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.

Shares of Cree, Inc. (CREE), which had been one of the leading semiconductor stocks of late, are getting hammered on their earnings report after the bell.

The markets started off bad and never got any better today, selling off late in the session again to close near their worst levels of the day. The Dow finished lower by 112 points (-1.1%) at 10506, the S&P 500 fell 10 points (-0.9%) to 1177 and the Nasdaq dropped 22 points (-1.1%) to 2071. The Russell 2000 fell 3 points to 610, and a rally in bonds pushed the 10-year Treasury yield down to 4.18%.

Market internals were decidedly negative with advances/declines 4 to 5 on the NYSE and 1 to 2 on the Nasdaq, and up/down volume ran about 1 to 2 on both exchanges. There were 159 new highs to 45 new lows.

A few groups did manage gains on the day, with housing stocks moving higher by 1.9% and oil services adding 1.8%. Many more groups moved lower, led by airlines (-2.9%), biotechs (-2.3%), health care products (-1.7%), drug stocks (-1.7%), internets (-1.7%) and semiconductors (-1.4%).

Crude oil shook the markets by moving higher by more than $1.50 today, to above $48/barrel. The dollar bounced back a bit, gaining 0.5%, and gold prices dipped slightly to under $425/ounce.

Those writing the obituaries for some commodity prices have failed to put recent market movements into their longer term perspective. The investor needs to be able to step back and see where short-term movements fit in the long term picture.

Just remember: “It ain’t over ’til it’s over.”

	Everyone got pretty excited when oil prices fell from the mid-50s to the low 40s. The truth was that prices had gotten away from themselves, and were just correcting from an extended, overbought condition. Since October, oil prices pulled back to support at the longer-term uptrend line and the support level in the low 40s — and have bounced higher.
	Now we find gold prices in a very similar situation after coming off the October highs. Note that gold made a similar move to the upside and retreat back to the trendline in the spring of 2004.

Charts courtesy of StockCharts.com

Good news from the retail sector this morning, as well as a drop in the prices of imported goods.

That’s good news, isn’t it? You’d think so, but the market doesn’t seem to care as it’s opened down this morning. The great Apple earnings don’t seem to be helping anyone other than Apple and a few others.