MARKET WRAP – BEARS SLAUGHTERED
I wish I had something unique to report, but we all pretty much know the routine by now. The stock market opened on time and promptly proceeded to do the only thing it pretty much ever does – gut and kill bears. Today’s move was particularly insulting to equity market bears as stocks dipped to morning lows of -1.5% before the 10:30 buying crew stepped in 45 minutes early and didn’t stop all day. Stocks ultimately finished with gains – most impressive.
This has become a truly breathtaking market that simply cannot be stopped. The stats are well known by now. Stocks rise on 80% of all days, Mondays are always up days, the 10:30 decline is guaranteed money, declines are brief if at all and risk appetite is off the charts. My favorite stat of the day:
- Housing stocks are up 11% in 4 sessions and up 29% in the last 8 weeks. Wow.
A slew of negative news could have taken the market lower this morning, but stocks shrugged off Greek debt worries, lower overseas stocks, weak earnings and higher than expected PPI.
There is an almost unstoppable bid under this market and the appetite for risk is so high that it almost feels like greed amok. Nonetheless, the trend remains very friendly and the “buy the dip” mentality is alive and well.
From Daily Futures:
U.S. Economy
The U.S. Labor Department said that jobless claims were down 24,000 last week to 456,000, roughly as expected. They also said that the producer price index was up .7% in March and up 6.0% from a year ago, more than expected. The June 2011 eurodollars were down .04 to 98.52.
The National Association of Realtors said that existing home sales were at an annual rate of 5.35 million in March, up 6.8% on the month and more than expected. July lumber fell $3.30 to $333.50.
Grains and Cotton
Compared to the latest four-week average, the USDA said that last week’s net sales of:
Corn were up 56%.
Soybeans were up 51%.
Wheat were down 46%.
Cotton were up 82%.
July cotton was down .33 at 84.82.
The USDA said that Egypt bought 120,000 tons of U.S. corn for the current 2009-2010 season. July corn was up 2.5 cents at $3.715.
July wheat closed up 11.25 cents at $5.11, the highest close in over six weeks, blamed on short-covering.
Livestock
After the close, the USDA said that, as of March 31st, there were 510.5 million pounds of frozen pork in storage, down 14% from a year ago and less than expected. There were also 58.9 million pounds of frozen bellies in storage, down 19% from a year ago, but more than expected. June hogs finished down .12 at 86.95, ahead of the report.
The USDA said that net sales of beef totaled 20,300 tons last week, up from 6,700 tons the previous week. June cattle ended up .15 at 95.60.
Cocoa
July cocoa closed up $52 at $3,139, the third consecutive day higher, helped by last week’s favorable grindings reports from North America and Europe.
Orange juice
After the close, the USDA said that, as of March 31st, there were 1.305 billion pounds of frozen orange juice concentrate in cold storage, up 1% from a year ago. July orange juice dropped 3 cents to $1.3595.
Energies
The U.S. Department of Energy said that underground supplies of natural gas were up 73 billion cubic feet last week to 1.829 trillion cubic feet, less than expected. Supplies are now 5.5% from a year ago. June natural gas closed up 17.4 cents at $4.215, the highest close in a week.
Currencies
Eurostat said that Greece’s budget deficit in 2009 totaled 13.6% of GDP, more than the 12.7% that was expected. For the entire EU-27, government deficits totaled 6.8% of GDP. The June euro fell .0090 to $1.3315, near the lowest close of the last eleven months.
A composite index of manufacturing and services in the Euro area increased from 55.9 to 57.3 in March, the highest in over two and a half years.
Moody’s reduced its credit rating for Greece from A2 to A3 and also added a negative outlook.
Statistics Canada said that its composite index of leading indicators was up 1.0% in March, stronger than expected. The June Canadian dollar closed up .12 at $1.0008.
The U.K.’s Office for National Statistics said that retail sales volumes were up 2.2% in March from a year ago, less than expected.
Go 1/3 short near close each day, close out at the bottom the following morning. If gap up into major resistance then dump else close out short at morning bottom and ride a 100% long until 3:58 pm. Repeat until plunge protection team is broken.
The charting of this market is beginning to look like Shanghei Composite flat tops.
This feels very wrong. It’s one thing to say that the trend is your friend, don’t fight the tape, etc., what is one to make of a market that has now gone up almost as fast as it went down. The Russel 2000 chart is truly astonishing. Where is all this buying coming from? Who exactly, is the smart money in a market like this? Can it really just be algorithmic driven prop desks day trading?
Man that sell of at around 4:00PM is brutal…
Same thing happened last night. Buy the morning dip.
I am so sick of this.
Feels like intervention by government or big financial. Reminds me of a pump and dump game played on penny stocks.
I read a piece somewhere else stating that 18 of last 19 Mondays and 33 of last 37 Mondays (back to Sept) have been positive. The best part was if one were to remove Mondays the indices would be negative on the year. That goes beyond coincidence into statistical anomaly and it only further solidified my opinion that there’s huge manipulation going on.
The bounce off today’s lows was nothing short of breathtaking. It felt like being trapped by the Borg. The rise was relentless and seemed inevitable even. I sold my May puts at a loss because, I knew, resistance was futile. I have not yet been assimilated into the bull collective, but my strength is weakening with each uptick. We don’t get down days any more, we might get down hours, but that’s about it.
This is the dumbest stock market ever!
It doesn’t pay any attention to facts, only opinions!
First of all, last Friday was mega-bearish, as noted here, with Bambi trying to cuff Goverment Sachs, and Greek bond spreads blowing out, and stocks declining on huge volume and massively negative advance/decline ratio.
Any market with half a brain would know this was bad news and everyone should sell. But no, this stupid market goes right back up.
Like I said, totally dumb.
I could not agree more! But, if we’re right, then why are we still losing money? OMFG!!!! This is nightmarish! Every time I go to pull the trigger on some “upside protection,” the rational part of my brain kicks in and says “Wait, not yet, don’t do it…” and then the market climbs, I’ve lost more money and the beat goes on…
I don’t think I can hold on much longer…
For those who shorted M & JWN…bloody
A slow day at work so I managed to watch the rise & fall as the day progressed. Amazing! I’m more confused than ever, but there’s no way I’m going to change my allocation in favor of additional equities (currently 65% equities).