Live Market Commentary For 05-07-2012

May 7th, 2012
in Gary's blogging

After Market Closing Comments:

Market closed mixed and trading was in a tight range. Volume started out heavy green followed by a tapering of mostly green until the close. Profit takers stepped in and eased the markets highs down a bit.

The DOW closed at 13009 down 29.74 or -0.23%. The 500 closed at 1369 up +0.48 or +0.04%. The Russell 2000 closed at 793 up 1.97 or +0.25%. The DOW is at the 50 day MA at 13010, the 500 is below its 50 day MA at 1377 and the $RUT is below its 100 day MA at 796. SSO is below its 50 day MA as well with SPY and QQQ.

The WTI oil ended up at 98.00, Brent at 113.32 and gold at 1638.42. USD Consumer Credit for March, classified as medium importance came in up $21.355B and $9.800B was expected. The prior report was $9.267B. Dailyfx reports:

Follow up:


Non-revolving credit (auto, student loans) up 11.3% annually.”

markets fell from that point into the October lows”


Consumer Credit Soars As US Government Encourages Student, Car Loan Bubbles

That US consumer credit soared by $21.4 billion in March on expectations of $9.8 billion rise, or the fastest monthly expansion since March 2001 would have been commendable and memorable if one did not dig through the actual components.

Which sadly are atrocious: of the entire surge, a modest $5.1 billion was from real credit, or revolving, credit-card type debt. This brought the total revolving debt to $804 billion or to a level first crossed in January 2005.

The balance, or $16.2 billion, was non-revolving debt, or the type of debt used to fund GM car purchases by subprime borrowers and push the student loan bubble well into its $1+ trillion record territory.

The total non-revolving debt is now $1.739 trillion: an all time record. As for the source of such debt? why the US government of course, in what is the supreme ponzi scheme, whereby the US government allows US consumers to purchase Government Motors products and to keep the Higher Learning status quo in power.

In other words, the US government has become the final enabler of the consumer spending bubble with proceeds used to keep the US auto unions happy (as channel stuffing is already at record high levels), and of course, to fund such ancillary student purchases as iPads. As for whether any of this debt will ever be paid off? Don't be silly.

The 500 at the close.

The $RUT at the close.

The DOW at the close.

The Indexes at the close.


CIA thwarted an underwear bomb plot on a U.S.-bound jet near the anniversary of bin Laden's killing, sources tell AP” 4:15 EST

Market Commentary At Noon:

The markets have continued their sideways movement sense the opening in a tight range. Gold fell -0.32% to $1638/ounce while Silver slips 1.43% to $29.47/ounce, WTI oil is at 97.49 and Brent is at 112.53.

The $RUT is at 791.67 down 0.17 or -0.03%, while the 500 is at 1369.06 down -0.09 or _0.01%. The DOW is at 13008.98 down -27.97 or -0.22%.

Greeks Voted Against Austerity, But Will They Get it Anyway?

The people of Greece spoke out: two thirds voted for parties clearly opposing austerity. Nevertheless, Greek election law means that the pro austerity, pro-bailout mainstream parties will likely continue ruling and having the same policy.


Europe’s doomed experiment with the politics of austerity went down in flames over the weekend as voters across the region veered sharply to the left in savaging incumbents. Elections in six European nations on Sunday promised to end any pretense of fiscal sanity. However, it remains to be seen how quickly and drastically the new leaders will act to further unbalance their nations’ books, ostensibly in the name of economic growth.”


France and Greece reject austerity. European markets, particularly in Greece, and U.S. stock futures have fallen after French and Greek voters resoundingly rejected austerity. In France, Francois Hollande won the presidency from Nicolas Sarkozy, who became the ninth European leader to be booted out in two years. In Greece, the two pro-bailout parties gained just 32% of the vote, down from nearly 80% in 2009. Opinion: What Hollande's victory means for the euro.

After Opening Market Commentary:

The DOW has fallen down to 12985 and has recovered a bit to 12999 or off 50.48 -0.40% in the opening seconds. The 500 futures were down as low as 1342 and have risen to the opening of 1368, down 3.56, -0.27%. The $RUT is also down to 789 or off 2.38, -028%.

The first 10 minute volume is very high and green as the 'dippers' come out in force however that hasn't had a direct reflection on the DOW and the SP500 remaining below Friday's close. The 20 minute volume has turned red and as heavy as the opening 10 minute's. By 10 am all the action was over with light volume. The $RUT showed a bit of green and the DOW and 500 were still in the red.


10:00 AM On the hour: Dow -0.29%. 10-yr +0.04%. Euro -0.29% vs. dollar. Crude -1.22% to $97.28. Gold -0.47% to $1637.45.

The trend is down and the bias is neutral.

WTI oil is at 97.37 having starting out at 98.60 then falling to 95.50, Brent is at 112.42 more or less where we left it on Friday. Brent also had a roller coaster ride this morning falling from 113.11 to 110.30. Gold fell from 1642 earlier to 1635 and is currently at 1639. and the USD was at 80.12, fell to 79.69 and is now at 79.74 just about where we left it on Friday.

Premarket Commentary:

The French election are having the most negative effect on the today's markets. Francois Hollande first socialist president in 17 years has upset the rest of the European nations by promising more government spending and an exorbitant tax on the rich among the many programs to aid the people.

As of 9 am they were down fractionally to flat. It is going to be one of those guessing days as we see who wins the tug-o-war; the bears or the bulls. If the volume is light, the bulls win hands down as we await more news on Greece. The Greek election is another story as we await more news.

To contact me with suggestions or deserved praise:

Written by Gary

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