USRant: Big Late-Session Reversal...

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

Pre-market data was significantly better than expectations - the Personal Income and Outlays report showed personal income pegging a 1.7% growth for the month (compared to consensus expectations of 0.3%), while consumption spending ran at a 0.5% growth rate (consensus guess was for 0.5%). The 'redefined whenever it goes negative' savings rate fell to the lowest number in the 50-year history of the series (although that history was changed recently when they redefined savings so that the number wouldn't be negative).  Call me a cynic, but frankly any economic system that relies - as its core GDP 'engine'  - on consumption spending which in turn is based on 'negative aggregate saving from current income... well, if you've done any economics at all, you know how that ends.

(Leave aside for a minute that demand can't drive an open economy since there is absolutely no link that forces domestic demand to be satisfied by domestic supply for anythhing except non-tradeable goods).

And I hate Daylight Savings. It's neutral when only the Australian end of the thing is considered, but since the US went off daylight savings over the weekend, it now means that the US markats open at 1:30 a.m. Australian time and close at 8:00 a.m. the following morning (which is why the USRant might seem late to Oz-domestic readers.

Federal Reserve Open Market Operations

The Fed's Open Market Operations desk performed 1 repurchase operation: a $4billion, overnight repurchase with $2.61billion in T-backed collateral undertaken at a -21 basis point discount to the Fed Funds Rate (FFR).

Major US Indices

If you view this session's behaviour as bullish, then I don't expect you to take in what follows... doubtless you're too busy fending off telephone calls from that Nigerian e-mail you responded to, where the guy told you that he had million of dollars that he would share with you if you helpde him get it out of the country - you gullible sap.

Anyhow - a bullish market is not one in which the S&P futures drop 11 points in the last half-hour (the Dow futures dropped back to a new session low at 10403 - implying a cash Dow of sub-10400). The last half-hour incldues the last quarter-hour of the cash market, during which time the Dow fell from a re-test of its session high at (10486.65... the re-test got to 10485.90) to its close at 10440.07; as near to a 50-point drop as makes no odds.

However the closing print still says that the Dow Jones Industrial Average advanced 37.3 points (0.36%), closing out the day at 10440.07 points. After opening at the Friday close of 10403.17 (which served as the low of the day, too), the index blasted upwards, hitting 10486.7 at the end of the first hour.  As I mentioned above, the Dow futures continued to slide after the cash market closed, and the current futures reading (10401) is a new session low and would imply a cash Dow under of about 10390. 

Within the blue-chip index, 17 stocks rose, the biggest gainers being Wal Mart (WMT, +3.98% to $47.31) and Caterpillar (CAT, +2.98% to $52.59), which accounted for 27 Dow points between them. Losers in the Dow numbered 13 and were led by Mcdonalds (MCD, -2.14% to $31.60) and Boeing (BA, -1.52% to $64.64), with these two stocks contributing -14 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the gainers by 309.2m shares to 169.1m.

The broader S&P500 rose 8.6 points (0.72%), to end the session at 1207.01 - again, well off the highs (the session high for the S&P was 1211.43). The S&P futures continued to dive after the cash market closed, and are currently at 1203.75 - which implies a cash index below 1200. Within the index, gainers numbered 387, while 94 S&P500 stocks fell for the day. Volume was tilted 3.2:1 in favour of the winners with 1712.17 million units traded in the winners as compared with 527.33 million traded in the losers .

Over at Times Square, the Nasdaq Composite rose 30.42 points (1.46%), to close at 2120.3, while larger-cap technology issues fared worse with the Nasdaq100 adding 22.07 points (1.42%), to end at 1579.18 points. Again, the NQ futures continued dropping (although not quite to a new session low); the implied cash index is under 1570.  Within the tech benchmark, gainers numbered 82, while 13 Nasdaq100 stocks fell for the day. Volume was tilted 4.8:1 in favour of the winners with 716.41 million traded in the winners compared to 148.12 million in the losers .

NYSE Volume was super-chunky, with 2.55 billion shares changing hands, while Nasdaq Volume was solid but not spectacular, with 1.87 billion shares traded.

Major Market Statistics
Index	Close	Gain(Loss)	%
Dow Jones Industrial Average	10440.07	37.3	0.36%
S&P500	1207.01	8.6	0.72%
Nasdaq Composite	2120.3	30.42	1.46%
Nasdaq100	1579.18	22.07	1.42%
NYSE Volume	2.55bn	-	-
Nasdaq Volume	1.87bn	-	-

Bellwethers

My 9-stock "bellwethers" group rose by an average of 0.86%: look at Citigroup

• General Electric (GE) -$0.14 (0.41%) to $33.91;
• Citigroup (C) -$0.12 (0.26%) to $45.78;
• Wal Mart (WMT) +$1.81 (3.98%) to $47.31;
• I.B.M. (IBM) +$0.46 (0.56%) to $81.88;
• Intel (INTC) +$0.17 (0.73%) to $23.50;
• Cisco Systems (CSCO) +$0.31 (1.81%) to $17.45;
• eBay (EBAY) +$1.18 (3.07%) to $39.61;
• Fannie Mae (FNM) -$0.52 (1.08%) to $47.52; and
• Freddie Mac (FRE) -$0.40 (0.65%) to $61.35.

Market Breadth & Internals

NYSE advancing Issues exceeded decliners by 2485 to 808 for a single-day A/D reading of 1677; Nasdaq gainers trumped losers by 2197 to 863. The 10-day moving average of the A/D line rose to 209.5 on the NYSE, while the 10dma of the Nasdaq A/D rose to 130.6.

NYSE advancing volume exceeded volume in decliners by 1910.6 to 559.4 million shares; Nasdaq advancing volume was greater than volume in decliners by 1504.3 to 306.3 million shares.

106 NYSE-listed stocks rose to new 52-week highs, and 90 posted fresh 52-week lows, while on the Nasdaq there were 111 stocks that hit new 52-week highs, and 54 which fell to fresh 52-week lows.

Market Breadth Statistics
	NYSE	Nasdaq
Advancers	2485	2197
Decliners	808	863
Advancing Volume (m)	1910.57	1504.26
Declining Volume (m)	559.37	306.25
New Highs	106	111
New Lows	90	54

Market Sentiment Statistics
Index	Close	Gain(Loss)	%
CBOE Volatility Index	14.87	0.62	4.35%
CBOE Nasdaq Volatility Index	17.63	0.11	0.63%
Equity Put-Call Ratio	0.65	0	0%
10-day PCR	0.68	0	0%
SPX-VIX Ratio	81.2	-2.93	-3.48%

Bond Market Analysis

Bonds rose at the long end, with the yield on the benchmark 30-year Treasury bond shedding 1.9 bps to 4.755%.

The middle of the yield curve was broadly higher: five year yields fell to 4.447%, and ten-year yields fell to 4.559%.

Spreads between short-dated (2-yr) Treasuries and high-grade corporate bonds of similar maturity profiles were 4.0 bps wider at 16.0 basis points; spreads between longer dated Treasuries and their corporate AAA counterparts fell to 53.0 bps for 10-year AAA, and 74.0 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 5.0 bps wider at 47.0 basis points and the 10-year AAA-A spread 3.0 bps wider at 8.0 bps.

Treasury Yields
Index	Close	Gain(Loss)	%
UST 13wk (yld)	3.805	-0.02	-0.52%
UST 2Y (yld)	4.37	0	0%
UST 5Y (yld)	4.447	-0.003	-0.07%
UST 10Y (yld)	4.559	-0.008	-0.18%
UST 30Y (yld)	4.755	-0.019	-0.4%

The Banks Index posted a rise of 0.26 points (0.26%), closing at 99.5; within the index,

• Washington Mutual (WM) +$0.70 (1.8%) to $39.60;
• PNC Financial Services (PNC) +$1.02 (1.71%) to $60.71;
• North Fork Bancorp (NFB) +$0.31 (1.24%) to $25.34;
• Bank Of NY (BK) +$0.35 (1.13%) to $31.29; and
• Mellon Financial (MEL) +$0.29 (0.92%) to $31.69.

The Broker-dealer Index rose 3.57 points (1.99%), to 182.97; the ticket clippers lined up as follows -

• Charles Schwab (SCH) +$0.60 (4.11%) to $15.20;
• Jeffries Group (JEF) +$1.43 (3.49%) to $42.46;
• Legg Mason (LM) +$3.31 (3.18%) to $107.31;
• E*Trade (ET) +$0.48 (2.66%) to $18.55; and
• Ameritrade (AMTD) +$0.53 (2.59%) to $21.03.

The Philadelphia SOX (Semiconductor) index gained 7.77 points (1.83%), to end the session at 432.64

• Marvell Tech Group (MRVL) +$2.01 (4.53%) to $46.41;
• Advanced Micro Devices (AMD) +$0.90 (4.03%) to $23.22;
• Freescale Semiconductors (FSL-B) +$0.75 (3.24%) to $23.88;
• Xilinx (XLNX) +$0.66 (2.83%) to $23.95; and
• Micron Technology (MU) +$0.32 (2.53%) to $12.99.

Gold & Silver Markets

Gold fell by $8.20 (1.73%) to close at $466.60 per ounce.

The Gold Bugs Index shed 1.36 points (0.61%), to 222.84

• Randgold Resources (GOLD) -$0.51 (3.61%) to $13.62;
• Golden Star (GSS) -$0.09 (3.49%) to $2.49;
• Newmont Mining (NEM) -$1.53 (3.47%) to $42.60;
• Meridian Gold (MDG) -$0.34 (1.78%) to $18.78; and
• Gold Fields (GFI) -$0.21 (1.57%) to $13.20.

Silver fell by $0.24 (3.07%) to close at $7.58 per ounce. 

The Gold and Silver Index (XAU) gained 1.04 points (0.97%), to end the session at 107.84 points.

• Placer Dome (PDG) +$3.44 (20.84%) to $19.95;
• Goldcorp (GG) +$0.58 (2.99%) to $19.96;
• Kinross Gold (KGC) +$0.12 (1.75%) to $6.98; and
• Agnico Eagle (AEM) +$0.14 (1.04%) to $13.66.

Precious Metals and Indices
Index	Close	Gain(Loss)	%
Gold	466.60	-8.20	-1.73%
Silver	7.58	-0.24	-3.07%
PHLX Gold and Silver Index	107.84	1.04	0.97%
AMEX Gold BUGS Index	222.84	-1.36	-0.61%

Oil Market

Oil lost ground and finally closd 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.

The Oil and Gas Index (XOI) posted a rise of 16.64 points (1.72%), to end the session at 985.62

• Sunoco (SUN) +$2.43 (3.37%) to $74.50;
• ConocoPhillips (COP) +$2.12 (3.35%) to $65.38; and
• Occidental Petroleum (OXY) +$1.98 (2.57%) to $78.88.

The Oil service stocks (OSX) Index gained 1.81 points (1.09%), to 167.75

• Cooper Cameron (CAM) +$2.33 (3.26%) to $73.73;
• Halliburton (HAL) +$1.47 (2.55%) to $59.10; and
• Weatherford International (WFT) +$1.45 (2.37%) to $62.60.

Energy Complex
Index	Close	Gain(Loss)	%
Reuters CRB	326.68	-4	-1.21%
Crude Oil Light Sweet	59.76	-1.46	-2.38%
Heating Oil	1.8239	-0.07	-3.85%
Natural Gas	12.205	-0.85	-6.51%
Unleaded Gas	1.5901	-0.08	-4.53%
AMEX Oil Index	985.62	16.64	1.72%
Oil Service Index	167.75	1.81	1.09%

Currency Markets

Negative private savings out of current income, a government budget in total disarray (with half of the deficit unreported), massive external imbalances... and the psycholocial certainty that the whole shebang is administered by liars and fools... of course the US dollar should be rising.

Seriously - if people are buying USD on an 'interest arbitrage' argument, they ought to be shot. Sure, the Fed will raise short-term rates tomorrow - but the ECB will do likewise. However the Euro-zone has a huge and growing aggregaste trade surplus (Germany is the country with the highest experts in the world); Euro-zone budgetary accounting is more honest than the US (and yet the zone still has a lower deficit to GDP ratio)... the Euro ought to bounce, and bounce hard.

USD Exchange Rates
Index	Close	Gain(Loss)	%
US Dollar Index	90.12	0.53	0.59%
Euro	1.1988	-0.0082	-0.68%
Yen	116.41	0.725	0.63%
Sterling	1.7697	-0.0037	-0.21%
Australian Dollar	0.7484	-0.0008	-0.11%
Swiss Franc	1.2889	0.0087	0.68%
Canadian Dollar	0.8463	-0.0032	-0.38%

OzRant: Mmmmm... This Will Be Tasty...

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

Australian 'investors' responded to Friday's US short squeeze like one of Pavlov's dogs... slavering away the moment Master rang the bell. Although the US market response to the non-indictment of Karl Rove did help to overcome some significant technical hurdles, the US market is not out of the woods by any means - and the Oz market will perform worse than the US (look at a chart of the Asian bourses). The Fed will raise interest rates tomorrow, and markets do not react well to increases in the default return on capital.

But today let's let the cattle have their little stampede; far better to watch and shake the head at the stupidity of it all, than to try and participate on either side. That said, a SPI short is just too tempting - tomorrow at 10:30 a.m. should be perfect. Although the short-term target iwll only be 10 SPI points, it may develop into something more delicious, as today's bulls get a sick feeling in the pit of their stomachs as they become unwitting producers of garmonbozia... the negative psychic energy that comprises the foodstuffs of the Black Lodge.

The broad market - the ASX All Ordinaries (XAO) -  rose by 72.20 points (1.66%), finishing at 4412.70 points. After opening at its low (4340.5) the market screamed upwards in the first half-hour - hitting the mid-4390's before it stopped like a motorcycle hitting an armco barrier. From there the index went nowhere - literally, no more than 5 points in either direction - for almost 5½ hours... until a last-ten-minute push finally got the All Ords above 4400 for the close.

Total volume traded on the ASX was 820 million units, a whopping 22.0% below its 10-day average - so take this little bounce as highly suspicious. Of the 486 stocks in the All Ords index, 273 rose while 91 fell. Volume was tilted in favour of the gainers by a margin of 6.1:1, with 329.08 million shares traded in gainers while 53.58million shares traded in the day's losers. So it was a low-volume, highly-tilted move... sounds like the 'Dumb Money at Work; sign is being hung out.

The Index that forms the cash basis for the SFE's Share Price Index Futures - the S&P/ASX 200 (XJO) - rose by 76.70 points (1.75%), finishing at 4459.70 points.

The "heavy hitters" of the Australian market - the ASX 20 Leaders (XTL) - rose by 40.50 points (1.72%), finishing at 2399.70 points. Within the index members, there were 18 that rose, and 1 losers. Total volume in rising issues within the ASX20 amounted to 70.5 while volume in the losers totalled 2.93m units.

The major winners in the "big guns" were -

• BHP Billiton (BHP), +$0.650 (3.23%) to $20.750 on volume of 13.01m shares;
• Woodside Petroleum (WPL), +$0.800 (2.6%) to $31.600 on volume of 846,000 shares;
• Rio Tinto (RIO), +$1.370 (2.49%) to $56.310 on volume of 1.48m shares;
• Coles Myer Ltd (CML), +$0.210 (2.14%) to $10.030 on volume of 1.98m shares; and
• Woolworths (WOW), +$0.330 (2.06%) to $16.330 on volume of 2.32m shares.

The only loser in the big-guns:

• St George Bank (SGB), -$0.300 (1.09%) to $27.240 on volume of 2.93m shares.

At the smaller end of the market's capitalisation scale, the ASX Small Ordinaries Index (XSO) rose by 36.00 points (1.44%), finishing at 2540.60 points. The major winners in the "pop-guns" were -

• Cellestis (CST), +$0.190 (7.57%) to $2.700 on volume of 123,000 shares;
• Psivida (PSD), +$0.045 (6%) to $0.795 on volume of 556,000 shares; and
• Primelife Corporation (PLF), +$0.060 (4.62%) to $1.360 on volume of 482,000 shares; and
• Repco Corporation (RCL), +$0.110 (4.35%) to $2.640 on volume of 852,000 shares; and
• A.B.C. Learning Centres (ABS), +$0.250 (4%) to $6.500 on volume of 278,000 shares.

The losingest-little-guys for the session were (in order of decline):

• Antares Energy (AZZ), -$0.055 (9.4%) to $0.530 on volume of 2.04m shares;
• Multiemedia (MUL), -$0.001 (6.67%) to $0.014 on volume of 11.13m shares; and
• Croesus Mining (CRS), -$0.020 (6.15%) to $0.305 on volume of 2.68m shares; and
• Atlas Group Holdings (AHS), -$0.070 (5.38%) to $1.230 on volume of 196,000 shares; and
• Lynas Corporation (LYC), -$0.005 (3.85%) to $0.125 on volume of 196,000 shares.

Index Changes

Code	Name	Close	+/-	%	Volume
XAO	All Ordinaries	4412.7	72.2	1.66%	466.94m
XTL	S&P/ASX 20	2399.7	40.5	1.72%	73.42m
XFL	S&P/ASX 50	4366.6	75.3	1.75%	161.78m
XTO	S&P/ASX 100	3617.2	62.9	1.77%	279.38m
XJO	S&P/ASX 200	4459.7	76.7	1.75%	353.33m
XKO	S&P/ASX 300	4454.2	76.2	1.74%	0
XMD	S&P/ASX Mid-Cap 50	4446.2	81.6	1.87%	0
XSO	S&P/ASX Small Ordinaries	2540.6	36	1.44%	117.88m

All Ordinaries Market Internals

Market Breadth

	ASX20	XTO	XJO	XAO	XSO	Market
Advances	18	88	160	273	123	595
Declines	1	3	13	91	36	343
Advancing Volume	70.5m	214.77m	258.25m	329.08	67.05	492.13
Declining Volume	2.93m	21.65m	29.25m	53.58	26.69	185.54

S&P/ASX200 GICS Sector Indices

The top sector for the day was XUJ Utilities which gained 3.70% to 5291.20 points. The sector was helped by

• Alinta (ALN), +$0.470 (4.56%) to $10.770 on volume of 354,000 shares;
• Australian Gas Light Company (AGL), +$0.640 (4.41%) to $15.140 on volume of 3.72m shares;
• Energy Developments (ENE), +$0.110 (2.48%) to $4.550 on volume of 334,000 shares;
• Australian Pipeline Trust (APA), +$0.070 (1.94%) to $3.670 on volume of 94,000 shares; and
• Gasnet Australia Group (GAS), +$0.030 (1.1%) to $2.750 on volume of 184,000 shares.

Second in the sector leadership stakes was XMJ Materials which gained 2.70% to 8230.20 points. The sector leaders were -

• James Hardie Industries N.V. (JHX), +$0.410 (5.07%) to $8.490 on volume of 1.36m shares;
• Adelaide Brighton (ABC), +$0.080 (3.92%) to $2.120 on volume of 240,000 shares;
• Lihir Gold (LHG), +$0.065 (3.86%) to $1.750 on volume of 7.1m shares;
• Paperlinx (PPX), +$0.110 (3.7%) to $3.080 on volume of 4.19m shares; and
• Kingsgate Consolidated (KCN), +$0.140 (3.54%) to $4.100 on volume of 443,000 shares.

The bronze today went to XHJ Healthcare which gained 2.61% to 5817.60 points. The sector was led by

• Ansell (ANN), +$0.470 (4.68%) to $10.520 on volume of 723,000 shares;
• Cochlear (COH), +$1.480 (4.05%) to $37.980 on volume of 168,000 shares;
• Healthscope (HSP), +$0.180 (3.26%) to $5.700 on volume of 1.23m shares;
• Resmed Inc (RMD), +$0.160 (3.21%) to $5.150 on volume of 621,000 shares; and
• Sonic Healthcare (SHL), +$0.450 (3.18%) to $14.580 on volume of 1.14m shares.

The worst-performed sector today - XNJ Industrials - actually gained 0.72%: when the worst-performed sector rises by almost 3/4 of a percent, you know you've got some real speculative mania happening.

Sector Indices

Code	GICS Sector	Close	+/-	%	Volume
XUJ	Utilities	5291.2	188.8	3.7%	5.5m
XMJ	Materials	8230.2	216.2	2.7%	71.17m
XHJ	Healthcare	5817.6	147.8	2.61%	12.72m
XEJ	Energy	9832.6	221.4	2.3%	14.14m
XIJ	Information Technology	432.8	9.4	2.22%	4.17m
XSJ	Consumer Staples	5834	113.6	1.99%	25.26m
XDJ	Consumer Discretionary	2219.5	37.9	1.74%	25.58m
XPJ	Property Trusts	1808.1	26.5	1.49%	64.9m
XFJ	Financials	5301.4	70.5	1.35%	119.54m
XXJ	ASX200 Financials ex Property Trusts	5469.4	70.7	1.31%	52m
XTJ	Telecommunications	1535.4	16.8	1.11%	12.01m
XNJ	Industrials	4982.1	35.8	0.72%	46.02m

All Ordinaries Major Movers

All Ords Volume Leaders

Code	Name	Close	+/-	%	Volume
BBB	B Digital	0.35	0.01	2.99%	41.91m
BBW	Babcock & Brown Wind Partners	1.66	-0.02	-1.19%	22.39m
MOF	Macquarie Office Trust	1.25	0	0%	15.41m
NAB	National Australia Bank	33	0.32	0.98%	13.45m
BHP	BHP Billiton	20.75	0.65	3.23%	13.01m
TLS	Telstra Corporation	4.21	0.03	0.72%	10.7m

All Ords Percentage Gainers

Code	Name	Close	+/-	%	Volume
CST	Cellestis	2.7	0.19	7.57%	123253
PMV	Premier Investments	4.3	0.29	7.23%	27000
MND	Monadelphous Group	3.82	0.25	7%	66927
EPT	Epitan	0.35	0.02	6.06%	667336
PSD	Psivida	0.8	0.05	6%	555842

All Ords Percentage Decliners

Code	Name	Close	+/-	%	Volume
AZZ	Antares Energy	0.53	-0.06	-9.4%	2.04m
MST	Metal Storm	0.2	-0.02	-6.98%	1.35m
FLT	Flight Centre	11.5	-0.83	-6.73%	462921
MUL	Multiemedia	0.014	-0.001	-6.67%	11.13m
CRS	Croesus Mining	0.31	-0.02	-6.15%	2.68m

Elsewhere in the Region...

Regional Indices

Country	Name	Close	+/-	%	Volume
New Zealand	NZSE50	3293.157	22.41	0.69%	21.35m
Japan	Nikkei 225	13606.5	259.96	1.95%	0
Korea	KOSPI	1158.11	17.39	1.52%	315206
Singapore	Straits Times	2223.89	31.48	1.44%	0
Hong Kong	Hang Seng	14325.67	109.84	0.77%	121.71m
Malaysia	KLSE Comp	909.78	3.99	0.44%	0

USRant: GDP? Or An Intact Sphincter (For Now)?

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

Pre-market data was basically in-line with consensus expectations, and yet the market opened with a decent gap up. The GDP report showed what I refer to as 'claimed' growth, at 3.8%: I say 'claimed' because hedonics adds at least 1.2% to the 'real' level of growth claimed by the US statistical authorities. 

That's 1.2% of each report's supposed 'growth' that doesn't go into anyone's bank, or into anyone's belly. No corporation makes an additional cent of profit, no worker takes home an additional cent of wages, and not a single cent of additional tax is collected ... you get the drift. 

In other words, it's an Orwellian fiction - the sort that the Soviet Union used to use to try and make its Five Year Plans look successful... as economic inefficiency, corruption and cronyism were eating the system from the inside out. Now that sounds familiar.

Anyhow - the important point is that the data was in line with the 'consensus guess.; the Globex futures marekt did as you would expect (i.e., bugger all); they were already up above 1189 (basis the front-month S&P futures).

The reason for the pre-GDP-data gain? The fact that several papers were already reporting that Karl Rove would not be indicted. And sure enough, at 2 p.m. at the press conference held by Special Prosecutor Patrick Fitzgerald, Rove was not indicted... only Lewis Libby (Cheney's chief of staff) was indicted. With the 'off the hook' verdict for Bush's Brain now semi-official, the market added 8 S&P points (and almost 90 Dow points... more than half the day's overall gain) in less than an hour.

So sure... it was the GDP numbers.  Believe that if you want. But when it surfaces that "Rover" has cut a deal and will drop his superiors in it when the Fitzgerald probe widens, don't be surprised if you have to find some data-related reason for every single point of today's advance being given back.

Federal Reserve Open Market Operations

The Fed's Open Market Operations desk performed 1 repurchase operation: a $9billion, 5-day repurchase with $0.065billion in T-backed collateral undertaken at a -13 basis point discount to the Fed Funds Rate (FFR).

Major US Indices

The Dow Jones Industrial Average advanced 172.82 points (1.69%), closing out the day at 10402.77 points (10400-ish). The index hit an intraday high of 10404.7, after opening at 10231.15 (the low of the session). 

Within the blue-chip index, 29 stocks rose, the biggest gainers being Hewlett Packard (HPQ, +4.33% to $27.96) and Verizon Communications (VZ, +3.06% to $31.70), which accounted for 17 Dow points between them. Only one Dow component fell - International Business Machines (IBM, -1.08% to $81.42). Even GM managed a gain (+0.26% to $27.26), which shows you jsut how much this was a short-squeeze rather than anything else. Volume traded was tilted in favour of the gainers by 457.5m shares to 7.9m.

The broader S&P500 added 19.51 points (1.65%), closing at 1198.41. Within the index, gainers numbered 425, while 58 S&P500 stocks fell for the day. Volume was tilted 3.8:1 in favour of the winners with 1771.42 million units traded in the winners as compared with 463.26 million traded in the losers .

Over at Times Square, the Nasdaq Composite rose 26.07 points (1.26%), to close at 2089.88, while larger-cap technology issues fared worse with the Nasdaq100 adding 13.73 points (0.89%), to end at 1557.11 points. Within the tech benchmark, gainers numbered 76, while 20 Nasdaq100 stocks fell for the day. Volume was tilted 2.0:1 in favour of the winners with 586.93 million traded in the winners compared to 291.65 million in the losers .

NYSE Volume was super-chunky, with 2.42 billion shares changing hands, while Nasdaq Volume was chunky, with 1.91 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	10402.77	172.82	1.69%
S&P500	1198.41	19.51	1.65%
Nasdaq Composite	2089.88	26.07	1.26%
Nasdaq100	1557.11	13.73	0.89%
NYSE Volume	2.42bn	-	-
Nasdaq Volume	1.91bn	-	-

Bellwethers

My 9-stock "bellwethers" group rose by an average of 1.15%; look at the Toxic Twins - Fannie and Freddie - to see why all the repurchase dough was concentrated in Agency and Motgage-backed collateral...

• General Electric (GE) +$0.47 (1.4%) to $34.05;
• Citigroup (C) +$0.49 (1.08%) to $45.90;
• Wal Mart (WMT) +$0.76 (1.7%) to $45.50;
• I.B.M. (IBM) -$0.89 (1.08%) to $81.42;
• Intel (INTC) +$0.49 (2.15%) to $23.33;
• Cisco Systems (CSCO) +$0.09 (0.53%) to $17.14;
• eBay (EBAY) +$0.59 (1.56%) to $38.43;
• Fannie Mae (FNM) +$1.18 (2.52%) to $48.04; and
• Freddie Mac (FRE) +$0.29 (0.47%) to $61.75.

Market Breadth & Internals

NYSE advancing Issues exceeded decliners by 2383 to 862 for a single-day A/D reading of 1521; Nasdaq gainers trumped losers by 2020 to 997. The 10-day moving average of the A/D line rose to -112.7 on the NYSE, while the 10dma of the Nasdaq A/D rose to -133.6.

NYSE advancing volume exceeded volume in decliners by 2022.9 to 380.3 million shares; Nasdaq advancing volume was greater than volume in decliners by 1235.4 to 654.6 million shares.

53 NYSE-listed stocks rose to new 52-week highs, and 153 posted fresh 52-week lows, while on the Nasdaq there were 53 stocks that hit new 52-week highs, and 112 which fell to fresh 52-week lows.

Market Breadth Statistics
	NYSE	Nasdaq
Advancers	2383	2020
Decliners	862	997
Advancing Volume (m)	2022.87	1235.35
Declining Volume (m)	380.29	654.64
New Highs	53	53
New Lows	153	112

Market Sentiment Statistics
Index	Close	Gain(Loss)	%
CBOE Volatility Index	14.25	-1.88	-11.66%
CBOE Nasdaq Volatility Index	17.52	-0.26	-1.46%
Equity Put-Call Ratio	0.65	-0.3	-31.58%
10-day PCR	0.68	0	0%
SPX-VIX Ratio	84.1	11.01	15.07%

Bond Market Analysis

Bonds fell at the long end, with the yield on the benchmark 30-year Treasury bond rising 0.4 bps to 4.774%.

The middle of the yield curve was broadly lower: five year yields rose to 4.45%, and ten-year yields rose to 4.567%.

Spreads between short-dated (2-yr) Treasuries and high-grade corporate bonds of similar maturity profiles were 8.0 bps wider at 16.0 basis points; spreads between longer dated Treasuries and their corporate AAA counterparts rose to 57.0 bps for 10-year AAA, and 77.5 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 5.0 bps tighter at 42.0 basis points and the 10-year AAA-A spread 2.0 bps tighter at 5.0 bps.

Treasury Yields
Index	Close	Gain(Loss)	%
UST 13wk (yld)	3.825	0.033	0.87%
UST 2Y (yld)	4.37	0.04	0.92%
UST 5Y (yld)	4.45	0.02	0.45%
UST 10Y (yld)	4.567	0.009	0.2%
UST 30Y (yld)	4.774	0.004	0.08%

The Banks Index rose 1.8 points (1.85%), to end the session at 99.24; within the index,

• Comerica (CMA) +$1.94 (3.48%) to $57.74;
• Fifth Third Bancorp (FITB) +$1.29 (3.29%) to $40.46;
• Washington Mutual (WM) +$1.08 (2.86%) to $38.90;
• Suntrust Banks (STI) +$1.93 (2.72%) to $72.80; and
• Wachovia (WB) +$1.19 (2.43%) to $50.09.

The Broker-dealer Index added 3.48 points (1.98%), ending the day at 179.4; the ticket clippers lined up as follows -

• Jeffries Group (JEF) +$1.58 (4.01%) to $41.03;
• Ameritrade (AMTD) +$0.57 (2.86%) to $20.50;
• Lehman Brothers (LEH) +$3.25 (2.83%) to $118.05;
• Merrill Lynch (MER) +$1.76 (2.81%) to $64.36; and
• Bear Stearns (BSC) +$2.70 (2.63%) to $105.50.

The Philadelphia SOX (Semiconductor) index declined 2.77 points (0.65%), closing at 424.87

• Maxim Integrated (MXIM) -$4.36 (11.19%) to $34.60;
• KLA-Tencor (KLAC) -$1.72 (3.64%) to $45.52;
• Linear Technology (LLTC) -$0.98 (2.85%) to $33.44;
• Applied Materials (AMAT) -$0.35 (2.09%) to $16.36; and
• Teradyne (TER) -$0.16 (1.18%) to $13.40.

Gold & Silver Markets

Gold fell by $0.80 (0.17%) to close at $474.8 per ounce.

The Gold Bugs Index advanced 2.21 points (1%), at 224.2

• Iamgold (IAG) +$0.35 (5.28%) to $6.98;
• Freeport McMoran (FCX) +$1.54 (3.22%) to $49.36;
• Eldorado Gold (EGO) +$0.09 (3.07%) to $3.02;
• Glamis Gold (GLG) +$0.53 (2.61%) to $20.85; and
• Harmony Gold (HMY) +$0.21 (2.02%) to $10.59.

Silver fell by $0.02 (0.26%) to close at $7.82 per ounce. The Gold and Silver Index (XAU) gained 1.25 points (1.18%), to 106.8 points.

• Barrick Gold (ABX) +$0.88 (3.34%) to $27.20;
• Freeport McMoran (FCX) +$1.54 (3.22%) to $49.36;
• Placer Dome (PDG) +$0.35 (2.17%) to $16.51; and
• Harmony Gold (HMY) +$0.21 (2.02%) to $10.59.

Precious Metals and Indices
Index	Close	Gain(Loss)	%
Gold	474.80	-0.80	-0.17%
Silver	7.82	-0.02	-0.26%
PHLX Gold and Silver Index	106.8	1.25	1.18%
AMEX Gold BUGS Index	224.2	2.21	1%

Oil Market

Oil was firmer, rising by $0.13 per barrel, closing at $61.22 per barrel - although again it tried to dip below $60 (but stopped well short - the low was $60.55). 

The Oil and Gas Index (XOI) added 23.84 points (2.52%), at 968.98

• Marathon Oil (MRO) +$2.66 (4.64%) to $59.94;
• Amerada Hess (AHC) +$4.60 (3.89%) to $122.91; and
• ConocoPhillips (COP) +$2.36 (3.88%) to $63.26.

The Oil service stocks (OSX) Index advanced 4.5 points (2.79%), closing at 165.94

• National Oilwells/Varco (NOV) +$2.81 (4.77%) to $61.77;
• Halliburton (HAL) +$2.53 (4.59%) to $57.63; and
• Rowan Companies (RDC) +$1.21 (3.83%) to $32.82.

Energy Complex
Index	Close	Gain(Loss)	%
Reuters CRB	330.68	-2.33	-0.7%
Crude Oil Light Sweet	61.22	0.13	0.21%
Heating Oil	1.8969	0	-0.23%
Natural Gas	13.055	-0.63	-4.6%
Unleaded Gas	1.6656	0.04	2.33%
AMEX Oil Index	968.98	23.84	2.52%
Oil Service Index	165.94	4.5	2.79%

Currency Markets

USD Exchange Rates
Index	Close	Gain(Loss)	%
US Dollar Index	89.59	0.46	0.52%
Euro	1.207	-0.0067	-0.55%
Yen	115.685	0.19	0.16%
Sterling	1.7734	-0.0096	-0.54%
Australian Dollar	0.7492	-0.0078	-1.03%
Swiss Franc	1.2802	0.0063	0.49%
Canadian Dollar	0.8495	-0.0034	-0.4%

USRant: It's All About Rove's Sphincter...

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

I've been sayin' for the last week and a half that these mad moonshots that the Dow has been having are not a sign of a well-functioning marekt; today's session simply adds more evidence to my case.

Here's the deal: if the thing doesn't start to bounce in the first hour of Friday's session, then the likelihood of a genuine meltdown - a good 500-1000 point decline in the Dow - is really quite high. There have already been five or six 'Hindenburg Omens' recently, and although I am skeptical about any 'omen' that is found retrospectively, it remains that the market internals of the US markets are decaying faster than week-old fish. 

And if Fitzgerald indicts Rove, game over. It is already clear that Rove is trying to cut a deal - do not think for one second that that sweaty porcine sack of shit has any loyalty to anyone except his own self: that's not the way parasitic vermin like Rove work. You don't get loyalty from creeps like him just because you've played the macho cowboy in two decade's worth of gay orgies... if a situation arises where Rove's ass is being hauled off to jail, and he can reduce that risk by handing over your head, you're done for. (Got that, Georgie-boy?).

Federal Reserve Open Market Operations

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

• a $4billion, 14-day repurchase entirely in T-backed collateral undertaken at a 15 basis point premium to the Fed Funds Rate (FFR); and
• a $12.5billion, overnight repurchase with $7.07billion in T-backed collateral undertaken at a 4.4 basis point premium to the Fed Funds Rate (FFR).

Taken together, these two repurchases reveal that the Fed will raise rates again (by another 25 basis points) next Tuesday - like, DUH.

For today the repurchases, while large, provided no discount to Fed funds and so did not result in any grease for the market's wheels. By the end of the session, the aforementioned wheels were suffering from a dose of metal-on-metal grindage.

Note also, that a huge wodge of repo dough was thrown at the Toxic Twins, which are threatening to break down completely as the bond market screws up their hedging and the housing market continues to emit a horrible grating sound...

Major US Indices

Early last week I mused on the possibility that the Dow would finish below 10,000 either last week (which I recanted after the big decline last Thursday)  or this week. And yet, despite another close below 10250, the likelihood that 10k is intact at the end of this week (i.e., tonight ,Australian time) is obviously very high... markets simply don't fall 200+ points on a Friday. It seems that someone has a cvested interest in postponing the inevitable test of 10k.

Today saw a string of intraday CCI buying divergences, and yet not a single one of them worked to any meaningsul effect. In terms of 'information content', the good old 'quarter by quarter' mechanism was more powerful - in other words, if you simply bought S&P futures every single time the Dow futures touched a multiple of 25 (from above), the 'trampolining' alone would have made you a happy little trader. 

I don't recommend that as a methodology - it only works when da Boyz are desperate to prevent a decline from taking hold in earnest. (As an aside, it is my firm belief that if they had not done so, the Dow would have finished somewhere in the low-to-mid-10100's).

Financial journlists will be thrashing about looking for a one-line explanation for the decline... oil prices, a hurricane somewhere, the decline in durable goods orders... you know the drill.

Sure, durable goods orders declined sharply. You will remember though, that we only watch one single line-item in the Durable Goods report... namely ...

Non-Defence CapEx excluding Aircraft

And that number wasn't all that bad: Non-Defence Capex ex Aircraft fell by 1.2% - a lot less than the headline 2.9% overall fall in Durables. The main culprit for the broader decline was a 20-odd percent fall in orders of commercial aircraft - always a 'lumpy' item.

And yes, General Motors weighted on the Dow thanks to the SEC investigation into its behaviour when shuffling off Delphi. I hope that the 'clawback' provisions in bankruptcy are applied to the Delphi spinoff - it is absolutely clear that GM was trying to offload some pensions responsibilities when it spun off that business. 

You know what I mean by 'clawback': it's when some transactions that are deemed "not arm's length" can be unwound retroactively in order to bring corporate assets back into the pot for distribution to creditors. Think of the instances when a bankrupt gives his $20 million art collection to his wife a month before declaring bankruptcy... that sort of thing is often "unwound". 

Anyhow - I said ages ago that GM was going to have to file Chapter 11 - probably before the end of the year. 

What fun that would be! A component of the most famous stock index in the world, the index that is the hallmark of what Americans like to pretend is Capitalism... a component of the mighty Dow, trading in bankruptcy protection. I don't think it's happened before (I'm not sure though).

Oh, but that would be priceless... it shows that the Flying Spaghetti Monster has a sense of humour.  (All that would happen, I think, is that Dow Jones & Co would kick GM out of the index.)

But I digress slightly. In my view, the intraday action does not support the contention that Durables or GM were the primary driver. The markets held up well early, and showed absolutely no reaction to the data when it was released.

No, I think that the big houses are getting very nervous about the rumours swirling around the Fitzerald inquiry into the Plame affair. If White House senior staff (like Rove and Libby) are indicted, the reputation of the U.S. will take yet another knock, at a time when markets are already fragile and any widening of risk premia would adversely affect markets. 

And if - as my little bird tells me - Rove is trying to cut a deal, it means that he is going to offer up someone big-oh-big in exchange for not having to suffer the sphincter-widening penal consequences of his treasonous activities (Bush could not pardon these chumps without risking impeachment, because the Republicans are screwed in next year's mid-term elections) .

So anyhow - if you need a 'one line' reason, that's it as far as I am concerned.

The Dow Jones Industrial Average shed 115.03 points (1.11%), closing out the day at 10229.95 points. The index hit an intraday high of 10349.22 (10350-ish) just after the end of the first 3 minutes; from there it was largely one-way traffic (a sort of slow-motion waterfall) for the rest of the session, with the indices all closing right on their respective lows. 

Within the blue-chip index, 5 stocks rose, the biggest gainers being Verizon Communications (VZ, +0.56% to $30.76) and SBC Communications (SBC, +0.21% to $23.70), which accounted for 2 Dow points between them. Losers in the Dow numbered 25 and were led by General Motors (GM, -6.79% to $27.19) and American Express (AXP, -2.47% to $48.90), with these two stocks contributing -26 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the losers by 286.7m shares to 68.8m.

The broader S&P500 declined 12.48 points (1.05%), to end the session at 1178.9. Within the index, gainers numbered 74, while 408 S&P500 stocks fell for the day. Volume was tilted 5.3:1 in favour of the losers with 1595.38 million units traded in the losers as compared with 298.30 million traded in the winners .

Over at Times Square, the Nasdaq Composite dipped 36.24 points (1.73%), to close at 2063.81, while larger-cap technology issues fared worse with the Nasdaq100 losing 31.76 points (2.02%), to end at 1543.38 points. Within the tech benchmark, gainers numbered 7, while 89 Nasdaq100 stocks fell for the day. Volume was tilted 11.1:1 in favour of the losers with 614.78 million traded in the losers compared to 55.34 million in the winners .

NYSE Volume was super-chunky, with 2.4 billion shares changing hands, while Nasdaq Volume was chunky, with 1.72 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	10229.95	-115.03	-1.11%
S&P500	1178.9	-12.48	-1.05%
Nasdaq Composite	2063.81	-36.24	-1.73%
Nasdaq100	1543.38	-31.76	-2.02%
NYSE Volume	2.4bn	-	-
Nasdaq Volume	1.72bn	-	-

Bellwethers

My 9-stock "bellwethers" group fell by an average of 0.47% (and didn't I tell you yesterday that Citigroup was not pointing to a higher marekt, but rather to the hopes of da Boyz to offload a bunch of calls at the open today? Ta-DAAAA!!!)

• General Electric (GE) -$0.12 (0.36%) to $33.58;
• Citigroup (C) -$0.24 (0.53%) to $45.41;
• Wal Mart (WMT) -$0.84 (1.84%) to $44.74;
• I.B.M. (IBM) -$0.58 (0.7%) to $82.31;
• Intel (INTC) -$0.23 (1%) to $22.84;
• Cisco Systems (CSCO) -$0.05 (0.29%) to $17.05;
• eBay (EBAY) -$0.46 (1.2%) to $37.84;
• Fannie Mae (FNM) +$0.23 (0.49%) to $46.86; and
• Freddie Mac (FRE) +$0.71 (1.17%) to $61.46.

Market Breadth & Internals

NYSE declining Issues beat out advancers by 2406 to 871, for a single-day A/D reading of -1535; and Nasdaq losers exceeded gainers by 2316 to 702. The 10-day moving average of the A/D line fell to -471.3 on the NYSE, while the 10dma of the Nasdaq A/D fell to -387.4.

On the NYSE declining volume was greater than volume in advancing issues by 1913.4 to 419 million shares; On the Nasdaq declining volume exceeded volume in advancing issues by 1461.8 to 238.3 million shares.

40 NYSE-listed stocks rose to new 52-week highs, and 229 posted fresh 52-week lows, while on the Nasdaq there were 42 stocks that hit new 52-week highs, and 128 which fell to fresh 52-week lows. Those new lows are starting to get very big - which points to a bounce fermenting deep in the bowels of the market; one more volatility spike and it oughta do it.

Market Breadth Statistics
	NYSE	Nasdaq
Advancers	871	702
Decliners	2406	2316
Advancing Volume (m)	419.04	238.27
Declining Volume (m)	1913.39	1461.81
New Highs	40	42
New Lows	229	128

Market Sentiment Statistics
Index	Close	Gain(Loss)	%
CBOE Volatility Index	16.13	1.54	10.56%
CBOE Nasdaq Volatility Index	17.78	1.91	12.04%
Equity Put-Call Ratio	0.95	0.14	17.28%
10-day PCR	0.68	-0.02	-2.86%
SPX-VIX Ratio	73.1	-8.57	-10.49%

Bond Market Analysis

Bonds rose at the long end, with the yield on the benchmark 30-year Treasury bond shedding 2.6 bps to 4.77%.

The middle of the yield curve was broadly higher: five year yields fell to 4.43%, and ten-year yields fell to 4.558%.

Spreads between short-dated (2-yr) Treasuries and high-grade corporate bonds of similar maturity profiles were 9.0 bps wider at 17.0 basis points; spreads between longer dated Treasuries and their corporate AAA counterparts rose to 52.0 bps for 10-year AAA, and 73.5 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 6.0 bps wider at 47.0 basis points and the 10-year AAA-A spread unchanged  at 7.0 bps.

Treasury Yields
Index	Close	Gain(Loss)	%
UST 13wk (yld)	3.792	-0.013	-0.34%
UST 2Y (yld)	4.33	-0.03	-0.69%
UST 5Y (yld)	4.43	-0.03	-0.67%
UST 10Y (yld)	4.558	-0.033	-0.72%
UST 30Y (yld)	4.77	-0.026	-0.54%

The Banks Index dipped 0.27 points (0.28%), to 97.44; within the index,

• US Bancorp (USB) -$0.32 (1.1%) to $28.88;
• Bank Of NY (BK) -$0.29 (0.95%) to $30.36;
• M&T Bank Corp (MTB) -$0.67 (0.64%) to $104.13;
• Citigroup (C) -$0.24 (0.53%) to $45.41; and
• Comerica (CMA) -$0.27 (0.48%) to $55.80.

The Broker-dealer Index dipped 3.94 points (2.19%), closing at 175.92; the ticket clippers lined up as follows -

• Jeffries Group (JEF) -$2.55 (6.07%) to $39.45;
• Legg Mason (LM) -$5.52 (5.09%) to $102.96;
• Ameritrade (AMTD) -$0.90 (4.32%) to $19.93;
• E*Trade (ET) -$0.58 (3.12%) to $18.00; and
• A G Edwards (AGE) -$0.87 (2.09%) to $40.81.

The Philadelphia SOX (Semiconductor) index slid 11.94 points (2.72%), to 427.64

• Marvell Tech Group (MRVL) -$2.00 (4.4%) to $43.49;
• Advanced Micro Devices (AMD) -$1.00 (4.38%) to $21.82;
• Maxim Integrated (MXIM) -$1.67 (4.11%) to $38.96;
• Broadcom (BRCM) -$1.62 (3.77%) to $41.31; and
• National Semiconductors (NSM) -$0.80 (3.54%) to $21.79.

Gold & Silver Markets

Gold rose $2.60 (0.55%) to close at $475.60 per ounce. It's clear that any loss of coinfidence in the US political leadership will adversely affect the USD, and the placement of Professor Helichopper to replace Mr Magoo is likely to raise inflationary expectations... both good for Gold in USD terms.

The Gold Bugs Index declined 1.5 points (0.67%), ending the day at 221.99

• Hecla Mining (HL) -$0.28 (7.71%) to $3.35;
• Iamgold (IAG) -$0.14 (2.07%) to $6.63;
• Eldorado Gold (EGO) -$0.06 (2.01%) to $2.93;
• Freeport McMoran (FCX) -$0.80 (1.65%) to $47.82; and
• Coeur d'Alene (CDE) -$0.05 (1.31%) to $3.77.

Silver fell by $0.02 (0.29%) to close at $7.84 per ounce. 

The Gold and Silver Index (XAU) lost 0.22 points (0.21%), ending the day at 105.55 points.

• Anglogold Ashanti (AU) -$0.71 (1.72%) to $40.55;
• Freeport McMoran (FCX) -$0.80 (1.65%) to $47.82;
• Meridian Gold (MDG) -$0.15 (0.79%) to $18.82; and
• Newmont Mining (NEM) -$0.14 (0.32%) to $43.95.

Precious Metals and Indices
Index	Close	Gain(Loss)	%
Gold	475.60	2.60	0.55%
Silver	7.84	-0.02	-0.29%
PHLX Gold and Silver Index	105.55	-0.22	-0.21%
AMEX Gold BUGS Index	221.99	-1.5	-0.67%

Oil Market

Oil was firmer, rising by $0.43 per barrel, closing at $61.09 per barrel in a rollercoaster session... first it jumped up to above $61.23, then it declined to $60.25... than it bounced again to close above $61. (Note - the day before yesterday I spoke of Oil "dipping below $80"... that was a $20 typo... if oil dips below $60 it is also below $80, but it sure as hell isn't 'dipping' below $80). 

The Oil and Gas Index (XOI) declined 22.1 points (2.28%), ending the day at 945.14

• Marathon Oil (MRO) -$3.80 (6.22%) to $57.28;
• Amerada Hess (AHC) -$3.89 (3.18%) to $118.31; and
• Kerr Mcgee (KMG) -$2.61 (3.06%) to $82.64.

The Oil service stocks (OSX) Index lost 4.16 points (2.51%), to end the session at 161.44

• Halliburton (HAL) -$3.05 (5.25%) to $55.10;
• Noble Corp (NE) -$3.16 (4.78%) to $62.93; and
• Global Industries (GLBL) -$0.60 (4.64%) to $12.34.

Energy Complex
Index	Close	Gain(Loss)	%
Reuters CRB	333.01	-1.5	-0.45%
Crude Oil Light Sweet	61.09	0.43	0.71%
Heating Oil	1.9013	0	0.14%
Natural Gas	13.684	-0.38	-2.67%
Unleaded Gas	1.6276	0.01	0.4%
AMEX Oil Index	945.14	-22.1	-2.28%
Oil Service Index	161.44	-4.16	-2.51%

Currency Markets

USD Exchange Rates
Index	Close	Gain(Loss)	%
US Dollar Index	89.13	-0.36	-0.4%
Euro	1.2137	0.0069	0.57%
Yen	115.495	-0.37	-0.32%
Sterling	1.783	0.0082	0.46%
Australian Dollar	0.757	0.0022	0.29%
Swiss Franc	1.2739	-0.0092	-0.72%
Canadian Dollar	0.8529	-0.0019	-0.22%

USRant: Significant Reversal? We'll See...

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

Pre-market data stank, with the primary nasties being earnings outlook reductions from Amazon.com and Boeing. AMZN - which was carrying the much richer earnings multiple - got absolutely hammered, falling almost 14% for the session. BA got off relatively lightly with a 2% downdraught.

The White House is bracing itself for rumoured indictments to be issued by Patrick Fitzgerald; the rumour is that the indictments will come today. Will it be Feith? Libby? (Deep breath.....) Cheney? (Deeper breath) ROVE?

Well, call me seditious, but the entire lot of them ought to be put in a room with 20 machete-wielding Fallujans. 'Outing' Valerie Plame was a low act, but was entirely consistent with the bitchy (and, frankly, massively gay) NeoTrot cabal. Of far greater import is the fact that they lied the world into a war that has cost 100,000 (conservatively) excess Iraqi deaths, mostly children, women and the elderly. And they have the gall to call Saddam Hussein 'evil'.

Hand the lot of them over to the Iraqis who have had their children torn to pieces by 'smart' bombs - and let the Iraqis get all 'Abu Ghraib' on their arses.

And where, Oh Where is the Australian media? Why aren't the shameless vermin who occupy Canberra being put in the dock over our involvement? Simple: because their symbiotes - the Canberra Press Gallery - are all hand-in-glove with their co-vermin... they're effectively one great big Judith Miller... a giant media whore-for-war. 

Thank Crom (or Odin, or the Flying Spaghetti Monster) for the blogosphere: that's what forced the Canberra Press Gallery to act all surprised about the Stalinist elements of the new 'anti-Terror' bill (which more accurately ought to be called an 'anti-Liberty' bill). Prior to some genuine outrage both here and in the US on major blogs, the Canberra Press Gallery had - like any good whore - simply taken directions from its client and had ignored the 'shoot to kill' and 'preventive detention' clauses. But for the blogs, Australia would never have known what it was in for. (Note - I don't include this blog among those who helped force the blowing of the whistle).

As I've said before - the next step is for the Stalinist-Statists to try and limit access to the internet... to further attempt to impose a 'correct line' ideology on the population. This step will almost certainly be driven by another round of scare-campaign roundups of agitators who are found to have 'kiddie porn' on their computers... it's amazing what a government stooge with a DVD in his pocket can achieve, given ten seconds of unsupervised access to a person's PC (assuming the required 'evidence' can't be 'pushed' to the 'perpetrator's PC via the Web).

Do not trust your government. It is there to take stuff off you.

Federal Reserve Open Market Operations

The Fed's Open Market Operations desk performed 1 repurchase operation: continuing its recent trend of disappointingly-inadequate jamjob-funding, it provided a $4.25billion, overnight repurchase with $4.053billion in T-backed collateral undertaken at a 3.8 basis point discount to the Fed Funds Rate (FFR).

Major US Indices

Just one clear divergence signal this session - a selling divergence that coincided with the Dow's tease-break of the first hour high. It took a little bit of time for that particular push to stall, but as usual the divergence approach paid off. It will be interesting to see if the grey moving average line (currently siting just below 10340) will provide the catalyst for a bounce tomorrow (if it's tested).

Several people whose work I admire were of the opinion that 1200 would hold on the S&P futures last night. More accurately, they started to think that once 1206 was broken to the upside: but as I said at the time (while 'they' were all waiting for a pullback to 1202), the market continued down through 1202 and only paused at 1200 thanks to a concatenation of numbers (10400 on the Dow futures was the 'primary trampoline', with the S&P futures at 1201) ... but all of them gave way eventually. 

About the only positive - technically speaking - about the session was that the Dow never seriously tested its early-session low (the S&P500 - both cash and futures -made new lows in the afternoon, as did the technology indices).

The Dow Jones Industrial Average lost 32.89 points (0.32%), closing out the day at 10344.98 points. After dipping to 10336 at the open - the result of reaction to the AMZN/BA warnings - the Dow spiked almost 100 points in about 90 minutes, to an intraday high of 10434.47 before the CCI divergence turned it down... and how. 

Within the blue-chip index, 14 stocks rose, the biggest gainers being Du Pont (DD, +1.72% to $41.50) and JPMorganChase (JPM, +1.06% to $36.10), which accounted for 9 Dow points between them. Losers in the Dow numbered 16 and were led by Boeing (BA, -2.79% to $65.10) and Mcdonalds (MCD, -2.09% to $32.31), with these two stocks contributing -20 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the losers by 230.8m shares to 179.1m.

The broader S&P500 declined 5.16 points (0.43%), ending the day at 1191.38. Within the index, gainers numbered 175, while 304 S&P500 stocks fell for the day. Volume was tilted 2.0:1 in favour of the losers with 1406.84 million units traded in the losers as compared with 701.45 million traded in the winners .

Over at Times Square, the Nasdaq Composite dipped 9.4 points (0.45%), to close at 2100.05, while larger-cap technology issues fared worse with the Nasdaq100 losing 10.68 points (0.67%), to end at 1575.14 points. Within the tech benchmark, gainers numbered 28, while 65 Nasdaq100 stocks fell for the day. Volume was tilted 2.2:1 in favour of the losers with 535.95 million traded in the losers compared to 245.88 million in the winners .

NYSE Volume was super-chunky, with 2.49 billion shares changing hands, while Nasdaq Volume was chunky, with 1.89 billion shares traded.

Major Market Statistics
Index	Close	Gain(Loss)	%
Dow Jones Industrial Average	10344.98	-32.89	-0.32%
S&P500	1191.38	-5.16	-0.43%
Nasdaq Composite	2100.05	-9.4	-0.45%
Nasdaq100	1575.14	-10.68	-0.67%
NYSE Volume	2.49bn	-	-
Nasdaq Volume	1.89bn	-	-

Bellwethers

My 9-stock "bellwethers" group rose by an average of 0.47%, thanks mostly to bounces in the Toxic Twins (Fannie Mae and Freddie Mac). Odd that these two mortgage-pimps should bounce, given rising long rates. Also, I think that Citigroup is being held up primarily so that its handlers can sell some calls in tomorrow's early going: for once I think that it's not acting as a bellwether.

• General Electric (GE) -$0.21 (0.62%) to $33.70;
• Citigroup (C) +$0.48 (1.06%) to $45.65;
• Wal Mart (WMT) +$0.19 (0.42%) to $45.58;
• I.B.M. (IBM) -$0.47 (0.56%) to $82.86;
• Intel (INTC) -$0.04 (0.17%) to $23.07;
• Cisco Systems (CSCO) -$0.02 (0.12%) to $17.10;
• eBay (EBAY) +$0.29 (0.76%) to $38.30;
• Fannie Mae (FNM) +$0.98 (2.13%) to $46.89; and
• Freddie Mac (FRE) +$0.82 (1.37%) to $60.75.

Market Breadth & Internals

NYSE declining Issues beat out advancers by 2214 to 1080, for a single-day A/D reading of -1134; and Nasdaq losers exceeded gainers by 1779 to 1206. The 10-day moving average of the A/D line fell to -237.8 on the NYSE, while the 10dma of the Nasdaq A/D fell to -118.2.

On the NYSE declining volume was greater than volume in advancing issues by 1620.7 to 815.5 million shares; On the Nasdaq declining volume exceeded volume in advancing issues by 1233.1 to 621.6 million shares.

62 NYSE-listed stocks rose to new 52-week highs, and 181 posted fresh 52-week lows, while on the Nasdaq there were 78 stocks that hit new 52-week highs, and 74 which fell to fresh 52-week lows.

Market Breadth Statistics
	NYSE	Nasdaq
Advancers	1080	1206
Decliners	2214	1779
Advancing Volume (m)	815.47	621.6
Declining Volume (m)	1620.71	1233.14
New Highs	62	78
New Lows	181	74

Market Sentiment Statistics
Index	Close	Gain(Loss)	%
CBOE Volatility Index	14.59	0.06	0.41%
CBOE Nasdaq Volatility Index	15.87	0.59	3.86%
Equity Put-Call Ratio	0.81	0.18	28.57%
10-day PCR	0.70	0	0%
SPX-VIX Ratio	81.7	-0.69	-0.84%

Bond Market Analysis

Bonds fell sharply at the long end, with the yield on the benchmark 30-year Treasury bond rising 8.3 bps to 4.796%. The 30-year bond dropped almost a full point, finishing the session at 111-16/32: yet again, I express my thanks to Crom (and Odin, and the Flying Spaghetti Monster)  for the heads-up that prompted me to exit the long position in the bonds (initiated at 112-19/32) off at 113-7/32 for a nice 25% gain in two sessions (there was a re-load also, but recall that I didn't 'claim' it despite its outperformance of the initial trade).

The middle of the yield curve was broadly lower: five year yields rose to 4.46%, and ten-year yields rose to 4.591%.

Spreads between short-dated (2-yr) Treasuries and high-grade corporate bonds of similar maturity profiles were 10.0 bps wider at 18.0 basis points; spreads between longer dated Treasuries and their corporate AAA counterparts rose to 51.0 bps for 10-year AAA, and 69.5 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 19.0 bps tighter at 41.0 basis points and the 10-year AAA-A spread 1.0 bp wider at7.0 bps.

Treasury Yields
Index	Close	Gain(Loss)	%
UST 13wk (yld)	3.805	-0.032	-0.83%
UST 2Y (yld)	4.36	0.04	0.93%
UST 5Y (yld)	4.46	0.081	1.85%
UST 10Y (yld)	4.591	0.083	1.84%
UST 30Y (yld)	4.796	0.083	1.76%

The Banks Index posted a rise of 0.38 points (0.39%), ending the day at 97.71; within the index,

• Fifth Third Bancorp (FITB) +$1.03 (2.72%) to $38.95;
• JPMorganChase (JPM) +$0.38 (1.06%) to $36.10;
• Citigroup (C) +$0.48 (1.06%) to $45.65;
• State Street (STT) +$0.55 (1.03%) to $54.10; and
• Washington Mutual (WM) +$0.37 (0.98%) to $38.06.

The Broker-dealer Index advanced 1.39 points (0.78%), at 179.86; the ticket clippers lined up as follows -

• Legg Mason (LM) +$5.00 (4.83%) to $108.48;
• E*Trade (ET) +$0.41 (2.26%) to $18.58;
• Raymond James (RJF) +$0.47 (1.44%) to $33.15;
• Charles Schwab (SCH) +$0.16 (1.12%) to $14.47; and
• Merrill Lynch (MER) +$0.42 (0.67%) to $63.48.

The Philadelphia SOX (Semiconductor) index slid 2.56 points (0.58%), ending the day at 439.58

• Teradyne (TER) -$0.43 (2.98%) to $14.00;
• Marvell Tech Group (MRVL) -$0.87 (1.88%) to $45.49;
• Taiwan Semiconductors (TSM) -$0.13 (1.65%) to $7.74;
• Applied Materials (AMAT) -$0.26 (1.51%) to $16.93; and
• Linear Technology (LLTC) -$0.45 (1.27%) to $34.95.

Gold & Silver Markets

Gold fell by $1.70 (0.36%) to close at $473 per ounce.

The Gold Bugs Index lost 6.76 points (2.94%), ending the day at 223.49

• Meridian Gold (MDG) -$1.65 (8%) to $18.97;
• Hecla Mining (HL) -$0.27 (6.92%) to $3.63;
• Golden Star (GSS) -$0.14 (5.15%) to $2.58;
• Kinross Gold (KGC) -$0.36 (5.03%) to $6.79; and
• Randgold Resources (GOLD) -$0.69 (4.65%) to $14.15.

Silver rose $0.04 (0.49%) to close at $7.86 per ounce. 

The Gold and Silver Index (XAU) lost 2.79 points (2.57%), to 105.77 points.

• Durban Rooderpoert Deep (DROOY) -$0.14 (10.07%) to $1.25;
• Meridian Gold (MDG) -$1.65 (8%) to $18.97;
• Kinross Gold (KGC) -$0.36 (5.03%) to $6.79; and
• Newmont Mining (NEM) -$1.57 (3.44%) to $44.09.

Precious Metals and Indices
Index	Close	Gain(Loss)	%
Gold	473.00	-1.70	-0.36%
Silver	7.86	0.04	0.49%
PHLX Gold and Silver Index	105.77	-2.79	-2.57%
AMEX Gold BUGS Index	223.49	-6.76	-2.94%

Oil Market

You might read some palaver today about how Oil fell after larger-than-expected inventory data. Well, I'm here to tell you the opposite. It rose - sharply - after the inventory data, and two hours after the data was released it was still knocking on the door of $63. The failure to get through $63 was a technical failure, and had nothing to do with the Inventories numbers.

Regardless of the reason for the decline, I'm chuffed that I didn't get all sweaty-palmed about it - as I said, it would have taken a close above $65 to get me back in the bull camp. As it now stands, crude has 'washed off' its oversold condition and can now resume its attempts to break $60 meaningfully.

This session Oil lost ground, shedding $1.78 per barrel, closing at $60.66 per barrel. It printed a 'spike' low at $58.86 as the big players slammed the market around in the seconds after the inventories numbers - that was pure stop-clearing, and from there the market shot skywards with some real venom. Only when the thing failed technically did the oil market (and the entire energy complex) reverse back down.

From here it seems almost a 'given' that Crude will be capable of testing my target of $57-ish.

The Oil and Gas Index (XOI) slid 2.58 points (0.27%), ending the day at 967.24

• Exxon Mobil (XOM) -$1.00 (1.75%) to $56.20;
• ChevronTexaco (CVX) -$1.01 (1.72%) to $57.66; and
• Sunoco (SUN) -$0.66 (0.91%) to $72.12.

The Oil service stocks (OSX) Index advanced 0.29 points (0.18%), at 165.6

• Tidewater (TDW) +$0.86 (1.9%) to $46.16;
• Schlumberger (SLB) +$1.48 (1.73%) to $87.15; and
• Noble Corp (NE) +$0.84 (1.29%) to $66.09.

Energy Complex
Index	Close	Gain(Loss)	%
Reuters CRB	334.51	-2.92	-0.87%
Crude Oil Light Sweet	60.66	-1.78	-2.85%
Heating Oil	1.8986	-0.03	-1.76%
Natural Gas	14.06	-0.28	-1.94%
Unleaded Gas	1.6211	-0.08	-4.62%
AMEX Oil Index	967.24	-2.58	-0.27%
Oil Service Index	165.6	0.29	0.18%

Currency Markets

USD Exchange Rates
Index	Close	Gain(Loss)	%
US Dollar Index	89.49	0.26	0.29%
Euro	1.2068	-0.0038	-0.31%
Yen	115.865	0.835	0.73%
Sterling	1.7748	-0.0096	-0.54%
Australian Dollar	0.7548	-0.0019	-0.25%
Swiss Franc	1.2831	0.0065	0.51%
Canadian Dollar	0.8548	0.0037	0.43%