Thursday, June 30, 2011

Morning Update/ Market Thread 6/30

Good Morning,

Equity futures are slightly higher again this morning, the dollar is lower but bouncing, bonds are lower, oil is flat around $95, gold is slightly higher, silver is flat, and food commodities are mixed.

Of course the notion that Greece was “bailed out” is just a twisted euphemism for being stuck with even more impossible debt. That tragedy is far from over, in fact it was only made worse.

The bounce in our markets is already running into resistance. The VIX went down and touched the lower Bollinger band yesterday while the major averages all slammed into their upper Bollingers, none have broken the downtrend as of yet. Below is a daily chart of the DOW showing it up against the upper Bollinger, up against down slopping resistance, and just below the now down slopping 50dma:

The XLF gapped higher yesterday and closed above the upper Bollinger. Phony money galore, I hope they enjoy the little pop while they can, today is supposed to be the last of the $600 Billion QE2, however, when looking at the POMO schedule we find that today’s POMO operation is NOT the last, that they have operations scheduled on July the 6th and 11th, and a statement that a new POMO schedule will be posted on July 13th. So, there you have the end of QE2, and the unnamed beginning of QE3 with no end of the market manipulation whatsoever. Sold to them.

Meanwhile debt saturated Americans continue to wallow in low employment. Weekly Jobless Claims came in at 428,000 which is much higher than the consensus looking for 420k. Here’s Econohope:
No worse but only little better is the indication for the June employment report based on initial jobless claims which edged only 1,000 lower in the June 25 week to 428,000. A look at the four-week average, up 500 in the week to 426,750, shows no change from the May 28 week. But this month-to-month comparison of the four-week average does show improvement through the month, including an important 14,000 improvement in the household-survey sample week of June 18 vs May 14 (426,250 vs 440,250).

Continuing claims have also been improving slightly from a month ago, down 12,000 in data for the June 18 week to 3.702 million to bring the unemployment rate for insured workers down one tenth to 2.9 percent.

The Labor Department cites no special factors skewing the data. There's no significant initial market reaction to today's report.

While Americans may not have figured it out yet, the Greeks have – and the violence continues. Public workers in Britain are now also taking to the streets as the criminal “upper” class is robbing their retirement plans. There are clearly two sets of laws in the world at this juncture in history, those that apply to the money changers, and those that apply to everyone else. Look for more rioting here in America as the impossible math expresses itself more fully in the near future.

The Chicago PMI will be out shortly, that should be interesting and we’ll report it (almost) live right here, inside of our Daily Market Thread.