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.

Amazon.com stock (AMZN) got smashed in the after-market after reporting disappointing earnings.

	With the market trying to stay afloat and work its way back to the highs, we find the number of S&P 500 stocks that are trading above their 50-day moving average at just above half. That’s down from nearly two months between 80 and 90 percent.
	The Nasdaq’s percentage of stocks above their 50-day only poked its way up above the 70 mark during the November-December rally. It now finds itself just under 50 percent.

Charts courtesy of StockCharts.com

The markets had a chance to impress everybody with their strength today and ended up putting in a rather uninspiring performance, but did rebound a bit in the last half hour to keep it somewhat respectable.

The Dow finished the day up 45 points (+0.4%) at 10597, the S&P 500 gained 4 points (+0.3%) to 1193 and the Nasdaq added 6 points (+0.3%) to close at 2075. The Russell 2000 gained 4 points (+0.6%) 632, and the bond market paid gave little weight to the hike in the Fed funds rate, leaving 10-year Treasury yields at 4.14%.

Market internals were a little stronger than the index numbers might indicate, with advance/declines at 20 to 13 on the NYSE and 8 to 7 on the Nasdaq, and up/down volume coming in at nearly 2 to 1 on the NYSE and 9 to 8 on the Nasdaq. New highs still outran new lows by 465 to 38.

Strongest group movement came from the airlines (+1.9%), oil services (+1.8%), natural gas (+1.4%), REITs (+1.1%) and paper stocks (+1.1%) on the up side, and from computer hardware (-0.8%), biotechs (-0.7%), semiconductors (-0.6%) and telecoms (-0.6%) on the down side.

Crude oil prices fell slightly to $46.69/barrel, the dollar moved just slightly higher and gold prices held between $421-$422/ounce.

The Fed raised the Fed funds rate another quarter-point today - the worst kept secret ever.

The Fed changed virtually nothing in its statement either. They continue to inch up the short-term rates in an attempt to get closer to non-negative real interest rates, but won’t raise rates any faster for fear of disrupting the markets and popping the asset bubbles that have been created by the easy money.

Drip, drip, drip…

Energy stocks were the best performing sector of ‘04. Of course, that does not necessarily mean that they will outperform the rest of the market in ‘05, even though they are off to a strong start.

And while oil prices continue to hold well above $40/barrel and the world’s global energy supply and demand picture seems to be very much in question, the energy sector continues to have many doubters.

I’ll get out when everyone starts bailing out of Google and getting into energy…