Wednesday, April 30, 2014

WEDNESDAY 4/30/14; GSK; ADP Employment Report; GDP; FOMC Rate Decision; EOM; YELP

The BOJ refrains from adding additional stimulus and sees inflation above 2% in 2016. The dollar/yen is flat at 102.50 and the NIKK is flat. The SSEC is also flat but the Hang Seng drops -1.4%. The April monthly results show that Australia outperformed while Japan underperformed. Global economic data shows that China will overtake the US economy in one year's time. India is moving into the third spot pushing Japan lower. Japan was pushed out of the number two spot by China about one year ago.

The euro remains sticky exactly at 1.38. The ECB says European banks have boosted their cash reserves since last summer. European markets trade lower. CAC is leading lower at -0.4%. German unemployment drops for the fifth consecutive month. Daimler profits are higher but the stock drops -3.2%. Mercedes earnings are blow-out positive the recall announced last evening now a distant memory. Mercedes sales are growing in China especially SUV’s and new stores are planned. BNP Paribas profit is growing but may face a fine from the US due to bank dealings with unapproved nations and money laundering allegations. CS is under the same scrutiny by US regulators including providing advice to companies concerning tax avoidance strategies. Barclay’s is setting up a ‘bad bank’ to handle its bad paper.

Royal Dutch Shell beats on earnings and rises +4% but there is large exposure to Russia and Ukraine which may negatively impact results moving forward. Talks are in progress between GE and Alstom. GE promises to maintain employment levels for three years to sweeten the deal. Alstom resumes trading after the halt late last week and catapults +15% higher but settles in at about up +8% today. Alstom will make a decision on its sale by the end of May.

The global M&A orgy continues especially in healthcare and pharma sectors. M&A activity typically coincides with market tops. 

[Text is Redacted: Purchase April 2014-04 to Read the Complete Chronology]

For the month, the SPX gains +0.6% and prints three consecutive up months and is up 7 of the last 8 months and also up 15 of the last 18 months. The power of the Fed and other central bankers is phenomenal with easy money fueling dividends, buybacks and the overall stock market. The Dow is up +0.8% on the month with the same monthly stats as the SPX. The COMPQ logs a down month losing -2%. There is always a fly in the ointment. The Nadsaq prints three down months out of the last four. The RUT loses -4% on the month placing another fly in the ointment. So tech and small caps want to lead the broad markets lower. Utilities and energy sectors are the winners in April. UTIL is up +4% this month and XLE gains +5.3%.

Health insurers are up strongly. WLP is up +5.6%. after raising forecasts CI +2.8%. SEE +5.3%. IP +1.6%. Higher paper and packaging companies (IP and SEE) is an encouraging sign for the economy. The hotel sector is from +2% to +5% higher today with strong moves in H, MAR, HLT and HOT. PBI +6.9%.  GRMN jumps +3.7% as its fitness monitor product gains popularity. GWW bounces +2.5% after announcing a dividend and buyback program. AVNR explodes higher +46% after receiving a favorable court decision on a patent dispute.

TWTR pukes -9%. EBAY collapses -5%. CHK drops -1.1% on news that its CEO is the highest paid in the US at an obscene $142 million. ESRX pukes -6.2% after lowering guidance. After the closing bell, YELP beats on earnings and pops +1% showing strength to the upside. WTW beats on earnings and leaps +19% in AH trading.

The minimum wage bill proposed by President Obama does not make it out of the democratically-controlled Congress. One-third of the people signing up for Obamacare have not paid their first premium far worse than expected.  The Whitehouse immediately disputes the data but continues to not provide actual numbers. The software contractor for the Obamacare web site says another $121 million is needed to fix the site. The web site remains unfinished and unable to handle transactions with the insurance companies. The work is being done manually and is very labor intensive which only serves to hurt the overall economy with such unproductive nonsense.

Departing HHS Secretary Sebelius says she will not testify before Congress so she rides off into the sunset like Lois Lerner involved with the IRS scandal. Nearly $800 million of taxpayer money is already lost with Obamacare so the total will move above one billion in short order. Silicon Valley tech companies chuckle at the Obamacare website and government incompetence since the site should already be fully functional with spending only one-fourth the cost. Instead, taxpayer money will continue to be wasted and Obamacare will likely require a bailout in a few years or sooner.

To create a trilogy of trouble for the president today, a CSX train hauling crude oil derails in Lynchburg, Virginia, USA, with as many as 14 tanker cars damaged and leaking. Three cars are in the James River leaking oil. President Obama refuses to approve the Keystone XL Pipeline project so more and more oil is transported by rail (to benefit his wealthy friend Warren Buffett) and accidents are occurring every couple months. Even though all environmental conditions are met and approved and democrats and republicans both call for the pipeline approval, the president will not permit the project since many of the wealthy donors to the Democratic Party are radical environmentalists. It is shameful since people desperately need jobs. Transporting oil via pipelines is obviously far safer than rail.

Tuesday, April 29, 2014

TUESDAY 4/29/14; DB; MRK; FOMC Meeting Begins; Consumer Confidence; EBAY; TWTR

Japan markets are closed for Showa Day. Markets are mixed in Aisa. China strongly rebounds. SSEC +0..8%. HSI +1.4%. Iron ore prices are at multi-year lows dragging the SPASX200 down -0.9%. The PBOC says they will establish a deposit insurance system and other banking reforms. China will allow some wealth management products to fail in an orderly way. PBOC wants to introduce private banks into the financial system.

Putin denounces the new sanctions as “cold war” tactics. Oil and gas company Gazprom says the sanctions will hurt over time. The Russia Foreign Ministry says the EU is under Washington’s thumb. Pro-Russian troops seize another police building in East Ukraine as the sanctions do not appear to have any bite. The Russian Ruble is 35.6470. This currency pair was 36 yesterday so the ruble is strengthening showing that the sanctions have no initial effect.

[Text is Redacted: Purchase April 2014-04 to Read the Complete Chronology]

After the closing bell, Twitter beats on earnings but the number of users disappoints analysts. Full year revenue guidance is lowered. TWTR is bludgeoned -9%. DVA reports a loss and is whacked -4% creating an unhappy ending to this movie. VPRT pukes -15% after reporting weak results. The GE-Alstom deal is approved and may be announced tomorrow. GE closes slightly down in AH’s. Panera beats on earnings but burns the bread by lowering guidance. PNRA drops -4.4%. Trulia misses big on EPS but slightly beats on the top line. TRLA -2%. STX beats on EPX but misses on top line and trades flat to negative. The IPO darling NDLS misses on top and bottom lines so it is beaten -6.5%.

EBAY beats on earnings 70 cents versus the 67 cents estimate and beats on the top line but guides lower. eBay also repatriated $9 billion in funds taking a tax hit of $3 billion which hints that management likely made a weak decision. Any amateur tax student could have provided better advice. Apple is a case in point that offered the bond sale today as a means to unlock the power of their cash hoard overseas. Right now, accountants and tax attorneys are knocking on eBay’s door handing out business cards professing they can provide better tax advice. EBAY pukes -4%. The stocks reporting earnings this evening are down across the board. TWTR is plummeting -10.5% so they can call the event hashtag collapse (#collapse).

VLO beats on earnings and pops to a new multi-year high. The integrated oils such as XOM and CVX, as well as the oil refiners such as VLO and TSO, are feeling love these days. XOM gains +0.3% printing new highs for the year today. Biopharma darling of long traders BMY beats on EPS but misses on the top line. Bristol-Myers Squibb’s cancer treatment nivolumab will proceed through the approval process more slowly than expected. BMY is beaten -3.6%.

North Korea is firing weaponry along the South Korean border. The construction and preparations for the Rio Olympics is badly behind schedule. Mercedes recalls 253K vehicles due to faulty lights. A poll shows that young Americans, disillusioned and disappointed with President Obama, are the least enthusiastic about voting in 14 years. Coldwater Creek receives court approval to proceed with a liquidation sale and continue closing stores.

Monday, April 28, 2014

MONDAY 4/28/14; Russia Sanctions

The New Zealand stock exchange is delayed from opening to begin the new week of trading due to a “system issue.” Trading is halted at 10 AM local time and trading resumes fifteen minutes later. The operator of the exchange, NZX Ltd, provides no further comment. The computer glitches, so-called fat finger trades, system issues and mini flash crashes continue plaguing global markets. Aussie dollar 0.9270.

The dollar/yen remains steady at 102.20. NIKK -1%. Japan March retail sales are very robust mainly due to increased spending ahead of the tax hike. 

[Text is Redacted: Purchase April 2014-04 to Read the Complete Chronology]

BA and GS are laggards today losing -1.3% and -1.1%, respectively. The utilities close at 6-1/2 year highs breaking out to new all-time highs. UTIL gains +0.5% to 555. Traders and investors flock to utilities for safety and a dividend creating a parabolic move and mini-bubble in utes. AAPL rallies nearly 4% as traders embrace a $17 billion bond sale strategy. GOOGL drops under its 200-day MA for the first time since November but recovers to close above at 523 flat on the day. TWTR loses -2.1% with earnings on tap tomorrow. BBY is a big winner +4.8%. POM +5.7%. ROP +6.5%. NEM -4%. ABX -3%.

After the closing bell, BWLD bounces +5.3% after beating on earnings. Container company TCS drops -5.7% after posting weaker results. HLF bounces +3% with a strong EPS beat and slight beat on top line sales. Guidance is lowered but the overall guidance for the year is better. Herbalife terminates the dividend to increase the buyback which pumps the stock price higher. GOGO drops -25% on news that T and HON are teaming-up to provide an in-flight Internet service. Travelers say that GOGO is too slow and welcome the competition.

The recovery rally emboldens the bulls who remain optimistic continuing to expect the SPX above 1900 and 2000 later this year. The VIX finishes under 14 after spiking to 15.28 today verifying the ongoing trader complacency. April began at SPX 1872.34 so price is playing around this level as the month ends on Wednesday. A pro-Ukraine peaceful demonstration occurs in Donetsk, Ukraine. Citizens simply want a united country in peace. They have emotional ties to Russia but at the same time do not want to be under dictatorial control.

Sunday, April 27, 2014

SUNDAY 4/27/14

President Obama visits Malaysia the first presidential trip to this nation in nearly fifty years. The president once again threatens “consequences” if Russia does not back away from aggression in East Ukraine. The daily repetition of warnings without follow-through is not helping Europe, the US or G7. It would be better if nothing was said. Clearly the US prefers an economic war versus a military war. Europe and Germany must decide the path forward; either throw Ukraine under the bus in favor of maintaining steady energy supplies to Europe from Russia, or, help defend their neighbors in Ukraine against Russia aggression because the bear will continue moving west, realizing that Europe’s weak economy will be further negatively impacted.

[Text is Redacted: Purchase April 2014-04 to Read the Complete Chronology]

President Obama wraps up the Malaysia trip and heads to the Philippines. Asia countries are disappointed that a TPP (Trans-Pacific Partnership) agreement is not yet reached. A Georgia-Pacific plywood plant in Texas explodes and will shut down operations indefinitely. Georgia-Pacific is a privately-held company.

Saturday, April 26, 2014

SATURDAY 4/26/14

Russia continues conducting military exercises along the Ukraine border. The Pentagon detects a Russian spy ship off the coast of Florida. Russia waits to see if the G7 including US and Europe impose additional sanctions this weekend or Monday. The Chinese and Russians have purchased much of the high-priced real estate in the States over the last year supporting the housing market. The Chinese now surpass the Russians as the strongest buyer of Manhattan real estate. The Ukraine turmoil is causing Russians to pull back on real estate purchases.

The MERS outbreak continues in Saudi Arabia with over 300 now infected. Five more have died from this lethal respiratory illness. The death rate is 40% and the rate of infection continues to increase. WHO is very concerned over the growing MERS outbreak.

Severe storms move across the central US creating golf ball size hail and tornado’s.

Friday, April 25, 2014

FRIDAY 4/25/14; Ukraine Turmoil Increases; F; CL; STT; WY; Consumer Sentiment

Asia markets remain weak for a couple days. NIKK is flat after Tokyo CPI is at a multi-year high so there is a slight whiff of inflation trying to surface but the jury remains out. Inflation will not exist in any nation without wages increasing. Asia weakness is partially due to the Japan and US unable to reach an agreement on the trade pact before President Obama’s departure.

China stocks are beaten with the SSEC losing -1% and HSI down -1.5%. China punishes internet company Sina for providing pornographic images over the Internet. SINA collapses -7%.  President Obama speaks in Seoul, South Korea, providing condolences over the tragic ferry accident where as many as 300 people may have perished. The dollar/yen is lower overnight to 102.21. The Aussie dollar recovers nicely to 0.9277.

Europe trades weaker as Ukraine turmoil increases. The MIB and DAX are both down -1%. Alstom shares are suspended from trading as the French econ minister is working on a deal with General Electric. Only yesterday Alstom was denying ongoing talks. France does not want to give away one of its crown jewel companies. France may keep the Alstom train division to save face avoiding the sale of the entire company with GE acquiring the turbine and other divisions.

UK retail sales are weaker than expected. Euro 1.3838. The UK gilt and US 10-year yields are both 2.67%. Germany’s 10-year is 1.51% so the lower yields show that money is moving into notes and bonds for perceived safety as the Ukraine worries grow. ECB’s VP Constancio says the central bank is looking at many different stimulus measures including asset purchases and “non-conventional instruments” to prevent long-term low inflation (they cannot allow themselves to utter the dreaded word ‘deflation’). The ECB lip service continues but no longer has an effect as the euro inches higher and higher hurting European manufacturers and exporters. AMZN is trading slightly negative in Frankfurt so traders are not impressed with Amazon results last evening.

S&P rating agency downgrades Russia’s credit rating to BBB- only one notch above junk with a negative outlook. Ukraine PM Yatsenyuk says Russia aims to occupy Ukraine “militarily and politically” and “Russia wants to start World War III.” Those words will receive a lot of attention. FM Lavrov says “Russia will retaliate” if important areas of the Ukraine are attacked. Putin announces plans to increase production of anti-missile systems. The geopolitical tensions are clearly increasing in and around Ukraine upstaging the president’s trip to Asia.

The headlines are crossing fast and furiously. Russia’s central bank steps in and raises the key interest rate from 7% to 7.5% attempting to stop the loss of capital out of the country. The Russian Ruble is 35.87 weakening but not yet near the recent weaker ruble levels at 36, 37 and 38 (the ruble currency number moves higher representing a weaker ruble and moves lower representing a strengthening ruble). Television news wires say nine are wounded and one dead in a gun battle in Ukraine. Ukraine turmoil is finally receiving the attention of complacent traders. A shooting war appears underway.

US mortgage lending is at a 14-year low. Obviously, the middle class and poor cannot afford a home without a job. The young adults are weighed down by student debt and do not have a job. Instead of buying a house they are moving home with Mom and Dad. The Fed’s easy money makes the wealthy wealthier but does not stimulate the overall economy. Companies do not spend the Fed’s free money on jobs or capital equipment for expansion but instead finance buybacks to pump the stock price higher to make themselves wealthier. So the weak mortgage lending numbers are not surprising at all. The cash buyers, hedge funds and wealthy Chinese and Russians have been supporting the housing market for the last year and this activity is waning. Young adults do not need homes since they cannot afford to marry these days.

The ‘net neutrality’ debate heats up. US regulators want to enhance open Internet rules and prevent Internet providers from blocking or slowing sites that provide an advantage to certain clients that pay more money. Europe operates on an open basis where there are no preferential advantages provided. Companies like NFLX want stricter rules. Everyone should have the same access to the Internet in the US but this is currently not the case.

US futures continue to drift lower overnight with S&P -2 an hour ago but at 7 AM down -5. Dow -60. Nasdaq -15. Gold is buoyant at 1297. The US 10-year yield drops to 2.66%. Copper is weak. Earnings are lackluster thus far this season. Financials are missing and tech is actually a bit light. Ford drives the earnings bus into a ditch to begin this morning’s reports. F misses on EPS by six cents, 0.25 versus 0.31 expected, and misses on the top line. This is a surprise to all the Ford cheerleaders’ parading across the television screens for the last couple months. F collapses -3.5% and blames recall costs and weather disruptions for the surprisingly weak numbers. Ford maintains guidance moving forward overall and increases guidance for China sales.

CL earnings are dead in line with estimates. Folks always need consumer staples such as toothpaste, toilet paper and soap, no matter what the economy or markets are doing. If the equity markets turn south, traders will attempt to hide money in consumer staple stocks such as CL, PG, CLX and others which are already catching a bid in recent weeks. At 7:30 AM, US futures continue to leak lower. S&P -6.3. Dow -66. Nasdaq -17. Copper recovers to the positive side. The dollar/yen drifts lower to 102.07 threatening the 102 psychological level so the stronger yen creates weakness in US futures. Germany’s 10-year yield drops under 1.50% to 1.488%. The Russian Ruble weakens further with the currency pair rising above 36.

Strategist Howard Ward appears on Bloomberg television saying the M&A and IPO activity will continue, stocks are not toppy and equities will likely run higher for a couple more years. The underlying bullish market sentiment remains. The dollar/yen falls briefly under 102 but recovers. BAC is down -1.6% on the mortgage settlement news. WFR reports a loss but bounces over +7% since it raises forward guidance. MSFT is up +1% well off the lofty +2.6% highs last evening. P follows through with last evening’s weakness puking -10%.

The opening bell rings and the Dow drops triple digits. The dollar/yen is holding the line at 102. WTIC crude oil drops under 101 to 100.75. V and MA both plummet -5% after Visa provides lower guidance. AMZN collapses -9%. CAT drops -1.6% with traders locking in the quick profits from yesterday’s pop. The bears have a firm hold on today’s action. The retail sector is very weak especially consumer discretionary which creates broad market weakness. XLY -1.7%. Utilities are the only positive sector. XLU is up +1.2% as traders seek perceived safety while receiving a strong dividend. Utilities continue to explode higher since the December low but the vertical move is becoming very long in the tooth.

High flying stocks are beaten. TSLA -3.9%. LNKD collapses -7.8%. TWTR -7.2%. YELP -8.1%. Housing-related stocks are bludgeoned indicating a lack of confidence with this important sector moving forward. Z -10.5%. TRLA -8.2%. USG -4.6%. MAS -7.4%. MHK -3.2%. HD -0.5%. So cabinets, rugs, floors, drywall and other suppliers are hit hard. Appliances buck the negative vibe with WHR up +0.5%. WY is another winner jumping +2.6% after reporting earnings today, however, LUMBER prints flat today despite the encouragement from Weyerhaeuser. Investor Jeffrey Gundlach of DoubleLine says home ownership will drop and recommends shorting the homebuilders.

Europe is red across the board. Germany plunges -1.9% lower but recovers into the closing bell finishing down -1.5%. Spain’s IBEX loses -1.5%. Fitch upgrades Spain’s credit rating to BBB+ from BBB as its economy stabilizes. Deutsche Bank plans to sell stock to bolster its balance sheet. DB drops -1.6%. CAC -0.8%. The majority of selling in Europe is bank and automobile sectors. Europe finishes flat on the week. Advertising giant WPP drops -1%.

INTU pops +2.8% on strong TurboTax software sales. The number of on-line tax filers increase again this year. Biotech stocks are sold off but pharma MYL pops +3.5% on news it is raising the bid for Sweden’s generic drug maker Meda. SBUX bounces +1% on news it will offer alcoholic beverages in more locations. K pops +0.3% after boosting the dividend. Kellogg knows how to play the game dangling a carrot for long traders as it also knows that traders will continue to seek consumer staple stocks as a safe haven. XLP is showing green up +0.2% against a back drop of red across the screens. PG +0.3%. Traders are chasing into consumer staple and utility stocks.

Oregon may end its $300 million health care exchange debacle and join the Federal exchange. Maryland’s exchange faces a similar fate. Vast amounts of money are wasted as States and companies continue dealing with Obamacare and the upheaval of the US health care system. A solar flare erupts from the sun last evening and causes communications problems at various locations in the Pacific Ocean today.

A couple months ago television pundits said to buy F, GM and IBM but now they say these stocks will be a 2015 story. This is remindful of the old Wall Street saying that a “trader turns into an investor when the trade goes the wrong way.”

Consumer Sentiment is higher than expected at 84.1 matching last summer’s optimism. The boost is surprising since gasoline prices are on the rise. Stocks continue to leak lower unimpressed with the happier sentiment. The IPO market is faltering. Many of the recent IPO’s over the last couple months are now down from -5% to -30% off the initial debut bounces. Traders and investors are not going to want to buy IPO’s if the trend is that they will lose one-third of their value over the first month.

The session ends near the lows clearly concerned over the growing Ukraine rhetoric and drama. The SPX loses 15 points, -0.8%, to 1863. The LOD is 1859.70 bouncing off the strong 1859 support. The 20-day MA is 1862.39 so the bulls close out the week one single point above this critical moving average. The 50-day MA is 1858.35 where the LOD bounced. The Dow drops 140 points, -0.9%, to 16361, finishing below its 20-day MA at 16380. The Dow Industrials have not been able to close at a new all-time high this year but the Transports have. Therefore, the recent stock market rally remains unconfirmed from a Dow Theory perspective. TRAN collapses -1.6%. The COMPQ loses 72 points, -1.8%, to 4076, a severe beating. The RUT small caps dump 21 points, -1.9%, to 1123. Tech and small caps clearly leading lower.

Copper positivity helps prevent the indexes from falling further. MSFT ends the day flat failing to capitalize on the earnings beat. AMZN collapses -10% to 303 dropping from over 400 less than three months ago a -25% loss. VFC +2.2%. STT drops -3% after earnings today creating a drag on the financial sector. XLF loses -0.8%. BAC -2.4%. For the week, the SPX is a hair lower -0.1%. The Dow is down -0.3%. The Nasdaq loses -0.5%. The RUT dumps -1.3% with small caps clearly being thrown overboard.

Fox Business News commentators Gary B Smith and Charles Payne say to buy the dips. CNBC commentators are in the same boat with the non-stop bullish sentiment continuing despite the down day. The VIX remains tame at 14.14 verifying complacency. The CPC and CPCE put/call ratios are moving up showing that traders are buying put protection but overall remains sanguine concerning the stock market. The Fed, BOJ and other central bankers (the ECB is on deck) are on a mission to push the stock market higher and keep extending time as long as possible to allow the global economy to recover. The top line flat to lower company sales numbers, however, clearly indicate the global economy is not recovering. At best it staggers through a sideways funk.

The market weakness is blamed on Ukraine. President Obama makes new threats today telling Russia once again there will be consequences and additional sanctions. The president also threatens North Korea but the daily threats of action go more and more unnoticed since they are only words repeated each day. Russian jets are now flying over East Ukraine territory so Putin is not paying any attention to the hollow threats. In fairness to the president, Europe is the weak-kneed participant relying on Russia for one-third of its energy and afraid to bite the Russian bear for fear of being bitten back. Europe’s inaction indicates that they really do not care if Ukraine is taken over by Russia. The markets will be impacted on Monday if the US and Europe finally do impose additional sanctions against Russia over the weekend.

Thursday, April 24, 2014

THURSDAY 4/24/14; CAT; GM; UPS; Durable Goods; AMZN; MSFT; SBUX

Asia markets are surprisingly negative in light of the FB and AAPL euphoria last evening. Dollar/yen is steady at 102.41. NIKK drops -1% and the SSEC loses -0.5%. The only two major markets higher are the SPASX200 (Australia) and Hang Seng each gaining +0.2%. Japan’s Abe says that a trade deal with US is still not reached. The trade deal is snagging on agricultural and automobile trade issues. President Obama is in Japan and reaffirms the US alliance with Japan including the disputed Diaoyu Islands (also known as Senkaku Islands). The New Zealand Dollar (kiwi) is the best performing currency of the year as the RBNZ started raising rates.

European markets are +0.5% to +1% higher. Alstom pops +13% on the GE takeover talk. Bouygues jumps +4.8%. Truck-maker Scania jumps +10% reaching an agreement with VW over share ownership. American Movil bids for Telekom Austria that pops +7%. German business confidence is better than expected showing that Ukraine turmoil is not effecting Germany as much as thought. The euro remains buoyant at 1.3835.

Draghi says the ECB is committed to using unconventional approaches to monetary policy. He says broad based deflation risks are not seen. Draghi continues to play down deflation but it is easy to see that this is his major concern. Draghi says an LTRO, asset purchases and other stimulus plans are on the table and provides lip service trying to talk down the climbing euro without actually performing any firm action. Traders are not biting with the euro remaining steady at 1.3822. The lip service routine with Draghi is getting old. The ECB will have to provide firm stimulus action to send the euro lower and help support the European manufacturing and export industries and jump start the economy.

European indexes remain elevated. US futures are strongly higher at 5:30 AM EST remaining excited about the FB and AAPL results last evening. S&P futures are +7 setting up a 7 to 10-handle pop in the SPX at the opening bell. Dow +35. Nasdaq +43. The 10-year yield is 2.70%, however, showing that many investors want to stay in the perceived safety of Treasuries. US traders wonder if the tech bullishness will carry the markets forward towards new all-time highs or if an initial market bounce will fade as the day moves along.

[Text is Redacted: Purchase April 2014-04 to Read the Complete Chronology]

Ukraine troops kill five pro-Russian troops in East Ukraine. Russia’s oil and gas conglomerate Gazprom continues to demand payment from Ukraine. Putin says the Internet is a “CIA product.” Secretary Kerry says the “window is closing” for Russia and they may make a “tragic mistake.” Global markets are becoming concerned over the growing geopolitical tensions.

Wednesday, April 23, 2014

WEDNESDAY 4/23/14; PMI's; BA; PG; New Home Sales; AAPL; FB

The dollar/yen remains elevated at 102.55-102.70 so the steady weak yen sends the NIKK +1% higher. TM outsells all other carmakers. China HSBC Flash PMI for April is 48.3 a slight improvement from March but remains below the 50 level indicating economic contraction. The data continues to conflict with China’s growth rate remaining elevated at 7.4%. April is typically a much stronger month economically so perhaps China’s growth numbers will leak lower as the year proceeds. The SSEC is down -0.3% and the HSI drops -1% due to a weak telecom sector. The Aussie dollar drops to 0.9302. SPASX200 rises +0.7%.

Elon Musk visits China to unveil the Tesla electric car. Crowds appear but one person complains about the small back seat and another shouts out “I’m disappointed.” Musk has delayed the release of the Tesla in China for a few months which is frustrating potential buyers. China has its own electric car agenda which works against Musk and Tesla but the overall introduction into China and Asia is off to a positive start.

North Korea prepares for a nuclear test. Ukraine says the truce is over and the pro-Russian occupations in East Ukraine will be rooted out and removed. A Russian bond auction fails as investors are hesitant to invest due to the ongoing Ukraine unrest. 

[Text is Redacted: Purchase April 2014-04 to Read the Complete Chronology]

AAPL resumes trading at 4:45 PM and the buyback, divvy and stock split win the day catapulting shares +8% higher. AAPL price jumps to 568 which is a test of the December highs. Five months of weakness is immediately wiped away in a heartbeat. Accounting gimmickry always wins and weak iPad sales are ignored. No value is added to the company by the accounting moves but the stock price will move higher. Who needs product sales when creative financial engineering can boost the stock price easier? QQQ and XLK jump +1.2%. The action points to a strong day for the tech sector tomorrow and a positive overall market mood just when the bears started to roll the indexes to the down side. Apple saves the day. Rumors surface that Apple made the 7 for 1 split to set an attractive price for a possible future inclusion into the Dow Jones Industrials.

CBI, one of the darling LNG plays, misses on earnings and trades -2% lower. TXN beats by a penny and trades +4% higher. TSCO misses on top and bottom lines and trades lower. IRBT drops -10% on weak earnings. The dollar/yen is 102.49 remaining elevated so AAPL may create happiness in Asia and then into Europe overnight. FB jumps +5% higher feeding off the Apple frenzy. AAPL is +8% as the conference call begins. General Electric is in talks to buy Alstom so GE trades slightly lower -0.2%. General Electric is looking for ways to use the cash on hand in Europe since the money cannot be brought back to the US due to the tax hit.

Tuesday, April 22, 2014

TUESDAY 4/22/14; Existing Home Sales; 2-Year Note Auction; MCD; UTX; T; GILD; YUM

Australia returns from the Easter holiday and the ASX 200 pops +0.5%. The dollar/yen is 102.51. The NIKK drops -0.9%. Japanese banks drop from -1% to -3%.

China is cutting the triple R’s on Friday for the rural areas which creates a positive mood. The banks will not have to keep as much cash on hand so lending can be increased. Property stocks run higher. China Premier Xi will not cap medicine prices as originally planned. China Resources Group Chairman Song Lin is fired and the associated enterprise, power and cement companies plummet form -3% to -10%. China Mobile misses on earnings with lower profits. The WB IPO is up +33% since its debut last week and the CEO says the shares were priced too low for the offering. Weibo is the Twitter of China.SSEC +0.3%. The Chinese Yuan is at the weakest level against the US Dollar in one year.

Vice president Biden is in meetings in Kiev, Ukraine, offering a paltry $50 million in aid. Ukraine will need near $50 billion to right its economic ship. 

[Text is Redacted: Purchase April 2014-04 to Read the Complete Chronology]

Homeland Security orders 25 million shotgun shells to be delivered over the next five years. All branches of the Federal government continue to weaponize and order huge lots of ammunition. A standing order of over 700 million rounds of ammunition to be delivered to the US government over the next three years remains in place. What does the government know that no one else knows? Is it an external or internal fear that causes taxpayer money to be spent on mountains of guns and ammunition?

22 million young adults are living with their parents the highest numbers in history. These young folks are victims of the economic malaise caused by the housing, banking and financial crisis that ruptured in 2006-2009. The young folks have hopes and dreams of marrying and forming a family but they have no money, there are very few job opportunities and at the same time they are straddled with huge student debt. Adults are marrying at the latest and oldest ages in history. The average student is stuck with $27K of debt. At least Ma and Pa has someone to take the garbage out and cut the grass. The structural unemployment in America will create economic problems for years to come.

Monday, April 21, 2014

MONDAY 4/21/14; Leading Indicators; NFLX

Australia, Kong Kong, Brazil and New Zealand markets are closed. Japan reports a record trade deficit as exports slow. The yen weakens slightly moving towards 102.60. The NIKK pops +0.5% but finishes the session flat with the weaker yen unable to overcome the negativity of the trade data. US futures are on the positive side. The BOJ provides a decision on monetary policy next week on 4/30/14. Japan is building a radar site near the disputed China-Japan Diaoyu Islands which will ratchet up the tensions between these two countries. The SSEC drops -1.5%. KOSPI loses -0.3%. Gold miners and coal and steel stocks are weak. The Beijing Auto Show begins this week.

[Text is Redacted: Purchase April 2014-04 to Read the Complete Chronology]

NFLX jumps +3% then drops to +2% bouncing like a yo-yo in volatile AH trading. After the dust clears, NFLX is up +7%.

The Whitehouse is calling on Russia to become more active in resolving the East Ukraine violence. Photographs show that Russian troops are already inside East Ukraine contradicting Putin’s insistence otherwise. The US threatens more sanctions but no one pays attention to the rhetoric anymore.

SUNDAY 4/20/14; Easter

Happy Easter. Gasoline jumps nine cents over the last couple weeks approaching $4 per gallon across most of the US. The Lundberg Survey says gasoline prices are at 13-month highs so the retail sector and consumer sentiment should experience weakness moving forward.

NHTSA documents show that GM waited for years to issue a recall on over 300K Saturn Ion automobiles despite the solid data showing that problems persist. General Motors continues to bleed from the recall debacle but the hedge funds are heavily invested in the troubled car maker insisting GM is a great buy. If one of the hedgies jumps ship, the others will follow.

SATURDAY 4/19/14

The US sends 150K ground troops to Poland which is directly west of Ukraine for war exercises. The Whitehouse not only delays the Keystone XL pipeline project but announces intent to resume funding solar and other alternative energy projects like the Solyndra debacle that flushed one-half billion dollars of hard-earned American taxpayer money down the toilet.

Senate Leader Reid calls the protestors at the Bundy ranch, where the US is trying to take over the rancher’s property, “domestic terrorists.” Reid, who takes an oath to defend the Constitution, instead labels protestors that are allowed to assemble in America, as terrorists. Families and children that are helping the Bundy’s defend their land all proudly wearing name tags that say “Domestic Terrorist.” A Reid staffer and family members are heavily involved in solar projects in Nevada and it is becoming more obvious that the land grab of the Bundy ranch is likely being forced to line their pockets with additional solar installations.

[Text is Redacted: Purchase April 2014-04 to Read the Complete Chronology]

The IRS scandal grows larger with the unpopular tax authority now tracking citizens via license plate technology. It is unclear what the IRS is doing with this information that takes away further American liberty, and refuses to discuss the program even though the IRS works for the American people, not the other way around. Big Brother now tracks your movements via your car in addition to your cell phone. 2 in 5 Americans now fear the government and these numbers are rising steadily as the NSA, IRS and other scandals continue and deepen. Nearly 3 in 5 Americans feel the government is a threat to liberty sowing the seeds for future social unrest in the US. The US government is boosting firepower with all government branches buying guns and weaponry and will receive over 700 million rounds of ammunition within the next three years; two bullets for each American citizen.

Friday, April 18, 2014

FRIDAY 4/18/14; Good Friday; US Markets Closed

Asia markets are quiet as Christians prepare for the holy Easter holiday. Japan, South Korea and China are trading. The NIKK gains +4% this week fueled by the lower yen with the dollar/yen moving up from under 101.50 to 102.57. Banzai! The SSEC ends down and KOSPI ends up. US markets are closed in observance of Good Friday and will not reopen until Monday.

[Text is Redacted: Purchase April 2014-04 to Read the Complete Chronology]

A 7.5 earth quake hits near Acapulco shaking Mexico City. The Whitehouse is delaying the Keystone XL pipeline project again, for the umpteenth time, to after the elections. Folks in the Midwest are hung out to dry and losing out on high-paying jobs that would fuel local economies. President Obama does not want to approve the project because he would lose voting support from the democratic environmentalists so the Midwest, where many States tend to be conservative thinking, suffers. Watch railroads such as CP that transport oil, albeit in a more dangerous way. Warren Buffett owns significant interest in the rails so the president’s decision to continually delay the Keystone XL pipeline greatly benefits his wealthy friend.

Thursday, April 17, 2014

THURSDAY 4/17/14; MS; GS; OpEx; Last Day of Trading before Easter

Asia markets trade flat to slightly higher after the strong US rally. Australia is the big winner with SPASX200 up +0.6%. Japan Consumer Confidence is at the lowest since August 2011. NIKK is flat. SSEC -0.3%. China sells off despite the PBOC cutting the RRR’s for certain rural banks to help stimulate local economies. These rural banks do not have to maintain as much cash reserves so this allows the banks to lend out more money. China property stocks are weaker dampening any bank enthusiasm especially with fresh home price data coming tomorrow. European futures are called lower. S&P futures are -3.

The violence increases in East Ukraine with pro-Russian forces gaining a larger grip on the region. Ukraine military jets are in the air. Three pro-Russian militants are shot and killed as they attack a Ukraine base; over one dozen others are injured. The violence is quickly becoming a shooting war. Armored vehicles are spotted in East Ukraine flying Russian flags. President Obama says that Putin’s aggressive decisions are going to be bad for Russia in the long term. The US, EU, Russia and Ukraine meet for talks in Geneva.

[Text is Redacted: Purchase April 2014-04 to Read the Complete Chronology]

The 10-year yield jumps higher today to 2.73% and settles at 2.72% receiving an 8 basis point bounce during a risk-on environment where money ran out of notes and bonds (prices down yields up) and into stocks. Traders believe in the stock market rally and since the US and Europe avoid confrontation in Ukraine, the holiday wine glasses raise toasting the Fed for providing non-stop money to drive the stock market higher and make the rich richer.

Positive SNDK earnings create a recovery in semiconductors that fuel the stock market higher. Disappointing earnings from IBM and GOOG are ignored by traders. Television personality Jim Cramer suggests buying IBM since it will be far stronger moving into 2015 and he also encourages buying Google considering it as growth at a reasonable price expecting higher prices for GOOGL moving forward. Strong levels of bullishness remain in markets.

Wednesday, April 16, 2014

WEDNESDAY 4/16/14; BAC; USB; Housing Starts; Industrial Production; Fed Chair Yellen Speaks; Beige Book; AXP; GOOG; IBM

China’s Q1 GDP is 7.4% beating the 7.3% estimates and relaxing fears of a drastic slowdown or hard landing. IMF’s Lagarde’s warning of a hard landing appears unwarranted. Growth is slowing but at a very slow rate. The data creates an upbeat mood in Asia as traders believe the Chinese economy is stabilizing. The dollar/yen continues higher from yesterday launching above 102 to 102.20. Banzai! The BOJ weakens the yen to pump the stock market higher. NIKK catapults +3%. Topix +2.7%. BOJ Governor Kuroda says stimulus is not imminent but remains committed to an inflation rate target of 2% within one year’s time. To meet this goal traders expect more BOJ stimulus within two or three months which sends equities higher. Aussie dollar 0.9352.

World markets take on a joyous tone overnight with the happy China news and promises of more sugar candy from the BOJ. 

[Text is Redacted: Purchase April 2014-04 to Read the Complete Chronology]

New York Attorney General Schneiderman subpoenas six HFT firms including Jump Trading, Chopper Trading, Tower Research and three others with potentially more coming. The high-frequency trading clamp-down begins. At issue is the relationship and interaction between the HFT firms and the exchanges. Dark pools are also under investigation.

Detroit sets up an eBay style web site to liquidate city property as part of its bankruptcy plan. The houses are mainly shells that have been stripped by thieves scrapping metal and stealing any of the contents worth money. Investors and folks that are trying to fix-up and renovate Detroit homes are victims of further theft which makes rehabilitation impossible and chases away any potential buyers.

Japan’s demographics continue to show a shrinking and aging population. The elderly are 25% of the total population for the first time ever. An ever-larger burden is placed on young people as the older folk’s population and pensions must be supported on their backs. Japan’s population is shrinking for three consecutive years.

Tuesday, April 15, 2014

TUESDAY 4/15/14; Tax Day; KO; JNJ; CPI; Chair Yellen Speaks; Whipsaw Market Action; INTC; YHOO; CSX

The dollar/yen is 101.78 remaining sideways over the last day. The strength on Wall Street does not carry though to Asia where markets are mixed. NIKK gains +0.6% but China’s SSEC drops -1.4% and HSI loses -1.6%. China retail sales, GDP and industrial production numbers are released this evening and will dramatically impact Asian and global markets. Chinese stocks are dragged lower by weak banking stocks. China’s money supply in March increases at the slowest pace since May 2001. The lower stimulus rate will decrease China’s growth. Rio Tinto iron ore shipments drop strongly but production remains firm.

[Text is Redacted: Purchase April 2014-04 to Read the Complete Chronology]

KO finishes up +3.7%. JNJ finishes up +2.1%. QIHU pops +4.4%. BCO collapses -11%. P +3.6%. Financials recover with the XLF up +1%. Semiconductors create strength in markets with SOX +1.6%. The IBB biotech index drops -6% intraday and then recovers the entire move to finish up +1%. Copper drops -1.6% recovering from the lows but remaining under the psychological 3 at 2.99. Traders continue to ignore Dr Copper. Gold plummets -2% recovering off the lows closing at 1300 on its 200-day MA. NEM -2.3%. Silver drops -2.4% under and remains under its important moving averages at 19.49.

After the bell, INTC, YHOO and CSX report and interestingly all three companies are expecting EPS of 37 cents. INTC beats by a penny on EPS and top line sales are in line a touch light. INTC pops +3%. YHOO beats by a penny on EPS and is a touch light on top line revenues just like INTC. YHOO bounces +1% higher. The results for both tech companies are not particularly impressive matching estimates but traders push both stocks strongly higher. Minutes later YHOO catapults +9% higher on robust Alibaba guidance. Alibaba continues to carry CEO Mayer although Yahoo numbers are slightly encouraging. YHOO shorts are running for their lives.

CSX beats by 3 pennies on EPS at 40 cents with a top line beat and pops +1% AH’s. The three key earnings releases are all positive so that will provide the bulls fuel for tomorrow’s session. Detroit reaches a deal with retired police and firefighters to preserve the current pensions.

The pro-Russian forces are creating instability in Moldova and Estonia in addition to East Ukraine. This is a Nazi tactic where the Russians create instability to provide a reason to invade these nations. The Whitehouse is very docile and does not want to become involved militarily in the growing unrest so Putin continues to help himself to additional pieces of pie. Traders ignore the geopolitical turmoil and happily buy stocks more concerned about the Fed and BOJ printing money to keep the stock market party going.

March 2014 Market Chronology Available on Amazon Kindle

The Daily Chronology of Global Markets and World Economics March 2014-03 issue is available on Amazon's Kindle. A handy link is provided in the left margin. All the recent eBook links are provided in the margins.

If you are a seasoned professional trader or a novice wanting to learn how and why markets move in real-time, the daily chronology series are the books for you. The eBooks detail market reactions to the Monthly Jobs Reports, Fed meetings, economic data, earnings releases and geopolitical events. Business and economic teachers and students enjoy the chronologies since textbook theory comes to life. Read about how the IPO frenzy is affecting markets. Study the impact of the recent copper collapse on markets. Become educated on how Ukraine turmoil affects global markets and currencies.

As always, special thanks to the international support for the K E Stone Blog Series of Web Sites especially the strong following from major money centers in New York, Chicago, London, Frankfurt, Paris, Singapore, Hong Kong, Tokyo and Sydney and the loyal following from the US, Canada, Mexico, Australia, UK, Germany, France, Russia, China (yes, Russia and China) and Malaysia. The blog sites only continue with the ongoing support of all followers large and small, professional and novice. Keystone the Scribe is the respected world leader in providing historical context for global markets and world economics. Read the Daily Chronology of Global Markets and World Economics March 2014-03 issue today to gain a vital market edge. Thank you for the support.

Sunday, April 13, 2014

MONDAY 4/14/14; C; Retail Sales; Business Inventories; ECB Stimulus Talk Boosts Markets

Australia considers raising the pension age breaking the promise during elections. Treasury official Joe Hockey says “all Australians must share the pain.” Aussie Dollar 0.9384. Coca-Cola Amatil, the KO arm in Australia, plunges -3% after a JPM downgrade adding to a -12% drop on Friday. The Korean Won weakens and Asia begins trading on a sour note. Industrials and raw materials are weak. Singapore Q1 GDP is 5.1% lower than expected.

[Text is Redacted: Purchase April 2014-04 to Read the Complete Chronology]

The worlds wealthy, made wealthier by the central bank policies, continue to buy expensive real estate, art, collectibles and vintage cars while the common person suffers with structural unemployment. Two homes are purchased in the US in excess of $100 million each which has never happened before. The Airbnb home-sharing service receives additional bad press as prostitutes are using many of the available apartments for sexual escapades and orgies. The Airbnb houses and apartments are far cheaper than renting hotel rooms. The owners are returning to their homes finding condoms, baby wipes and other remnants of the sexual parties and encounters strewn across the rooms.

SUNDAY 4/13/14; East Ukraine Violence Increases

Ukraine tension mounts as pro-Russian forces attack and takeover police stations and government buildings in East Ukraine. Much of East Ukraine is more Russian-friendly while West Ukraine is more European and West friendly. The unrest and instability creates a reason for Putin to invade East Ukraine like Crimea. Ukraine mounts an anti-terrorist operation against the Russian aggression. 

[Text is Redacted: Purchase April 2014-04 to Read the Complete Chronology]

Draghi says the ECB stands ready to act with stimulus, including QE, if the euro rises further. Euro 1.3846. Dollar/yen 101.54. Pro-Russian forces are fighting Ukraine troops in East Ukraine with gun fire and casualties occurring. Europe and US will have to respond. The UN Security Council meets in emergency session at 8 PM EST. Russia says the US and Europe are instigating violence in East Ukraine. In reality, Russia is promoting the violence to provide a reason to invade East Ukraine. The US is investigating claims that Syria has used chemical weapons against its citizens. The situations in both Ukraine and Syria worsen. US futures are down -0.3% to begin the new week of trading. S&P -6. Dow -50. Nasdaq -12. The 10-year yield is 2.62%.

SATURDAY 4/12/14

The NSA exploited the Heartbleed computer virus for years fully knowing of the danger but did nothing to warn anyone. The NSA prioritizes spying on Americans above all other considerations. Data shows that 44% of the Twitter members have never tweeted; they simply use the popular site as a news feed.

Ukraine is suspending payment to Gazprom, the Russian gas and oil conglomerate, which escalates the ‘gas wars’. The move increases tensions especially in East Ukraine where pro-Russian forces continue to create instability so Putin has a reason to invade. Russia provides one-third of Europe’s natural gas via pipelines through Ukraine.

[Text is Redacted: Purchase April 2014-04 to Read the Complete Chronology]

Proponents of the Constitution, veterans of wars and believers in the Founding Fathers flood into the area to help Bundy defend his land against the US government. The situation is spinning out of control and may end up as another disaster like Ruby Ridge and Waco. The FAA orders a no-fly zone above the cattle ranch. America is descending into a police state.

Friday, April 11, 2014

FRIDAY 4/11/14; PPI; Consumer Sentiment; JPM; WFC; Market Selling Continues

Asia is lower across the board. NIKK plummets -2.4% logging the worst week since the Fukishima disaster three years ago. The NIKK loses the 14K level now at October lows. The Topix has the worst week since last summer. The dollar/yen drops to 101.32 but recovers to 101.83. The dollar index is down every day this week and prints the worst weekly drop in eight months. The USD plummets from 80.8 to 79.4 in five days, -1.7%, a huge move for a currency. Fast Retailing plummets -8%. SSEC -0.2%. HSI – 0.8%.

Australia is down -1%. The Aussie dollar hits a five-month high of 0.9439 (from 0.90 to over 0.94 in only one month’s time) before retreating. A CAT 5 tropical cyclone hits the northern Australia coast. KOSPI -0.6%. Samsung drops -1% after releasing an updated version of the Galaxy S smartphone. China’s inflation remains below the government target of 3.5% which opens the door to implementing stimulus if the PBOC desires. Q1 may be the weakest quarter for China in years. 

[Text is Redacted: Purchase April 2014-04 to Read the Complete Chronology]

The banks are weak. C -1%. BAC -1.6%. GS -1.3%. MS -1.6%. JPM -3.1%. XLF -0.8%. KRE -0.7%. BKX -1.1%. Warren Buffett smiles with glee since the only bright spot in the financial sector is WFC gaining +0.7%. WTIC crude oil moves up to 104.

At 11 AM, President Obama nominates Sylvia Matthews Burwell to replace Kathleen Sebelius at HHS. Burwell is expected to move through the approval process and will become the new face of Obamacare. The Nasdaq turns positive. The SPX and RUT are flat. The Dow remains slightly negative. Copper reverses course and turns negative. The dollar/yen is up to 101.67 so the weaker yen provides lift in equities. XLF -0.4%. SOX -0.2%. VIX 16.00. SPX recovers to 1832 so the strong 1828 support is holding.

At 1 PM markets deteriorate. The Dow is down triple digits losing 105 points. VIX is up to 16.84 approaching 17. Copper is negative. Palladium is the lone gainer in metals. Dollar/yen 101.56. GILD is the best performer today on the Nasdaq recovering +3.8% after the recent drubbing. WIN is smacked -1.9% lower giving up all of yesterday’s gains. Traders buy  Windstream because it has the highest dividend at 11%. At 1:30 PM, the broad indexes stagger lower and are testing the lows of the day.

Putin escalates the natural gas wars across Ukraine and Europe demanding that Gazprom be paid or there will be repercussions. The US and Europe remain docile. Syria uses chemical weapons in four separate attacks against its citizens creating more turmoil in the Middle East. Markets turn sour. Traders must decide on what positions to hold through the weekend.

Semiconductors collapse at 2:15 PM. Equities print new lows for the day with the Dow down 134 points, SPX down 13 points and Nasdaq losing 40 points. The major indexes are down between -0.7% and -1.3%. The VIX jumps above 17 to 17.23. TRIN is 1.36 representing a steady-eddy orderly selling day without any panic occurring. Orderly selling days usually lead to more orderly selling days. The volume is below average reflecting a strong absence of buyers so markets stagger lower.

Consumer discretionary, XLY, is the worst sector dumping -1.1%. LB, URBN and KORS are all down -3% to -4%. JCP is collapsing -10%. GPS is beaten -2.4%. Typically, traders will monitor the Masters Golf Tournament but the stock market requires full attention. Golfer Bubba Watson, and holder of a green jacket, strings together multiple birdies and leads the Masters golf contest at -8 under par with the second round in full swing (four rounds are played with the final round on Sunday).

The SPX drops to 1818. Documents surface in the General Motors investigation showing that Mary Barra was made aware of steering problems in 2011. Barra said she did not have any knowledge of the problems. Traders are jumping ship and giving up on the stock. GM crashes into the ditch dumping -4.5% on the news. The problems at General Motors are going to continue a long time.

Markets are in free fall. At 2:43 PM, the Nasdaq collapses through the psychological 4K level. At 2:49 PM, the TICK machine prints -1100 identifying a market low at SPX 1815. The Dow is down 152 points at 16018 only 18 bucks from losing 16K. The RUT small caps are down -1.7%. The carnage continues. The 10-year yield holds steady at 2.61%. The 2.58%-2.60% level is strong support over the last couple months and if it fails, a yield at and under 2.50% will likely be guaranteed in the near future.

HLF plummets -12% as news wires say a criminal probe is launched into Herbalife by the DOJ and FBI. HLF denies the probe. Multi-level marketing company NUS loses -4% in sympathy.  Equities languish into the closing bell. The Nasdaq teeters at 4000. Dollar/yen 101.61. Traders blame a lot of the market selling on tax season. The deadline to file taxes is Tuesday, 4/15/14. Seasonality-wise, markets are typically weak in front of the tax deadline and then recover after April 15th.

At the closing bell, the drama with Nasdaq 4000 continues as the day settles out. The SPX loses 17 points, -0.9%, to 1816. The Dow loses 142 points, -0.9%, to 16028. The Nasdaq loses 54 points, -1.3%, to 3999.73, a single hair under the psychological 4K level which is multi-month support. The Nasdaq closes under 4K for the first time since February. The RUT loses 16 points, -1.4%, to 1111.

VIX finishes above 17 at 17.26. Utilities are flat. Telecom, IYZ, dumps -2%. XLY -1.4%. XLF -1.4%. The banks all finish negative except WFC +0.7%. JPM loses -3.6% and is down -7.4% this week. A lot of long players worship at CEO Jamie Dimon’s altar and expected stellar earnings (which missed instead) so they had their heads handed to them. SOX -1.6%. SMH -1.5%. Consumer discretionary, financials and semiconductors push the broad indexes lower. The majority of traders this year tout financials as the sector that will create new market highs but are now abandoning this scenario. NQ Mobile, a bearish play publicized by noted short seller Carson Block of Muddy Waters Research, plunges -21% after missing earnings.

For the week, the SPX drops 49 points, -2.7%,. The Dow is off 386 points, -2.4%. The Nasdaq is pummeled 128 points, -3.1%. The RUT small caps drop 42 points, -3.6%. All the major indexes have lost their 20-week MA’s; a highly significant support level that forecasts lower prices ahead. TRAN loses -2.8% this week and prints exactly at its 20-week MA at 7360 and will make an important directional decision on Monday. The 10-year yield is 2.62%. The Baltic Dry Index, BDI, continues to drop this year now down from above 2300 to 1000, -57%. The drop in ocean shipping stocks verifies the China economic slowdown.

After the closing bell, Senator Blumenthal calls for General Motors to establish a compensation fund to handle the automobile recall disaster. Considering the revelations that Barra may have known about the car problems in 2011, she may face fraud charges moving forward. Barra is the first female head of GM and may end up being the CEO with the shortest tenure at GM. Government authorities deepen their investigation. GM collapses -4.1% today and is down -8.3% for the week. GM peaked at 41.60 in December and is now under 32, a drop of -24%.

AMZN announces plans to pay $5000 to unhappy employees to encourage them to quit. The gimmick creates a buzz. Amazon can boast about how everyone is happy since very few if anyone will accept the offer. In truth, if an employee is fired (layoff), that worker can collect unemployment compensation that will total $10K to $15K and more so only an idiot would quit. In addition, the offer is only for fulfillment center employees so the maneuver is an attempt to front-run potential unionization.

Thursday, April 10, 2014

THURSDAY 4/10/14; China's Trade Data Weakens; Equity Markets Collapse

China’s March Trade data falls for two consecutive months but the Asian markets shake off the disappointment and instead run higher joining the US party. SSEC gains 1.4% and HSI jumps +1.5% boosted by the Fed easy money talk and anticipation that the PBOC will provide stimulus despite Premier Li stating otherwise. Bad news is good news around the globe. The central bankers have created sick markets where traders move equities up and down depending on the ongoing money printing and other stimulus measures.

[Text is Redacted: Purchase April 2014-04 to Read the Complete Chronology]

Comedian Stephen Colbert signs a five-year deal to replace David Letterman on the late night television show so CBS should see active trading tomorrow. A horrific vehicle crash occurs in California between a bus and an FDX truck with several dead. FedEx is cooperating fully with authorities investigating the accident.

Wednesday, April 9, 2014

WEDNESDAY 4/9/14; 10-Year Note Auction; FOMC Minutes Ignite Strong Rally

The dollar/yen recovers to 102 but the weaker yen does not aid the Nikkei. The NIKK loses -2.1% down four consecutive sessions. Yesterday afternoon the big drop in the dollar/yen pair, from over 103 to sub 102, did not result in the weakness that would be expected in US markets. The BOJ is not increasing stimulus so the dollar/yen is dropping. The euro moves above 1.38. The dollar is 79.77 unable to stay above the 80 level. The weaker dollar boosts the euro higher and helps send the dollar/yen lower. So the action over the last day is a weak dollar story. The dollar/yen drops from 103 weakening the Nikkei while at the same time a weak dollar buoys the commodity sector that provides lift to US equities.

[Text is Redacted: Purchase April 2014-04 to Read the Complete Chronology]

The Caligula-style orgy is in full swing as traders cheer a weak economy. This means the Fed will keep printing money and make those owning stocks wealthier. Unfortunately, if you are the other one-half of the country that does not own stocks and is mired in structural unemployment and underemployment, well, you are screwed. Fed Chair Yellen lives up to her dovish reputation and the Fed will continue supplying the heroin for market junkies making the rich richer. The Fed and both democrat and republican politicians do the bidding of the wealthy. Traders turn giddy and care-free drunk on the Fed wine.

WTIC crude oil jumps to 103.50. Markets are on fire after the FOMC Minutes. The weaker dollar sends oil and other commodities higher. Brent oil hits 108. Gold is 1311. Copper recovers but remains a touch under the flat line so Doctor Copper is not convinced of the euphoric rally. VIX drops to 13.80 providing upside fuel. The 10-year yield drops to 2.68%. The lower dollar sends the euro higher. ECB’s Draghi is restless and sleepless as he watches the euro climb higher. The higher euro will continue to crush European manufacturers and exporters and prevent the continent from recovering from the ongoing recession and depression.

FB runs ever higher now up +6%. The happy market mood continues into the last hour of trading. The SPX moves above the 20-day MA at 1863.41. The Dow is above its 20-day MA at 16329. The Nasdaq is up a big +1.4%, RUT +1% and Dow and SPX both up +0.9%. Tech and biotech stocks the clear winners. Interestingly, the TRIN is 1.22 on the bear side today despite the robust rally. VIX recovers off the 13.79 low and tries to move back above 14.

At the closing bell, traders high-five each other and make plans to celebrate at happy hour. The dovish Fed throws a big party today. The SPX gains 20 points, +1.1%, to 1872. The Dow leaps 181 points, +1.1%, to 16437. The COMPQ gaps up catapulting 71 points, +1.7%, to 4184. The RUT gains 16 points, +1.4%, to 1160. VIX is 13.82 ending sub 14 and under the 200-day MA which is a feather in the bull’s cap. Dollar/yen 102.00. Euro 1.3852. The 10-year yield is 2.69%. Silver loses -0.9% with gold finishing higher at 1313. Copper ends down -0.3%. XLF is +0.9% but the banks lag the major indexes.

FB leaps +7.3%. Sandberg says she does not plan to leave Facebook. The brokers have been beaten lately but ETFC jumps +6%. Biotechs jump higher. IBB +4%. VRTX bounces +7%. REGN +7%. CELG +6.6%. P gains +5.3%. The momo high-flyer names all jump strongly higher today while the old school tech stocks and broader market finished up from +-.2% to +1.7%. YELP +6%. CZR +9.5%. LNKD +4.2%. PCLN +4%. The LQ IPO ends as a winner on its debut day of trading up +0.7%. HSY melts away losing -2.8% in the strong up tape.

After the bell, the steaks are sizzling at Ruby Tuesday’s as RT jumps +12% after beating handily on earnings. Bed Bath and Beyond misses on EPS and reports lackluster sales. BBBY drops -4%. The ALLY IPO prices at 25 at the low end of the 25-28 range. IMPV issues an earnings warning and collapses -35%. The bullish vibe returned in a heartbeat today. Traders remain complacent and lack any fear or worry that markets will sell off especially after the Fed dishing out more candy today. The VIX is under 14 and put/call ratios are uber low verifying the ongoing market complacency. The CPCE and CPC print 0.45 and 0.61, respectively, signaling a significant market top is at hand at any time within the coming days or a week or two.

Data on the Obamacare sign-ups show folks that are sicker than expected and many are taking or require prescription drugs. If more ill people sign up than anticipated, with less healthy folks signing up, higher premiums are on the way for everyone. The upheaval of the US health system continues. Medicare pay-out data shows that a small number of providers receive obscenely high Medicare payments for treating patients. $77 billion payments are made to 800K doctors. Only 100 doctors receive a combined $610 million. The controversial figures create further media discussions on the US healthcare mess.