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.

Word is that the new gold ETF (symbol GLD) may begin trading tomorrow (Thursday).

BMB also heard on CNBC today that gains on the gold ETF may be taxed as a collectible rather than capital gains, which would mean a higher tax rate on profits. Something to research and understand before investing.

Earnings good, guidance not so good.

The markets blasted off the pad this morning and were in fine form midday, but ended up giving back about half their gains by the end of the session. Trading was heavy as the Dow moved higher by 62 points (+0.6%) to 10549, the Nasdaq gained 21 (+1.0%) to close just shy of the 2100 mark and the S&P 500 added 7 points (+0.6%) to close at 1181. The Russell 2000 also added 4 points, or 0.6%.

Even after two days worth of not-so-great inflation data, bonds rallied pushing the 10-year yield back down to 4.14%. Don’t ask - I have no answers.

Market internals, of course, were strong with advances leading declines about 2 to 1 and up volume leading down volume by 7 to 3. New highs beat out new lows by 20 to 1.

As you might expect, most groups were winners today with the best being computer hardware (+3.4%), semiconductors (+2.9%), and disk drives (+2.8%). REITs were the big losers today, dropping 2.2%.

The dollar keeps falling, gold keeps climbing.

Usually, almost without fail, when a merger deal is announced the acquiring company’s stock takes a dip and the acquired company’s stock goes up to match the acquisition price.

Not today. Kmart is acquiring Sears. They both go up — up big. Less than two years ago, Kmart was in bankruptcy, closing stores left and right. On today’s deal, KMRT jumps from $101 (and they probably have no business being at $101) to $118. Sears has been in a year long slide, closing at $31.65 on October 25th. Now, just 3 weeks later, after the Vornado disclosure and the Kmart deal, it’s trading at nearly $56.

Go figure. Maybe HP and Compaq wish they’d waited a few more years to do their merger, eh? They’ve got plenty of nice buildings too.

I don’t know. Some of this stuff is getting pretty weird.

Now you’ll be paying Tivo a subscription fee for their service to see their sponsored advertisements.

Not my idea of a good deal.

No doubt, this rally is different from the other rally attempts the markets have made this year. This article shows you the technical reasons that make the difference: whether you choose to “buy the dips” is up to you.

Consumer prices up 0.6% - biggest gain in 5 months. Are we surprised? No.

The markets don’t seem to care much right now. They’re still giddy over HP’s numbers, housing starts and the Kmart/Sears merger. Not much movement in the bond markets either.

The currency market noticed the CPI numbers. The dollar has fallen to $1.3025 against the Euro, and gold is trading above $443/oz.