Bear Mountain Bull

Not much of interest in the markets today, but late day selling forced the major indices into slight losses on the day. The Dow fell 17 points (-0.2%) to 10783, the Nasdaq dropped 3 points (-0.1%) to 2175 and the S&P 500 lost 1 point (-0.1%) to 1212. The Russell 2000 dropped a point to 651, and the yield on the 10-year T-note fell to 4.22%.

Volume was light, internals slightly positive, and new highs outnumbered new lows 437 to 9. None of the industry groups made major moves.

The NYMEX was not open for crude oil trading today, the dollar index bounced up 0.4% to 80.86 and gold prices hovered around $438/ounce.

Hopefully things will pick up after the New Year’s holiday!

For the most part, it was a real snoozer on the street today. The Dow slipped late in the day to finish down 29 points (-0.3%) at 10800, but the Nasdaq gained 1 point to 2178 and the S&P 500 remained unchanged at 1213. The Russell 2000 lost less than a point to 653. Bonds rallied a bit, pushing the yield on the 10-year Treasury down to 4.26%.

Despite the lack of movement in the indices, market internals leaned to the positive side, and up volume doubled down volume on the Nasdaq. There were 429 new highs and only 7 new lows.

Airlines led the upside with a 1% gain, and on the down side, steel stocks fell 5% on concerns that China’s steel exports could hurt other producers.

Crude oil prices dipped a little today to $43.45/barrel, the US dollar index slid another 0.5%, nearing the 80 level at 80.57, and gold remained at about $437/ounce.

Do you remember the Commodore 64? I’m sure you’ve been dying to dig yours out of the closet and fire it up again…

Weekly jobless claims fell by 5,000 last week.

A rather listless day on Wall Street today as the markets digested their gains of yesterday. The Dow slid 25 points (-0.2%) to 10829, the Nasdaq and S&P 500 each fell less than a point to finish at 2177 and 1213 respectively. The Russell 2000 fell 1 point to 653. Some selling in the bond market pushed the yield on the 10-year Treasury up to 4.32%.

Market internals were slightly positive with the exception of the advance/decline numbers on the Nasdaq, which were slightly negative.

Not a lot of movement in the industry groups today - oil services moved up by 1.4% and semiconductors added 0.9%. The downside was led by defense stocks, which fell 1.4%.

Crude oil surged to more than $43.50/barrel on news of explosions on Saudi Arabia. The dollar index rebounded by +0.3%, and gold prices took a dive back to $436/ounce.

Sales of existing homes rose 2.7% in November. I would imagine people will continue to buy houses as long as interest rates stay low.

Does that offset the drop in new home sales we saw?

The semiconductor group continues to lag the rest of the market, and its upward momentum has all but stopped. The SOX now finds itself being squeezed from above by its declining 200-day moving average, and from below by its ascending 50-day MA.

Chart courtesy of StockCharts.com

The markets bounced back nicely from their losses of yesterday, gaining back everything they lost and then some. The Dow finished higher by 78 points (+0.7%) to close at 10854, the Nasdaq gained 23 points (+1.1%) to 2177 and the S&P 500 added 8 points (+0.7%) to 1213. The Russell 2000 also gained 10 points to finish at 654. Bonds remained relatively unchanged, the 10-year yield holding at 4.29%.

Market internals were decidely positive, although in light holiday trading. Advances/declines ran slighly better than 2 to 1, with up volume over down volume by more than 3 to 1 on the NYSE but less than 2 to 1 on the Nasdaq. There were 413 new highs and 30 new lows.

Nearly every group enjoyed gains today, with the leaders being transports (+2.4%), housing stocks (+2.4%), biotechs (+2.3%), internets (+1.5%), retailers (+1.3%) and health care (+1.2%). Gold stocks were the lone losers, dropping 0.8% on the day.

Crude oil prices recovered a bit to $41.77/barrel, the dollar index remained unchanged and gold prices slipped just under $444/ounce.

The December consumer confidence numbers show a significant increase from November.

Not surprising to BMB, especially taking into account the nice rally in the markets over the past couple of months and the holiday season. Yet, if consumer confidence is so high, why are the Xmas retail numbers so shaky? It seems like it’s a little too easy to just say you’re confident when someone is asking you in a survey. But talk is cheap — it doesn’t mean a heck of a lot if you aren’t acting the part.

The markets slid a bit today — some will tell you that it was because of a slide in the dollar or a rise in interest rates. It certainly wasn’t because oil prices fell, even though they did. I don’t think that anyone ever really knows the reason why the market moves — I wish they’d quit trying to tell me. The market does what it does, and that’s all you need to know.

The Dow fell 51 points (-0.5%) to 10776, the Nasdaq lost 6 points (-0.3%) to 2154 and the S&P 500 dropped 5 (-0.4%) to 1205. The Russell 2000 also lost 5 points to 644, and bond prices fell pushing the 10-year Treasure yield up to 4.29%.

Market internals were negative, with advances/declines and up volume/down volume nearly 1 to 2 on the NYSE but less negative on the Nasdaq. There were 390 new highs to only 17 new lows.

Not much upside in the industry groups, with gold stocks leading a very small pack with a gain of 0.8%. On the downside, oil services dropped 2.3%, followed by natural gas (-1.5%), housing (-1.3%), oil (-1.2%) and transportation stocks (-1.0%).

Crude oil prices fell well below $42/barrel, and the US dollar index fell 0.6% as the dollar fell to new lows against the Euro. Gold prices moved back above $444/ounce with the fall in the dollar.

Breakfast at Schaeffer’s — the Monday morning look at technicals and sentiment.

Are we headed for a repeat of January ‘04? Maybe, maybe not.

Despite the problems currently swirling around names like Pfizer (PFE) and Merck (MRK), some of the other drug stocks seem to making some strong moves off their lows.

	Johnson & Johnson has been a solid performer for nearly all of 2004.
	Bayer had some bad news of its own last week with possible problems with its Aleve pain reliever, but the stock isn’t hurting, at least not yet.
	Wyeth has been quietly sneaking higher since July.
	U.K. based Shire Pharmaceuticals has powered higher after putting in a low in August.

Charts courtesy of StockCharts.com

Items of note on the latest industry moves:

• A decent Christmas week, with only one industry group losing ground.
• A look at the 4-week and 8-week numbers shows only one group down over the 8 week period, but many more over the past 4 weeks. Obviously the more recent 4 weeks have been a little tougher sledding.
• The move down in the gold stocks all happened in the first week of December, and the table doesn’t show that the group’s slide pretty much stopped at that point.

The Sector SPDRs all drifted higher along with the major indices this week, led by basic materials, financials and utilities. Still not much red showing up in this table. So far, so good.

Pretty quiet day on the markets today, so I’m not sure how meaningful any of the numbers are. The Dow gained 11 points (+0.1%) to 10827, the Nasdaq added 3 points (+0.2%) to 2160 and the S&P 500 added less than a point to 1210. The Russell 2000 also added 1 point to 649, and the yield on the 10-year Treasury moved up to 4.22%.

Volume was light due to the holiday, but internals did lean to the positive. There were 430 new highs to 23 new lows.

No movement to speak of in the industry groups today, as no groups gained even 1%. On the downside, the airlines and REITs each fell about 1%.

Crude oil remained steady at $44.18/barrel. The dollar fell, however, by 0.7%, but gold remained at $441/ounce.

All sorts of mixed news this morning: consumer spending down, consumer sentiment up, new home sales down, dollar new low against Euro.

What does it all mean? Judging by the market’s performance today so far, either it’s good news or it doesn’t matter. Hey, it’s Christmas!!

Investors continue to show very little, if any, fear of this market going lower. Can you blame them? The market has regained all of its losses since January, and has rallied strongly since the August lows.

No reason to be fearful — until things change. BMB will be watching these indicators for signs of reversal, which will indicate more fear entering into the market translating into selling pressure.

	The VIX/VXO, the market’s “fear gauges”, continue to move lower, now at levels not seen since 1995.
	The plunge in the CBOE equity only put/call ratio seems to have stalled, but the indicator hasn’t exactly turned upward with enthusiasm, which would indicate a rising level of ‘fear’. Currently, the moving averages of the put/call ratio look like they might drag along the bottom for a while longer.

VXO chart courtesy of StockCharts.com

A PHP upgrade on the host server has apparently messed up some of BMB’s scripts, causing errors to occur when attempts are made to post/view comments or to link directly to a post.

BMB is working to correct the issue ASAP.

Update: I think I’ve worked around the problem. If anyone notices anymore funky behavior, please feel free to ‘Email BMB’ and let me know. Thanks Amer!

The markets tacked a little more onto their rally of yesterday. Some say it was because of the fall in crude oil prices, but who really knows?

The Dow gained another 56 points (+0.5%) to move to another yearly (and more!) high of 10816. The Nasdaq gained 6 points (+0.3%) to 2157 and the S&P 500 added 4 points (+0.3%) to move to 1209. The Russell 2000 moved 2 points higher to 649, but the bond market sold off a bit, moving the 10-year yield to 4.20%.

Market internals were positive again today with advance/declines slightly positive but up volume /down volume on the plus side by almost 2 to 1. There were 542 new highs and only 14 new lows.

There were gains seen by the airlines (+2.6%), defense stocks (+1.3%) and networking stocks (+1.3%), while oil services (-1.6%) and natural gas stocks (-1.1%) moved to the downside.

As we mentioned earlier, crude oil prices fell on the weekly inventory data, moving down to $44.24. The dollar index was unchanged, though the dollar did make gains against the pound due to concerns over UK interest rates falling. Gold prices fell back just below $440/ounce.

I don’t like to put too much emphasis on these weekly numbers, but here they are.

Crude oil inventories were up, so oil prices have taken a hit of just over $1.50/barrel, and the market is trading up a bit. It seems a little silly to me that the market pundits are just dying for these numbers to come out every week — if they’re good, it’s a party, and if they’re bad, it’s a death nell.

Take a deep breath folks. These numbers have been coming out weekly for years, and they’ll continue to come out for even more years. You just never paid any attention to them before. And the daily fluctuations in crude oil prices are just like daily movements in stocks — just noise. Take a look at the long term move in oil prices and see if today’s numbers had any effect on the upward trend. In case you’re wondering, the correct answer is “no”.

Just when some (BMB included) thought the market might roll over a bit here, Santa stopped by a few days early and dropped a nice little rally down the chimney on Wall Street today, leaving the Dow to close 98 points higher (+0.9%) at 10759, a 3 1/2 year high (June, 2001). The Nasdaq rose 23 points (+1.1%) to 2150 and the S&P 500 gained 11 points (+0.9%) to 1205. The Russell 2000 also picked up 8 points to 646, and bond prices moved higher dropping the 10-year Treasury yield to 4.17%. Volume was healthy for a holiday week.

Market internals came in strongly positive, recovering from disappointing showings the past few sessions. Advances led declines by about 2 to 1, and up volume led down volume by 7 to 2. There were 442 new highs, and only 31 new lows.

There was green pretty much across the board in the industry groups, with the best being airlines (+2.8%), oil services (+1.7%), disk drives (+1.6%), internets (+1.4%), transportation stocks (+1.4%), chemicals (+1.3%) and gold stocks (+1.3%).

Crude oil remained pretty much unchanged at $45.76/barrel, the dollar posted slight gains and gold slipped slightly to $441/ounce.

I hope CNBC is getting compensated for their day-long Apple IPod commercial blitz today…

All day long, CNBC has had a reporter at the Apple store in New York, and they’ve cut to him a number of times throughout the day. He says “I don’t want to sound like a commercial”, and then he goes on to sound like a commercial — talking about how cool the IPod is, how many people are in the store, how many IPods Apple is going to sell, and showing all the add-ons that are available for it. If they weren’t meant to be commercials, they sure turned out to be. But now that I think about it, I didn’t see any U2 band members around…

It’s rather shameful, in my opinion.

Half of Americans surveyed worry about their level of debt. From what I’ve read about the current level of household debt, it sounds like the other half should probably be worried too.

Now we can add Aleve to the list along with Vioxx and Celebrex. This time Bayer’s the target.

Maybe the US public will finally think twice about demanding a drug to fix every one of their ailments. Yeah, right. Although it could happen indirectly - as we sue the drug companies into submission, string up a few FDA officials along the way, and the drug companies decide that it’s just not worth the effort to even produce the drugs anymore. Then the public won’t have the drugs - but is that what they really want?

What a country.

The semiconductors have not been a happy bunch of late. The SOX spent from mid-October through the first week of December above its 20-day moving average. Every close since then has been below a now declining 20-day MA, and the uptrend off the lows has clearly been broken.

Chart courtesy of StockCharts.com