August 16th, 2012
in Gary's blogging
Opening Market Commentary For 08-16-2012
Morning financial's were mixed and depending on how you want to decipher the numbers, but it appears to be 'not so good'. The premarkets rose a few points and then fell a few points, nothing new here. The Building Permits were up, but the Housing Starts were down. Initial Claims were up 1.1% and Continuing Claims fell by 5,500 to 363,750, the lowest level since the end of March. I interpret this number as more folks giving up and not a good sign. Even the Canadian numbers were down. (Chart below)
Today is starting out to be another Snoozefest as the averages opened up green in abominable low volume then marked the score board with some red volume but the markets general remained in the green, but flat. By the 15 minute mark the markets turned mixed with the DOW off 4 and the 500 off 0.42 and the volume was all red. At 10 am the Philadelphia Fed numbers from a survey conducted questioning manufacturers in the Third Federal Reserve District on general business conditions was announced falling to 7.1 when 5.0 was expected. The markets already in slight melting down continued the fractional downward melting at the negative news.
The Bloomberg Consumer Comfort Index falls to -44.4 from -41.9 the previous week.
By the end of the month we will witness the day of reckoning with the Greek drama being played out on the World stage and it is proposed to have a tragic ending. Most pundits following this episode of repaying its debt, feel all is not well and default is coming.
Greece has disappointed its creditors yet again. Now its government plans to ask for more time -- and needs billions more in aid. But Greece's euro-zone partners are unwilling to provide any more help, meaning that the only hope now is to admit defeat and let the country make a fresh start. A Commentary by Stefan Kaiser more...
The RRR** is not in the best interest of the trader this morning being very narrow and without a fall back if you 'guess' incorrectly. Until we break out of this channel all bets are off. I expect the markets to flounder like they have for the past 6 sessions and melt down fractionally today.
The DOW at 10:15 is at 13162 down 3 or -0.02%.
The 500 is at 1405 up 0.30 or 0.02%.
The $RUT is at 801.36 down 2.89 or -0.36%.
SPY is at 141.01 up 0.04 or 0.03%.
The trend is neutral and the current bias is neutral.
WTI oil is at 94.30 trading between 94.87 and 94.15 and the bias is negative.
Brent crude is at 115.50 trading between 116.65 and 115.50 and the bias is negative.
Gold is neutral today at 1604.93 trading between 1608.65 and 1600.83 with a positive bias.
Dr. Copper is at 3.36 even with 3.36 earlier.
Earlier the USD rose from 82.66 to 82.94 and then falling to 82.50 starting after the 8:30 reporting of morning financial's. The USD is currently at 82.59.
For another interpretation of the employment numbers out this morning Zerohedge reflect that the reason the numbers are down is because unemployed folks can't collect the free money anymore and therefore are not counted. So there are fewer people collecting benefits, BUT ARE STILL UNEMPLOYED!
As has now become the norm, last week's initial claims was revised higher (because no algos care about what the real number was with a one week delay) from 361K to 366K, even as this week saw a modest miss at 366K on expectations of 365K.
This "modest" 1K miss will be revised to a 4K miss next week. And while continuing claims also missed expectations by 5K, printing at 3,305K, it was the cliff of extended benefits that continues to bite, with another 64K people no longer collecting Uncle Sam's 99 week free dole in the week ended July 28.
This brings the last two weeks' total to nearly 200K: unless this handout was replaced by disability payments, the hit to GDP will be material.
** RRR = Risk Reward Ratio
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Written by Gary