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With a decline of 33.8% for the year, the Dow racked up its second worst calendar decline on record (in 1931 the Dow fell 52.7%). The high-to-low move for 2008 was a decline of 44%...the largest decline since 1932 (that year, the Dow fell 55% from high to low). The Dow close at 8776 is below its closing level in May 2003 (and while we're at it, below the closing level of March 1998).
The fall from the October 2007 all-time high to the November '08 bounce low was 48.2% (both the S&P500 and the Nasdaq100 registered falls of over 50%) - after the Crash of 1929, the market took until October 1930 to register a 50% fall from its September 1929 all time high.
In 1930, the entire world thought that the worst was over. Even those who had made fortunes on the short side (like Jesse Livermore) went long... and went broke. It took another two years - until June 1932 - for the Dow to register its post-1929 low... at 42.84, 88% below the record high and 84% below the closing level of 1929.
As we enter 2009, you might pretend that the mood is bearish. That people expect a bad year in 2009 - after all, isn't that what people are saying in the media? You can see gloomy stories pretty much everywhere.
Stories are one thing: ask yourself what people are actually doing. They are behaving as if they think the market will continue onwards and upwards - as if an economy with the worst balance sheet position since the Depression, can somehow magically be resuscitated. The Dow is almost 1400 points above its bounce-point - a 19% bounce in a little over six weeks. That's supposed to be interpreted as bearish behaviour?
The thing is this: if you have a patient whose heart valves are shot, you have two options. Option 1 is to treat the problem - replace the valve - which then requires the patient to undergo a reasonably long and painstaking recovery (as befits the gravity of the illness). Option two is to keep the guy on his feet until he dies... pump the sucker full of amphetamines and get him back out on the plantation so you can suck the last bits of life off his bones. I call this the Cheney option... it is what a parasite would choose for its host.
The US has chosen option 2 for almost the entire second half of the 20th century, and in doing so has inflated bubble after bubble after bubble. This time it's run out of things to bubble-ise.
There were two real lietmotifs for the recent pumping of the indices: first, to get Citigroup back above $5 so that fund managers did not have to kick it out of portfolios; second, to try and put just a little bit of lipstick on the pig.
Did you see what happened to the 30-year bond? it broke. A drop of 3 full points. A harbinger.
Economic News
Nobody cares... the US housing market is shot, the US consumer is broke and getting even more brokerer, and the US government's finances are about a bajillion times worse than those of the average homeless crack-whore.
Yanks are a very gullible crowd though - as evidenced by the proliferation of evangelical churches led by not-gay lisping mincing freaks. The great unwashed - who for so long thought that George Bush was going to help them - now look to that skinny mulatto metrosexual (Hussein Osama? whatever... you know the guy I mean - the latest bankers' whore in the White House). He is now the Great Off-White Hope... all because he stole a Cuban socialist's motto (Si! Se Peudes!).
And of course Saint Ben and his mate the Cancer Fairy are going to make everything perfect by inventing a golden pony that shits Mars Bars.
Headline Indices
The Dow Jones Industrial Average index (DJI) gained 108 points (1.25%) to 8776.39 points. The index high for the day was 8842.66, while the low was 8664.89.
Total volume traded in the 30 components of the index was 702.87m shares. Advancers outpaced decliners by 5 to one, with 25 advancers to 5 decliners. Advancing volume exceeded declining volume by 503.74m to 199.13m shares. The biggest gainers (percentage-wise) were -
- Bank Of America (BAC) +0.84 (6.3%) to $14.08 on volume of 111.71m shares;
- Alcoa (AA) +0.57 (5.3%) to $11.26 on volume of 29.46m shares;
- Boeing (BA) +1.42 (3.4%) to $42.67 on volume of 5.43m shares;
- American Express (AXP) +0.55 (3.1%) to $18.55 on volume of 9.6m shares; and
- Merck (MRK) +0.8 (2.7%) to $30.4 on volume of 11.98m shares.
The S&P500 index (SPX) gained 12.61 points (1.42%) to 903.25 points. Total volume traded in the 500 components of the index was 2.92bn shares. Advancers outpaced decliners by 6.8 to one, with 419 advancers to 62 decliners. Advancing volume exceeded declining volume by 2.08bn to 613.02m shares. The biggest gainers (percentage-wise) were -
- CB Richard Ellis Group (CBG) +0.52 (13.7%) to $4.32 on volume of 4.92m shares;
- MGIC Investment (MTG) +0.38 (12.3%) to $3.48 on volume of 1.71m shares;
- Liz ClaiborneInc. (LIZ) +0.25 (10.6%) to $2.6 on volume of 2.26m shares;
- American CapitalLtd. (ACAS) +0.3 (10.2%) to $3.24 on volume of 7.03m shares; and
- ProLogis (PLD) +1.28 (10.2%) to $13.89 on volume of 18.29m shares.
The Nasdaq Composite gained +26.33 points (1.7%) to 1577.03 points. while the Nasdaq100 gained +10.31 points (0.86%) to 1211.65 points.
Total volume traded in the 100 components of the index was 573.12m shares. Advancers outpaced decliners by 2.6 to one, with 70 advancers to 27 decliners. Advancing volume exceeded declining volume by 385.1m to 177.8m shares. The biggest gainers (percentage-wise) were -
- Virgin Media (VMED) +0.51 (11.4%) to $4.99 on volume of 4.65m shares;
- Level 3 Communications (LVLT) +0.07 (11.1%) to $0.7 on volume of 7.08m shares;
- Cadence Design Systems (CDNS) +0.26 (7.6%) to $3.66 on volume of 3.64m shares;
- Leap Wireless International (LEAP) +1.63 (6.5%) to $26.89 on volume of 1.35m shares; and
- Expedia (EXPE) +0.44 (5.6%) to $8.24 on volume of 2.87m shares.
Volatility
The CBOE Volatility Index dropped 1.63 points (3.92%) to 40.00 points. and the CBOE Nasdaq100 Volatility Index dropped 0.88 points (2.11%) to 40.79 points.
Breadth and Internals
A total of 3950 issues traded today on the NYSE; 3212 stocks posted gains for the day, and there were 665 losers. 23 stocks made new 1-year highs on the NYSE, while 67 shares plumbed new 52-week depths.
On the Nasdaq 3076 tickers traded today; total Nasdaq volume was 1.52bn shares. A total of 2264 stocks posted gains for the day, with aggregate volume of 1.19bn shares changing hands in the day's winners. The red zone of the Nasdaq exchange comprised 680 losers, and total declining volume was 290m shares. 23 Nasdaq-listed stocks hit new 52-week highs, while 88 shares dipped to new 1-year lows.
| Major Market Statistics | |||
| Index | Close | Gain(Loss) | % |
| Dow Jones Industrial Average | 8776.39 | +108.00 | 1.25% |
| S&P500 Index | 903.25 | +12.61 | 1.42% |
| Nasdaq Composite | 1577.03 | +26.33 | 1.7% |
| Nasdaq100 | 1211.65 | +10.31 | 0.86% |
| CBOE Volatility Index | 40.00 | -1.63 | -3.92% |
| CBOE Nasdaq100 Volatility Index | 40.79 | -0.88 | -2.11% |
Dow Darlings
- Bank Of America (BAC) +0.84 (6.3%) to $14.08 on volume of 111.8m units
- Alcoa (AA) +0.57 (5.3%) to $11.26 on volume of 29.5m units
- Boeing (BA) +1.42 (3.4%) to $42.67 on volume of 5.4m units
- American Express (AXP) +0.55 (3.1%) to $18.55 on volume of 9.6m units
- Merck (MRK) +0.8 (2.7%) to $30.4 on volume of 12m units
Dow Duds:
- General Motors (GM) -0.60 (15.8%) to $3.20 on volume of 25.9m units
- Citigroup (C) -0.09 (1.3%) to $6.71 on volume of 92.2m units
- Home Depot (HD) -0.09 (0.4%) to $23.02 on volume of 15.1m units
- Pfizer (PFE) -0.04 (0.2%) to $17.71 on volume of 32.3m units
- Intel (INTC) -0.03 (0.2%) to $14.66 on volume of 33.7m units
Most Traded Dow stocks:
- Bank Of America (BAC) +0.84 (6.3%) to $14.08 on volume of 111.8m units
- Citigroup (C) --0.09 (1.3%) to $6.71 on volume of 92.2m units
- General Electric (GE) +0.38 (2.4%) to $16.2 on volume of 60m units
- Microsoft (MSFT) +0.1 (0.5%) to $19.44 on volume of 45.6m units
- Intel (INTC) --0.03 (0.2%) to $14.66 on volume of 33.7m units
Precious Metals
Precious metals futures advanced nicely... the "Long gold on a 2-day hold of 750" is looking quite nice. If Gold can get above 905 and hold it for two days, then it will get past its old high.
| Precious Metals Futures | |||
| Index | Close | Gain(Loss) | % |
| Gold | 880.5 | 10.5 | 1.21 |
| Silver | 11.375 | 0.395 | 3.6 |
| Palladium | 186.5 | 2.35 | 1.28 |
| Platinum | 940.9 | 31 | 3.41 |
The Gold Bugs index (XAU) gained 2.66 points (2.19%) to 123.85 points. Total volume traded in the 16 components of the index was 86.55m shares. Advancers outpaced decliners by 15 to one, with 15 advancers to 1 decliners. Advancing volume exceeded declining volume by 73.12m to 13.42m shares. The biggest gainers (percentage-wise) were -
- Harmony Gold (HMY) +0.55 (5.3%) to $10.97 on volume of 1.88m shares;
- AngloGold Ashanti (AU) +1.14 (4.3%) to $27.71 on volume of 1.67m shares;
- Silver Stand Resources (SSRI) +0.61 (4%) to $15.94 on volume of 0.69m shares;
- Gold Fields Ltd (GFI) +0.34 (3.5%) to $9.93 on volume of 3.64m shares; and
- RandGold Resources (GOLD) +1.34 (3.1%) to $43.92 on volume of 0.61m shares.
Energy Complex
Energy futures are starting to finally get a bid, although Natural Gas remains oddly weak -
| Energy Futures | |||
| Commodity | Close | Gain(Loss) | % |
| Crude Oil | 42.95 | 3.92 | 10.04 |
| Heating Oil | 1.4095 | 0.1034 | 7.92 |
| Natural Gas | 5.594 | -0.265 | -4.52 |
| Gasoline RBOB | 1.003 | 0.1177 | 13.29 |
| Ethanol | 1.62 | 0.009 | 0.56 |
The Oil Services index (OSX) added 1.34 points (1.12%) to 121.38 points. Total volume traded in the 15 components of the index was 67.01m shares. Not a single stock declined within the index. The biggest gainers (percentage-wise) were -
- Global Industries (GLBL) +0.19 (5.8%) to $3.49 on volume of 1.39m shares;
- Nabors Industries (NBR) +0.42 (3.6%) to $11.97 on volume of 4.88m shares;
- BJ Services (BJS) +0.29 (2.5%) to $11.67 on volume of 3.3m shares;
- Halliburton (HAL) +0.45 (2.5%) to $18.18 on volume of 10.37m shares; and
- Tidewater (TDW) +0.74 (1.9%) to $40.27 on volume of 0.79m shares.
Currency Futures
Currency futures performed as follows -
| Currency Futures | |||
| Index | Close | Gain(Loss) | % |
| U.S. Dollar Index | 82.12 | 0.34 | 0.42 |
| Euro FX | 1.3921 | -0.0133 | -0.95 |
| Swiss Franc | 0.9364 | -0.0099 | -1.05 |
| Soybeans | 972 | 26 | 2.75 |
| Australian Dollar | 0.6997 | 0.0133 | 1.94 |
| Canadian Dollar | 0.8224 | 0.0065 | 0.8 |
| Japanese Yen | 1.1029 | -0.0062 | -0.56 |
| New Zealand Dollar | 0.5826 | 0.0098 | 1.71 |
Bellwethers
The nine-stock group that makes up the Rant bellwethers advanced on average by 2.4%. The fallout occurred as follows:
- General Electric (GE) +0.38 (2.4%) to $16.20 on volume of 60m units.
- Citigroup (C) -0.09 (1.32%) to $6.71 on volume of 92.2m units.
- Wal-Mart (WMT) +1.01 (1.83%) to $56.06 on volume of 13.8m units.
- IBM (IBM) +0.61 (0.73%) to $84.16 on volume of 6.64m units.
- Intel (INTC) -0.03 (0.2%) to $14.66 on volume of 33.67m units.
- Cisco Systems (CSCO) +0.07 (0.43%) to $16.30 on volume of 36.76m units.
- Google (GOOG) +4.54 (1.5%) to $307.65 on volume of 2.85m units.
- Fannie Mae (FNM) +0.07 (10.14%) to $0.76 on volume of 20.17m units.
- Freddie Mac (FRE) +0.04 (5.8%) to $0.73 on volume of 14.24m units.
Other Indices of Interest...
The Banks index (BKX) advanced 1.38 points (3.21%) to 44.32 points. Total volume traded in the 24 components of the index was 536.22m shares. Advancers outpaced decliners by 10 to one, with 20 advancers to 2 decliners. Advancing volume exceeded declining volume by 259.95m to 170.35m shares. The biggest gainers (percentage-wise) were -
- Huntington Bancshares (HBAN) +0.53 (7.4%) to $7.66 on volume of 4.81m shares;
- Zions Bancorp (ZION) +1.62 (7.1%) to $24.51 on volume of 2.48m shares;
- Bank Of America (BAC) +0.84 (6.3%) to $14.08 on volume of 111.71m shares;
- PNC Financial (PNC) +2.82 (6.1%) to $49 on volume of 8.06m shares; and
- State Street (STT) +1.77 (4.7%) to $39.33 on volume of 3.1m shares.
The Semiconductor index (SOX) rose 0.91 points (0.43%) to 212.17 points. Total volume traded in the 18 components of the index was 129.29m shares. Advancers and decliners were split evenly, 9 decliners to 9 advancers. Declining volume was greater than advancing volume by 78.83m to 50.45m shares. The biggest gainers (percentage-wise) were -
- Micron Technology (MU) +0.2 (8.2%) to $2.64 on volume of 11.96m shares;
- Sandisk (SNDK) +0.43 (4.7%) to $9.6 on volume of 4.95m shares;
- Texas Instruments (TXN) +0.36 (2.4%) to $15.52 on volume of 13.42m shares;
- Infineon Tech (IFX) +0.02 (1.4%) to $1.4 on volume of 1.02m shares; and
- National Semiconductor (NSM) +0.14 (1.4%) to $10.07 on volume of 3.95m shares.
The ChildKiller ("Defence") index (DFX) rose 6.88 points (2.65%) to 266.03 points. Total volume traded in the 17 components of the index was 98.67m shares. Advancers outpaced decliners by 15 to one, with 15 advancers to 1 decliners. Advancing volume exceeded declining volume by 97.19m to 1.48m shares. The biggest gainers (percentage-wise) were -
- Esterline Tech (ESL) +2.1 (5.9%) to $37.89 on volume of 0.21m shares;
- Teledyne Tech (TDY) +2.34 (5.5%) to $44.55 on volume of 0.34m shares;
- Gencorp (GY) +0.19 (5.4%) to $3.68 on volume of 0.26m shares;
- Embraer Empresa (ERJ) +0.61 (3.9%) to $16.21 on volume of 0.65m shares; and
- Boeing (BA) +1.42 (3.4%) to $42.67 on volume of 5.43m shares.
