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Yesterday's USRant predicted a bounce today; if you were a Super Sleuth you might have got the hint by decoding the phrase "Tomorrow should see a bounce, but don't be surprised if it takes ages to get traction." You don't have to be bloody Leonardo da Bloody Vinci to work out that Code, eh?
Well, the bounce got traction all right - and exactly as I surmised, the Dow took an hour to get out of a 20-point trading range, then shot up like a bulldog with Tabasco on his goolies. (Note - I don't know what that looks like: I was just trying to think up an alternative to "like a duck shot in the bum". I would never do such a thing. Don't even think of trying that at home. No bulldogs were harmed in the Ranting of this Rant).
Bulldogs aside (speaking of which - GO PIES), as I was saying... one hour in, off she shot. Up 90 points in a little under an hour and a half, until it ran into 11025-ish. It was like pitting a Trabant against a Mack truck. For the rest of the session, the plucky little Trabant tried to keep itshead up, but just kept getting smacked in the face.
When you consider that the test of 11025 by the cash Dow coincided with the test of 1250 by the cash S&P, you will not be surprised that the twin test failed. Thanks to generous dollops of lipstick, the Sow was kept in the green for the session.
It's late June, and the Pies are still in the eight. Maybe this is the start of the Kingdom of the AntiChrist. That would also explain why my bloody PC experienced the BSoD four times... each time at a slightly different point in preparing this very Rant what you are readin' right now.
Come, friendly bombs, and fall on Microsoft...
Federal Reserve Open Market Operations
The Fed's Open Market Operations desk did not enter the market..
Major US Indices
The Dow Jones Industrial Average posted a rise of 32.73 points (0.3%), closing out the day at 10974.84 points. The index hit an intraday high of 11029.83 (11025-ish), after falling to its session low of 10938.42 just after the end of the first half-hour. At the end of the first hour, that same level was re-tested, and held... and then off she shot, just as forecast. (Did I mention that? That I forecasted-ed it? Bloody BEFORE it bloody happened? I do that sometimes...)
Within the blue-chip index, 19 stocks rose, the biggest gainers being Verizon Communications (VZ, +1.77% to $32.74) and Caterpillar (CAT, +1.49% to $70.99), which accounted for 13 Dow points between them. Losers in the Dow numbered 10 and were led by General Motors (GM, -2.66% to $25.65) and Hewlett Packard (HPQ, -2.11% to $32.86), with these two stocks contributing -11 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the gainers by 224.2m shares to 196.2m.
The broader S&P500 was basically unchanged - it dropped 0.02 points (let's call that 0%), to 1240.12. Within the index, gainers numbered 197, while 258 S&P500 stocks fell for the day. Volume was tilted 1.2:1 in favour of the losers with 1007.23 million units traded in the losers as compared with 832.13 million traded in the winners. Notice yet again that, in comparison to the other indices, the Dow looks like a sow that's been lipsticked up like a $20 hooker? Odd, that.
Over at Times Square, the Nasdaq Composite slid 3.35 points (0.16%), to close at 2107.06, while larger-cap technology issues fared better with the Nasdaq100 losing 0.62 points (0.04%), to end at 1548.32 points. Within the tech benchmark, gainers numbered 48, while 45 Nasdaq100 stocks fell for the day. Volume was tilted 1.3:1 in favour of the winners with 384.77 million traded in the winners compared to 296.47 million in the losers. You could almost call it square in the internals.
NYSE Volume was super-chunky, with 2.23 billion shares changing hands, while Nasdaq Volume was pretty modest, with 1.62 billion shares traded.
| Major Market Statistics | |||
| Index | Close | Gain(Loss) | % |
| Dow Jones Industrial Average | 10974.84 | 32.73 | 0.3% |
| S&P500 | 1240.12 | -0.02 | 0% |
| Nasdaq Composite | 2107.06 | -3.35 | -0.16% |
| Nasdaq100 | 1548.32 | -0.62 | -0.04% |
| NYSE Volume | 2.23bn | - | - |
| Nasdaq Volume | 1.62bn | - | - |
Bellwethers
My 9-stock "bellwethers" group rose by an average of 0.10%
- General Electric (GE) -$0.02 (0.06%) to $33.70;
- Citigroup (C) +$0.19 (0.4%) to $48.01;
- Wal Mart (WMT) +$0.16 (0.33%) to $48.43;
- I.B.M. (IBM) +$0.32 (0.41%) to $77.99;
- Intel (INTC) -$0.09 (0.49%) to $18.15;
- Cisco Systems (CSCO) -$0.09 (0.45%) to $19.73;
- eBay (EBAY) +$0.06 (0.2%) to $30.17;
- Fannie Mae (FNM) +$0.05 (0.11%) to $47.16; and
- Freddie Mac (FRE) +$0.27 (0.47%) to $57.84.
Market Breadth & Internals
NYSE declining Issues beat out advancers by 1816 to 1422, for a single-day A/D reading of -394; and Nasdaq losers exceeded gainers by 1691 to 1338. The 10-day moving average of the A/D line rose to -500.6 on the NYSE, while the 10dma of the Nasdaq A/D rose to -488.4.
On the NYSE declining volume was greater than volume in advancing issues by 1227.8 to 944.7 million shares; Nasdaq advancing volume was greater than volume in decliners by 850.9 to 751.4 million shares.
24 NYSE-listed stocks rose to new 52-week highs, and 170 posted fresh 52-week lows, while on the Nasdaq there were 38 stocks that hit new 52-week highs, and 163 which fell to fresh 52-week lows.
So every internal measure - new highs/lows, advancing/declining numbers and volumes, all say "Blyecch". And yet the Dow rose. Lipstick on a pig, I tells ya.
| Market Breadth Statistics | ||
| NYSE | Nasdaq | |
| Advancers | 1422 | 1338 |
| Decliners | 1816 | 1691 |
| Advancing Volume (m) | 944.65 | 850.86 |
| Declining Volume (m) | 1227.82 | 751.43 |
| New Highs | 24 | 38 |
| New Lows | 170 | 163 |
| Market Sentiment Statistics | |||
| Index | Close | Gain(Loss) | % |
| CBOE Volatility Index | 16.69 | -1.14 | -6.39% |
| CBOE Nasdaq Volatility Index | 21.03 | -1.01 | -4.58% |
| Equity Put-Call Ratio | 0.78 | -0.23 | -22.77% |
| 10-day PCR | 0.88 | -0.01 | -1.27% |
| SPX-VIX Ratio | 74.3 | 4.75 | 6.83% |
Bond Market Analysis
Bonds fell at the long end, with the yield on the benchmark 30-year Treasury bond rising 1.3 bps to 5.196%. 5.25 seems close - and a wholeswathe of adjustable-rate mortgages are about to fall due for re-rating. Can you spell "Honey, We Lost The House?" (I know... mortgages hinge of 10-years these days... but the 10-year yield is only 4bps behind the 30).
The middle of the yield curve was broadly lower: five year yields rose to 5.133%, and ten-year yields rose to 5.157%.
Spreads between short-dated (2-yr) Treasuries and high-grade corporate bonds of similar maturity profiles were 2.0 bps tighter at 38.0 basis points; spreads between longer dated Treasuries and their corporate AAA counterparts fell to 71.0 bps for 10-year AAA, and 102.5 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 3.0 bps looser at 30.0 basis points and the 10-year AAA-A spread 6.0 bps looser at 24.0 bps.
| Treasury Yields | |||
| Index | Close | Gain(Loss) | % |
| UST 13wk (yld) | 4.8 | 0.045 | 0.95% |
| UST 2Y (yld) | 5.19 | 0.08 | 1.57% |
| UST 5Y (yld) | 5.133 | 0.015 | 0.29% |
| UST 10Y (yld) | 5.157 | 0.012 | 0.23% |
| UST 30Y (yld) | 5.196 | 0.013 | 0.25% |
The Banks Index gained 0.16 points (0.15%), to 106.29; within the index,
- JPMorganChase (JPM) +$0.54 (1.35%) to $40.49;
- Bank Of NY (BK) +$0.29 (0.92%) to $31.89;
- Wachovia (WB) +$0.38 (0.72%) to $53.01;
- Golden West Financial (GDW) +$0.39 (0.54%) to $72.64; and
- Washington Mutual (WM) +$0.19 (0.43%) to $44.53.
The Broker-dealer Index gained 1.5 points (0.75%), closing at 202.37; the ticket clippers lined up as follows -
- E*Trade (ET) +$0.41 (1.98%) to $21.14;
- Bear Stearns (BSC) +$1.50 (1.15%) to $132.14;
- Goldman Sachs (GS) +$1.51 (1.05%) to $145.26;
- Raymond James (RJF) +$0.27 (0.97%) to $28.12; and
- Ameritrade (AMTD) +$0.12 (0.79%) to $15.25.
The Philadelphia SOX (Semiconductor) index shed 3.13 points (0.7%), closing at 446.05
- Marvell Tech Group (MRVL) -$1.99 (3.79%) to $50.47;
- Teradyne (TER) -$0.24 (1.66%) to $14.18;
- National Semiconductors (NSM) -$0.23 (0.95%) to $23.93;
- Altera (ALTR) -$0.10 (0.57%) to $17.46; and
- Intel (INTC) -$0.09 (0.49%) to $18.15.
Gold & Silver Markets
Gold rose $8.10 (1.42%) to close at $580.50 per ounce. The entire world is having a little existential crisis vis a vis Gold. How much easier would it have been for them to have read my clear statement (when Gold was $274, Oil as $19 a barrel and the Euro was $0.84)... "Buy Gold. Buy Oil. Buy Euro, Sell S&P"... aaah, those were the days - when interesting vehicles were not being pawed over by True Believers.
It's the True Believers that cause all this volatility - Da Boyz know that no matter how much they batter the thing around, the True Believers will dive right back in at the first sign of strength, thence to be followed by Momentum Traders, and then by Breakout Traders, and then by NuffNuffs... and then Whoooshka... down she comes again.
Don't get me wrong - Gold will eventually surpass $1000 an ounce, and maybe even $2000 or $3000. But by the time it gets there, there will exist a group of (bankrupt) people whose only exposure to Gold has been long, and yet they will have bought at or near every swing top, and exited at or near every swing low. For some reason, there is a type of investor who finds it easy to BUY something that is going parabolic... that's why for weekly-basis analysis, theCommitments of Traders data is so important.
The Gold Bugs Index advanced 8.35 points (2.94%), ending the day at 292.78
- Golden Star (GSS) +$0.14 (5.45%) to $2.71;
- Eldorado Gold (EGO) +$0.22 (5.15%) to $4.49;
- Agnico Eagle (AEM) +$1.35 (5%) to $28.37;
- Randgold Resources (GOLD) +$0.83 (4.62%) to $18.80; and
- Gold Fields (GFI) +$0.79 (4.57%) to $18.07.
Silver rose $0.3 (3.01%) to close at $10.27 per ounce. The Gold and Silver Index (XAU) gained 2.75 points (2.21%), closing at 127.1 points.
- Durban Rooderpoert Deep (DROOY) +$0.06 (5.17%) to $1.22;
- Agnico Eagle (AEM) +$1.35 (5%) to $28.37;
- Gold Fields (GFI) +$0.79 (4.57%) to $18.07; and
- Harmony Gold (HMY) +$0.49 (3.9%) to $13.06.
| Precious Metals and Indices | |||
| Index | Close | Gain(Loss) | % |
| Gold | 580.50 | 8.10 | 1.42% |
| Silver | 10.27 | 0.30 | 3.01% |
| PHLX Gold and Silver Index | 127.1 | 2.75 | 2.21% |
| AMEX Gold BUGS Index | 292.78 | 8.35 | 2.94% |
Oil Market
Oil lost ground, shedding $0.21 per barrel, closing at $69.34 per barrel.
The Oil and Gas Index (XOI) shed 1.43 points (0.14%), to 1019.76
- Kerr Mcgee (KMG) -$0.37 (0.75%) to $48.82;
- ConocoPhillips (COP) -$0.40 (0.68%) to $58.80; and
- Sunoco (SUN) -$0.26 (0.43%) to $60.60.
The Oil service stocks (OSX) Index shed 4.35 points (2.26%), to 188.26
- GlobalSantaFe (GSF) -$1.80 (3.49%) to $49.80;
- National Oilwells/Varco (NOV) -$1.98 (3.39%) to $56.50; and
- Baker Hughes (BHI) -$2.22 (2.88%) to $74.91.
| Energy Complex | |||
| Index | Close | Gain(Loss) | % |
| Reuters CRB | 376.5 | 2 | 0.53% |
| Crude Oil Light Sweet | 69.34 | -0.21 | -0.3% |
| Heating Oil | 1.9508 | 0.01 | 0.72% |
| Natural Gas | 6.502 | -0.39 | -5.67% |
| Unleaded Gas | 2.0167 | 0.01 | 0.74% |
| AMEX Oil Index | 1019.76 | -1.43 | -0.14% |
| Oil Service Index | 188.26 | -4.35 | -2.26% |
Currency Markets
| USD Exchange Rates | |||
| Index | Close | Gain(Loss) | % |
| US Dollar Index | 85.76 | -0.16 | -0.19% |
| Euro | 1.2578 | -0.0078 | -0.62% |
| Yen | 114.97 | 114.0923 | 12999.01% |
| Sterling | 1.8419 | -0.0017 | -0.09% |
| Australian Dollar | 0.7376 | 0.0019 | 0.26% |
| Swiss Franc | 1.2392 | 0.4251 | 52.22% |
| Canadian Dollar | 0.8939 | -0.0021 | -0.23% |
