August 7th, 2012
in Gary's blogging
Closing Market Commentary For 08-07-2012
The markets sort of muddled sideways until 2:30 where the US dollar made a sudden jump from 82.25 to 82.29. It appears Fed's Bernanke spoke on Financial Education in Washington at 2:30 and did not discuss monetary policy in his prepared speech and that may have prompted the positive shift in the USD. He did say that the Fed has to be accountable for its actions but has a 'good bit of independence' making reference to US Senator Rand Paul unveiled threats. Dr. Ben also mentioned that the Europe crisis has had 'significant' effects on the U.S. and 'is slowing the U.S. Economy' – ya think? The airlines, real estate, DJ Utilities and the oil index all were in the red at the bell while most other averages just kept their heads above water.
The markets followed Bernanke’s remarks by falling fractionally but well within the tight parameters formed earlier AND on anemic volume. By then WTI oil had dropped 90 cents and gold had moved up 2 dollars providing the only action for the mid afternoon as we waited for the USD Consumer Credit (JUN) at 3:00.
At the 3 pm announcement Consumer Credit moved up 6.46 billion while economists were expecting a higher 10,250 billion down from the previous report of 16,700 billion. It's the slowest pace of expansion in 10 months. The effect on the markets after the 3 pm Consumer Credit announcement was a modest decline in the oils and one cent on copper. The USD stabilized up at 82.27 until the close. A small bit of profit taking was on the rise during the last 5 minutes but never went below the opening numbers.
The 500 at the close.
The DOW at the close.
The RRR** remained narrow and risky. It is not conducive for profitable trading with the distinct possibility of another sharp reversal coming at any time.
The DOW at the close is at 13168 up 51 or 0.39%.
The 500 is at 1401 up 7.12 or 0.51%.
The $RUT is at 801.34 up 6.99 or 0.88%.
SPY is at 140.35 up 0.73 or 0.52%.
The trend is up and the current bias is negative.
WTI oil is at 93.46 trading between 91.78 and 93.70 and the bias is negative.
Brent crude is at 111.87 trading between 109.10 and 111.87 and the bias is negative.
Gold was up this morning but fell to 1612.10 where it is now. Trading has been between between 1608 and 1618 with a neutral bias.
Dr. Copper is at 3.43 up from 3.37 earlier.
Earlier the USD tumbled from 82.43 to 82.06 and climbed up to 82.29.
Both the European and Asian markets closed up moderately today.
More Keynesian crap from our 'Teleprompter and Chief' this afternoon. This whole market is about how much free stuff can we get.
The global printer-in-chief is about to address educators in Washington DC (via the video conference stream below) focusing on the need for personal financial education in the wake of the financial crisis. We suggested a name for the plan: The 'Complete Re-education And Positivism' Plan but given the audience was K-12 educators of economics, the C-R-A-P Plan just did not seem appropriate. Perhaps his proposal is the BTFD Plan?
** RRR = Risk Reward Ratio
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Written by Gary