Bear Mountain Bull

It’s time again for a little BMB R&R, especially with the market behaving as bizarrely as it’s been. Maybe if we stop watching it start to behave a little better…

Posting will be very light and variable over the course of this week, but we’ll put up an open thread each market day for our readers to comment on the day’s market activity or to post any interesting links they might run across.

Check the space below for whatever the latest might be during this ‘off’ time, and please visit the various sites in the ‘Links’ and ‘Regular Stops’ for up-to-date market news and analysis.

BMB will be back in full swing by next weekend.

As if Krispy Kreme (KKD) needed any more trouble, the company now finds it is the target of a formal SEC Investigation.

Go ahead and buy the donuts - but BMB recommends you stay away from the stock.

The market picture wasn’t a real pretty one again today: the Dow & S&P 500 were each down less than 1%, but the Nasdaq fell 28 points, or 1.5%. Volume was a bit on the light side. Advances:Declines — NYSE - 1:1, Nasdaq - 3:7. Up:Down volume: NYSE - 3:7, Nasdaq - 1:4.

Seeing as how there were more losers than winners, let’s start with the losers: Semiconductors down 3.4%, disk drives (again) down 2.7%, computer hardware and internet stocks each fell a little over 2%. The only real winners of the day were the gold/silver stocks, with the XAU up just over 2% (The move taking place in precious metals is one that shouldn’t be ignored…).

Oil fears continue, with crude closing the session solidly above $53/barrel.

So is the action of the last two days just a correction or pullback, or is it the beginning of larger move down? BMB wishes he had that answer for you, but if he knew these things he’d probably be lounging on a beach in Hawaii rather than writing this blog entry. We’ll take a look at some charts over the weekend and let you try to decide for yourself…

FXI - began trading today.

Update: For whatever reason, the IShares site has nothing on the components of the new FXI ETF, and the link in the article to the FTSE Index site requires registration/login. For those who are wondering what the components of the FTSE/Xinhua China 25 Index are, here’s a list:

Aluminum Corp of China
BOC Hong Kong
Beijing Datang Power Gen
CITIC Pacific
CNOOC
China Life Insurance
China Merchant Holdings
China Mobile
China Petroleum & Chemical
China Resources Enterprise
China Shipping Development
China Telecom
China Unicom
Cosco Pacific
Denway Motors
Guangdong Electric Power Development
Huaneng Power International
Jiangsu Expressway
Lenovo Group
Maanshan Iron & Steel
PICC Property & Casualty
Petrochina
Sinopec Shanghai Petrochemical
Yanzhou Coal Mining
Zhejiang Expressway

Lawrence McMillan, renowned options trading expert, bestselling author and president of McMillan Analysis Corporation (www.optionstrategist.com), provides a free weekly analysis of the markets via email (also posted at the site - sign up for email delivery here). While the analysis is geared toward traders, it provides the investor with useful and timely perspective on current market movements.

This week’s analysis expresses the frustration felt by those trying to figure out where this market is heading:

The market is trying very hard to prove everyone wrong these days. It is like a petulant child, refusing to behave in an accepted manner. This “petulance” began with sell signals in late September, but just as the market got rolling on the downside, it quickly reversed upward without the benefit of buy signals or major oversold conditions. The ensuing rally seemed strong, extending so far as to break through resistance and downtrend lines this week, culminating on Wednesday. That upside breakout led some to turn bullish, only to see selling with a vengeance occur on Thursday. This type of action can be hazardous to your wealth.

He concludes the analysis with:

In summary, this is a very difficult market to judge right now. None of the indicators are near to creating new buy signals, yet price momentum has been strong. On the other hand, new sell signals haven’t appeared either. So, we say this is a time to stand aside, waiting for some agreement among the various technical indicators and having that confirmed by price action — before taking on new broad market index option positions.

If you feel like you just don’t know where to put your money, whether to be in or out, you are not alone. When the picture is blurry to even experts like Mr. McMillan, perhaps it’s best to just stand aside and wait for the smoke to clear.

If you don’t have a broker that provides realtime streaming quotes or you don’t like to leave your trading platform open on your computer screen at work, take a look at Scottrader.

Scottrade, the online broker, allows you to use a demo version of their Scottrader platform for free!! Go to the Scottrader link above, click “Login to the Demo Version” on the right-side panel, then fill in the form under “Need to register for the demo?”. You’ll be sent a password to be used in combination with your email address to login to this ‘lite’ version of their realtime streaming quote display. Freebie!!

The weekend is the best time for the individual investor to do a little research and catch up with the markets. The problem is that most financial sites shut down and go home after the closing bell on Friday afternoon!

Not so with BMB. After all, as an investor, that is when I look at what’s happened in the past week and what I’d like to watch for the following week. Keep an eye on BMB for weekend updates - who knows what you’ll see?

Looks like the September jobs report was ‘weaker than expected‘.

Expect a lower open in the markets today, as the Dow futures are currently trading down 26 and Nasdaq 100 futures down 9 from yesterday’s close.

On the upside is gold, with the quote I’m seeing at $424.50/ounce.