On 6/22/12, Friday, Asia falls overnight in sympathy to the U.S. markets. The request for bank aid for Spain is expected to occur by Monday with funds provided in July. Germany IFO business sentiment is weak, at a two-year low. Italy sentiment is weak printing a record low. Oil and gold continue lower. Brent drops below 90. Oil in general is down about 25% from the top four months ago. The ECB relaxes rules on the collateral that banks offer in exchange for the loans they receive. This provides increased availability of ECB liquidity but also increases the risk on the ECB’s balance sheet. To no surprise, Germany’s Bundesbank disagrees with this decision and says “We’re critical of this.” Keystone’s SPX:VIX Ratio Indicator jumps above 68 indicating a bullish day ahead. Keystone’s SPX 60-Minute with 200 EMA Indicator turns bullish. The financials are on the positive side after the Moody’s downgrades and in the afternoon drive higher, only to tumble in the final minutes. The broad indexes gain from one-half to one percent today. Despite the large down day yesterday, the markets finish relatively flat on the week with the Nasdaq and tech sector actually finishing higher.
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On 6/25/12, Monday, Storm Debby in the Gulf continues to dump several inches of rain over Florida and heads for the panhandle. Oil price flattens as worries that the storm will intensify and hit the Louisiana and Texas oil coasts diminishes. The world finds out that China’s economic data may be highly manipulated and masking the true downturn now occurring. The data released by all countries is phony baloney it is only a matter of degree; the U.S. data to a lesser amount, China data to a greater amount. Soros says “Europe risks Summit fiasco.” Spain formally requests a bailout but oddly enough, does not state the amount of money needed. A 100 billion euro sum is bandied about by news organizations. The euro breaks thru 1.25. Moody’s says that a downgrade of Spanish banks is coming today. U.S. futures are weak, the S&P’s down 11 and Dow Industrials off 90. Fitch downgrades Cyprus to junk status. The markets are on high alert for the U.S. Supreme Court ruling on Obamacare today but the decision will be on Thursday. The markets tumble all day long. U.S. banks are down from 2% to 5%. Keystone’s SPX:VIX Ratio Indicator drops under 68 signaling a large down day on tap and continued bearishness ahead. The European markets close with the Spain market down a huge 3.6%. Spanish and French banks are down from 5% to 6%; bank balance sheets are collapsing in Europe. The closing bell rings with the SPX down 21 points, -1.6%, to 1314. The Dow Industrials drop 138 points, -1.1%, to 12503. The Nasdaq falls 56 points, -2%, to 2836. The RUT drops 13, -1.7%, to 762. After the bell, Moody’s downgrades 28 Spanish banks from one to four notches including Banco Santander and Bankia. WTIC oil closes at 79.
On 6/26/12, Tuesday, Germany says that the other Euro nations are talking about Eurobonds but no one is talking about giving up sovereignty. The Euro Summit this week must address the Eurobond versus Sovereignty issue. The markets open and head higher. Consumer Confidence is weaker than expected but markets maintain an upwards buoyancy all day long. Egan-Jones downgrades Germany since they are going to be left holding the European bag. The retail sector supports the markets with WMT making another 52-week high. During the trading day, Merkel says that “Europe will not have shared liability for debt as long as she lives.” The news wires report her as saying ‘over my dead body’ but questions arise as to what she was exactly referencing, she may have been talking about ‘partial’ shared liability in the Eurozone, not complete shared liability, and ‘partial’ remains undefined as well. The bulls try to move Keystone’s SPX:VIX Ratio Indicator above 68 in the afternoon but the day ends with this tool remaining in the bear camp forecasting bearishness ahead. Keystone’s 30-Minute 8 MA and 34 MA Cross Indicator, however, turns bullish in the final half hour of trading. Markets finish the day up but on vapor volume. Traders are simply waiting for the Euro Summit on Thursday.
On 6/27/12, Wednesday, Stockton, California prepares to file for Chapter 9 bankruptcy as early as today. If so, it will be the largest city to go bankrupt in the U.S. Markets jump higher at the open. Keystone’s SPX:VIX ratio, 30-minute and 60-minute charts all turn bullish. The markets continue to throw off mixed signals, a few hours moving in the bulls direction only for the bears to push it the other way. Markets are in waiting mode for the Euro Summit.
On 6/28/12, Thursday, JPM’s trading loss from the recent debacle may approach 10 billion dollars far above original estimates; JPM drops over 5% pre-market and will obviously impact the financial sector. Germany’s jobless rate is 6.8%, worse than expected and proves that the Euro crisis is impacting Germany’s economy. The Spain 10-year yield moves above 7% increasing the tension as the Euro Summit begins. Spain-Germany spread is blowing out. U.S. GDP is unchanged at 1.9%. Markets tumble lower at the opening bell and weaken further at 10 AM EST as the Supreme Court ruling on the Affordable Healthcare Act is announced. Keystone’s SPX:VIX Ratio Indicator drops under 68 and other indicators turn bearish. The session remains weak until the news wires say that a break thru at the Euro Summit may be occurring. The equity markets catapult higher late day mounting nearly a complete comeback. The SPX had dropped to 1313 intraday and then moved up to 1332 finishing flatish at 1329. The Dow Industrials dropped to 12450 intraday and then up to 12626 before closing at 12602. After the close, NKE earnings disappoint sending the stock lower.
On 6/29/12, Friday, EOM, EOQ2, EOH1. News from the Euro Summit, where banks may be allowed to recapitalize directly from the bailout funds, and Merkel is shown to comply and compromise, sends global equity markets catapulting higher. Spain and Italy teamed up to form a strong alliance and Merkel folded. Italy’s Monti gave Merkel the full monty. Spain 10-year yield falls under 6.7% heading lower. Italy drops under 6%. The euro jumps large. Spain indexes are up over 3%. U.S. futures show S&P’s up 17 handles and the Dow Industrials up 126 handles. The opening bell rings and the markets move up all day long into the close. Keystone’s SPX:VIX Ratio Indicator jumps over 68 and other indicators turn bullish. Keystone’s NYA 40-Week MA Cross Indicator turns bullish indicating a bull market moving forward. A historic up move occurs to end the month, quarter and first half of 2012. The SPX closes up 33 points, 2.5%, to 1362. The Dow Industrials are up 278 points, 2.2%, to 12880. The Nasdaq is up 86 points, 3.0%, to 2935. The Dow moved from a low on Thursday at 12450 to a high at 12880 today, a whopping 430 points in only two days time. The SPX moved from a low on Thursday at 1313 to a closing and intraday high today at 1362, almost 50 S&P handles in only two days time. Obviously the bulk of the move today is short-covering as the short-sellers got caught off base. For the quarter, Q2, the SPX lost 3.3%, the Dow lost 2.2%, and Nasdaq lost over 5%. Gold gained 48 bucks moving back towards the 1600 level. Oil ends over 9% higher today to 85 per barrel. F is weak due to growing losses from overseas.
On 6/30/12, Saturday, analysts are parsing thru the Affordable Healthcare Act decision to understand the market ramifications. More importantly, Merkel has to sell her decision to the German people that will not be happy to hear what she has to say. The weekend provides time to sort thru the Euro Summit decision and determine exactly what was said and what the plan is for Europe moving forward.
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On 7/2/12, Monday, ISM Manufacturing Index-will impact energy markets and pivot markets at 10 AM EST.
On 7/3/12, Tuesday, markets close early due to the July 4th Independence Day holiday tomorrow.
On 7/4/12, Wednesday, markets are closed in Observance of July 4th Independence Day holiday.
On 7/5/12, Thursday, BOE and ECB Rate Decisions and Press Conferences. U.S. markets reopen for trading.
On 7/6/12, Friday, Jobs Report-3 weak reports in a row-5 reports remain, including this one, until the presidential election.
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On 7/11/12, Wednesday, 10-Year Note Auction. FOMC Minutes.
On 7/12/12, Thursday, 30-Year Bond Auction.
On 7/13/12, Friday the 13th, PPI. Consumer Sentiment.
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On 7/16/12, Monday, Retail Sales.
On 7/17/12, Tuesday, China GDP.
On 7/18/12, Wednesday, Housing Starts.
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On 7/26/12, Thursday, FB earnings.
On 7/27/12, Friday, GDP. Consumer Sentiment.
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On 7/31/12, Tuesday, EOM. FOMC Meeting Begins.
On 8/1/12, Wednesday, ISM Mfg Index. FOMC Rate Decision.
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