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.

One of the strongest currencies against the US Dollar over the past few days has been the British Pound. Two days ago, you could buy the pound for $1.89. Tonight, that same pound will cost you more than $1.93. Check out the chart.

So this article shows up on Yahoo Finance — since it’s from TradingMarkets.com, I check it out. I don’t know what market planet this guy lives on, but I would be a little skeptical about what he says — I’m not sure he’s watching the same market I am.

For example, he says:

One thing to remember is that Bull Markets do not just rally with the feeling that everything is fine. They usually climb a wall of worry such as the NASDAQ has currently been doing.

Whaaaaaat??? What worry is he talking about? If there’s ever been a rally with absolutely no worry, no fear, this has been one. The VIX has been at multi-year lows many times during this year, it is now, and has been throughout this rally. Many people that monitor market sentiment are complaining that everybody is bullish. The CBOE put/call ratio has plunged to levels seen only 4 times in the last three years. Some wall of worry.

Then there’s this:

We have also watched quality growth stocks with strong earnings post very strong initial gains. These names include Google (GOOG), Travelzoo (TZOO), Apple Computer (AAPL), Bebe Stores (BEBE) among others.

Now I can’t argue with the strength of the moves these stocks have made, but since when are Google and Travelzoo “quality growth stocks”?? Travelzoo has been public just over a year, Google much less, and they certainly do not have much of a track record that allows you to label them as “quality” anything.

Now I can’t deny that the market is strong here, and that many stocks are making great moves. But let’s call things as they really are.

I’ll take this guy with a grain of salt. Maybe the whole shaker.

Investors fell all over themselves buying stocks today, after good consumer spending news and a drop in the price of crude oil following the government’s oil inventory report. The Dow advanced 162 points (+1.6%) to finish at 10590, the Nasdaq moved up by 41 (+2.0%) to 2138 and the S&P 500 gained 17 (+1.4) to close at 1191. The Russell 2000 added 10 points to 644. No one seemed to be bothered by the dip in bond prices that pushed the yield on the 10-year Treasury to 4.37%. Volume was heavy and internals were all strongly positive.

The biggest winners were airlines (+5.6%), disk drives (+5.1%), semiconductors (+3.8%), broker/dealers (+2.6%), and housing stocks (+2.5%, with interest rates on the way up - go figure). Anything associated with oil got smacked down today, like oil services (-3.9%), natural gas stocks (-2.3%) and oil stocks (-1.9%).

Crude oil fell to $45.49/barrel, and gold was trading above $453 after touching $455 during the day.

Schaeffer takes a look at recent option activity and the decline in the put/call ratio.

Crude oil prices and oil services stocks are under pressure today after the government reports oil inventories are up.

Stocks are getting a bit of a bump this morning from reports of increases in consumer spending and income in October.

Perhaps this should be a dollar downdate: today it will cost you more than $1.33 to buy a Euro and more than $1.92 to buy a Pound (UK).