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Those of you who've never heard of 'Juba' can look him up on Google; suffice it to say that he's a fairly lethal sort of 'mofo'. Today someone took a leaf out of Juba's book during the first ten minutes of the US day session; they breathed in, breathed out, squeezed, and absolutely headshot the Euro... driving it down 60 pips in less than 45 minutes (and a good 30 of that happened in about 5 minutes). If you've ever seen the Juba videos, you will see the effect: nothing like the movies - no acrobatics from the victim... just a rapid slump to the ground.
To continue the 'insurgent' metaphor, someone planted an IED under the equity indices at 4:15 a.m. Australian time - the Dow rocketed up 50 points in 15 minutes before trying to hold on to 10600 (and failing). it was clearly some piece of news that cause massive short-covering - I haven't even bothered to find out what the news was.
So there were two very obvious bits of manipulation in two very distinct markets - interesting indeed.
Also, when the AEI Petroleum Status Report came out (and showed a solid 4.6m barrel increase in crude inventories) the first thing Crude Oil did was drop (as you might expect).
Do you remember what I always say about the first reaction to a piece of data? It's the 'nuffie reaction'.
After dropping to about $58.60, oil positively rocketed (upwards), going all the way to $60.40 - by which time all the nuffnuffs that shorted the news would have been stopped out and licking their wounds... half of them probably reversed to long near the high. And then... whooshka... down it went. So finally, Crude has closed under $59 - albeit not by much. That puts it within a session's decline of my long-standing target (mid-$57-ish); if it gets through there and actually makes for the head & shoulders target I mentioned months ago (mid-$54-ish), then as I've said before, the bull market in Crude is over for a good while.
Federal Reserve Open Market Operations
The Fed's Open Market Operations desk performed 1 repurchase operation: a $3.5billion, overnight repurchase with $3.368billion in T-backed collateral undertaken at a 7.6 basis point discount to the Fed Funds Rate (FFR). Not enough to make any difference.
Major US Indices
Early weakness, a lackluster mid-session until a diabolical moonshot (for no obvious reason), then a give-back of the entire spike. Weird.
If you examine a chart of the Dow (I'm not putting one in - there's nothing worth mentioning) you might think that the afternoon slump didn't quite give back every point of the 4:15 moonshot... but look more closely. The low of the 4:15 a.m. bar was 10542.40... and the low of the final bar of the day? 10542.40.
The Dow Jones Industrial Average advanced 6.49 points (0.06%), closing out the day at 10546.21 points. The index hit an intraday high of 10601.92 (10600-ish), and fell as low as 10519.55 during the session (note: my data says that the low was 10507, but I'm taking the 'consensus' number).
Within the blue-chip index, 18 stocks rose, the biggest gainers being United Technology (UTX, +1.96% to $52.54) and Wal Mart (WMT, +1.24% to $48.20), which accounted for 13 Dow points between them. Losers in the Dow numbered 11 and were led by General Motors (GM, -4.72% to $24.64) and Du Pont (DD, -2.12% to $42.11), with these two stocks contributing -17 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the gainers by 204.4m shares to 144.1m.
The broader S&P500 added 2.06 points (0.17%), to 1220.65. Within the index, gainers numbered 293, while 183 S&P500 stocks fell for the day. Volume was tilted 1.4:1 in favour of the winners with 1012.12 million units traded in the winners as compared with 718.09 million traded in the losers .
Over at Times Square, the Nasdaq Composite advanced 3.74 points (0.17%), to close at 2175.81, while larger-cap technology issues fared worse with the Nasdaq100 adding 1.81 points (0.11%), to end at 1630.21 points. Within the tech benchmark, gainers numbered 53, while 40 Nasdaq100 stocks fell for the day. Volume was tilted 1.1:1 in favour of the winners with 344.07 million traded in the winners compared to 314.47 million in the losers .
NYSE Volume was super-chunky, with 2.19 billion shares changing hands, while Nasdaq Volume was about average, with 1.6 billion shares traded.
| Major Market Statistics | |||
| Index | Close | Gain(Loss) | % |
| Dow Jones Industrial Average | 10546.21 | 6.49 | 0.06% |
| S&P500 | 1220.65 | 2.06 | 0.17% |
| Nasdaq Composite | 2175.81 | 3.74 | 0.17% |
| Nasdaq100 | 1630.21 | 1.81 | 0.11% |
| NYSE Volume | 2.19bn | - | - |
| Nasdaq Volume | 1.6bn | - | - |
Bellwethers
My 9-stock "bellwethers" group rose by an average of 0.11%
- General Electric (GE) +$0.16 (0.47%) to $33.92;
- Citigroup (C) +$0.22 (0.47%) to $46.82;
- Wal Mart (WMT) +$0.59 (1.24%) to $48.20;
- I.B.M. (IBM) -$0.31 (0.37%) to $82.84;
- Intel (INTC) +$0.25 (1.02%) to $24.80;
- Cisco Systems (CSCO) -$0.11 (0.62%) to $17.75;
- eBay (EBAY) -$0.22 (0.52%) to $42.08;
- Fannie Mae (FNM) -$0.58 (1.23%) to $46.40; and
- Freddie Mac (FRE) +$0.32 (0.53%) to $61.00.
Market Breadth & Internals
NYSE advancing Issues exceeded decliners by 1774 to 1507 for a single-day A/D reading of 267; Nasdaq gainers trumped losers by 1648 to 1350. The 10-day moving average of the A/D line rose to 122.5 on the NYSE, while the 10dma of the Nasdaq A/D rose to 134.3.
NYSE advancing volume exceeded volume in decliners by 1247.8 to 840.6 million shares; Nasdaq advancing volume was greater than volume in decliners by 860.7 to 697.1 million shares.
101 NYSE-listed stocks rose to new 52-week highs, and 135 posted fresh 52-week lows, while on the Nasdaq there were 106 stocks that hit new 52-week highs, and 64 which fell to fresh 52-week lows.
| Market Breadth Statistics | ||
| NYSE | Nasdaq | |
| Advancers | 1774 | 1648 |
| Decliners | 1507 | 1350 |
| Advancing Volume (m) | 1247.77 | 860.72 |
| Declining Volume (m) | 840.6 | 697.05 |
| New Highs | 101 | 106 |
| New Lows | 135 | 64 |
| Market Sentiment Statistics | |||
| Index | Close | Gain(Loss) | % |
| CBOE Volatility Index | 12.92 | -0.16 | -1.22% |
| CBOE Nasdaq Volatility Index | 15.97 | 0.41 | 2.63% |
| Equity Put-Call Ratio | 0.68 | -0.01 | -1.45% |
| 10-day PCR | 0.65 | 0 | 0% |
| SPX-VIX Ratio | 94.5 | 1.31 | 1.41% |
Bond Market Analysis
Bonds fell sharply at the long end, with the yield on the benchmark 30-year Treasury bond rising 6.7 bps to 4.826%.
The middle of the yield curve was broadly lower: five year yields rose to 4.553%, and ten-year yields rose to 4.635%.
Spreads between short-dated (2-yr) Treasuries and high-grade corporate bonds of similar maturity profiles were 10.0 bps wider at 17.0 basis points; spreads between longer dated Treasuries and their corporate AAA counterparts fell to 52.0 bps for 10-year AAA, and 73.0 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 unchanged at 42.0 basis points and the 10-year AAA-A spread 2.0 bps looser at 10.0 bps.
| Treasury Yields | |||
| Index | Close | Gain(Loss) | % |
| UST 13wk (yld) | 3.877 | 0.015 | 0.39% |
| UST 2Y (yld) | 4.46 | 0.06 | 1.36% |
| UST 5Y (yld) | 4.553 | 0.072 | 1.61% |
| UST 10Y (yld) | 4.635 | 0.07 | 1.53% |
| UST 30Y (yld) | 4.826 | 0.067 | 1.41% |
The Banks Index advanced 0.69 points (0.69%), to end the session at 101.02; within the index,
- US Bancorp (USB) +$0.43 (1.47%) to $29.63;
- M&T Bank Corp (MTB) +$1.49 (1.4%) to $108.06;
- Keycorp (KEY) +$0.45 (1.39%) to $32.91;
- Northern Trust (NTRS) +$0.62 (1.19%) to $52.63; and
- Wachovia (WB) +$0.56 (1.09%) to $51.75.
The Broker-dealer Index rose 2.14 points (1.15%), to 187.74; the ticket clippers lined up as follows -
- A G Edwards (AGE) +$2.19 (5.22%) to $44.18;
- E*Trade (ET) +$0.45 (2.44%) to $18.90;
- Legg Mason (LM) +$2.33 (2.09%) to $113.96;
- Morgan Stanley (MWD) +$0.54 (1.03%) to $53.08; and
- Goldman Sachs (GS) +$1.18 (0.93%) to $128.70.
The Philadelphia SOX (Semiconductor) index added 6.36 points (1.41%), ending the day at 458.66
- Broadcom (BRCM) +$3.11 (7.23%) to $46.13;
- ST Microelectronic (STM) +$0.66 (4.01%) to $17.12;
- Taiwan Semiconductors (TSM) +$0.25 (2.9%) to $8.88;
- Applied Materials (AMAT) +$0.43 (2.46%) to $17.92; and
- Infineon Tech (IFX) +$0.23 (2.42%) to $9.75.
Gold & Silver Markets
Gold rose $5.20 (1.12%) to close at $467.50 per ounce.
The Gold Bugs Index rose 7.2 points (3.23%), at 229.91
- Coeur d'Alene (CDE) +$0.27 (7.24%) to $4.00;
- Harmony Gold (HMY) +$0.58 (5.51%) to $11.11;
- Gold Fields (GFI) +$0.69 (5.12%) to $14.16;
- Randgold Resources (GOLD) +$0.66 (4.77%) to $14.50; and
- Glamis Gold (GLG) +$0.83 (4.02%) to $21.48.
Silver rose $0.05 (0.7%) to close at $7.68 per ounce.
The Gold and Silver Index (XAU) gained 3.28 points (3.09%), ending the day at 109.29 points.
- Durban Rooderpoert Deep (DROOY) +$0.07 (5.79%) to $1.28;
- Harmony Gold (HMY) +$0.58 (5.51%) to $11.11;
- Gold Fields (GFI) +$0.69 (5.12%) to $14.16; and
- Anglogold Ashanti (AU) +$1.79 (4.59%) to $40.81.
| Precious Metals and Indices | |||
| Index | Close | Gain(Loss) | % |
| Gold | 467.50 | 5.20 | 1.12% |
| Silver | 7.68 | 0.05 | 0.7% |
| PHLX Gold and Silver Index | 109.29 | 3.28 | 3.09% |
| AMEX Gold BUGS Index | 229.91 | 7.2 | 3.23% |
Oil Market
Oil lost ground, shedding $0.78 per barrel, closing at $58.93 per barrel. I made some remarks about oil's pst-data gyrations in the prefaratory remarks at the top...
The Oil and Gas Index (XOI) dipped 8.27 points (0.84%), to 977.76
- ChevronTexaco (CVX) -$1.09 (1.88%) to $56.77;
- ConocoPhillips (COP) -$1.01 (1.52%) to $65.60; and
- BP (BP) -$0.90 (1.35%) to $65.60.
The Oil service stocks (OSX) Index declined 0.79 points (0.46%), to 170.41
- Baker Hughes (BHI) -$1.57 (2.83%) to $53.88;
- Weatherford International (WFT) -$0.85 (1.3%) to $64.65; and
- Tidewater (TDW) -$0.58 (1.23%) to $46.50.
| Energy Complex | |||
| Index | Close | Gain(Loss) | % |
| Reuters CRB | 330.68 | -0.27 | -0.08% |
| Crude Oil Light Sweet | 58.93 | -0.78 | -1.31% |
| Heating Oil | 1.7896 | 0.01 | 0.62% |
| Natural Gas | 11.669 | -0.12 | -1.05% |
| Unleaded Gas | 1.5513 | -0.01 | -0.7% |
| AMEX Oil Index | 977.76 | -8.27 | -0.84% |
| Oil Service Index | 170.41 | -0.79 | -0.46% |
Currency Markets
Everybody is still keen as mustard to short the Euro; after clawing its way (in fits and starts) back from the effects of the morning ambush, it stalled at 1.1800 for three hours. Every time it got 1.1800 on the offer, everyone in the world wanted to sell into the bid. IT was the same all the way up; every time the futures or the spot got to a multiple of 0.0025, there would be a sudden rush of selling at the bid. Since the spot and the futures are out of synch it made the claw-back decidedly traumatic - it was like watching someone try to swin butterfly through a vat of cold porridge.
Still, folks who short close to a low are the people who eventually provide the momentum upwards (as their stops are hit). Frankly, to me it's ridiculous that anybody would be shorting now - take a look at the selling divergence at the start of the year and ask yourself why anyone waited for a drop of a full 17¢ before finally deciding to short?
You might also note that there appear to be five nice waves between the January high and the recent CCI divergence, with the third being the longest and the first and the fifth being of roughly equal length (in terms of the price decline from peak to bottom for each wave). Nice...
| USD Exchange Rates | |||
| Index | Close | Gain(Loss) | % |
| US Dollar Index | 91.5 | 0.13 | 0.14% |
| Euro | 1.1762 | -0.0019 | -0.16% |
| Yen | 117.595 | 0.31 | 0.26% |
| Sterling | 1.7429 | -0.0016 | -0.09% |
| Australian Dollar | 0.7367 | 0.0021 | 0.29% |
| Swiss Franc | 1.3112 | 0.0002 | 0.02% |
| Canadian Dollar | 0.843 | -0.0014 | -0.17% |
