Saturday, December 7, 2013
Keystone's Trading Week in Review and Key Events Ahead for Trading the Markets 12/7/13
On Friday, 11/29/13, Comet ISON burns up and disintegrates as it passes the sun. A SpaceX (Elon Musk) launch to place a satellite in orbit continues to face delays. Australia rejects ADM’s $2.6 billion takeover deal of Graincorp, which drops -23%, since the deal is contrary to national interests. Asian stocks are flat to lower with the Nikkei printing a +9.3% monthly gain. Japan inflation sneaks higher at levels not seen since 1998. Dollar/yen is 102.33. China flies war planes through the disputed air space above the Japanese islands escalating tensions. Eurozone inflation is a hair higher than expected and unemployment a hair lower. Euro is 1.3614. Ukraine freezes plans to join the EU on pressure from Russia. S&P raises the credit ratings on Spain and Cyprus but lowers the Netherlands rating based on economic growth prospects. Germany’s retail sales drop for 2 consecutive months and unemployment rises for the 4th month. 25% of Spaniards say they would consider leaving Spain for better economic opportunities. Markets reopen for trading for a shortened session. Today is EOM and the most bullish day of the year. Today is Black Friday one of the top busiest retail sales days of the entire year that will provide an early gauge on the retail shopping season. Traders are optimistic holding the least amount of puts in the retail sector in 3 years. The overnight shopping shows robust crowds and sales especially at BBY, WMT, LTD and TGT. iPad Air is selling well and about 75% of the Smartphone sales in Japan are the iPhone. AAPL jumps +0.7% pre-market pushing Nasdaq futures higher to +17. S&P +5. Dow +50. Unions picket in front of WMT stores protesting over low wages. The 10-year yield is 2.76%. Bitcoin hits $1236. Marc Faber of The Gloom, Boom & Doom Report appears on business television and says a massive speculative bubble is in place across nearly all asset classes including stocks, bonds, bitcoin and farmland. Faber cites the Case-Shiller PE Index in the mid-20’s but is not shorting the market aggressively as yet. He warns investors to lower their expectations moving forward. Equities move higher after the opening bell with new record highs printing for the major indexes again. BIDU, TSLA, NFLX and other momo stocks jump over +1% higher, pumping the Nasdaq higher. WTIC crude oil creates a death cross with the 50-day MA dropping down through the 200-day MA. Both the SPX and VIX trade higher in early trading; one of them is wrong. The bulls are in control until one-half hour before the early 1 PM close when sellers enter driving the Dow about 70 points lower off the top. The SPX, Dow and RUT finish flat on the day and the Nasdaq positive. The Nasdaq is pumped by the high flyers, biotech and large-cap tech stocks such as AAPL. AMZN gains +2% moving vertically higher on joyous holiday shopping expectations. The SPX prints a new all-time intraday high at 1813.55. The Dow prints a new all-time intraday high at 16174.51 venturing ever-nearer the inflation-adjusted Dow high at 16219. The Nasdaq closes at a new 13-year high at 4060 now well above the psychological 4K level without even performing a back kiss as yet. The RUT prints a new all-time intraday high at 1147.00 and new all-time closing high at 1142.89. The biotech sector pumps the small cap RUT higher. Interestingly, the VIX jumps over +5% higher in the final minutes of trading. Gold drops -5.4% to 1251 during November. For the week, the SPX is slightly up, ditto the Dow, the Nasdaq is up +1.7% and RUT up +1.6%. The SPX is up 8 consecutive weeks the longest streak in a decade. The Dow prints 12 new all-time record highs during November. For the month, the Dow is up +3.5%, SPX +2.8%, Nasdaq +3.6% and RUT +3.9%. The bulls appear unstoppable due to the Fed and BOJ money-printing. The central bankers are the markets as evidenced by the BOJ weakening the yen creating a +9% NIKK rally over the last month. On the eve of when the Obamacare web site is supposed to be fully functionally, the Whitehouse says there will be intermittent outages on the site from 9 PM EST to 8 AM tomorrow morning. Margin interest is now in excess of $410 billion catapulting higher week after week as long traders chase the markets higher; greed is taking over. The margin interest is now at lofty levels like the October 2007 market top. The CPCE put/call ratio drops to 0.48 verifying the uber complacency in markets and signaling a significant market top in place. Traders are completely worry-free and do not believe that markets can sell off since the Fed will not taper QE until March.
On Saturday, 11/30/13, today is the day the Whitehouse promised that the Obamacare website would work properly. Television personality Barbara Walters interviews President Obama and the First Lady where he tries to defend his trustworthiness after the 3 years of lies about the Affordable Health Care Act. The usual Black Friday shopping mayhem occurs at stores and malls with a few shootings, one sick soul shooting another over a big screen television, stabbings, a bomb threat and lots of pushing and shoving. It is always amazing how quickly humans can turn into animals. Consumers are happy with stores busily slitting each others’ throats with competitive sales, 40% off, 50% off, 60% off and more. Retail analysts report that this is the most promotional holiday shopping season since 2008, when the stock market was crashing. Sales on the Internet jump strongly. The retail sales numbers appear strong, however, at what cost to margins? N. Korea forces a U.S. hostage to apologize for war crimes. There is no word on when he will be released. N. Korea will likely use him as a bargaining chip to receive aid in exchange for his return. A U.S. war veteran, held as a hostage in North Korea, is forced to apologize for war crimes. North Korea is likely using the vet as a bargaining chip to gain aid from the U.S. South Korea bans the import of all fish from the Fukishima nuclear disaster area. Fish and animals along the west coast of North America are showing signs of radiation sickness. Radiation monitors across the U.S. are showing ever-increasing levels, especially along the west coast in California, with radiation fallout and ocean contamination from Fukishima the culprit. The main stream media continues to ignore the ongoing Japan nuclear disaster. The U.S. airlines are told to comply with the Chinese requests for flying over the disputed airspace above the Japanese islands. Violence continues in Egypt requiring security authorities to use tear gas on the crowds. Social unrest continues around the globe with protests ongoing in Russia, Brazil and Thailand. Thousands of protestors attack government buildings in the Ukraine.
On Sunday, 12/1/13, Thailand protestors storm the prime minister’s offices and the violence results in 3 dead. Moody’s upgrades Greece’s debt rating 2 notches but the bonds remain in junk territory and the country mired in depression. U.S. retail sales are up +2.3% for Thursday and Black Friday as compared to last year, however, Black Friday sales are down -13% compared to last year. The Thursday store openings pulled sales forward. China’s PMI is a touch better than expected at 51.4 indicating an economy maintaining a level footing and not decelerating, however, the need for raw materials continues to decrease. Laptop and tablet sales competition increases as MSFT launches an ad campaign telling consumers not to be ‘scroogled’ (buying a GOOG Chrome book). AMZN’s Jeff Bezos, on the 60 Minutes news program, highlights drones for use in delivering packages. The technology is a few years away and would be named Amazon Prime Air.
On Monday, 12/2/13, Australia’s inflation rises more than expected. British Prime Minister Cameron lands in China to discuss trade. The HSBC China PMI is 50.8 better than expected but below last month’s number. The smaller China manufacturers remain challenged moving forward. Dollar/yen is 102.75 moving higher but the Nikkei finishes down due to the stronger dollar causing the rise in the currency pair rather than a weaker yen. Copper and commodities are lower on the stronger dollar. Europe PMI’s are all showing improvements across the board; the Fed and BOJ money-printing creates the positivity in markets the last few months. Italian finance minister Saccomanni says Italy is at a positive turning point and the economy is recovering. The 10-year yield moves higher to 2.79%. The Obamacare web site is functioning marginally better but continues to experience sporadic problems. The Whitehouse says 100K sign-ups occur in November but the 7 million goal to make the new healthcare program viable remains far away. Television pundits and analysts continue to tell folks to buy the market with both hands. Today is Cyber Monday the busiest Internet shopping day of the year. Equities stumble sideways to begin the new week of trading. The 10-year yield moves above 2.80%. Gold and gold miners are selling off strongly reflective of tax loss selling to offset gains. Gold loses 30 bucks to 1219. GLD loses -3%. GDX loses -6%. SLW drops -5%. Retail stocks are sold off. Interestingly, there are more folks out shopping this year thus far but the retail sales are lower compared to last year. URBN is punished -3.6%. AEO is upgraded so it rises slightly. MS downgrades MMM and it drops -4.4%; a heck of a drop for a blue chip divvy darling. ISM Mfg Index rises strongly confirming the global rise in manufacturing data over the last few hours. Markets remain flat all day long as volatility creeps higher creating anxiety. Utilities, telecom and home builders are weak on elevated Treasury yields. Noted economist Robert Shiller says the markets, especially housing and tech sectors, may be in a bubble. Equities fall out of bed at 3:30 PM as the VIX climbs above 14. The SPX drops under 1800 and the Dow drops under 16K but both recover in the final minute. At the bell, the SPX loses 5 points to 1801. The Dow loses 77 points to 16009. The Nasdaq drops 15 points to 4045. The RUT loses 14 points, -1.2%, to 1129. Trannies print a new all-time high today at 7304.49 before pulling back. The broad indexes sold off since the yen strengthened dropping the dollar/yen pair from over 103.10 today to 102.95. Equities print down days for Friday and Monday which is a bearish signal if it trends for the weeks forward. Equities are selling off in the final one-half hour of trading for the last 5 consecutive days a very bearish signal showing funds distributing stock. Strategist James Paulsen of Wells Capital appears on business television and says SPX 2000 is doable next year with a lot of sideways action on tap. Adam Parker of MS sets a cutsie price target of SPX 2014 for 2014. Someone was destined to do that. Parker had the low SPX estimate on the street this year and he wisely changed course part way through the year turning bullish. He now has the distinction of the most bullish SPX target for next year. BMO’s Brian Belski says SPX 2000 will print next year with market adjustments also occurring and the SPX will finish at 1900 in 2014. The bulls are out in force with 3 more analysts touting SPX 2000 targets for the months ahead. Complacency rules the markets. Vice president Biden arrives at Tokyo and plans to visit China and South Korea as well over the coming week. KKD misses earnings and sells off AH’s. The new moon hits a peak at 5:22 PM EST. Markets are typically bearish moving through the new moon. GS’s strategist Kostin targets SPX 1900 for 2014 and hedges the bet saying a 10% correction is possible during the same time frame. The AMZN drone delivery video is all the rage today. Considering that this Bezos story hits on Cyber Monday, the busiest Internet shopping day of the year, and Amazon is the largest Internet retailer, the drone is likely delivering B.S. AAPL buys Topsy for 200 million, a small company specializing in analyzing Twitter data. The Fed okay’s the GS and JPM revised capital plans for 2013. In a few short weeks, the banks will submit capital plans for 2014. The Whitehouse performs a victory lap saying the Affordable Care Act website is up and running as promised, however, on closer inspection, the site is handling only a limited amount of potential enrollees and are sending them to a que line where they wait before proceeding. The Whitehouse remains secretive and will only release website data in bits and pieces, and only data that paints the Obamacare debacle in a positive light. The back end of the site, where folks can complete payment for insurance as well as where hospitals and doctors receive payments has yet to be programmed. Concern grows over folks that may think they are signed up for Obamacare health insurance, but come January 1st they will realize they instead no longer have insurance, creating chaos. The Whitehouse defends the poor performance of the Obamacare web site providing verification to the old saying, “it’s good enough for government work.” To add further insult to the American people, Senate Leader Reid excludes his staff from Obamacare who will all keep their current better insurance.
On Tuesday, 12/3/13, RBA says Aussie dollar is “uncomfortably high.”Thailand protesters become more aggressive and are determined to take over government offices but the authorities are avoiding a heavy-handed approach to regain order. Dollar/yen remains elevated at 103.10 so the Nikkei finishes higher due to the weaker yen printing a 6-year high. Euro/yen pair hits 140 causing grief in Europe that needs a weaker euro to help stimulate growth. The central bankers are stepping on each other’s toes. Parents are told to keep their children indoors today due to the Shanghai air pollution. U.K.’s Cameron pushes for more China trade but also pushes improvements in human rights. Vice President Biden urges Japan and China to lower tensions concerning the air space above the disputed Japanese islands. WTIC crude oil is 94.14 and Brent oil 111.53, a 17.5 wide spread. Brent oil may need to retreat to match the recent weakness in West Texas crude. The Saudi’s say Iranian oil coming on line will not affect OPEC oil production targets. At 4:30 AM EST, the dollar/yen drops under 103 and S&P futures drop from flat to -2 on the stronger yen. The central bankers are the markets. The wealthy are wealthier thanks to Chairman Bernanke’s policies and continue to push money into the art and collectables markets with Bruce Lee memorabilia headed for auction and expected to sell for nearly $200K. U.K. construction data is the strongest in 6 years fueling a potential housing bubble. European markets are flat to lower. Basic materials are hit. Italy’s Mt. Etna erupts for the 19th time this year with hot lava flowing down the sides of the volcano. The copper weakness continues. Brazil’s Q3 GDP declines -0.5% from the previous quarter with commodities creating much of the weakness. Cyber Monday sales are about 20% higher than last year maintaining its moniker as the busiest Internet shopping day of the year. Motor Vehicle Sales are in-line with expectations showing a surprisingly healthy automobile market. The rich, made wealthier through the central banker’s money-printing, are buying the luxury car brands. The broad indexes drift lower all day long as the dollar/yen drops to 102.33. The move lower is muted due to the Fed’s double POMO pump today, printing money like madmen. The DAX loses -1.9% the largest drop in 3 months. POT cuts 18% of its workforce on lower sales. At 2 PM, equities recover into the closing bell. The SPX finishes down 6 points, -0.3%, to 1795. The Dow drops 94 points, -0.6%, 15915. The Nasdaq loses 8 points, -0.2%, to 4037. Semiconductors are positive today holding up the Nasdaq. AAPL gains +2.7% as traders believe Apple has turned the corner and will head higher. The RUT dumps 5 points, -0.5%, to 1124. Cyclical stocks are sold off as traders question the strength of the global economy. Volatility continues higher with the VIX approaching 15. KKD is creamed today losing -23%. China bellwether YUM warns that sales will remain challenged moving forward so it is punished -3%. JCP reports robust retail sales but this may not equate to profits due to heavy discounting. After the bell, a judge rules that Detroit’s bankruptcy proceedings can continue. The action sets precedence for anyone holding muni bonds and also anyone holding a pension (pensions will likely take a cut). The ruling places Detroit’s art and other assets at risk. Detroit is over $18 billion in debt. The U.S. Supreme Court rejects appeals by AMZN and OSTK concerning the collection of sales taxes. Amazon will have to proceed with charging sales tax in New York and the Congress will have to address the Internet sales tax issue. New York’s Attorney General Schneiderman says the ruling validates the efforts to have Internet companies and retailers treated equally concerning the collection of sales taxes. Traders remain strongly bullish and permabear analysts such as David Rosenberg, Jeremy Grantham and Hugh Hendry have all flipped to the bull camp. The number of bearish newsletter writers is at a record low not seen since the 1980’s. Traders currently believe they are fully protected from any stock market downside since the Fed, BOJ and other central bankers will continue printing money. When the entire crowd is partying like its 1999, position yourself close to the exit door.
On Wednesday, 12/4/13, the Aussie dollar drops to 0.9018. The dollar/yen is 102.70. The stronger yen sends NIKK lower -2.2%. The Shanghai is up +1.3%. China sees a rising domestic automobile demand. The EU announces a large $2.3 billion fine against the large banks for the rigging of Libor interest rates. The banks fined include C, DB, RBS, JPM, and Societe Generale. Barclay’s and UBS are immune from fines since they first reported the scandal and cooperated with authorities. The banking sector sells off after the announcement. Tesco, the U.K. grocer, reports disappointing earnings. U.K. services PMI drops to 60 the lowest reading since June so the sterling drops to 1.6363. Germany reports a robust services PMI but Italy is weaker than expected illustrating the divergence in European economies. European markets are flat in early trading. OPEC tensions increase over increased oil production from Iran and Iraq as well as the ever-increasing U.S. shale oil production. The 10-year yield is 2.80% traveling sideways the last couple days. U.S. futures drop to the flat line after the banking fine announcement. Mortgage Applications are down for 5 consecutive weeks and re-fi’s are strongly lower. ADP Jobs Report is 215K jobs blowing out the consensus at 175K and revising last month’s low 130K jobs up to 184K. The 10-year yield marches higher hitting 2.85%. The S&P futures drop to -5 a 9-point turnaround over the last couple hours. C is -1.7% pre-market. Clothing retailers voice concern over sluggish sales since the inventories are well-stocked. This is great for consumers since the holiday discounting will be large but bad for retailers as they lose profit. Retailers are concerned over the lack of traffic in stores the last few days. AEO -2.0%, RTH is -0.2%, EXPR -19%, TGT -0.9%, JCP -4.0%. Markets drop at the opening bell. The VIX moves above 15. Banks are weak with C -1.7% and JPM -0.4%. New Home Sales blow out to the upside with a +25% gain. ISM Non-Mfg Index is weaker than expected showing a sluggish services economy. Equities quickly recover and the SPX reverses off the LOD at 1786 up to 1800. The dip-buyers jump into the broad indexes and the market bullishness continues. The VIX drops under 15. Oil inventories show a continued strong supply available. The markets are in a state of confusion since the robust ADP report hints that QE tapering will occur sooner than expected, so rates rise and stocks drop, but the weak ISM data hints that QE will continue forever so stocks move higher. The Fed and other central bankers have destroyed price discovery in markets. At 11 AM, traders decide to exit the clown ride and stocks collapse with the SPX dropping from 1800 down to 1780, a 20-handle drop in 2 hours time. A truck hauling radioactive material is stolen in Tepojaco, Mexico. The dangerous cobalt material can be used for a dirty bomb. A few hours later the truck is recovered but the container is open contaminating the area. Hazardous materials crews are cleaning the site and believe most of the radioactive material is recovered but the thieves are missing. Authorities believe the culprits will seek medical attention since their exposure will cause radiation sickness; they will likely die. The IAEA has been notified as per international protocol. A similar event in Thailand about 13 years ago resulted in several deaths and over 2000 people exposed to radiation. The Beige Book release says the economy is growing at a modest pace. Stocks recover again for another whipsaw move with the SPX moving higher from 1780 to 1796. GIB loses -4.2% on news that Jim Chanos is shorting CGI Group. SHLD is -8.3% as Eddie Lampert sells to meet redemptions. CF jumps +11% promising to raise the dividend. President Obama speaks on ‘income inequality’ in America in front of a friendly and supportive Center for American Progress crowd. The average bank teller makes about 26K/year and one-third are on some form of government assistance. The bank executives, however, are richer than ever and the too-big-to-fail banks are larger than ever. The gap between rich and poor is increasing; however, it is not in spite of the president’s policies but because of the president’s policies. The Fed is printing $85 billion per month of easy money. Banks and companies use the money to fund stock buybacks that artificially pump stock prices higher making the rich richer. 50% of the population does not own stocks, the poor, so they do not enjoy any upside in net worth while at the same time suffer through structural unemployment. The Fed money does not help Main Street and instead benefits Wall Street. Banks are not lending so there is no velocity of money occurring. The president’s policies are actually the main cause of the growing income inequality problem. President Obama boldly proclaims that Obamacare will not be repealed as long as he is president. Concern is growing that the millions that have had their health insurance cancelled, because of Obamacare, will not be able to sign up for new coverage by the 12/23/13 deadline, due to the problems with the website and the program, to avoid a lapse of coverage beginning 1/1/14. A Harvard poll shows a majority of young folks have no intent on signing up for Obamacare which would place the taxpayer on the hook to pay for the Affordable Care Act. The trading session ends relatively flat on the day. The SPX remains under 1800 and the Dow under 16K, now under 15900. The Ukraine opposition meets with government officials after 20K protestors take to the streets. Ex Fed Chair Greenspan says bitcoin is in a bubble but remember, he was incapable of identifying any of the asset bubbles he created in markets due to his policies.
On Thursday, 12/5/13, the International Data Corporation (IDC) says global tablet sales are peaking this year and next and will trail off as consumers prefer the larger smartphones rather than small tablets. The dollar/yen drops towards 102 so the Nikkei dumps -1.5% and Asia stocks are weak across the board. AAPL and CHL announce a joint deal to distribute iPhone’s on the China Mobile network. China bans the use of bitcoin for business transactions on fears of using the virtual currency for illegal activities. Individuals are allowed to use the bitcoin. Bitcoin drops to 970. The BOE maintains its benchmark interest rate at 0.50% as expected. Ditto the ECB holding steady with their low rate and Draghi is more worried about deflation than inflation. Metro AG is downgraded and dumps -5.1%. The negativity in European retail sales continues after Tesco’s weak results this week. The euro remains elevated at 1.36 so Draghi does not succeed in talking down the euro and European markets sell off. F debuts a new Mustang design and seeks to gain global appeal for the brand. Jobless Claims are under 300K near a 6-year low and GDP is a strong 3.6% so traders now expect QE tapering sooner than later and the 10-year yield pops to 2.87% and stock futures weaken. How sickening is it that all market action must be assessed in the context of the Fed’s QE program? The jump in GDP is mainly due to inventories so most analysts continue to expect GDP to print around 1% moving forward and believe today’s robust 3.6% number is an outlier. The 30-year yield is 3.91%. The broad indexes move sideways with a weak bias as the session begins. Gold and miners sell off again and GDX prints a 5-year low. Carl Icahn seeks a lower buyback plan of 50 billion for AAPL stock. Natty gas inventories drop far more than expected on the colder weather in the States so price jumps above the 4 level at a 6-month high. Wharton’s professor Jeremy Siegel says Dow 18K is possible for next year. Some MCD workers walk off the job to protest low wages and continue to push for a $15 minimum wage shouting “we can’t survive on $7.25.” Democrats in Congress encourage McDonalds and other fast-food establishments to raise wages. CZR loses -1.8% after saying on-line gambling may hurt business. CELG jumps +3% after an UBS analyst forecasts a 200+ price target. Breast cancer start-up PBYI explodes +67% higher on encouraging results. ARO drops -1% after missing earnings and guiding lower. Other retailers guide lower and are sold off including WTSL -14.0%, GES -1.3%, JCP -8.4% and FRAN -8.0%. TIF gains +1.2% since GS placed it on the conviction buy list. Texas retailer CONN jumps +21%. The dollar/yen loses the 102 level dropping to 101.66 so the stronger yen sends U.S. equities lower. The VIX is above 15. The banks are weak today, despite the up in yields, due to concern that the Volcker rule will limit hedging strategies. XLF is down -0.8%. Bitcoin recovers back above 1K. Hedge fund manager Kyle Bass is bullish on GM and betting against European banks. Markets print at the lows of the day moving into the last hour of trading. MSFT loses -3.0%. The art bubble continues higher with more record-breaking auctions occurring including Hopper’s ‘East Wind Over Weehawken’ selling for $40.5 million today. Byron Wien is another bear turned bull saying equities have further to run on the upside. Bears are now rarer than hen’s teeth. The broad indexes close down on the day logging 4 consecutive down days which is especially odd to begin a new month. Tomorrow would be expected to be up. The SPX loses -0.5% to 1785. The Dow dumps -0.5% to 15823. The Nasdaq finishes only a hair lower and the RUT finishes positive. Much of the selling is likely tax loss selling. After the bell, retailers are hit. BIG -9%. FIVE -8.3%. COST reports the weakest performance since 2009 and is sold off. ULTA dumps -15.3%. An SEC letter is requesting information on JCP’s liquidity, cash flow and other issues so it is beaten -1% AH’s. GPS is a bright spot +2.5%. The beloved South Africa leader Nelson Mandela passes at age 95. Between 10% and 25% of the Obamacare enrollments contain data errors which will affect how quickly these folks can obtain health insurance.
On Friday, 12/6/13, futures are positive in the early morning with S&P’s +7. The dollar/yen is inching higher to 102.20 which creates lift in the NIKK. Vice president Biden wraps up the China visit urging a resolution to the Japan island dispute. Biden’s next stop is S. Korea. Abe takes the lead and requests a summit with China to address the rising tensions in Asia. Smog in Shanghai is at the highest extremely hazardous levels. Thousands of mourners gather outside Mandela’s house to pay respect. North Sea ports close due to severe storms. GM will stop offering the Chevy brand in Europe. DB exits commodity trading leaving GS as the main player involved in the commodities sectors. The Bundesbank raises growth estimates and says Europe is recovering. The euro remains elevated at 1.3667. AEO is -5.6% pre-market. Congress is one week away from the deadline to develop a budget agreement and the news is encouraging from Capitol Hill that a 2-year deal may announced next week. The Monthly Jobs Report is stellar with 203K jobs, 7.0% unemployment rate (lowest since the December 2008 market crash, 5 years ago), both average hours worked and wages are up and the labor participation rate moves up a touch to 63% but holding at the 3-decade lows. Interestingly, 41% of the jobs created are government jobs. Markets react violently in both directions. The 10-year yield jumps to 2.93% but quickly retreats to 2.87% where it was before the number. 10 minutes after the release and markets are where they were before the report but as time ticks by equities catch a strong bid and by 9 AM EST the S&P’s are +17, Dow +105 and Nasdaq +29. The bulls are running. Volatility drops. The broad indexes leap higher at the opening bell with the SPX printing up over 1800 and Dow over 16K. Consumer Sentiment is 82.5 at the summer time highs. Fed’s Plosser says “we need to begin to get rid of QE,” but no one pays attention. ULTA -21%. JCP -8.7%. The tape is strong today. Volatility remains low under 14 and the dollar/yen jumps higher to 102.85 creating the bull fuel for the stock market. Natty gas is 4.11 remaining at a 6 month high. Interestingly, the high-flyers like AAPL, FB, NFLX and TSLA are all sold off today ending negative. GPS -3% losing last evenings luster. GOOG prints a new all-time high at 1070. Bitcoin drops to 877 after BIDU says it will not accept bitcoin for payments. At the bell, the SPX gains 20 points, +1.1%, to 1805, halting the 5-day losing streak. The Dow gains 199 points, +1.3%, to 16020 as the dividend stock bubble is pumped. XLP jumps +1.4% as traders think they will be safer in the staples (tooth paste, toilet paper, soap, etc…) if a market down turn occurs. They will likely not be. The Nasdaq is up 29 points, +0.7%, to 4063 with a hanging man candlestick printing on the daily chart. The RUT is up 9 points +0.8%, to 1131. Tech and small caps lag the broader market up move. Trannies also underperform at +0.6%. For the week, the SPX is a hair lower reversing the 8-week winning streak. The Dow is negative on the week losing -0.4% and its 8-week winning streak. The Nasdaq is a single hair positive on the week with the RUT small caps down -1.1% this week. The overall bullish market vibe continues with long trader’s high-fiving each other without any fear of market downside ahead. The 10-year yield is 2.88%. Dollar/yen 102.90. The euro hits 1.37 which will limit Europe’s ability to recover. The USD dollar basket weakens to 80.27 on the stronger euro. The pound is 1.6347. Long traders need to send a thank you note to the BOJ since the bludgeoning of the yen today, -1.1%, driving the dollar/yen higher to 102.90, was the main driver of the higher stock market. Banzai!! The central bankers are the market and the Fed and BOJ have been tag-teaming in recent days, taking turns at pumping the stock market higher. It took 6 Fed POMO pumps this week to prevent the stock market from dropping and another 6 POMO pumps are planned for next week.
On Saturday, 12/7/13, North Korea frees the American vet held hostage. South Africa announces 10 days of mourning over Mandela’s death. The Obamacare mess continues with growing concern that folks will have a lapse in coverage starting January 1st due to the poor functionality of the website and program in general. The Whitehouse is aware of this problem but has not sent letters to warn people. Many folks think they signed up for insurance, but they are actually not covered. Based on current projections, there may actually be more folks that have lost health insurance than gained insurance come January 1st.
On Sunday, 12/8/13, … there are 16 days (2 weeks) remaining in the holiday shopping season until Christmas and 23 days until the EOY. There are 16 trading days remaining in the year.
On Monday, 12/9/13, ….
On Tuesday, 12/10/13, NFIB Small Business Optimism Index. JOLTS Job Openings Report. Wholesale Trade. 3-Year Note Auction.
On Wednesday, 12/11/13, Mortgage Applications. Oil Inventories. 10-Year Note Auction. Treasury Budget 2 PM.
On Thursday, 12/12/13, Jobless Claims. Retail Sales. Import and Export Prices. Business Inventories. Natty Gas Inventories. 30-Year Bond Auction.
On Friday, 12/13/13, PPI. Congress provides a detailed road map to handle the U.S. budget crisis moving forward.
On Saturday, 12/14/13, …
On Sunday, 12/15/13, Nelson Mandela is buried at his final resting place.
On Monday, 12/16/13, Empire State Mfg Index. TIC data. Industrial Production. 2-Year Note Auction.
On Tuesday, 12/17/13, FOMC 2-day meeting begins. Is QE taper talk on the table? CPI. Housing Market Index. 5-Year Note Auction. A full moon occurs. Markets are typically bullish moving through the full moon. Markets are typically bullish from a Tuesday low to a Wednesday high for OpEx week.
On Wednesday, 12/18/13, Mortgage Applications. Housing Starts. Oil Inventories. 7-Year Note Auction. FOMC Meeting Announcement and Forecasts 2 PM which will create a market pivot point. Chairman Bernanke Press Conference and Q&A from 2:30 PM to 3:30 PM will move markets.
On Thursday, 12/19/13, BOJ 2-day meeting begins. Jobless Claims. Philly Fed and Existing Home Sales 10 AM will create a market pivot point. Natty Gas Inventories. 5-Year TIPS Auction.
On Friday, 12/20/13, BOJ rate and policy decision. OpEx Quadruple Witching. GDP. Atlanta Fed Business Inflation Expectations. Kansas City Fed Mfg Index.
On Saturday, 12/21/13, ….
On Sunday, 12/22/13, ….
On Monday, 12/23/13, the initial sign-up period for Obamacare ends (extended from 12/15/13) for those beginning insurance on 1/1/14. The Whitehouse needs 7 million people (mainly healthy young people) to sign-up by March, otherwise, the program will start bleeding money and require a future bailout by the taxpayers. Personal Income and Outlays. Chicago Fed National Activity Index. Consumer Sentiment 9:55 AM will create a market pivot point.
On Tuesday, 12/24/13, Durable Goods Orders. FHFA House Price Index. New Home Sales. Richmond Fed Mfg Index. Markets Close Early for Christmas Eve.
On Wednesday, 12/25/13, Markets are Closed in Observance of Christmas holiday.
On Thursday, 12/26/13, Markets Reopen for Trading. Mortgage Applications. Jobless Claims. Oil Inventories.
On Friday, 12/27/13, Natty Gas Inventories.
On Saturday, 12/28/13, …..
On Sunday, 12/29/13, …..
On Monday, 12/30/13, Pending Home Sales Index. Dallas Fed Mfg Survey. Farm Prices.
On Tuesday, 12/31/13, EOM. EOQ4. EOY2013. S&P Case-Shiller. Chicago PMI 9:45 AM will create a market pivot. Consumer Confidence 10 AM will create a market pivot point. Gold is down on the year for the first time this century.
----------------------------- 2014 ----------------------
On Wednesday, 1/1/14, Markets are Closed in Observance of New Years holiday. A major Bradley turn date occurs where a major market directional move is expected in the 12/23/13 through 1/8/14 time frame. The Bradley turn does not predict direction, only that a strong move will occur one way of the other. Another Bradley turns in quick order so the beginning of the year may be a wild ride for the stock market. A new moon occurs. Markets are typically bearish moving through the new moon.
On Thursday, 1/2/14, Asia PMI’s. Europe PMI’s. Markets Reopen for Trading. Motor Vehicle Sales. Mortgage Applications. Jobless Claims. Natty Gas Inventories. Oil Inventories (one-day delayed).
On Friday, 1/3/14, …Europe must finalize all plans for the new banking union by March.
On Thursday, 1/9/14, a Bradley turn date occurs where a market directional move is expected in the 1/2/14 through 1/16/14 time frame. The Bradley turn does not predict direction, only that a strong move will occur one way of the other.
On Wednesday, 1/15/14, a Continuing Resolution (CR) is needed to fund and keep the U.S. government open.
On Thursday, 1/16/14, a full moon occurs. Markets are typically bullish moving through the full moon.
On Wednesday, 1/29/14, Chairman Bernanke conducts his last official two-day meeting (1/28 and 1/29) as Chair of the FOMC.
On Friday, 1/31/14, Chairman Bernanke’s term ends at the Fed. New Chair Yellen takes over.
On Friday, 2/7/14, the Debt Ceiling Limit is hit where the U.S. may default on obligations. Treasury Secretary Lew will use extraordinary measures to extend this time forward so late February or early March is a likelier deadline. Winter Olympics begin in Sochi, Russia, through 2/23/14.
On Saturday, 3/15/14, the deadline for the Obamacare sign up period ends. The Whitehouse needs 7 million people (mainly healthy young people) to sign-up by today or the program will be bleeding money profusely and require a taxpayer bailout.
On Wednesday, 3/19/14, new Fed Chair Yellen talks at the conclusion of her first FOMC meeting (3/18 and 3/19).
In February/March, Fed Chair Yellen testifies before Congress.
In February/March, the German High Court must rule on the constitutionality of the OMT program. The decision is delayed from the Fall 2013. Many German citizens believe the OMT is simply a backdoor mechanism to fund other countries.
In February/March and forward, European bank stress tests are ongoing and will take one year to complete (there are likely 10% of the 128 banks undercapitalized with no clear way on how to recapitalize these troubled institutions). The one-year timeline is chosen to keep stretching things out in the hope that the European economy recovers before further bad news occurs.
In March, the ESM is officially “fully operational.” The Euro banking union is in place after delays from January 2013 to January 2014 and now to March 2014.
In April, MSFT no longer supports Windows XP.
In June, employer mandate provisions begin for Obamacare with many workers likely forced into part-time 30 hours per week or less employment.
On Tuesday, 11/4/14, mid-term elections. The 2-year presidential race for 2016 begins.
On Saturday, 11/15/14, the enrollment period for Obamacare in 2015 begins (pushed forward from 10/15/14 by the Whitehouse and democrats in November 2014; voters will not experience the sticker shock of higher insurance premiums, since too few healthy young people are signing up to support the program, until after the election).
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