April 5th, 2012
in Gary's blogging
Noon trading saw the markets rise from a lower opening to rising to yesterday's sessions close and now the markets are sea-sawing on low volume. DaBoyz and the HFT's must be really raking in the dough in their quest of moving the markets up and down as they wish. This is what happens when you have low volume.
The smaller lot selling and buying of the cash crowd can work these markets but the profits are meager and the risk outweighs the rewards, so be careful if you are in this flock of folks or you will get flocked. It is true that you have a 50% chance of getting it right, but greed gets in the way and statistics show small lot traders get it wrong most of the time.
The DOW is currently at 13073, the 500 is at 1399, SSO is at 57.70 and SPY is at 140. Gold moved back to its morning lows of 1628 and the oils moved up a point. I expect a quiet session to continue throughout the afternoon with a possible decline towards the close. Tomorrow is closed and the bonds close at noon.
“European shares close mixed, but well off the lows following 2 days of big losses. Stoxx 50 -0.4%, Germany -0.2%, France +0.1%, Italy -0.2%, Spain -0.1%, U.K. +0.4%. Euro -0.6% vs. the dollar, but the big story was the common currency's momentary breach of the SNB's CHF 1.20 floor. “
Today's initial claims number printed at 357K, on expectations of 355K, a number which next week will be revised higher once again, likely to 362K. The game here is simple - just show a decline in claims, as what happened to last week's number, also revised higher, this time from 359K to 363K, just so it can show a 6K decline and allow the idiot media to blow such headline as "Weekly US unemployment benefit applications fall to 357,000, lowest in 4 years" from AP and "Jobless Claims in U.S. Decrease to Lowest Level in Four Years" from Bloomberg. In reality, this is the third consecutive miss of consensus in a row.
“All of this would be great... if only the March 15th original number of 351,000 wasn't lower than the April 5th pre-revision number of 357,000, and which next week will be revised to 361,000!
In the meantime, everyone gets that warm and fuzzy feel: after all Bloomberg itself, which prepared the above reports, just told us its consumer comfort index just soared from -34.7 to -31.4, the highest since 2008. And nobody would ever think of manipulating public opinion now would they?
"Truth in government statistics decreases to lowest level in 4 years." “
Other news from the @telegraph: .
“Spanish government borrowing costs are in the spotlight again - bond yields are climbing again today, and the spread between Spain's borrowing costs and Germany's - used as a measure of how risky investors consider the debt to be - rose to its widest level since the end of November.
Yields on Spanish and Italian debt have come down in recent months, after the ECB turned on the liquidity taps and offered cheap three-year loans to eurozone banks, creating a market for the bonds again and pushing down borrowing costs to more affordable levels.
The yield on Spanish 10-year bonds was 12 basis points higher at 5.84pc today, after rising around 30 basis points yesterday. The yield differential over Bunds, at 411 basis points, was its widest since late November.
Spain suffered a blow yesterday when the rate it had to pay to borrow went up at an auction of government bonds. That has unsettled the market further.”
Markets opened down making it the third day in a row.
The DOW opened at 13067 and is currently at 13046and the 500 opened at 1398 and is at 1396. Gold opened higher at 1361, SLV trending up 30.81 and GLD doing the same at 158.41. WTI oil has moved little in the 101 range as has Brent at 121. The small caps ($RUT) opened lower but has since regained some of the mornings losses. But still remains below yesterday's close at 834 now at 817. Watch the small caps for the lead.
The EUR/USD pair has fallen to 1.3034 while the USD has risen to 80.28 and still may get to 85 before winter rolls around. SSO opened at 57.14 down from 57.42 and is currently at 57.50. The early morning trend is up on low to moderate volume with the 'dippers' buying the dip on falling volume. Mr. Market will surly have a few surprises I am sure as DaBoyz do their thing.
“Stocks are poised to extend yesterday's losses as rising Spanish and Italian bond yields again weigh on sentiment and overshadow more positive jobs data (I, II), with S&P benchmark futures -0.3%. Polycom tanking 20.2% following a profit warning, although Bed Bath & Beyond is +4.7% after Q4 earnings. “
Leavitt this morning gives out probably the best take on the market today. He is reading the tea-leaves from available charts, which I believe have been severely skewed through manipulation of the low volume markets and should be viewed with skepticism and caution.
“The week began with the long term trend being up and the short term trend being neutral (the indexes were in consolidation mode). First the top of the range was tested, then the bottom, and in my opinion, the long term trend is still up and the short term trend is still neutral.
But as of now, today’s open will be below yesterday’s low, so the market is in danger of losing its range and officially being considering in a short term downtrend. Play good defense. Don’t be a hero out there. We’ve had a really good run the last few months…lots of good set ups. But the market doesn’t move uninterrupted in one direction. Maybe it has topped and a full-blown correction is underway. Or maybe it’ll just pull back a little to allow the charts to reset. (Oh and if you’re wondering about the tendency to move in a certain way before Good Friday, don’t. The indexes have been all over the map the last couple years.)"
Financial reporting this morning has the new claims for unemployment benefits fell to 357,000 last week -- the lowest level since April 2008 -- from an upwardly-revised 363,000. Claims were expected to fall to 355,000 from an initially reported 359,000.
Translated, that means 120 more people found jobs in each state than last month. On the USD Continuing Claims (MAR 24) it was lower by 10,000 meaning 200 folks gave up looking for a job in each state. These numbers will be revised later as they have been for months, so don't be like most people and put a lot of faith in what the government feeds you in the form of data.
This could be the first step of a market correction be on your toes.
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Written by Gary