MarketRant: USRant: Goodie Two Shoes...

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Those who decide to try and rise this little wavelet will get their heads handed to them, methinks. The rally started as nothing more than a short squeeze - because anybody who learnt in the last month what the word meant suddenly became experts and jumped short at the bottom.

That said, the rally has already recruited some actual dumb-money buying rather than short-covering. There is a big difference, and it shows. or the moment the short covering is still there, but the spiky vertical surges as short holders stops get tickled, has gone.

Gold and Oil both had good days - Gold sharply back above $900 (closing up a massive 29.80 per ounce to $912.90 per ounce), while oil added $2.45 a barrel and closed back above $89 at $89.45 a barrel.

But the big move was the 30-year bond - down over three full points to 118 9/32. 3 entire points in the bond is a massive move. The US Dollar Index also got smacked, and the USD lost 1.68 cents against the euro and 2.1 cents against the Looney. The USDX was down 0.705 to 75.87, having dipped below 75.50 during the session. Patience, my precioussss... 75 breaks, and even the Saudis will dump the dollar (they're doing that already by redirecting their oil revenues to internal development rather than buying Treasuries and US stocks... Prince Alwaleed excepted).

Economic News

A moderately busy day data wise, but nothing which gave additional confidence -

Jobless Claims for last week were lower than expected, at 301k (versus consensus of 321k). That's on a seasonally adjusted basis.In actual real numbers of actual real people making actual real claims for jobless benefits, there were 408,333 applicants for the week, versus 367,583 for the same week in 2007.
Sometimes the smell surrounding seasonal adjustments is worse than a bag of prawns that's sat in the sun for a month.
The EIA Petroleum Status Report has been prominent as focus for speculation since oil started being noticed. Today's numbers - which refer to last week's inventories, showed build for the week of 2.3 million barrels.

But the kicker was Existing Home Sales which came in at 4.89m, down 2% from the prior period - and slightly below expectations of 4.95 million.

Not much to see here, you might say.

But...

Prices for single family homes fell for the first time since data began being collected (in 1968); there is a very good chance that it represents the first year-on-year fall since the Great Depression.

The drop for median single-family dwellings was only 1.8% (i.e., a 6% real decline given inflation of 4.1%), but for now it suffices to make those "property always goes up" knobs STFU.

When you widen the analysis universe to include th speculative-investor-heavy 'condos' (blocks of flats), the median price decline becomes 6%... indicating that the median condo investor went backwards more than 12% real last year. Well played.

Fed Open Market Operations

The Fed did three repurchase operations today, only one of which had any ramifications for the market...

a 1 day 6.25bill, all in Treasury-backed, at a huge discount (108bps below Fed Funds!!)
a $8bill operation with a 7-day term, but with only $0.45 bill in Treasury-backed
a $5bill 14-day repo, none in Treasury-backed

Headline Indices

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The Dow Jones Industrial Average advanced 108.44 points (0.88%) to 12378.61 points. The index high for the day was 12399.18 (set at about 2:40 p.m.), while the low was 12241.80 at about 10:25 a.m. and r-tested at 12:40 p.m. (NY time).

The Dow's top 5 percentage gainers were

Alcoa (AA) rose 1.62 (5.55%) to 30.81 on volume of 18.3 million units
Microsoft (MSFT) rose 1.32 (4.13%) to 33.25 on volume of 147.9 million units
Hewlett-Packard (HPQ) rose 1.7 (3.94%) to 44.89 on volume of 22.3 million units
Citigroup (C) rose 0.97 (3.68%) to 27.33 on volume of 135.1 million units
Intel (INTC) rose 0.71 (3.55%) to 20.69 on volume of 94.3 million units

The top 5 percentage decliners...

AT&T (T) fell -0.94 (-2.56%) to 35.75 on volume of 44.7 million units
Wal-Mart (WMT) fell -1.25 (-2.49%) to 48.91 on volume of 34.8 million units
JP MorganChase C (JPM) fell -0.76 (-1.66%) to 44.96 on volume of 52 million units
Merck (MRK) fell -0.75 (-1.49%) to 49.56 on volume of 39.4 million units
Home Depot (HD) fell -0.39 (-1.3%) to 29.56 on volume of 26.7 million units

Most Traded Dow stocks were

Microsoft (MSFT) rose 1.32 (4.13) to 33.25 on volume of 147.9 million units
Citigroup (C) rose 0.97 (3.68) to 27.33 on volume of 135.1 million units
Intel (INTC) rose 0.71 (3.55) to 20.69 on volume of 94.3 million units
Pfizer (PFE) rose 0.19 (0.83) to 23.05 on volume of 56.3 million units
General Electric (GE) rose 0.06 (0.17) to 34.65 on volume of 53.5 million units

The S&P500 Index did better than the Dowager, advancing 13.47 points (1.01%) to 1352.07 points.

The Nasdaq Composite advanced 44.51 points (1.92%) to 2360.92 points, while the Nasdaq100 advanced 37.39 points (2.09%) to 1826.92 points.

The CBOE Volatiity Index lost 1.24 points (4.27%) to 27.78 points, and the CBOE Nasdaq100 Volatility Index lost 1.8 points (5.29%) to 32.22 points.

NYSE Total Volume totalled 5.75billion units. 3.6 billion shares traded in the 2148 advancing NYSE stocks, and the 1209 losing stocks turned over 2.07billion shares. 16 NYSE stocks made new 52-week highs, and 79 hit new one-year lows.

Nasdaq Total Volume totalled 3.02billion units; 73% of Nasdaq volume was in advancing stocks (1740 stocks gained, turning over 2.2 billion shares). The 1302 decliners traded 727 million units. Only 43 Nasdaq stocks made new 1-year highs, while 130 made new 1-year lows.

Major Market Statistics
Index	Close	Gain(Loss)	%
Dow Jones Industrial Average	12378.61	+108.44	0.88%
S&P500 Index	1352.07	+13.47	1.01%
Nasdaq Composite	2360.92	+44.51	1.92%
Nasdaq100	1826.92	+37.39	2.09%
CBOE Volatiity Index	27.78	-1.24	-4.27%
CBOE Nasdaq100 Volatility Index	32.22	-1.80	-5.29%
NYSE Total Volume	5.75bn	-	-
Nasdaq Total Volume	3.02bn	-	-

Bellwethers

The nine-stock group that makes up the Rant bellwethers advanced on average by 1.3%. The fallout occurred as follows:

General Electric (GE) up $+0.06 (0.17%) to $34.65 on volume of 53.51 million units.
Citigroup (C) up $+0.97 (3.68%) to $27.33 on volume of 135.05 million units.
Wal-Mart (WMT) down $1.25 (2.49%) to $48.91 on volume of 34.78 million units.
IBM (IBM) up $+0.81 (0.76%) to $106.91 on volume of 12.54 million units.
Intel (INTC) up $+0.71 (3.55%) to $20.69 on volume of 94.31 million units.
Cisco Systems (CSCO) up $+1.08 (4.49%) to $25.11 on volume of 68.39 million units.
Google (GOOG) up $+25.8699 (4.72%) to $574.49 on volume of 9.37 million units.
Fannie Mae (FNM) down $0.59 (1.7%) to $34.19 on volume of 26.39 million units.
Freddie Mac (FRE) down $0.52 (1.6%) to $32.00 on volume of 21.33 million units.

Other Indices of Interest...

The Banks Index got back to above 80. Index volume totalled 623.1 million shares. Of the 24 index components, 18 advanced, with volume in advancers totalling 432.4 million units. The remaining 6 stocks in the index fell, with total downside volume traded of 190.7 million shares.