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 S&P broke that uptrend line off the August lows today, and fell back through its 50-day MA. There should be some support near this area of the February lows and in the 1175 region.
	The Nasdaq broke though the minor trendline along the ‘05 lows. Now, the big test is the January low of 2008. If it breaks that level, there’s not much there to hold it up.

Charts courtesy of StockCharts.com

The market got multiple doses of bad news today, and didn’t hold up very well under the pressure. A warning from GM, news of record US current account deficits and record high oil prices combined to send the market lower. The Dow Industrials dove lower by 112 points (-1.0%) to 10633, the S&P 500 fell 10 points (-0.8%) to 1188 and the Nasdaq dropped 19 points (-0.9%) to 2016. The Russell 2000 lost 4 points (-0.6%) to 623, the Dow Transports were down 1.5%, Utilities down 0.7% and the bond market rallied slightly to nudge 10-year Treasury yields down to 4.51%.

Volume picked up on the NYSE, and dipped just slightly on the Nasdaq. Market internals?? Positively gross. Advances/declines ran 3 to 8 on the NYSE and 1 to 2 on the Nasdaq, with up/down volume at 2 to 5 on the NYSE and almost 1 to 4 on the Nasdaq. We saw more new lows than new highs on both exchanges today: highs/lows were 49/63 on the NYSE and 36/88 on the Nasdaq. Those are some pretty ugly numbers.

Only one group moving higher to note, that being the gold & silver stocks which gained 0.8%. On the red side, the list is long. Getting the worst of it were the steel stocks (-3.3%), chemicals (-2.3%), paper (-2.2%), transports (-1.5%), telecoms (1.3%), retailers (-1.2%), networkers (-1.2%), REITs (-1.2%), biotechs (-1.1%), broker/dealers (-1.1%), and semiconductors (-1.0%).

As we said earlier, crude oil prices hit record levels today, closing at $56.46/barrel today, up $1.41. The dollar suffered from the current account deficit news, with the dollar index falling 0.6%, and gold prices moved up to $443/ounce.

BMB Note: Keep an eye on your holdings: the S&P 500 dropped through its uptrend line and its 50-day moving average today and is testing its February lows. The Nasdaq broke through its February lows and is now testing its January lows. The Dow has also broken its uptrend line over the past few days. Things are getting a little dicey here. Protect yourself.

Crude oil prices moved to record high levels following the government’s weekly release of inventory data, hitting prices above $56/barrel - currently at $55.95.

Crude gains after weekly supply data by Lisa Sanders
DALLAS (MarketWatch) — April crude rallied above $55 a barrel after the Energy Department said U.S. crude inventories rose by 2.6 million barrels for the week ended March 11. However, gasoline supplies dropped by 2.9 million barrels, and distillate stocks fell by 1.9 million barrels. The April contract last stood at $55.30, up 25 cents; April unleaded gasoline was higher by 1.2 percent, or 1.77 cents, at $1.525 a gallon; and April heating oil added 1 percent, or 1.6 cents, to stand at $1.568 a gallon.

Just when you thought it was over for Research In Motion and their stock was headed for the dumpster, along comes a settlement in a patent dispute to save them.

Those of you who follow BMB already know that the US is running a huge trade deficit. Americans keep borrowing money and buying foreign goods, but we don’t produce much for export. Oh yeah, we’re a “services” economy. What’s that supposed to mean?

Note that the decline in the US dollar doesn’t seem to be closing the gap as we’re continually told it will.

General Motors warns of a first quarter loss. The market is acting surprised, but they shouldn’t be. And they’ve been taking down GM stock for months now.

I don’t understand GM at all. They’re now much more of a finance business than a car maker, so I think the only reason they still make cars is to provide business for their finance side.