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.

The market struggled to gain ground today, and the major averages finished with only nominal gains. The Dow gained 23 points (+0.2%) to 10572, the Nasdaq gained 4 (+0.2%) to 2104 and the S&P 500 added 1 point (0.1%) to close at 1183. The Russell 2000 fell just less than 1 point to close at 622, and the 10-year Treasury yield fell to 4.12%.

Internals were mixed, with advances/declines running right around even, and up volume just slightly ahead down volume. The number of new highs decreased significantly today, but still far outnumbered the new lows, about 10 to 1.

Very few big movers in the industry groups today: on the up side, oil services gained back 2.4% and semiconductors tacked on 1.3%, while on the down side, gold stocks dropped 1.8% and drug stocks fell 1.3%.

Is the U.S. playing ‘currency chicken’ with the Europeans, daring them to devalue the Euro if it becomes too strong against the dollar?

Mike Hartman, in his latest contribution to Financial Sense Online, says as much. Referring to Treasury Secretary Snow’s comments on the dollar, he says:

Basically, Mr. Snow is trying to tell the European Union to get with the program and stimulate the economy via monetary and fiscal stimulus. We want them to inflate just like we are along with Japan. Monetarily we are telling them to lower interest rates and gun the money supply, while on the fiscal side we are probably telling them to increase government deficit spending to keep the money flowing until economic momentum can sustain itself. Remember that the euro was created to eventually work as a global reserve currency concurrent with the U.S. dollar. It looks like our guys are saying, OK Europe, you want a strong currency…you can have it along with its attendant problems. Now we have to see who will win this grand game of chicken. Will the U.S. begin to impose discipline on monetary and fiscal policies, or will the E.C.B. buckle under the pressure of a strong euro forcing them to overtly weaken the euro and support the dollar just as Japan and China have been doing?

Filling the trade gap isn’t going to be easy, or painless.

The first US gold ETF (symbol: GLD) began trading today.

More info on GLD available at http://www.streettracksgoldshares.com/.