Archive - Dec 2009

One of the screens that we at Fibozachi continually monitor throughout the Cash session (09:30 - 16:00) is the NYSE TICK.

The hackneyed cliche of "volume precedes price" is certainly true more often than not, however, it is far from foolproof. We prefer to modify this tired cliche by saying that: "buying and selling pressure precedes price."

The snapshots included (from today's session) clearly illustrate how this critical relationship (between the TICK and price action itself) plays out on a daily basis.

More Mutual Assured Destruction from Ber Bernanke: "Without addressing every specific item, I believe that the release of much of the information requested would inhibit the policymaking process or reduce the effectiveness of policy and thus would not be in the public interest."

In other news Dow Jones, New York Times, the Associated Press and Reuters all have enjoined Bloomberg in demanding that Federal Court uphold the previous decision by the NY Supreme Court, seeking the Fed to disclose confidential bail out information.

In this 12.15.09 edition of the Fibozachi Technical Update (FTU), we present you with 15 technical profiles of the BKX - Bank Index, Crude Oil Futures, Natural Gas Futures, the VIX, the US Dollar Index, and IBM common stock ...

The question now: where does the latest batch of good "bailout" news come from?

Is Citi going to be out of TARP after completing the secondary it is trying to get done? No is the answer. But you could have fooled me.

Since there is no volume this week and most players are out of the market for the rest of the year, the Goldman Squid Desk is busy again studying the books of its biggest clients, looking for outsized put or call positions in individual stocks. As usual, we find sudden shanks or unexpected bottlerocket runs as Goldman extracts its usual pound of flesh out of its customers.

With UBS out, and CS to follow, how the hell will the ultra upper middle class continue not paying their taxes?

A month ago Zero Hedge dubbed Gramm-Leach-Bliley the worst Bill ever passed. Its passage, coupled with a bunch of insane money printing leprechauns, presaged the ultimate collapse of Lehman, and was the main reason why capitalism nearly died last year (and why contrary to all you hear, is still in critical care). Yet from mere grumblings a month ago, the chorus of voices calling for a  repeal of G-L-B, and a renewal of Glass-Steagall has reached a crescendo, and today Majority leader Steny Hoyer said that the renewal of the Glass-Steagall act was a distinct possibility.

XOM is the world's best investor in the energy business, and has a multi-decade track record and the returns on capital to prove it. This is undeniable. But, Exxon looks out 20 years when evaluating acquisitions and investments. Natural gas investors should not look too much into this bet, because Exxon's time horizon is longer than most of our careers, and perhaps lives, will be.

"Builder confidence in the market for newly built, single-family homes receded one point to 16 in December as continued weakness in the economy and job markets weighed on consumers’ potential home buying plans, according to the latest NAHB/Wells Fargo Housing Market Index (HMI), released today.The December HMI fell one point to 16, its lowest point since June of this year. Two out of three component indexes also were down, with a one-point decline to 16 registered for current sales conditions and a two-point decline to 26 registered for sales expectations in the next six months. The component gauging traffic of prospective buyers remained unchanged for a third consecutive month, at 13." - National Association Of Home Builders

When Dubai World black swanned global investors last month with what amounts to be a reported $80 Billion in debt liabilities, it sent shivers down the spine of many a financial manager and stock trader. For those who were paying attention, Dubai’s troubled assets were no surprise, it was simply a matter of time. Oft repeated by contrarian analysts and investors like Dr. Doom Marc Faber, Gerald Celente, Jim Rogers, and Karl Denninger, the mathematical certainty of the economic crisis would play out - eventually.

REITs have ascended too far from their fundamentals -DJ US Real Estate Index has outpaced S&P 500 index by more than 50% during a time when their macro and fundamental outlook pale compared to that of the broad market. There is no "deal" to be had here! What you are witnessing is momentum trading, not fundamental value.

Nothing too secret here: banks are willing to wager the systemic stability so they can get another bonus payment before everything hits the fan next year. What happens when (not if) TARP is needed again? Well, these banks will have to nationalized, or else there will be a revolution. And these banks know this, so they would rather cash in at least one more bonus after which who the hell cares.

Just in case you needed some more validation for a "strong" Euro thesis, the latest bit of news out of Europe shows that all those problems that were initially swept under the rug, just like in a crappy Japanese horror movie, find a way to reach out and haunt Central Bankers worldwide. First the Baltics, then Greece, then Austria, and now, once again, Ireland. 50% state ownership of Ireland's two leading banks is now on deck. To keep this as surreal as possible, may we suggest that Fred "Iceman" Mishkin quit his job in Columbia where all he does is spread completely factual and thoroughly undiscredited economic non-bullshit and run for [president/despot/tyrant/monarch/steam spewing geyser] of Iceland.

This is the second time in a week that a bill auction has closed at exactly 0%. The Treasury has auctioned off $57 billion since December which is yielding absolutely nothing. Surely, this can go on forever. In fact, can the US reverse roll all of its $7 trillion in marketable securities in the form of 1 months? That would surely help the deficit as no interest has to be paid by the US. Ever.