Stocks and Precious Metals Charts - Beware of Bears - Non-Farm Payrolls Tomorrow

 

"Beneath some burning, unknown gaze
I feel my very wings unpinned,
And give my name to the abyss
Which waits to claim me as its own.”

Charles Baudelaire, Lament of Icarus

"When humanity, subjugated by the terror of crime, has been driven mad by fear and horror, and when chaos has become the supreme law, then the time for the empire of lawlessness will have come."

Friedrich Rudolf Klein-Rogge, Das Testament des Dr. Mabuse

"And you could say in some respects this 'shadow behind the power' that makes money off war, period, no matter who's the belligerent, makes money off that volatility now, especially with computers that are able to assist them in doing so, like currency manipulation, for example, or just general speculation.  And they don't care about what they're doing to the real economy, because they're raking in the dough."

Lawrence Wilkerson, former chief of staff to Colin Powell

“How you are fallen from heaven, Lucifer, son of the morning.   How you have been cut down to the ground, You who laid low the nations.  For you said in your heart: ‘I will ascend into heaven, I will exalt my throne above the stars of God. I will sit on the mount of the most holy on the farthest sides of the north.  I will ascend above the heights of the clouds. I will be as God.’

Isaiah 14:12-14

Stocks were lower today on a repricing of risk (again).

The Dollar was sharply higher, along with the VIX, in a risk off move.

Gold and silver were lower, moving inversely with the dollar.

Tomorrow is the Non-Farm Payrolls report, which may move markets.

I am not so sure where the market is going.

Theories abound, including the Fed pivot and the suppport for markets in anticipation of the mid-term elections.

However, we are clearly in a bear market. 

And we will remain in one until we start to see higher lows and higher highs.

So until then, beware of bears.

Have a pleasant evening.

Stocks and Precious Metals Charts - Fearless, Into a Three Day Weekend - CrashTrak

 

"Bear market rallies, or 'relief rallies,' are sharp upward spikes in prices on the US equity markets.  They are fed by short covering.  Those who are short, or have positions based on the assumption that the stock market is going lower, are forced to buy stocks either from fear of losses, or because they are undercapitalized and overleveraged.  The leverage may be in terms of time (as in the case of stock options) or money (margin).

The bear market rally consists of a violent opening spike.  That spike will be up to the nearest strong overhead resistance as the short sellers panic.  Then the market will pull back, because there are no serious buyers yet to sustain the prices, and the early shorts have covered.  Also, insiders will begin to feed their dog stocks into the public markets.

The prices will pull back to the nearest support.  Once the bulls feel confident again, the buying will resume, this time more slowly as naive speculators begin to succumb to the 'good news.'  The highwater mark of the opening price spike will be a definite target for this secondary move higher.  Often the initial effort to find support fails, and the bullish sentiment will pull back and try to find stronger support from which to resume the price advance.

Very infrequently there is a 'failure to rally' and a failure to find support at a near support level.  Buyers (also known as 'the greater fool') are not to be found, and the dip buyers panic, and a freefall ensues.  This also can be quite breath-taking, as the insiders are selling not buying, and the small speculators are exhausted and starting to panic.  This is an uncommon event, but can be quite damaging if you are caught on the wrong side of it.  This is how we came up with the term 'chasing nickels on the freeway' to describe it.  Buying the dip in price in bull markets is easy money; buying the dip in bear markets is for gamblers.

The best way for most traders to play these markets is to stay out. The opportunity to be whipsawed is very high. Take a break. Go for a walk. The market will always be there. The greed of 'lost profits' pulls you back in, and then fear will take you out, on a stretcher if you are not careful. 

Controlling one's emotions in volatile markets is the primary challenge for experienced traders."

Jesse, Bear Market Rallies, 17 July 2008


US markets will be closed on Monday for Memorial Day observance. 

Stocks were in rally mode today, what looked like a proper bear market rally.

Considering we have seven weeks of weakness and declines as we *finally* set that second low we have to say that it's about time.

Now let's see if bully can keep the squeeze going, or not.

With the general risk on atmosphere, the Dollar and VIX were lower.

The VIX is now back down to its 50 DMA which has marked a support level in the recent past.

Gold and silver were trying to break out this morning, but were smacked down lower in the general exuberance. 

Next week may be pivotal.

For the rest of the world, try to carry on with US guidance on Monday.

Have a pleasant weekend.

KKR Cancels Their Secondary Stock Offering of $500 Million As Earnings Drop 92%

"Market conditions" says Bloomberg TV. And a freshly announced 92% drop in earnings year over year that the company announced after the bell did not help.

The decline in profits was related to "one time issuance of equity awards from its stock issuance" most likely related to their recent IPO on July 15.

I'll try to keep a straight face. I'm sorry. Who is their CFO, Bernie Madoff? What they hell are they doing with a secondary offering less than a month after the IPO, and having given away most of their earnings in employee bonuses! Are they nuts? Do these jokers have a business plan, or do they just make it up as they go along?

The pulling of a big high profile secondary like this is a sign that the underwriters looked behind the curtain of market depth and volume and said, Yech! There is no way this beast will fly and we are not going to eat the excess shares and risk a failed offering. We're technically insolvent ourselves!

Aug. 5: KKR Rises As Citi Says BUY to $14 Target

Maybe Wall Street really needs those wealthy welfare tax cuts if bonuses are going to be limited to only 92% of earnings, and the shareholding public will not agree to foot the bill in the free market by taking on new shares just a few weeks after the IPO.

Spin that, you gravy sucking Wall Street pigs.

WSJ
KKR Drops Plans for Stock Offering
By PETER LATTMAN
AUGUST 9, 2010, 5:38 P.M. ET.

KKR & Co. said it dropped plans to raise $500 million in a stock offering, a setback for the firm as it begins life as a company publicly traded on the New York Stock Exchange.

In reporting earnings for the first time as an NYSE-listed firm, KKR said late Monday that it earned $29.9 million, compared with $365.8 million during the same period of 2009. That 92% drop, in part, reflects the cost of the one-time issuance of equity awards relating to its stock issuance. (The shareholders should revolt and throw out management - Jesse)

KKR's core private-equity business performed well. Holdings on its balance sheet, which include Texas utility Energy Future Holdings Inc., were marked 6% higher in the three months through June. The Standard & Poor's 500-stock index dropped 12% for the quarter.

Last month, KKR moved its listing to the NYSE from the Euronext exchange to provide its stock with more liquidity and a broader investor base. In May, it announced that as part of its U.S. listing it would raise $500 million to fund the firm's growth and potential acquisitions. KKR has since squelched the offering...