Markets Close Up, But The Fall Is Going To Be Painful

July 17th, 2012
in Gary's blogging

Closing Market Commentary For 07-17-2012

I think we are in trouble when the volume falls off to anemic levels and the markets slither up to new highs like the snakes that are spreading out the 'Fairy Dust'. Scary enough to believe the manipulation of DaBoyz, 'Dark Pool' participants and yet unidentified Market crooks are going to screw the sheeples and investors alike right into the ground. Kiss your 401's goodbye because the fall is going to be painful.

Aftermarket financial reporting showed that Intel (INTC) second-quarter earnings were $0.54 per share, beating the expectations of $0.52. Revenue came in about at expectations of $13.5 billion, while analysts were looking a bit more at $13.56 billion. Initially the stock fell to 24.65 from 5.25 and then rose to 25.76, settling at 25.65. The aftermarket in general had a higher amount of volume but stayed in the same place it had been since 2:30.

Follow up:

Foxnews printed that Yahoo also reported second-quarter earnings that beat analyst expectations at $0.27 per share on revenue of $1.08 billion. Wall Street was expecting the tech company to report earnings per share of $0.23 on revenue of $1.1 billion.

The DOW at 4:00 is at 12805 up 78.33 or 0.62%.

The 500 is at 1363 up 10.03 or 0.74%.

The $RUT is at 799.45 up 2.79 or 0.35%.

SPY is at 136.48 up 1.06 or 0.78%.

The trend is slightly positive and the current bias is neutral.


WTI oil is at 89.11 trading between 89.46 and 87.40 and the bias is positive.

Gold is at 1581 trading between 1599 and 1571 with a negative bias.

Dr. Copper is at 3.46 down from 3.51 earlier.

As reported earlier the USD rose from 83.06 to 83.67 and currently is down at 83.27.

The 500 at the close.

The DOW at the close.

This article is one YOU HAVE TO SEE! I have been complaining, bitching and generally throwing curses at DaBoyz and the HFT's for screwing up the markets and the porn loving SEC does ABSOLUTLY nothing. Now we wait to see if we have institutional selling coming up this week.


The Incredible Lightness Of Buy-Side Volume

Today's market movement was/is remarkable in its clarity. One glance at this chart and it will become brutally clear that once 1340 was hit, the 'tickle-algo' was triggered and a de minimus volume press on the bid-offer stack limped us all the way back to the day's highs - considerably above VWAP.

Whether we see the institutional selling blocks hit now is still undecided but if there was ever any doubt about who is selling and who is buying this chart should clarify...

Yes, "they" have way more than enough money to buy any market move they want. So if they'll net profit from a move up or a move down or holding steady, they'll spend some money to make it happen.

"They" have enough money to place bets, sell bets, AND move the market.

Overwhelmingly rigged to provide more and more and more profit to a few people and wipe out everyone else....

Shorting is usually futile unless short interest has been completely purged, the market has had 5 too many drinks and headline sentiment is manic bullish.

We still have tons of shorts in this market. They need to be wiped out for prices to move down decisively again. Until then, lot's of fakes until it rips higher taking out the short interest. Probably on new Chinese stimulus and a big Asian rally. The IMF has asked for it.

A good exercise: pair your position to the maximum size that will allow you to still sleep. Hold your short steadfast through the buying capitulation (whatever level that is).

You may come out ahead or behind in the end, but you will benefit from having experienced all the mental stages of a drawdown.”

Ms. Lien, in the following article, thinks that September is a good time for a QE3 and like I have said before the Conservative side of the political spectrum has laid heavy pressure on Dr. Ben and his dovish monkey's NOT to put us in more debt and Dr. Ben does not want to appear to be Obama's lap dog either. There are few more reasons why a QE3 won't happen this year, but you get the gist of it.

Ugly Retail Number Won't Change Bernanke's Tone by Kathy Lien

With 3 back to back months of negative retail sales growth, we are looking at a very weak third quarter GDP that will show minimal improvement in growth. The Empire State Manufacturing index rose to 7.39 from 2.29 in July but this uptick in NY manufacturing conditions will be lost amongst the weak retail sales number.

September is a far more realistic timing for QE3 because by then 2 additional months of non-farm payroll reports will be released, central bank officials would have held their annual economic summit in Jackson Hole and the Fed would have prepared their latest economic projections. With 2 months to go before the September meeting, Bernanke is under no pressure to drop any new hints because he will have plenty of opportunities to do so the future.”

Another note to remember as you read about how the DOW will rise to 16,000 next week.

Retail and consumer products: A less stable environment ahead by Jeffrey B. Edelman

Download the white paper

By all indications, 2012 will be another year of lethargic growth, store closings and increased focus on everyday low prices by several major retailers, all which will have a significant impact on the entire retail landscape.

Multichannel is key to survival for many. Online retailing also threatens existing store economics, measurement systems and incentives. As a result, financial metrics are changing, too. Online retail has altered the business model, either because of lost volume from the store or through increased costs of multichannel development.

Enhancing the shopping experience is integral to a retailer's success; however, this becomes more difficult for those that are poorly positioned.

In addition, retailer consolidation will likely continue, if not intensify. Marginal formats, brands and secondary store labels are becoming less relevant. Market share will be an integral part of vendor and retailer sales growth.

Differentiation, whether it is a point of view, service, selection or a variety of other factors, may become a key traffic driver. Want rather than need is most critical in driving consumer purchase decisions.”

And the Keynesian politicians in California keep on spending, just like the ones in Washington and the EU. Fairy Dust, Hopium and Delusionol are not going to help anyone except those on the take. When is this crap going to stop? Do we really have to have a MAJOR crisis to reset the clock?


Bullet Train is California's Toga Party

The opportunity to build a high-speed rail line that would initially traverse a stretch of California desert and farmland is catnip to the state’s politicians and organized labor, if not to taxpayers. The $68 billion project would mean instant cash and jobs for a state that is verging on financial collapse. But does it make economic sense? Maybe to someone on LSD. As far as we’re concerned, the money would be better spent drilling oil wells in YMCA basements. The interest alone on $68 billion would probably suffice to provide limo service for any Californian needing to get from point A to point B. And if one assumes that the eventual cost of this boondoggle will vastly exceed initial estimates, you could probably hire a part-time chauffeur for every working Californian on the interest the sum would generate.”

And the last word for the day – but don't hold your breath on anyone ever going to jail.


Ben Bernanke has been asked a lot of questions this afternoon about Libor. He's said that Libor manipulation does appear to fall into the area of criminal activity. He adds that there have been many bad practices in the banking sector and that it is important to address these issues through enforcement.”

** RRR = Risk Reward Ratio

To contact me with suggestions or deserved praise:

Written by Gary

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