TUESDAY 5/20/14; HD; SPLS; DKS; CRM

The dollar/yen is trading wildly dropping to 101.10 (stronger yen) which is a four-month support level and near the 200-day MA. The dollar/yen then jumps higher to 101.57 (weaker yen) but then drops again to 101.35. Euro/yen is at a 3-month low at 138.787 going back to early February. The NIKK ignores the erratic currency moves and gains +0.5%. Japan utilities move higher supporting the market. A two-day BOJ meeting begins. The Aussie dollar drops below 0.93 to 0.9271. Asian indexes are mixed each side of the flat line.

China reacts angrily against the spying allegations from the US yesterday. China says the government and military has never conducted cyber spying against the US. The relationship between the US and China is damaged from the spying allegations and China plans to retaliate. China says the US is a thief calling other countries thieves. Russia’s Putin is in Shanghai discussing a joint 30-year China-Russia gas deal. The negotiations are continuing as both sides fight over price.

Thailand’s army declares martial law. The Bangkock SET drops -1.1%. The Thai Baht loses value. The army says this is not a coup and the government is functioning but if it quacks like a duck, it’s a duck. The army says it is keeping peace and order as the political factions sort out their differences and work towards a transitional government. The turmoil is destroying Thailand’s tourism industry. Indonesia’s Jakarta loses -2.7% as worries surface over elections within two months. There are a huge number of elections this year in emerging market countries across Asia. India has set a happy tone so far.

Russia’s Medvedev says the US and Europe sanctions can lead to a new cold war. On the African continent, questions grow over the safety of doing business in Nigeria which is Africa’s strongest economy. Suicide bomber blasts are targeting Christians in Nigeria. The school girl kidnapping and ransom drama by Boko Haram, now called the Al-Qaeda of West Africa, continues.

[Text is Redacted: Purchase May 2014-05 to Read the Complete Chronology]

The session ends with the SPX down 12 points, -0.7%, to 1873, sitting between the 20-day MA resistance ceiling above at 1879 and the 50-day MA support floor below at 1868. The standard deviation bands on the SPX daily chart are very tight indicating that a very sharp, quick and strong move is about to occur, up or down, of about 20 or 30 handles or more. The Dow loses 138 points, -0.8%, to 16374. The COMPQ drops 29 points, -0.7%, to 4097. The RUT loses 17 points, -1.5%, to 1098, remaining under its 200-day MA. Surprisingly, a Tuesday is lower. The 5-month trend is for 90% of the Tuesday’s to finish positive. The 10-year yield is 2.50%.

The retail sector is crushed today due to the weak earnings releases. People are not buying apparel and have less money to spend since food inflation and higher gasoline prices are cutting into budgets. RTH -0.9%. XRT -2.1%. TGT -3%. WMT -1.2%. SPLS -13%. DKS -18%. HD bucks the trend gaining +1.9%. Biotech is bashed with IBB losing -1.4%. Internet stocks tumble lower with FDN -0.7%. Regional banks are slapped with KRE -1%.

After the bell, Salesforce.com beats by a penny on EPS 11 cents versus 10 cents and the top line is 1.23 billion versus the 1.21 billion expected. CRM bounces +0.6%. ADI pops +2% on better than expected earnings.