FRIDAY 10/31/14; BOJ Shocks Global Markets with Double-Whammy Money Bazooka; Russia Central Bank Intervention; Global Short-Covering Rally; ABBV; XOM; CVX; CLX; D; WY; EOM (End of Month); Halloween Day; Chicago PMI; Consumer Sentiment; SPX, INDU, UTIL, IBB, XLV and AAPL All-Time Record Highs; COMPQ 14-1/2 Year Record High

The SPASX200 gains +0.5% driven higher by the Aussie banks. The KOSPI trades marginally lower dragged down by goliath shipbuilder Hyundai Heavy drowning -7%. Sony misses earnings forecasts and lowers guidance.

The Nikkei Index is sent higher in early trading following the US rally and on news that the Japanese Government Pension Investment Fund (GPIF) plans to increase the weighting in domestic and foreign stock positions by 25% across the board. The dollar/yen jumps to 109.40 and the weaker yen catapults the NIKK up +1.4%. Traders ignore the tame inflation and weak household spending data for Japan since the BOJ and government policies are focused on pumping the stock market higher. The equity markets are clearly manipulated by the central bankers and propped up by money printing.

After an afternoon policy meeting, BOJ Governor Kuroda shocks the markets by announcing more stimulus. Japan fires a double whammy money bazooka promising to buy 25% more stocks in the government pension fund as well as providing more easy money. Banzai!! The dollar/yen explodes higher to 111.57 (7-year low in yen). The NIKK rocket launches over +5% and settles up +4.8% to 16414 to a 7-year high. US futures catapult higher. S&P +21. Dow +180. Nasdaq +59. Euro 1.2573. Pound 1.5996.

The central bankers are the market and continue to pump the stock market with money printing for the last six years. The SIP data feed outage yesterday coincided with a purchase of 15000 E-mini S&P’s so obviously the  insider’s are told ahead of time so they can make easy stock market gains in a few hours time. Is Wall Street rigged? Of course it is.

The Japan decision is Abenomics on steroids and smacks of desperation since the inflation target of 2% remains difficult to attain. Japan is cheapening their currency through money printing. Global currency wars continue as nations compete in a race to debase; a race to the bottom. China indexes jump higher. SSEC +1.3%. HSI +1.3%. Aussie markets run higher on the news. SPASX200 +0.9%. Banzai!! The KOSPI also turns around finishing up +0.3%.

Since today is the EOM, the monthly charts are going to print a positive month and likely create a global stock market rally for a few months. Shock and awe from Japan! The actions by Japan smack of desperation but no one cares since Japan’s double-whammy money bazooka will allow long traders to rape the upside in equity markets with central banker easy money. Fundamentals and technical’s are tossed under the bus since central banks can create never-ending higher stock markets printing money continuously without consequences. At least for now.

Copper leaps higher gaining +0.8% to 3.09. Gold collapses 26 to 1172 which creates technical damage. Silver is down -2.6% to 16.00. Silver has lost nearly -8% of its value in only 48 hours. US Treasury yields are; 2-year 0.48%, 5-year 1.59%, 10-year 2.32%, 30-year 3.06%. German bund 0.84%. Japan 10-year yield 0.46%.

European indexes launch on the Japan double-whammy news. CAC +2%. IBEX +1.8%. DAX +1.6%. FTSE +1.2%. French banks are higher after BNP Paribas reports positive results. Royal Bank of Scotland sets aside $639 million to handle future litigation costs. BCS and C announced plans to set aside more funds for litigation yesterday. RBS moves +4% higher. The troubled Italian bank Monte dei Paschi is halted from trading after a near -3% drop. BMPS offes no clear plan on how to increase its capital position. The Italian bank trouble spreads with Banca Crige, another bank stress test failure, suspended from trading after a -2.4% selloff.

Euro zone inflation is up +0.4% in line with expectations, however, disinflation and deflation remain firmly on the table. Last month’s inflation read was +0.3%. Italy’s 10-year yield drops to 2.39%. Spain 10-year yield 2.12%. Greece 10-year yield is very erratic up over 50 basis points yesterday and down 14 basis points today to 7.94%.

The Russia central bank raises the key benchmark rate to 9.50%. The intervention was obvious yesterday as evidenced by the strength in the ruble. The Russian Ruble currency pair is 41.7261 which indicates a +0.6% strengthening of the ruble. Russian stocks are up +1.5% across the board. Russia and Ukraine reach a natural gas deal. The cease-fire in Ukraine loosely holds as the pro-Russian separatists are stepping up the fighting against Ukraine troops.

At 6 AM, S&P +23. Dow +196. Nasdaq +62. At 6:45 AM, S&P +24. Dow +196. Nasdaq +64. CAC +1.9%. IBEX +1.7%. DAX +1.7%. FTSE +1.1%. European indexes level off at the highs from the Japan excitement with Germany continuing to inch higher.

WTIC crude oil drops -0.6% to 80.65 and Brent falls -0.8% to 85.56. How comical, or perhaps tragic, it is to see oil reflect a slowing global economy while at the same time the central banks manipulate stock prices higher? Natural gas is up +3% to 3.94 working towards the psychological 4 level. The US 10-year yield is up a tick to 2.33%.

At 7 AM, S&P +23. Dow +195. Nasdaq +63. Dollar/yen 111.74.

At 7:05 AM, S&P +20. Dow +172. Nasdaq +57. Dollar/yen 111.71.

XOM reports blowout earnings 1.89 versus 1.71 expected on EPS and $107.5 billion top line versus $105.5 billion expected. Exxon increases the dividend +9.5%. CVX beats on the bottom line but misses on the top line. Both major oil producers are reducing production. ABBV beats and raises guidance bouncing +3.6% and adding lift to the biotech and pharma sectors. Futures remain elevated receiving a happy nod from the earnings releases.

Consumer staple CLX beats on earnings and rises +0.5%. HLT beats on earnings and raises guidance; the Ebola scare is not having an impact so the stock moves higher. COL beats on earnings. Lumber indicator WY beats on earnings and drifts marginally higher. NWL dumps -5% after beating on EPS but missing on the top line. The top line misses continue for many stocks but traders ignore this warning of weaker earnings ahead since the central banks support the markets.

At 8:30 AM, the Fed’s favorite economic metric, Personal Income and Spending, reports a miss. The Spending portion is down -0.2% and Income is up +0.2%. Higher numbers were expected for both components. Traders do not care since the BOJ is pumping global markets higher. Today is the EOM and the SPX started October at 1972.29. After the Japan double-whammy money bazooka, a positive month is on tap for the SPX reversing September’s down month. The Halloween holiday is the second largest retail spending holiday only surpassed by Christmas.

US futures remain strong. S&P +22. Dow +189. Nasdaq +60. Dollar/yen 111.59. 2-year yield 0.49%. 5-year 1.60%. 10-year 2.33%. 30-year 3.07%.

The trading session begins with equities launching higher continuing a global short-covering rally. The major indexes explode over +1% higher. The market bears are running for their lives. Semiconductors leap higher with SOX up +3.5%. MCHP +5.3%. INTC +3.7%. V continues running higher up +2% above 241 and Argus upgrades Visa setting a 260 price target. MHK, a housing sector bellwether, is upgraded and gains +5%. Interestingly, as stocks come on line, copper collapses and turns negative losing all gains in the overnight session.

DXJ, the Japan ETF, leaps +10%. The dollar/yen moves above 112. The stocks that reported earnings last evening and this morning launch higher except for Starbucks. GRPN +21%. LNKD +12%. XOM +1.3%. CVX starts out lower but turns higher up +1.1%. SBUX -2.2%. Chemical bellwether EMN bounces +7%. SAM, Boston Beer, the maker of Sam Adams beer, gains +7.2% on robust sales. The middle class and poor are drinking their troubles away. MBLY gains +2.4% on strong earnings. Blue chips IBM and MCD are sour spots trading down in the up tape. AEGR crashes -39% after reporting a loss, decreasing guidance and receiving downgrades. Gold is crushed -3% and silver is down -3.4%.

At 9:45 AM, Chicago PMI is a solid and very strong number at 66.2 above last month’s 60.5 and at a one-year high. The ordering components are all higher. Inventories are down so restocking will be needed especially if the weather turns cold a healthy economic sign. The Chicago PMI hints at a solid end to the year on tap but the data shows very little interest in cap ex spending by companies so economic softness should continue in 2015.

At 9:55 AM, Consumer Sentiment is 86.9 the highest since July 2007 adding more bull fuel for the stock market. On-line travel company EXPE jumps +3.2% on strong results. OWW is up +1.3% and PCLN +2.8% riding the Expedia coattails. PCAR is up +2% on an upgrade.

WTIC oil briefly falls under 80 and the average US gasoline price is at 3.00 per gallon slipping below. C gains +0.4% today the bad news last night about restating earnings long forgotten. Silly things like fundamentals, earnings, valuations and technical’s do not matter. All that matters is the central bankers pumping the stock market higher with easy money. Traders are partying like its 1999.

The Dow, IBB (biotech) and UTIL and XLU (utilities) print new all-time record highs. The Dow Industrials confirm the all-time highs on the Dow Transports which verifies the bullish rally from a Dow Theory perspective. TRAN, however, does not print a new all-time high today but is a hair away. Utilities may drift lower due to lackluster earnings from D. The Nasdaq prints a new 14-1/2 year high.

At noon time, the 2-year yield is 0.50%. 5-year 1.62%. 10-year 2.34%. Utilities, XLU and UTIL, are the only negative sector after printing new all-time highs this morning. 124 of the S&P 500 stocks (25%) are printing fresh new one-year highs including DIS, HUM, MMM and FDX. The market bullishness is off the charts. Traders are high-fiving each other in a euphoric celebration of central banker easy money. The only flies in the ointment are copper trading down and volatility remaining oddly elevated with the up tape.

At 1 PM, equities continue sideways at the highs. The SPX is up 20 points, +1%, to 2014. The Dow is up 181 points, +1%, to 17375. DD, JPM, V and INTC are leading the way higher. The Nasdaq is up 62 points, +1.4%, to 4628. The RUT is up 15 points, +1.3%, to 1170. Oil, gold, silver and copper all trail lower on the stronger dollar index with USD up +0.9% to 86.83. Euro 2527. The 10-year yield is 2.33%. Gold miners are slapped. NEM -7%. ABX -2.4%. AUY -8%.

The bullish sentiment is off the charts and more euphoric than when the stock market was at the all-time highs one month ago. Traders, analysts and economists remain continually bullish regardless of market direction. Princeton Securities NYSE floor trader Ben Willis says that stocks will end the year at new all-time highs. Money manager Ric Edelman says “buy the dips.” Mizuho Securities strategist Carmine Grigoli reiterates his SPX 2150 target and says this may be conservative (he expects the SPX to print even higher). WFC manager John Manley says all the metrics that pushed stocks higher remain in place. Manley says, “We are not at high valuations” and “nowhere close to a bear market.”

A Virgin Galactic air ship, owned by billionaire Richard Branson, crashes in the Mojave Desert during a test flight. One pilot is killed and another severely injured. Virgin Galactic is striving to provide the first commercial space flight service for the general public at $250K per ride. The first commercial flights were supposed to occur this year but had already been pushed forward to early 2015. Are you ready to sign up? Interestingly, Russian rocket engines were used for both the Virgin Galactic tragedy and the rocket explosion that occurred on the launch pad in a separate incident two days ago although the story is developing. The fuel formula is believed to be the cause of the tragedy. The Virgin Galactic program suffers a serious setback and the first commercial space flights will likely be delayed into 2016 or later.

At 3 PM, the SPX is at 2012 dancing to and fro along the September all-time closing high at 2011. The all-time intraday high is 2019.26 on 9/19/14 and the all-time closing high is 2011.17 on 9/18/14. The SPX is up 18 points, +0.9%. The Dow is up 153 points, +0.9%, to 17347. The COMPQ is up 53 points, +1.1%, to 4619. The RUT is up 15 points, +1.3%, to 1171. The computerized trading robots are taking over late day moving the four major indexes higher in unison.

Farm Prices show the low grain prices continuing. The CORN ETF is down about -50% off its 2012 high but has recovered about +14% over the last month. The JO coffee ETF has doubled over the last year but falls -18% over the last month. SGG, the sugar ETN, has collapsed from the 2011 top at 105 to 40, -62%, however, the weekly chart is positively diverged from a technical perspective and likely an attractive candidate for a long play. Ditto the CANE ETF. Sugar may become sweet again for the months ahead.

In the final one-half hour, there is $1.7 billion in orders to buy, the highest level seen in many weeks, which will push the market up to the intraday highs into the closing bell. Sure enough, the SPX is pumped higher starting at 3:24 PM at 2010 and ending at 2018 at the closing bell an eight-handle move, +0.4%.

The day ends with the equity markets gapping higher on the Japan stimulus that creates a global short-covering rally. Halloween is a trick for the bears and treat for the bulls. The SPX gains 23 points, +1.2%, to 2018 exactly as the S&P futures indicated when the Japanese shock and awe was announced overnight. The SPX prints a new all-time closing high at 2018.05 but the all-time intraday high remains in place at 2019.26 from 9/19/14. The HOD is 2019.19 falling only about a buck short of printing a new all-time record intraday high.

The Dow is up 195 points, +1.1%, to 17391, printing a new all-time intraday high at 17395.54 and new all-time closing high at 17390.52. The Dow Industrials print new highs confirming the new highs in the Dow Transports from a Dow Theory perspective signaling further upside in the broad indexes. The trannies, however, were unable to print a new high in today’s action.

The COMPQ gains 65 points, +1.4%, to 4631, a new 14-1/2 year record high. The Nasdaq is nearing 5K the peak of the dotcom bubble in early 2000. The Russell 2000 Index gains 18 points, +1.5%, to 1174 lagging the other major indexes and not yet back to the July all-time record high above 1210.

For the week, the SPX gains +2.7% building on last week’s strong gains. The Dow is up +3.5% on the week and the COMPQ gains +3.3%. The RUT small caps explode +4.9% during the week. The NYA gains +2.5%. Semiconductors print a strong recovery with the SOX up +4.7% this week. Biotech stocks, IBB gain +2.7%. Financials, XLF, are up +3.2% this week. Energy lags with XLE up +2.1%.

The twelve-day rally is a phenomenal parabolic move higher that began with Fed’s Bullard comments that more QE is on the way. In about two weeks time, the SPX moves from 1820 to 2018, a huge 200 handle turnaround, nearly +11%. The power of the central bankers is impressive although obscene. Free markets died in late 2008 and early 2009 when the Fed bailed out the banks and other companies such as AIG and GM and began the quantitative easing. The Dow moves from 15860 to 17396, 1536 points, nearly +10% over the last few days. The COMPQ is up from 4123 to 4642, a ridiculous 519 points, nearly +13%! The RUT rallies from 1040 to 1174, 134 points, +13%! Major indexes simply do not move over +10% in a matter of days unless goosed by the central bankers.

The dollar/yen is 112.31 a huge move this week considering the currency pair was under 109 only one day ago. This is an obscene move for currencies but the power of the central bankers appears limitless. Euro 1.2533. Pound 1.60. The USD dollar index is 86.913 up from 85.200, +2%, in only 48 hours time. The Japanese yen, XJY, weakens due to the BOJ money printing, collapsing from 92.60 to 89.04, -3.8%, over the last three days. The central banks are the market. The 10-year yield is 2.34%. The Japan 10-year JGB yield is a paltry 0.457%.

The utility sector, UTIL and XLU, print new all-time record highs before retreating and ending the day negative in the up tape. UTIL tops at 599 and XLU at 45.63. The weekly uptrend in utilities signals a strong stock market moving forward. The biotech sector continues to pound higher with IBB printing a new all-time high at 303 before retreating to the flat line. The healthcare sector also prints new all-time highs with XLV at 68. There are new all-time highs in many other sectors and stocks.

AAPL prints another new all-time record high above 108 for the 38th record high of the year. CNTL, a potential takeover target, jumps +13%. C finishes +0.7% higher despite the restatement of earnings. Banking analyst Mike Mayo, using a Halloween metaphor, says, Citigroup is “like free candy at these prices.”

The bullish parade of sentiment by traders and analysts is unstoppable. CNBC television commentator Robert Frank says, “Stay in the market even when it’s tough.” UBS strategist Jim Lacamp says headwinds have become tailwinds and he comments on the ongoing Keynesian stimulus saying, “the market likes it and it will keep us going for a while.” Matrix Asset Advisors strategist David Katz says November and December are typically good months for the stock market and “Stocks will trade higher.” As the stock market prints new all-time record highs, key economic bellwether copper sells off, a coupon company, GRPN, catapults +22%, and the camera-on-a-stick company, GPRO, jumps +13%. What does this tell you?

When traders were expecting the ECB to pump the markets higher with stimulus, instead the Japanese government pension fund and the BOJ fire a double-whammy money bazooka creating a shock and awe wave of easy money. Traders expect a further upside orgy with ECB President Draghi announcing stimulus next Thursday at the ECB meeting or in the weeks ahead. The central bankers are the market; can it be any more obvious? Bullish traders are celebrating into the weekend raping the market upside with the central banker’s easy money.