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.

	Gold rises to 6-month highs…
	…as the dollar falls to 8-month lows.

Charts courtesy of StockCharts.com

Schaeffer gives us his view on the recent action in the mining stocks.

Google reported earnings after the bell, and is trading at $161.00, now up $20 on the day. Ebay has risen over $9.00 on the day after its earnings report yesterday.

	The Dow’s closing lows of August lie just above the 9800 mark — the same area that has marked the intraday lows of the last two sessions.
	The Nasdaq rallied strongly today in the last hour of trading, starting at below 1940. The rally stalled at 1957, with the 200-day moving average hanging just overhead at 1961, and the October highs (1971) and the year’s downtrend line just above that. Also, the Nasdaq ’squeeze’ is now getting rather tight - we’re still waiting for the battle of the two trendlines to be decided.

Charts courtesy of StockCharts.com

This rather bizarre day on Wall Street is finally over. The Dow spent nearly all day in negative territory, fell to the 9800 level intraday for the second day in a row, then rebounded off that level to finish at 9865, for a loss of only 21 points (-0.2%). On the other hand, the Nasdaq spent all day in slightly positive territory, then rallied strongly late in the day to finish up more than 20 points, or a little more than 1%. Volume was strong, and advances/declines, up volume/down volume and new highs/new lows all ran around 2 to 1.

Large gains were enjoyed by the internet stocks (+4%), boosted by Ebay’s earnings report, semiconductors (+4%) and network stocks (+3%). And, of course, the Dow Transports moved to new highs yet again today. The only notable losing group was the biotechs, which fell a little over 1%.

This all took place on a day when the US Dollar fell to 8-month lows against the Euro and the 10-year Treasury yield spent all day below the 4.00% level.

So, BMB poses the question: Can the Nasdaq (and the transports) continue to rally higher, even as the Dow Industrials languish at YTD lows? Or put another way — can a rally in tech turn the Dow around?

A rather bizarre day in the markets so far, with the Dow down 74 points and the S&P down 4, but the Nasdaq hanging on to a slight gain. The Dow is being dragged down by Caterpillar and SBC, while the Nasdaq is being held up by internet and semiconductor stocks.

After reporting earnings after the bell yesterday, and guiding earnings lower for ‘05, Ebay is up more than $6.00 in pre-market.