Stocks Higher into Final Hour on Debt Ceiling Hopes, Short-Covering, Healthcare/Commodity Sector Strength
Broad Market Tone:
- Advance/Decline Line: Modestly Higher
- Sector Performance: Most Sectors Rising
- Market Leading Stocks: Underperforming
Equity Investor Angst:
- ISE Sentiment Index 85.0 -46.9%
- Total Put/Call .93 +25.68%
Credit Investor Angst:
- North American Investment Grade CDS Index 86.41 -.93%
- European Financial Sector CDS Index 135.0 +2.32%
- Western Europe Sovereign Debt CDS Index 98.9 +.93%
- Emerging Market CDS Index 212.39 -.50%
- 2-Year Swap Spread 14.75 +.5 bp
- 3-Month EUR/USD Cross-Currency Basis Swap -16.75 +.75 bp
Economic Gauges:
- 3-Month T-Bill Yield .06% -1 bp
- China Import Iron Ore Spot $145.90/Metric Tonne unch.
- Citi US Economic Surprise Index -2.10 -4.3 points
- 10-Year TIPS Spread 2.52 -2 bps
Overseas Futures:
- Nikkei Futures: Indicating -72 open in Japan
- DAX Futures: Indicating +13 open in Germany
Portfolio:
- Slightly Higher: On gains in my biotech/medical sector longs and emerging markets shorts
- Market Exposure: 50% Net Long
1 comment:
It is very likely that an Elliott Wave 5 High top occurred in the S&P 500 today.
It has been national sovereignty that has supported currency carry trade foreign investing, and given moneyness to companies worldwide, as is seen in the ongoing Yahoo Finance chart of the following corporations, together with the S&P, SPY. Leading Country and Company Stocks include the following; their charts suggests a market top has been achieved.
Japan, KUB … Industrial Equipment
Mexico, FMX … Consumer Discretionary
Italy, E … Energy
Netherlands, LYB, …. Materials
Netherlands, UN … Consumer Goods
Brazil, SBS ….Utilities,
Denmark, NVO … Health Care
United Kingdom, ARMH … Technology
India, HDB … Banking
US, MSI, VZ ... Telecom
On Tuesday, January 22, 2013, the chart of the S&P, $SPX, SPY, hit a 5 year high as Bespoke Investment Group reports in Seeking Alpha, 10th Longest 10% Rally on Record. World Stocks, VT, traded to a new rally high on rising Basic Material Stocks, IYM, and XLB, and rising Financial Stocks, XLF. The the strongest risers of the day were, GDX, (but not SIL), PSCE, XLE, OIH, IEZ, SLX, WOOD, and RWW, KRE, RWJ, IRE, SAN, CHIX, and BJK, IYR, ROOF, PKB, ITB, IHF, FAA, REM, and VIG. Global Producers, FXR, rose to a new high. Greece, GREK, Italy, EWI, Ireland, EIRL, Spain, EWP, Argentina, ARGT, Thailand, THD, Australia, EWZ, Netherlands, EWN, Finland, EFNL, Russell 2000, IWM, China Small Caps, and the Shanghai Shares, CAF, rose to new rally highs. Of note, the Gold Mining Stocks, GDX, led by AUG and EGO, have been trading higher since January 8, 2013. This as Japan, NKY, traded sharply lower.
Peak Currencies, DBV, CEW, occurred January 17, 2013, as Competitive Currency Devaluation commenced at that time. On Tuesday, January 22, 2013, the Small Cap Value Shares, RZV, rose 1.1%, and the Small Cap Growth Shares, RZG, rose 0,6, taking the Currency Demand Curve, RZV:RZG, higher to 50 day resistance, on a demand for the Euro, FXE, and the Australian Dollar, FXA, which turned the US Dollar, $USD, UUP, somewhat lower to close at 79.87, which has been trading higher since January 14, 2013. Major World Currencies, DBV, and Emerging Market Currencies, CEW, have been trading lower since January 17, 2013, which have turned Carry Trade Countries, EFA, lower, reflecting an extinguishment of foreign investing; this on the exhaustion of the World Central Banks’ monetary authority ability to sustain global growth and corporate profitability. It is the Japanese, EWJ, shares, such as TTM, HMC, NSANY, KUB, MKTAY, that are leading the Global Producers, FXR, and Carry Trade Countries, EFA, lower; these have induced the Automobiles, CARZ, seen in this Finviz Screener to trade lower.
Of note, Closed End Equities, CSQ, traded higher as Closed End Debt Fund, PFL, traded lower. The ratio of these, CSD:PFL, two has been trading lower since September 14, 2012, suggesting that a market top is being achieved.
It has been the most toxic of debt, specifically, Distressed Investments, FAGIX, (like the debt taken in by the US Federal Reserve under QE1), Junk Bonds, JNK, Leveraged Buyouts, PSP, and Senior Bank Loans, BKLN, seen in this combined ongoing Yahoo Finance Chart, that have been the basis for Liberalism’s global debt based, currency carry trade rally, that commenced with the anticipation of the ECB’s OMT, in June 2012. The world passed through Peak Credit, AGG, on December 6, 2012, and it is unlikely that the toxic debt can continue to give seigniorage, that is moneyness, to stocks, ACWI. Yes it is likely that a stock market top has been achieved Tuesday, January 22, 2013.
Investors began to derisk out of Commodities, DBC, on September 14, 2012, and it is likely that they will on January 23, 2013, begin to disinvest out of stocks, VT.
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