April 19th, 2012
in Gary's blogging
Closing Market Comments:
At about 3:30 a 10 minute red volume spike peaked over the 2 previous ones today. If there ever been a sell signal in the making I believe today was it. From about 1:30 the market began its slide to Monday's midday numbers, recovering slightly to end the day where it recovered slightly. Oil remained at the 102 level and Brent slipped out of the mid 118's to 117.92 – not much happened in the commodity arena. Gold climbed a bit higher settling in at 1642.
At least FoxNews is NOT blaming it Apple sliding or some European politician passing gas like so many brain-dead pundits are writing.
“After spending much of the day fluctuating between modest gains and losses, Wall Street is tumbling deep into negative territory, with the Dow and S&P 500 down 1%. Industrial, technology and financial shares are under the most selling pressure. Volatility is up 5% and traders are bidding up Treasury bonds as anxiety rises.”
The 500 at the close. Penetrated the support but backed off. Challenged the resistance but never broached.
The $RUT at the close. Entirely non-committal. Almost a trend changing spinning top candle.
The DOW at the close. The DOW's resistance was challenged and I'll say it was not enough to stay above it.
The Indexes at the close. I see the Nasdaq 100 was one of the looser's, not a good bullish sign.
PM Rocky Brands (RCKY): Q1 EPS of $0.10 beats by $0.03. Revenue of $53.3M (+2% Y/Y) misses by $1M.
4SanDisk (SNDK): Q1 EPS of $0.63 misses by $0.08. Revenue of $1.21B (-8% Y/Y) in-line. Shares -2.8% AH.
Microsoft (MSFT): FQ3 EPS of $0.60 beats by $0.02. Revenue of $17.41B (+6% Y/Y) beats by $230M. Shares +1.8% AH. Company lowers FY12 operating expense guidance to $28.3B-$28.7B ($28.5B-$28.9B prior). Establishes preliminary FY13 opex guidance of $30.3B-$30.9B
The Quiet Before The Storm:
The afternoon trading has been light to moderate, unusual because it was heavier overall than anytime in the last 6 months. The bulls and bears are evenly matched for now, but that might not stay the same by Monday. The markets have once again turned red and have fallen to the bottom where they were this morning and trading in an extremely narrow range belying the elevated volumes. There is a battle going on and it appears the bears are wining as the storm winds are just getting up to speed.
At 1:20 the 10 minute red volume spiked as high as this morning's decline as the 'Dippers' came to the rescue ending the markets fall. The cautionary red flags are waving in full force-out over the resent full blown market declines which would have been unabated if it were not for the bulls willing to take a chance. And a gamble it is over the long run, but Friday could see the markets rise because of the option expiration’s. The markets have continued their narrow range trading with a slight negative bias going into the last 2 hours of trading.
Today has been a relatively exciting one as the markets just might be getting some juice in them. From a traders stand point, this is good news and we do need some favorable indications. But until there is a 'real' trend, be careful trading as the movements are not conducive to profitable trading. The risk still outweighs the reward aspect and after the beating we took last year caution is the better part of valor.
Just read at Zerohedge and I have to agree. Sooner or later the public is going to DEMAND the SEC do something. I have done my part by putting it out for others to see.
“. . . the SEC still has NO IDEA what liquidity is, and continues to refuse to take ANY action against High Frequency Trading, to press criminal charges against ANY banker, or for that matter, to do anything that may jeopardize its staffers future careers as 7th assistant general council at assorted bailed out Wall Street firms.”
Midday Market Commentary:
Gold was very active during the melee this morning moving from its low of 1630 to a high of 1653 finally resting at 1649. WTI oil was unfazed staying in the 102 range and Brent is the 118 range. The USD was at a low of 79.50 climbed to 80.00 and leveled out at 79.63. These are the day's when traders can get lucky if you want to gamble. Interesting how Mr. Market can turn things around when you least expect it.
By 11:00 all of the excitement was over, volume fell to its 'normal' anemic lows. The markets then continued to trade in a very narrow range at he high for the morning with a slightly negative bias. By Noon the market was in full swing falling again reaching close to its morning lows. Volume was mostly red and moderate and gaining speed. The market roller coaster races on.
Maybe, the market is going down a whole lot more and maybe it isn't. I think it is, but with recent market movements that surprised me, I am not going to bet on anything - just yet anyway. Remember, "There are old traders, and there are bold traders. But there are no old, bold traders"
I was interested in exploring the viability of shorting ETF's while the market is at the daily highs and it looks like the maximum movement was less than a point for FAZ. So, back to sitting on my hands while I wait for Friday closing minutes as I bet that will be a excellent time to take a short position. A good bet for numerous reasons.
If there is going to be a war with Iran, Saturday's New Moon would be a good cover and send Monday's markets spiraling down. Friday is also Options Expiration day and will probably drive the market up and falling on Monday. Might be a big gamble, but more on that tomorrow.
Also making news this morning is the Philadelphia Federal Reserve's came in at 8.5 in April, far short of expectations of 12. Readings above zero point to expansion, while readings below zero indicate contraction.
Roller Coaster Ride This Morning:
Interestingly, the 'Dippers', the HFT and bold day traders moved the market to yesterdays highs in quick fashion. What took 3 minutes to fall it took 30 minutes to completely wipe out the losses and gain some giving the bears a distinctive bloody nose. By 10:45 the green volume was a bit lighter, but still the markets were climbing. The 500 and the $RUT were thinking about challenging that resistance we spoke of earlier, but not quite there. It remains formidable.
Looking back at the total volume for the day it has been the heaviest by both the bulls and the bears but the sudden decline this morning only accentuates the overlying market weakness and the bears have the edge.
Aftermath: The Knife Has Fallen:
Well it didn't fall too far, but far enough to reiterate the saying that the markets can fall faster than you can catch them. Boy, it was quick and decisive to say the least. The 'Dippers' are out in full force making a lot of moderate green volume which is climbing as I write. The line in the sand is drawn as the resistance shown in yesterdays closing remarks have taken on new meaning (See Charts Here)
I can see where this brief interlude of buying is going to be a error in judgement and we can expect to see further red as the day progresses.
The DOW ended down at 12971 and recovered to 13001, the 500 descended to 1379 and currently is at 1383. The $RUT took the biggest hit dropping to 793 and recovering to 803.
By 10:30 the 'Dippers' have done all the dipping and the green volume has fallen off with the near term trend with a positive bias.
Flash Remarks At 10:05
The markets are in a free fall of moderate proportions the DOW fell to 12986 , the 500 fell to 1380 and the Russell fell to 798. The markets have recovered slightly and fell again. The 10 minute red volume was the heaviest seen in 6 months.
March Existing Home Sales: -2.6 to 4.48M vs. 4.62M expected, 4.60M prior (revised from 4.59M).
ZeroHedge cuts through BofA's (BAC) "accountant fudge heaven" in its Q1s, which is apparently bamboozling even analysts, to declare that only three things matter: 1) The approaching refi cliff, in terms of tens of billions in maturities; 2) sliding sales and trading revenues; 3) reserve release gimmicks. Shares are -0.3% after being higher earlier.
Market Opening Remarks:
Market opened down after 'less-than-good' numbers came in for the unemployment crowd. The DOW opened at 13028 and promptly went to 13009. The 500 opened at 1385 and found its way to 1382 under low red volume.
The first 10 minutes was trading in a very narrow range with the volume becoming moderate. The $RUT opened at 804 and fell to 802. The 20 minute volume still see a quiet market place with the 'Dippers' jumping in and creating a slightly choppy environment and low to moderate green volume. All the markets are in the green now with the DOW up at 13048, the 500 up at 1387 and the $RUT up at 806.
There is little news coming across the wires but what is there is looking negative in the European court.
“The IMF is meeting at this moment and on to the IMF bailout fund: Lagarde says she expects it to be "significantly" increased over the weekend of meetings. She will ask IMF members to "finish the job" and boost the resources.”
The premarket activity started out with the SP500 up 4.80 points and the DOW up 49.00 points. That quickly evaporated into negative numbers right after the unemployment report.
U.S. CONTINUING CLAIMS (APR 7) COMES IN AT 3297K VS. 3300 PROJECTED, PREVIOUSLY REVISED TO 3271K FROM 3251K.
The number of people seeking U.S. unemployment benefits dipped last week but remained higher than it's been in recent weeks. The slight rise in applications in the past few weeks could signal that the gains in the job market are uneven.
The Labor Department says weekly applications declined 2,000 to a seasonally adjusted 386,000. The previous week's data was revised up 8,000 to 388,000. The four-week average, a less volatile measure, rose 5,500 to 374,750, the highest in nearly three months.
Hiring slowed in March after a fast start this year. Employers added only 120,000 jobs in March _ half the pace of the previous three months. Many economists downplayed the weak March figures, noting that a warmer winter may have led to some earlier hiring in January and February.
Morgan Stanley posted a first-quarter loss of 5 cent a share on continuing operations. Excluding a one-time charge, the investment bank earned 71 cents, much stronger than the 44 cents analysts expected. Sales came in at $8.9 billion, stronger than the $7.31 billion expected.
Verizon Communications unveiled a first-quarter EPS of 59 cents on sales of $28.24 billion. The blue-chip tech company was forecast to earn 58 cents on $28.17 billion.
Travelers revealed a first-quarter operating profit of $2.01 a share on sales of $6.39 billion. Analysts expected the Dow component to earn $1.52 a share on $5.71 billion.
Bank of America posted a first-quarter profit of 3 cents a share, or 31 cents excluding an adjustment related to credit spreads. Analysts were looking for the bank to earn 12 cents. Revenue came in at $22.28 billion, lighter than the $22.51 billion expected.
More negative news coming in from Europe.
In the past 30 minutes [@7:30EST], Europe has turned downright ugly, with short-term Bunds soaring to a record 140.64, and weakness creeping across the peripherals, as the realization that not only was the Spanish bond auction unsustainable, but also a French downgrade rumor once again making its way (the source of this is a Citi note by Michael Saunders who said that it is likely that Moody's will follow S&P, and put the French Aaa rating on review for possible downgrade by the autumn, after the country's supplementary budget is formalized).
The result is a sudden and swift slide in the EURUSD to 1.3070 or the LOD. Here are some of the other recent surprising developments in the aftermath of what the propaganda machine wants to spin as a "successful" Spanish bond auction.
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Written by Gary