Bear Mountain Bull

Good info from one of BMB’s favorites, Gary Kaltbaum, as he points out a few areas beginning to show signs of weakness.

Update: After today’s trading, you can add Radio Shack to Gary’s list. Here’s the chart for RSH.

There will be little or no posting today, as BMB will be away tending to some personal business. Take good care of the markets for me.

Looks like the PHLX Housing Index could be forming a short-term top here. A break below current levels would complete the double-top formation.

Chart courtesy of StockCharts.com

The markets were all over the place today, starting out up, plunging midday, then recovering and wavering the rest of the day. The Dow Industrials recovered after being down more than 100 points to finish down only 46 (-0.4%) at 10476. The Nasdaq hung onto some gains for the day, moving up 5 points (+0.2%) to 2107, and the S&P 500 slipped 4 points (-0.3%) to 1178. The Russell 2000 added 3 points to 634. Perhaps some of the most telling action took place in the bond markets, where the 10-year yield got bumped up to 4.33%.

Internals were biased slightly to the negative on the NYSE and slightly positive on the Nasdaq. As has been the way of things lately, new highs far outnumbered new lows.

Not a lot of movement in the industry groups today, with one of the only real winners being the computer hardware group which added 1.7% thanks to Apple’s 6% gain. The losers were so-called ‘interest rate sensitive stocks’, with housing stocks getting the worst of it by falling 2.4%. Other losers were natural gas stocks (-1.2%), utilities (-1.1%) and oil services (-1.0%).

Crude oil settled around $49.70/barrel, and gold moved higher on the day, breaking above $453/oz.

The dollar hasn’t tumbled much further today – yet – but that hasn’t stopped the gold bulls from pushing gold above $453/ounce.

Looks like the fear of rising interest rates is getting to the housing stocks today. The PHLX Housing Index ($HGX chart) is down more than 2% today, with many of the homebuilders down more than 3%.

The stock markets never did live up to the expectations of the futures traders this morning, starting off on the plus side but not holding there for very long. Currently, the Dow is down 86 points and the Nasdaq down 6.

Perhaps the more interesting news is the selling in the bond market: the 10-year yield is currently at 4.34%, quite a jump from last week’s levels.

Looks like the market may get another bump up today, at least to start with. Pre-open futures are trading up about 50 points on the Dow, Nasdaq 100 up 14. Apple is already up another $3 in pre-market on another analyst upgrade. IPod saves the world.

Let the froth continue. Enjoy it while you can – just have enough sense to get out when it ends.

Wal-Mart sees lackluster November sales.

That should make for some interesting commentary come Monday morning.

Here are the charts of the 4 top performing sectors for the week:

	Energy stocks gained 3.5% on the week. Last week, BMB told you: “The XLE has held support nicely at the 50-day moving average and looks poised to move higher.” Bingo.
	Utilities (+3.0%) continue to show strength, but could be getting a little ahead of themselves here.
	Basic Materials (+2.7%) have spiked since breaking free of their trading range.
	Consumer Discretionary stocks (+2.0%) have done the same.

Here’s the scorecard for the past 8 weeks:

Charts courtesy of StockCharts.com

	The major indices all remain extended from their moving averages, but have struggled to move higher over the past couple of weeks. The Dow has regained only part of what it lost last Friday.
	The S&P has hit a bit of a ceiling above the 1180 mark.
	Ditto the Nasdaq at 2100.
	But the small-caps managed to break free over the last couple of sessions…
	…as have the mid-caps.
	The dollar continues to plummet…
	…and gold continues to soar.
	Those who were excited over oil’s October/November pullback are now disappointed — crude prices pulled back only far enough to resume their uptrend.

Charts courtesy of StockCharts.com

The major indices closed the shortened trading day virtually unchanged: the Dow gained less than 2 points and the S&P gained less than 1 point while the Nasdaq fell less than a point.

The only groups managing to make a move today were gold stocks (+2.5%), commodities (+1.5%) and natural gas (1.5%).

The ‘triple-Qs’ (QQQ) Nasdaq 100 tracking stock will be moving from the Amex to the Nasdaq, effective December 1, and will be changing symbols from QQQ to QQQQ.

Richard Reinhard of Growth Stocks Weekly discusses technical analysis, gold and the dollar.

His thoughts on the dollar:

The US dollar is in a secular bear market. You can’t open a financial newspaper or watch the financial news channels without hearing about the dollar bear. This trend became technically apparent in early 2002, just like the mirror-image gold price lift-off, yet the press typically provided little if any coverage.

With the US Dollar Index finally breaking the 85 support level in recent weeks and now with gold breaking through its US$430-435 resistance, we are clearly starting another upwave for gold (Gold has since moved above $450 – BMB). The stock markets are looking somewhat like a rabbit in the road staring at oncoming headlights – frozen in disbelief, fear or confusion. The lag in the gold stocks is symptomatic – but once the trends accelerate away from their key resistance (for gold) and support (US dollar) areas, there will be a rush to participate by the undecided or offside investors – eventually resulting in an accelerating trend that will shock the dozing public.

Asked for his biggest trading rule, he responds:

• A rising tide raises all ships, and vice versa, so assess the tide, not the ships.

Some of my other timeless favorites:

• Be patient: don’t be rattled by fluctuations.
• When all you’re left with is hope, get out.
• Never catch a falling knife.
• Cut your losers, and let your winners ride.
• Bear markets begin in good times. Bull markets begin in bad times.
• Draw trendlines. If a stock is in a downtrend don’t go long, and visa versa.
• If you learn one candlestick pattern, learn Doji at the top of a trend.
• Contrarians are correct at turning points in the market, but wrong the rest of the time.

Even though U.S. markets were closed for the Thanksgiving holiday, things didn’t change much when it came to the overseas markets: the dollar was down, and gold moved higher.

More on gold’s move here.

Despite a mixed bag of economic news, the markets maintained a positive bias all day today, albeit on expected low pre-holiday volume. The Nasdaq led the way with a gain of 18 points (+0.9%) to again finish above the 2100 level at 2102. The Dow gained 28 points (+0.3%) to 10520 and the S&P 500 added 5 points (+0.4%) to 1182. The Russell 2000 also tacked on 5 points (+0.8%) to close at 629.

Internals were also positive, with advances leading declines by about 2 to 1, and up volume leading down volume by about the same ratio. New highs clobbered new lows by 617 to 21.

The gains were widespread amongst the industry groups, with only the gold stocks slipping a bit on the day (-0.5%). The gainers were led by the airlines (+2.5%), natural gas stocks (+2.0%), paper (+1.8), oil services (+1.5%) and internets (+1.5%).

The markets will be closed tomorrow for the Thanksgiving holiday, and will trade only a half day on Friday.

It’ll get ya. I knew those things were bad news…

Jobless claims fell, which is good. Durable goods order fell too, which is not good. Here’s the info.

The markets were down today – then up. No, they were down. Oops, I mean they were up. Oh never mind. Just forget it.

The major indices went nowhere, but took a roundabout way to get there, flinching quite a bit when crude oil headed higher but regaining the lost ground when oil fell back. The Dow gained only 3 points, and the Nasdaq and S&P 500 each fell less than a point. The Russell 2000 actually did move a bit, gaining 3 points or 0.5%.

Market internals leaned a little toward the positive side, roughly 5 to 4 for both advances/declines and up volume/down volume. In what is getting to be a broken record, there were many more highs than new lows.

In the industry groups today, winners were led by oil services (+1.2%), REITs (+1.1%) and airlines (+1.1%). The only significant losses were suffered by the gold stocks, which took a 2.3% cut.

The dollar being down isn’t new, but oil sneaking its way back up toward $50/barrel is. The market indices are trickling down, but oil related stocks are moving higher.

The markets were sleeping early in the session, but woke up midday to finish with modest gains. The Dow moved up 32 points (+0.3%) to 10489, the Nasdaq gained 14 points (+0.7%) to 2085 and the S&P 500 added 7 points (+0.6%) to 1177. The Russell 2000 also moved higher by 8 points (+1.3%) to 621 and the yield on the 10-year Treasury fell to 4.16%.

Internals were solidly in positive territory with advances leading declines by 11 to 5 on the NYSE and 3 to 2 on the Nasdaq. Up volume led down volume by about 2 to 1, and there were 338 new highs to 35 new lows.

The gains were modest but widespread today, as virtually no industry groups lost ground. The biggest winners were computer hardware (led by the reaction to an analyst call on Apple, +2.1%), transports (+2.0%), oil stocks (+1.6%) and utilities (+1.6%). Crude oil prices slipped a little on the day but remained above $48/barrel, and December gold futures closed just above $449/oz.

The weekly wrap on technicals and sentiment from Schaeffer’s.

Note the info on the CBOE put/call ratio. This is an indicator that, at its extremes, tends to mark peaks and troughs in the markets. BMB has been watching the ratio fall over the past couple of weeks, and an uptick may indicate that a short-term top has been reached. A couple of places you can follow both the day-to-day put/call ratio readings and the 21-day MA are at Schaeffer’s market tools and at VTOReport.com.

Shares of Apple are currently trading up more than $7.00 at $62.50, following Piper Jaffray’s raising of their price target on AAPL from $52 to $100.

Um, folks, just because they set a target of $100 doesn’t mean it will get there — and I don’t think they meant it would hit the target tomorrow!

The latest issue of the Chart Watchers newsletter from StockCharts.com came out over the weekend. It is always an interesting read, giving concise insight and perspective from a number of market experts.