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Attention...
Breadth and the index internals (the advance-decline tilt, the volume tilt, and the clear abandonment of all hope in the last hour) encourage us to think about the long side. As a cheeky first step, today is the day to have a crack at an index call (on the Australian market) - or long an Index CFD - at a critical time during the session (SPISpy subscribers will get a notification).
It's interesting to notice what happens the moment markets start behaving in ways that politicians don't like - they immediately start interfering with them. That's typical of the parasite class. This is typical of people who have nothing in their intellectual toolkit except megalomania and personal avarice.
The only skill possessed by these vermin is the ability to con a little more than half of those who are dumb enough to vote. In countries that have a Stalinesque mandatory voting system - like Australia - the government always gets way less than half the vote... politicians claim a 'mandate' as a result of being some other guy's fourth choice.
The moment anything behaves in a way that they don't like, they try to push it around. Are there sections of the community that don't believe in some myth expounded by your financial backers? OK... outlaw Atheism. (Ha ha - you thought I was going to mention the Holocaust®, didn't you). Are your peons getting uppity about the amount of cash you rape off their paypackets? Send in the Armed Goons.
That's the natural tendency of the despot, you see - and all politicians are despots-in-waiting. The Rudd government in Australia is about to bring civil liberty to a par with China and North Korea: they are going to (try to) censor the internet.
Of course.the way they sell it to the housewives of the world is to say they are doing it to protect the children. It's always about the children. I wrote over five years ago that all the kiddie-porn crap that we are told about was a ruse, intended to justify an eventual attempt to censor the internets tubes... because government hates the idea that there is a media that they can't buy.
Two salient Rant-quotes:
from October 27, 2005:
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).
and (from October 23, 2004 )
I am highly suspicious of this recent "child porn" "sweep. There. I've said it.
Folks are no longer sufficiently scared by "terrorism" (read: the only way the Third World can try and force the First World to back off), so it's time for a new bogeyman. And everybody loves kiddies and is viscerally appalled by anyone who would do harm to them.
This "kiddie porn" imbroglio (or even frisson) strikes me as a very obvious government-agency-as-protector-of-the-innocent exercise. It is aimed at keeping housewives in a state of high anxiety and making the general public view government enforcement agencies as soething other than the means by which government arrogates to itself the exclusive right to organised violence.
Ask yourself how easy it is to "push" data to someone's PC.
And of course government is always trying to get its oars wet whenever the financial markets fall... they don't have a hope in hell of changing any outcome, but like Management Consultants they feel obliged to be seen to be doing something.
Economic News
Building Permits for October fell by 12.1% (to 708000 units from September's 805000). For the month. That was about 8% below the consensus guess of 765000; Housing Starts were down as well, but 'only' by 4.5%.
The Consumer Price Index fell by 1% (consensus thought it might fall 0.75%); excluding food and energy, the fall was only 0.1%.
Let's be clear on this - the 'deflation' thesis is questionable at best. You will never convince me that the Fed can expand money by 45% in six weeks, without setting off the start of a Zimbabwe-style inflation.
The deflation hypothesis says that the monetary transmission mechanism will effectively break - and the huge increase in base money will not feed through to broader measures of money, since Bank deleveraging and credit standards, and tapped-out consumers, will combine to reduce the segment of the money supply that is determined in the private sector.
We all know now that Japan's "quantitative easing" was not successful in reflating Japan's economy - there was too much balance sheet hangover, and the quant easing had no obvious effect on prices (although the question must be 'relative to what?'). So despite massive stimulus, there was no inflation in Japan for 20 years.
I admit that it is almost 15 years since I got a First in Monetary Economics (ECO3660, from memory), but I am reasonably certain that I could mount a convincing case as to why the dribble-rate money creation (the Japanese case) is drastically different from the Zimbabwe-style 5%-a-week money growth of recent times in the US.
Headline Indices
The Dow Jones Industrial Average lost a lazy 427.47 points (5.07%) to 7997.28 points. The index high for the day was 8504.64, while the low was 7987.08.
The Dow has given back everything back to March 31 2003 on a closing basis. Today's intraday low on the Dow was slightly higher than the low on November 13th (which was 7947) and over 200 points higher than the low on October 10th (7747).
The Dow Jones Industrial Average index (DJI) contains 30 components; the total volume traded in the index was 1.59bn shares. All 30 Dow components fell.
The main decliners (in percentage terms) were -
- Citigroup (C) -1.96 (23.4%) to $6.40 on volume of 340.28m shares;
- AIG (AIG) -0.39 (20%) to $1.56 on volume of 62.2m shares;
- Bank Of America (BAC) -2.13 (14%) to $13.06 on volume of 172.36m shares;
- Alcoa (AA) -1.32 (13.9%) to $8.16 on volume of 33.46m shares; and
- JPMorganChase (JPM) -3.67 (11.4%) to $28.47 on volume of 89.89m shares.
The S&P500 Index lost 52.54 points (6.12%) to 806.58 points. The S&P500 index (SPX) contains 500 components; the total volume traded in the index was 5363.74m units. Within the index, only 6 issues rose, with aggregate volume of a tiny 58.58m units; 482 issues fell, with aggregate volume of 5.30bn shares.
The main decliners (in percentage terms) were -
- Lincoln National (LNC) -4.85 (39.9%) to $7.31 on volume of 17.71m shares;
- Liz ClaiborneInc. (LIZ) -1 (31.9%) to $2.13 on volume of 4.73m shares;
- Hartford Financial Svc.Gp. (HIG) -2.76 (28.6%) to $6.88 on volume of 28.51m shares;
- ProLogis (PLD) -1.16 (25.1%) to $3.46 on volume of 13.84m shares; and
- Ford Motor (F) -0.42 (25%) to $1.26 on volume of 127.28m shares.
The Nasdaq Composite lost 96.85 points (6.53%) to 1386.42 points and the Nasdaq100 lost 68.15 points (5.9%) to 1087.60 points..
The Nasdaq100 index (NDX) contains 100 components; the total volume traded in the index was 1136.21m units. Within the index, only 1 stock rose, with aggregate volume of 10.27m units; 97 issues fell, with aggregate volume of 1.1bn units.
Today the index fell by 68.15 points (5.9%) to 1087.6 points. The main decliners (in percentage terms) were -
- UAL (UAUA) -2.47 (22.4%) to $8.56 on volume of 10.73m shares;
- Yahoo! (YHOO) -2.41 (20.9%) to $9.14 on volume of 57.36m shares;
- Sirius Satellite Radio (SIRI) -0.038 (19%) to $0.162 on volume of 66.16m shares;
- Virgin Media (VMED) -0.85 (18.1%) to $3.84 on volume of 9.37m shares; and
- Level 3 Communications (LVLT) -0.15 (16.7%) to $0.75 on volume of 12.96m shares.
Volatility
The CBOE Volatility Index advanced +6.62 points (9.79%) to 74.26 points and the CBOE Nasdaq100 Volatility Index advanced +6.35 points (9.3%) to 74.66 points..
Breadth and Internals
A total of 3739 issues traded today on the NYSE; today's total volume was 3.03bn shares. A total of 303 stocks posted gains for the day, and volume in advancing issues totalled 380m shares. Exerting downwards pressure on the index were 3390 losers, which accounted for a total declining volume of 2.65bn shares. 20 stocks made new 1-year highs on the NYSE, while 1037 shares plumbed new 52-week depths.
On the Nasdaq 2990 tickers traded today; total Nasdaq volume was 2.36bn shares. A total of 336 stocks posted gains for the day, with aggregate volume of just 50m shares changing hands in the day's winners. The red zone of the Nasdaq exchange comprised 2568 losers, and total declining volume was 2.3bn shares. 2 Nasdaq-listed stocks hit new 52-week highs, while 834 shares dipped to new 1-year lows.
| Major Market Statistics | |||
| Index | Close | Gain(Loss) | % |
| Dow Jones Industrial Average | 7997.28 | -427.47 | -5.07% |
| S&P500 Index | 806.58 | -52.54 | -6.12% |
| Nasdaq Composite | 1386.42 | -96.85 | -6.53% |
| Nasdaq100 | 1087.60 | -68.15 | -5.9% |
| CBOE Volatility Index | 74.26 | +6.62 | 9.79% |
| CBOE Nasdaq100 Volatility Index | 74.66 | +6.35 | 9.3% |
No Dow components rose
.Dow Duds:
- Citigroup (C) -1.96 (23.4%) to $6.4 on volume of 340.3m units
- Bank Of America (BAC) -2.13 (14%) to $13.06 on volume of 172.6m units
- Alcoa (AA) -1.32 (13.9%) to $8.16 on volume of 33.5m units
- JPMorganChase (JPM) -3.67 (11.4%) to $28.47 on volume of 89.9m units
- General Electric (GE) -1.61 (10%) to $14.45 on volume of 181.1m units
Most Traded Dow stocks:
- Citigroup (C) -1.96 (23.4%) to $6.4 on volume of 340.3m units
- General Electric (GE) -1.61 (10%) to $14.45 on volume of 181.1m units
- Bank Of America (BAC) -2.13 (14%) to $13.06 on volume of 172.6m units
- Microsoft (MSFT) -1.33 (6.8%) to $18.29 on volume of 102.4m units
- JPMorganChase (JPM) -3.67 (11.4%) to $28.47 on volume of 89.9m units
Precious Metals
Precious metals futures were again mixed -
| Precious Metals Futures | |||
| Index | Close | Gain(Loss) | % |
| Gold | 735 | 2.3 | 0.31 |
| Silver | 9.25 | -0.3 | -3.14 |
| Palladium | 187.65 | -27.65 | -12.84 |
| Platinum | 822 | -15 | -1.79 |
The Gold Bugs index (XAU) contains 16 components; the total volume traded in the index was 159.49m units. Within the index, 3 issues rose, with aggregate volume of 21.43m units; 13 issues fell, with aggregate volume of 138.06m units.
Today the index fell by 3.81 points (5.03%) to 71.91 points. The main decliners (in percentage terms) were -
- Coeur d'Alene (CDE) -0.09 (18%) to $0.41 on volume of 11.42m shares;
- Agnico Eagle Mines (AEM) -4.97 (16%) to $26.18 on volume of 8.54m shares;
- Silver Stand Resources (SSRI) -0.73 (9.1%) to $7.26 on volume of 1.09m shares;
- Gold Fields Ltd (GFI) -0.55 (8.9%) to $5.6 on volume of 7.4m shares; and
- Kinroos Gold (KGC) -0.9 (7.5%) to $11.13 on volume of 13.54m shares.
Energy Complex
Energy futures were broadly softer -
| Energy Futures | |||
| Commodity | Close | Gain(Loss) | % |
| Crude Oil | 53.22 | -1.17 | -2.15 |
| Heating Oil | 1.7597 | 0.0018 | 0.1 |
| Natural Gas | 6.7 | 0.184 | 2.82 |
| Gasoline RBOB | 1.096 | -0.0408 | -3.59 |
| Ethanol | 1.687 | -0.001 | -0.06 |
The Oil Services index (OSX) contains 15 components; the total volume traded in the index was 108.98m units. Within the index, all 15 issues fell.
Today the index fell by 8.87 points (6.61%) to 125.29 points. The main decliners (in percentage terms) were -
- National Oilwell Varco (NOV) -2.63 (10.4%) to $22.72 on volume of 8.96m shares;
- Rowan Co (RDC) -1.43 (8.9%) to $14.62 on volume of 6.58m shares;
- Oceaneering International (OII) -2.26 (8.8%) to $23.31 on volume of 0.95m shares;
- Nabors Industries (NBR) -1.2 (8.5%) to $12.89 on volume of 7.12m shares; and
- Smith International (SII) -2.35 (8.5%) to $25.34 on volume of 4.06m shares.
Currency Futures
Currency futures were pretty stagnant on a closing basis despite the weakness in equities -
| Currency Futures | |||
| Index | Close | Gain(Loss) | % |
| U.S. Dollar Index | 87.95 | 0.2 | 0.23 |
| Euro FX | 1.2588 | 0.0025 | 0.2 |
| Swiss Franc | 0.8264 | -0.0043 | -0.52 |
| Australian Dollar | 0.6436 | 0.0014 | 0.22 |
| Canadian Dollar | 0.8009 | -0.0068 | -0.84 |
| Japanese Yen | 1.0379 | 0.0002 | 0.02 |
| New Zealand Dollar | 0.5457 | 0.0009 | 0.17 |
Bellwethers
The nine-stock group that makes up the Rant bellwethers declined on average by 9.9%. The fallout occurred as follows:
- General Electric (GE) -1.61 (10.02%) to $14.45 on volume of 181.13m units.
- Citigroup (C) -1.96 (23.44%) to $6.40 on volume of 340.31m units.
- Wal-Mart (WMT) -1.72 (3.26%) to $51.00 on volume of 29.69m units.
- IBM (IBM) -4.11 (5.13%) to $75.97 on volume of 12.56m units.
- Intel (INTC) -0.62 (4.73%) to $12.49 on volume of 73.31m units.
- Cisco Systems (CSCO) -1.37 (8.33%) to $15.08 on volume of 72.24m units.
- Google (GOOG) -17.24 (5.8%) to $280.18 on volume of 7.8m units.
- Fannie Mae (FNM) -0.09 (19.15%) to $0.38 on volume of 37.19m units.
- Freddie Mac (FRE) -0.06 (9.68%) to $0.56 on volume of 9.58m units.
Other Indices of Interest...
The Banks index (BKX) contains 24 components; the total volume traded in the index was 958.22m units. All 24 issues fell, with aggregate volume of 958.22m units.
Today the index fell by 5.06 points (11.08%) to 40.62 points. The main decliners (in percentage terms) were -
- Citigroup Inc (C) -1.96 (23.4%) to $6.4 on volume of 340.28m shares;
- Keycorp (KEY) -1.79 (18.9%) to $7.7 on volume of 12.69m shares;
- National City (NCC) -0.32 (15.2%) to $1.78 on volume of 48.87m shares;
- State Street (STT) -5.43 (15.2%) to $30.33 on volume of 6.94m shares; and
- Bank Of America (BAC) -2.13 (14%) to $13.06 on volume of 172.36m shares.
The Semiconductor index (SOX) contains 18 components, all of them fell today; the total volume traded in the index was 246.78m units.
Today the index fell by 14.79 points (7.71%) to 177.1 points. The main decliners (in percentage terms) were -
- Micron Technology (MU) -0.39 (15.9%) to $2.07 on volume of 27.78m shares;
- Advanced Micro Devices (AMD) -0.38 (15.2%) to $2.12 on volume of 17.1m shares;
- Infineon Tech (IFX) -0.38 (14.7%) to $2.21 on volume of 1.77m shares;
- Teradyne (TER) -0.43 (11.6%) to $3.27 on volume of 2.52m shares; and
- Applied Materials (AMAT) -1.08 (11.4%) to $8.42 on volume of 28.09m shares.
The ChildKiller ("Defence") index (DFX) contains 17 components; the total volume traded in the index was 223.14m units. All 17 fell.
Today the index fell by 15.54 points (6.57%) to 221.16 points. The main decliners (in percentage terms) were -
- Gencorp (GY) -0.46 (18.8%) to $1.99 on volume of 0.54m shares;
- General Electric (GE) -1.61 (10%) to $14.45 on volume of 181.02m shares;
- Teledyne Tech (TDY) -3.83 (9.2%) to $37.68 on volume of 0.18m shares;
- Esterline Tech (ESL) -2.41 (8.1%) to $27.32 on volume of 0.17m shares; and
- Embraer Empresa (ERJ) -1.13 (7.8%) to $13.37 on volume of 0.82m shares.
