -$1.47 (2.81%) to $50.91;
- Fifth Third Bancorp (FITB) -$0.55 (1.37%) to $39.68;
- Bank Of NY (BK) -$0.38 (1.21%) to $31.12;
- US Bancorp (USB) -$0.35 (1.2%) to $28.80; and
- Regions Financial (RF) -$0.27 (0.82%) to $32.73.
The Broker-dealer Index advanced 0.07 points (0.04%), to end the session at 185.84; the ticket clippers lined up as follows -
- Jeffries Group (JEF) +$0.49 (1.13%) to $43.76;
- Bear Stearns (BSC) +$1.02 (0.96%) to $107.51;
- Ameritrade (AMTD) +$0.20 (0.94%) to $21.50;
- Legg Mason (LM) +$0.71 (0.64%) to $111.69; and
- Lehman Brothers (LEH) +$0.54 (0.44%) to $123.09.
The Philadelphia SOX (Semiconductor) index advanced 8.31 points (1.88%), to end the session at 449.53
- Micron Technology (MU) +$0.60 (4.52%) to $13.87;
- Texas Instruments (TXN) +$1.17 (3.95%) to $30.81;
- KLA-Tencor (KLAC) +$1.86 (3.85%) to $50.13;
- Applied Materials (AMAT) +$0.50 (3.05%) to $16.89; and
- Intel (INTC) +$0.60 (2.58%) to $23.89.
Gold & Silver Markets
Gold fell by another $2.70 (0.58%) to close at $461.90 per ounce. It could fall back to $420 without doing any serious damage to the uptrend that has been in force since January 2002.
The Gold Bugs Index declined 3.9 points (1.7%), to end the session at 225.13
- Golden Star (GSS) -$0.20 (7.25%) to $2.56;
- Kinross Gold (KGC) -$0.32 (4.44%) to $6.89;
- Goldcorp (GG) -$0.56 (2.75%) to $19.79;
- Meridian Gold (MDG) -$0.46 (2.39%) to $18.76; and
- Eldorado Gold (EGO) -$0.08 (2.37%) to $3.29.
Silver rose $0.06 (0.83%) to close at $7.62 per ounce.
The Gold and Silver Index (XAU) lost 1.7 points (1.57%), to end the session at 106.4 points.
- Kinross Gold (KGC) -$0.32 (4.44%) to $6.89;
- Goldcorp (GG) -$0.56 (2.75%) to $19.79;
- Meridian Gold (MDG) -$0.46 (2.39%) to $18.76; and
- Harmony Gold (HMY) -$0.24 (2.26%) to $10.40.
| Precious Metals and Indices | |||
| Index | Close | Gain(Loss) | % |
| Gold | 461.90 | -2.70 | -0.58% |
| Silver | 7.62 | 0.06 | 0.83% |
| PHLX Gold and Silver Index | 106.4 | -1.7 | -1.57% |
| AMEX Gold BUGS Index | 225.13 | -3.9 | -1.7% |
Oil Market
Didn't I tell y'all that Oil was at risk of a decent bounce?
Specifically, starting on Monday...
Oil lost ground and finally closed below $60. For the session it lost $1.46 per barrel, closing at $59.76 per barrel - still well off the session low of $59.25, but still more than $2 above my long-held "head & shoulders' target of 57-ish. If it's not there within a couple of sessions, it's unlikely to get there.
And this (from Wednesday morning, which covered Tuesday's US session):
As I said yesterday, the time window for oil's decline is starting to close: if the market can't get down to my long-held "$57-ish" target within a couple of sessions, it's going to bounce. Keep that in mind if you're one of those folks who is habitually late on a move - if you're short oil from below $65, you might have your nerve tested.
Oil was firmer, rising by $2.03 per barrel, closing at $61.78 per barrel.
The Oil and Gas Index (XOI) posted a rise of 17.39 points (1.73%), at 1023.24
- Marathon Oil (MRO) +$1.59 (2.58%) to $63.13;
- TotalFinaElf S.A. (TOT) +$3.20 (2.5%) to $131.40; and
- ConocoPhillips (COP) +$1.46 (2.19%) to $68.17.
The Oil service stocks (OSX) Index rose 1.9 points (1.09%), ending the day at 176.95
- Rowan Companies (RDC) +$1.60 (4.53%) to $36.89;
- Halliburton (HAL) +$1.73 (2.75%) to $64.68; and
- Transocean (RIG) +$1.61 (2.67%) to $61.94.
| Energy Complex | |||
| Index | Close | Gain(Loss) | % |
| Reuters CRB | 331.63 | 2.84 | 0.86% |
| Crude Oil Light Sweet | 61.78 | 2.03 | 3.4% |
| Heating Oil | 1.8156 | -0.01 | -0.67% |
| Natural Gas | 11.689 | 0.08 | 0.73% |
| Unleaded Gas | 1.6268 | 0.06 | 3.68% |
| AMEX Oil Index | 1023.24 | 17.39 | 1.73% |
| Oil Service Index | 176.95 | 1.9 | 1.09% |
Currency Markets
The Euro selling is overdone (ECZ3 is at 1.1965 presently) - expect another bounce (the hourly chart has registered a CCI divergence, but because the 'retail spec' ForEx market is inhabited largely by highly leveraged morons who trade breakouts (and are in the ForEx market because they crapped out trading breakouts in stocks), a divergence can persist for half a day without anybody spotting it (except Woodies CCI Club, which I highly recommend although I don't go there often... Woodie is the Financial Markets equivalent of Buddha).
Seriously - the 'average' ForEx trader has no idea what he's doing; they are the financial market equivalent of a suicide bomber. All they know is that currencies move quickly and you can get loads of leverage... they dive in, take the advice of some brokerage dill (RefcoFX was a big one), get burnt and eventually give up.
But if you're diligent, have some clues, and approach the thing sensibly, it's a great way to make a decent amount of money with a small capital base. But you have to operate on the basis that you would prefer 10 scalps that worked for ten pips each (which is actually reasonably easy to do) rather than doing what the nuffies do - getting stopped out 40 times for a 30 pip loss thinking that this breakout will be the one that snaffles them the 1000-pip breakout that htey saw in that e-mail they got.
| USD Exchange Rates | |||
| Index | Close | Gain(Loss) | % |
| US Dollar Index | 90.44 | 0.67 | 0.75% |
| Euro | 1.1939 | -0.0124 | -1.03% |
| Yen | 117.415 | 0.51 | 0.44% |
| Sterling | 1.7697 | -0.0048 | -0.27% |
| Australian Dollar | 0.7384 | -0.0028 | -0.38% |
| Swiss Franc | 1.2928 | 0.0131 | 1.02% |
| Canadian Dollar | 0.8461 | -0.0011 | -0.13% |
