September 27th, 2012
in Gary's blogging
Closing Market Commentary For 09-27-2012
There was no midday post if you are wondering as we interviewing several banks that went on longer than planed. Markets rallied during the afternoon starting around the noon hour that is being attributed to good news (hopium) that Spain may have a viable financial plan, however, I'll believe that when I actually see it. This whole market has been so much bull crappy to the point that it makes me sick. Anyone that tells you that the market is in good shape has their head up their bum.
Market ended up, but still down from Tuesday's session, so don't get excited with the DOW's 72 points gained today. The market did ease off its highs to melt down slightly and who knows what will happen tomorrow. Don't believe everything you see, the bears are still waiting in the wings.
It should be abundantly obvious to everyone with a half a brain that no one is trading and you will continue to see the same old BS again and again for the foreseeable future. Investing or trading is for the 'sheeples' and the mentally ill during this period of low volume. Absolutely nothing of any substance will come out of trying to making sense of today's market place.
There are selling 'Hopium' again, must be a good batch for the market to rally like this on anemic volume. Personally, I think it is the HFT computers because there is simply no human traders.
Wall Street is bouncing back from a multi-day slump after Spain revealed its economic reform plan that many analysts hope will open the door to a rescue from the European Central Bank. The Dow is up 100 points, or 0.75%, while the broader S&P 500 is 1.1% to the upside. Technology, energy, financial and consumer discretionary shares are leading the gains.
Read this and you will seriously wonder what made the market rise.
With EURUSD now 100pips higher, equities holding gains, and Monti confirming to the world that his Spanish friends have made considerable moves here, we leave it up to BNP to point out the sad reality of what we have just been sold.
The 2013 budget does indeed focus on spending cuts (worth potnetially 0.75% of GDP next year) which is providing a headline of epic austerity, but the use of the social-security fund to buy time, the overly optimistic growth forecasts for 2013, and the lack of detail on structural reform was disappointing (or should have been to anyone who actually listened). It seems Spain has effectively agreed the terms for financial aid, without agreeing the terms of financial aid and while their hope is that the leftovers from the banking bailout fund will ease some pain; it seems the regional angst (Catalonia for example) and the fact that, as we noted a month ago,
Spain only has enough cash to see it through to October, leaving them likely to need EUR30-50bn minimum asap.
The RRR** was very narrow at the opening bell and continued to be so up to the end and any trades during today's session will probably end up on the unprofitable side as long as this market has low volume and remains flat. Swing trading is at your own risk and being the market is at a crossroads of sorts, I would prefer to sit on my hands rather than risk guessing incorrectly.
The DOW at 4:00 is at 13485 up 72.46 or 0.54%.
The 500 is at 1447 up 13.83 or 0.96%.
The $RUT is at 843.54 up 9.61 or 1.15%.
SPY is at 144.80 up 1.39 or 0.98%.
The longer trend is up, the past week's trend is neutral to bearish and the current bias is down.
WTI oil is up today and is at 92.10 trading between 90.00 and 92.38 and the bias is positive.
Brent crude is up today and is at 112.31 trading between 109.70 and 112.48 and the bias is positive.
Gold is up today at 1777.46, trading between 1750.62 and 1779.40 with a positive bias.
Dr. Copper is at 3.75 up from 3.71 earlier.
The US dollar rose from 79.73 earlier to 80.00 and back down to 79.55 and is currently trading at 79.62.
The 500 at the close.
The DOW at the close.
A massive 13% collapse in durable goods, the biggest since January 2009; a $20 billion miss to annualized Q2 GDP estimates, and well below the lowest estimate, 60+ weeks of constant upward BLS revisions to initial claims "data" and not to mention assorted atrocious economic (note: not to be confused with market - the two are now completely unlinked) data from around the globe.
And what does the White House say: the data shows that the "US is making progress."
We sure wouldn't want to know what it would look like if after 3 episodes of easing, trillions injected into the economy via the Fed, and of course $6 trillion in extra debt the US was not making progress. Oh and yes, everything else is Bush's fault.
** RRR = Risk Reward Ratio
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Written by Gary