Interdum stultus opportuna loquitur...

Tuesday, December 20, 2005

USRant: Fun For An Hour Or So...

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

A Monday decline. How interesting. 

I have heard it blamed on Bush's lamentable Oval Office speech over the weekend, in which he basically said "The ragtag insurgency in Iraq is chopping our 'best in the world' military to pieces, but we have to sacrifice some more of our low-skilled youth in order to... to .... " to what, exactly?  

Oh yes. We have to get some more of 'our' kids (but not Bush's kids, and not Cheney's kids) killed otherwise the ones that died already will have died "in vain".

Is there anyone stupid enough to think that this is a sensible rationale for continuing a failed operation? Obviously there is a core of idiots in any country, but you would hope that as a species we are - on average - smarter than that.

Still, my hopes might be misplaced. After all, "Blackhawk Down" glorifies the fact that the US military wasted 10 or so lives in order to try and retrieve two corpses. Not two MIAs, not two wounded comrades. Two corpses. The commanders of the operation generated another 10 corpses (and 20 or so wounded) in the process, and wasted millions of dollars' worth of ordnance (and lost another $20 million helicopter) in order to get back two skin-bags of dead meat. That. my friends, is what should be known as 'doing a Kerkorian' - where you throw good resources into the fire in order to try and salvage soemthing that is already dead.

And the public ate that shit up, on the basis that somehow it's 'heroic' that stone-stupid grunts are dumb enough to believe in bullshit like "Noone gets left behind". Here's a tip, gruntsters... once a bullet rips your brain in half, you're no longer 'anyone'. You're not even  'anybody' in the sense that 'anybody' implies a personality. You're a limp bag of meat with half your face missing - not worth dying for.

And as for Dick "I had other priorities during VietNam" Cheney using the old bromide "These colours don't run" at his speech - someone ought simply to have grabbed that sack of shit by the throat and done his heart a favour (his heart has been trying to quit for twenty years). Cheney - like Bush - was an armchair hawk even in his youth.

The ultimate coward is the man who is all for war but won't put his body in the line of fire. Be anti-war and get a deferment, and you have my respect. If you're pro-war and refuse to pick up a weapon, you're a bag of shit who deserves to be spat on. Historically, great leaders have led their troops into battle. Godefroi de Buillon, Saladin, Othman, Genghis Khan, Julius Caesar, Attila, Arminius ("Herman the German"), Wellington, Washington, Rommel, Montgomery ... what these men had in common was that they led from the front. They weren't flabby, pasty effeminate lady-men who want the reflected glory of the spilt blood. Crassus died trying to take Baghdad - today's 'leaders' are too chicken-shit to be anywhere near the enemy.

Oh wait... this is supposed to be about markets and such...

Federal Reserve Open Market Operations

The Fed's Open Market Operations desk performed 1 repurchase operation - a $7.5billion, overnight repurchase entirely in T-backed collateral undertaken at a 3 basis point discount to the Fed Funds Rate (FFR). With that sort of size, and with a decent little discount, it's no surprise that the market had a bit of an attempt at the upside beginning at 10 a.m. precisely: an early dip (only about 20 Dow points) was regained with the Dow rising almost 30 points in the half-hour after 10 a.m.; a second effort saw the first hour high broken jsut before 12:15.

As we all know by now, breaks of the first-hour extremes (high or low) are almost always a tease tick, designed to lure in breakout traders - and then skin them.

The thing about 'our' method - fading intraday sentiment extremes (that is, buying oversold and selling overbought) is that the likelihood of a reversal is very high so long as you choose your reversal points judiciously. The likeihood of an intraday trend continuation from overbought levels is very low... and yet Homo Nuffnufficus always finds it easier to buy a high than to sell it. Conversely - to their cost - they find it easier to sell a low than to buy when everything looks like it's going to fall off a cliff.

Major US Indices

The Dow Jones Industrial Average lost 39.06 points (0.36%), closing out the day at 10836.53 points. The index hit an intraday high of 10922.41 just before 12:15 opn the 'tase break' of the first hour's high. from there it dropped for almost the rest of the afternoon, although 10825-ish provided support in the last half-hour (the low was 10825.64). The Dow futures had a high of 10873 (10875-ish) and a low of 10773 (10775-ish) - an exact 100-point range that tickled two sets of 'quarters'. 

Within the blue-chip index, 9 stocks rose, the biggest gainers being Pfizer (PFE, +7.71% to $24.32) and Merck (MRK, +7.46% to $32.25), which accounted for 32 Dow points between them. Losers in the Dow numbered 21 and were led by Caterpillar (CAT, -4.71% to $56.83) and General Motors (GM, -3.84% to $21.05... poor old bankrupt-as-NeoTrot-philosophy GM...), with these two stocks contributing -29 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the losers by 274.6m shares to 234.7m.

The broader S&P500 slid 7.4 points (0.58%), to 1259.92. Within the index, gainers numbered 73, while 407 S&P500 stocks fell for the day. Volume was tilted 2.7:1 in favour of the losers with 1419.58 million units traded in the losers as compared with 521.94 million traded in the winners. A tilt that lopsided on a nday with no news, presages a bounce tomorrow. Even so, I still think Google (GOOG) is worth a shot on the short side, and I will hunt out an appropriate option for tonight.

Over at Times Square, the Nasdaq Composite slid 29.74 points (1.32%), to close at 2222.74, while larger-cap technology issues fared worse with the Nasdaq100 losing 24.32 points (1.44%), to end at 1664.36 points. Again - no news to speak of; just an overbought market with everybody on the same side of the boat. Within the tech benchmark, gainers numbered 19, while 77 Nasdaq100 stocks fell for the day. Volume was tilted 7.4:1 in favour of the losers with 655.94 million traded in the losers compared to 88.88 million in the winners.

NYSE Volume was super-chunky, with 2.21 billion shares changing hands, while Nasdaq Volume was reasonable at 1.75 billion shares.

-1.32%< /tr> < /tr>
Major Market Statistics
Dow Jones Industrial Average10836.53-39.06-0.36%
S&P500 1259.92-7.4-0.58%
Nasdaq Composite2222.74-29.74
Nasdaq1001 664.36-24.32-1.44%
NYSE Volume2.21bn--
Nasdaq Volume1.75bn--


My 9-stock "bellwethers" group fell by an average of 0.95%; not a single one o them managed a ain, Notice though, that Citigroup (the most manipulated large-cap stock in existence) held above $49. It seems that the market's ego-blowjob for Greenspan is not quite over (which means that the eventual longer-term swing high will occur on or about January 10th, ±4 sessions)

  • General Electric (GE) -$0.24 (0.67%) to $35.82;
  • Citigroup (C) -$0.20 (0.41%) to $49.17;
  • Wal Mart (WMT) -$0.31 (0.63%) to $48.96;
  • I.B.M. (IBM) -$0.61 (0.73%) to $82.76;
  • Intel (INTC) -$0.60 (2.27%) to $25.78;
  • Cisco Systems (CSCO) -$0.05 (0.28%) to $17.47;
  • eBay (EBAY) -$1.32 (2.87%) to $44.62;
  • Fannie Mae (FNM) -$0.27 (0.57%) to $47.24; and
  • Freddie Mac (FRE) -$0.11 (0.17%) to $65.91.

Market Breadth & Internals

NYSE declining Issues beat out advancers by 2388 to 943, for a single-day A/D reading of -1445; and Nasdaq losers exceeded gainers by 2134 to 958. The 10-day moving average of the A/D line fell to -227.3 on the NYSE, while the 10dma of the Nasdaq A/D fell to -340.7. The breadth stats have gone from overcooked to freezing in a very short space of time - I will have a look at short interest and put option stats on my bellwethers tonight and see if there's any sign of a short-squeeze being set up. (Things to look for if you're doing it yourself: lots of puts being sold at the bid to small-lot buyers, and an increase in short interest on a big-volume, high-tilt down day like today).

On the NYSE declining volume was greater than volume in advancing issues by 1489.2 to 693.4 million shares; On the Nasdaq declining volume exceeded volume in advancing issues by 1364.2 to 346 million shares.

70 NYSE-listed stocks rose to new 52-week highs, and 108 posted fresh 52-week lows, while on the Nasdaq there were 93 stocks that hit new 52-week highs, and 73 which fell to fresh 52-week lows.

Market Breadth Statistics

NYSE Nasdaq
Advancers9 43958
Decliners2 3882134
Advancing Volume (m)693.44345.98
Declining Volume (m)1489.181364.16
New Highs7093
New Lows10873

Market Sentiment Statistics
CBOE Volatility Index11.370.777.26%< /td>
CBOE Nasdaq Volatility Index14.261.3210.2%< /td>
Equity Put-Call Ratio0.6100%
10-day PCR0.5800%
SPX-VIX Ratio110.8-8.75-7.32 %

Bond Market Analysis

Bonds rose at the long end, with the yield on the benchmark 30-year Treasury bond shedding 0.9 bps to 4.641%.

The middle of the yield curve was mixed: five year yields rose to 4.364%, and ten-year yields fell to 4.442%.

Spreads between short-dated (2-yr) Treasuries and high-grade corporate bonds of similar maturity profiles were 3.0 bps tighter at 12.0 basis points; spreads between longer dated Treasuries and their corporate AAA counterparts fell to 69.0 bps for 10-year AAA, and 95.5 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 11.0 bps wider at 27.0 basis points and the 10-year AAA-A closing to zero.

Treasury Yields
UST 13wk (yld)3.860.0280.73%< /td>
UST 2Y (yld)4.3400%
UST 5Y (yld)4.3640.0050.11%
UST 10Y (yld)4.442-0.006-0.1 3%
UST 30Y (yld)4.641-0.009-0.1 9%

The Banks Index lost 0.87 points (0.82%), at 104.92; within the index,

  • US Bancorp (USB) -$0.54 (1.75%) to $30.38;
  • State Street (STT) -$1.01 (1.73%) to $57.37;
  • National City Corp (NCC) -$0.52 (1.49%) to $34.30;
  • Golden West Financial (GDW) -$0.96 (1.42%) to $66.66; and
  • Fifth Third Bancorp (FITB) -$0.55 (1.39%) to $38.89.

The Broker-dealer Index declined 1.64 points (0.83%), at 195.4; the ticket clippers lined up as follows -

  • Charles Schwab (SCH) -$0.41 (2.72%) to $14.68;
  • Bear Stearns (BSC) -$2.37 (2.02%) to $115.20;
  • Lehman Brothers (LEH) -$1.93 (1.5%) to $127.06;
  • Goldman Sachs (GS) -$1.37 (1.08%) to $125.13; and
  • E*Trade (ET) -$0.17 (0.8%) to $21.05.

The Philadelphia SOX (Semiconductor) index lost 11.39 points (2.3%), to 483.9

  • Teradyne (TER) -$0.62 (4.19%) to $14.16;
  • Broadcom (BRCM) -$2.01 (4.1%) to $47.01;
  • Xilinx (XLNX) -$0.96 (3.53%) to $26.23;
  • Texas Instruments (TXN) -$1.04 (3.14%) to $32.03; and
  • Maxim Integrated (MXIM) -$1.00 (2.66%) to $36.63.

Gold & Silver Markets

Gold rose $0.2 (0.04%) to close at $506.10 per ounce, although it spent a good part of the session above $510 and couldn't hold that level.

The Gold Bugs Index lost 1.44 points (0.55%), closing at 258.52

  • Golden Star (GSS) -$0.11 (4.58%) to $2.29;
  • Coeur d'Alene (CDE) -$0.13 (3.21%) to $3.92;
  • Glamis Gold (GLG) -$0.51 (2.03%) to $24.64;
  • Goldcorp (GG) -$0.39 (1.95%) to $19.65; and
  • Hecla Mining (HL) -$0.07 (1.93%) to $3.55.

Silver rose $0.05 (0.52%) to close at $8.65 per ounce. 

The Gold and Silver Index (XAU) lost 1.16 points (0.95%), to 121.2 points.

  • Goldcorp (GG) -$0.39 (1.95%) to $19.65;
  • Placer Dome (PDG) -$0.42 (1.87%) to $22.06;
  • Anglogold Ashanti (AU) -$0.81 (1.71%) to $46.62; and
  • Freeport McMoran (FCX) -$0.80 (1.49%) to $53.00.
Precious Metals and Indices
Gold506.10 0.200.04%
Silver8.65 0.050.52%
PHLX Gold and Silver Index121.2-1.16-0.95 %
AMEX Gold BUGS Index258.52-1.44-0.5 5%

Oil Market

Oil lost some more ground, shedding $0.72 per barrel, closing at $57.34 per barrel and trading under $57 during the session.  Natural Gas had a bounce (not surprising since it had absolutely cratered in the last three sessions), but the lack of cold weather in the NorthEast is going to be a real cramp on the subsets of the Energy complex that get used for hoe heating (Propane, NatGas, and Heating Oil).

The Oil and Gas Index (XOI) shed 6.34 points (0.63%), closing at 993.3

  • Repsol YPF (REP) -$0.67 (2.23%) to $29.31;
  • ChevronTexaco (CVX) -$0.76 (1.32%) to $56.75; and
  • Sunoco (SUN) -$0.98 (1.24%) to $78.37.

The Oil service stocks (OSX) Index dipped 2.46 points (1.33%), to 182.37

  • Smith International (SII) -$1.02 (2.69%) to $36.84;
  • Global Industries (GLBL) -$0.32 (2.66%) to $11.70; and
  • National Oilwells/Varco (NOV) -$1.40 (2.2%) to $62.17.
Energy Complex
Reuters CRB344.611.770.52%
Crude Oil Light Sweet57.34-0.72-1.24 %
Heating Oil1.7033-0.03-1.66%
Natural Gas14.0430.413.01%
Unleaded Gas1.5269-0.04-2.68%
AMEX Oil Index993.3-6.34-0.63 %
Oil Service Index182.37-2.46-1.3 3%

Currency Markets

USD Exchange Rates
US Dollar Index89.860.140.16%< /td>
Euro1.2002 -0.0014-0.12%
Yen116.085 0.4050.35%
Sterling1. 7622-0.0101-0.57%
Australian Dollar0.7398-0.0048- 0.64%
Swiss Franc1.29290.00290.2 2%
Canadian Dollar0.8549-0.0073- 0.85%