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 NYSE is undertaking a merger of its own, joining with electronic trading exchange Archipelago. The NYSE will also become a publicly traded entity.

This is the Nasdaq advance-decline line since mid-November of last year. The line is constructed by subtracting the number of declining stocks from the number of advancing stocks each day, then plotting the cumulative total. If more stocks go up than down on a day, the line goes up. If more stocks go down than up on the day, the line goes down. This line can give you a pretty clear picture of the strength - or weakness - of the market at a glance. I think the picture it has painted since the beginning of January is quite revealing. Don’t let anyone tell you that the market is turning around until this line starts to trend higher. Then we’ll believe it.

Chart courtesy of StockCharts.com

The excitement over earnings from Intel and Yahoo were able to boost the market today - for about an hour. Then it was all downhill from there, and like many recent days, the hill was rather large. Again.

The Dow Industrials gave up another 115 points (-1.1%) to 10012, and are now pushing down on that 10000 level. The S&P 500 fell 15 points (-1.3%) to 1138 and the Nasdaq dumped 19 points (-1.0%) to 1914. Those figures put both the Dow and the S&P at new closing lows for the year. The Russell 2000 fared even worse, dropping 10 points (-1.7%) to 585, the Dow Transports fell 1.6%, the Utilities lost 0.9%, and bonds fell on the CPI news in the morning, but rebounded by the end of the day, leaving the 10-year Treasury yield near 4.19%.

Market internals were - you guessed it - pretty poor. Volume was again healthy on a bad day, topping 2 billion shares on both exchages. Advances/declines: 1 to 3 on the NYSE, 3 to 7 on the Nasdaq. Up/down volume: 3 to 17 on the NYSE, 1 to 2 on the Nasdaq. New highs/lows: NYSE 16/105, Nasdaq 21/143.

Nothing to mention on the winning side - there were mostly losers again today. Leading the way down were the broker/dealers (-2.7%), steel stocks (-2.7%), housing (-2.4%), paper stocks (-2.4%), HMOs (-2.3%), semiconductors (-2.2%), airlines (-2.0%), chemicals (-1.9%), oil stocks (-1.8%), retailers (-1.7%), commodities (-1.7%), drug stocks (-1.6%), disk drives (-1.6%) and natural gas (-1.6%). Not pretty.

Crude oil bounced around after the government’s inventory data indicated a drawdown in both crude inventories and gasoline, but finished the day up only 15 cents at $52.44/barrel. The dollar index fell again, today dropping 0.3%, and gold prices moved to above $434/ounce.

This market remains a huge mess. There will need to be some significant changes in the internal character of the market before you have to worry about missing any large upward moves.

Earnings from EBAY, MOT, QCOM and others after the bell tonight.

As one might expect, the pre-market looks pretty positive on the Nasdaq stocks this morning, after last night’s earnings reports from Intel and Yahoo. We’ll see if any gains actually hold through the day.

Earnings out this morning from United Technologies and Caterpillar seem to have been positive, and both companies upped their guidance. That news has helped out the index futures which had pulled back after the CPI numbers were released.

We’ll see how things go. The internals of this market are in shambles, and one day isn’t going to put that back together, although there certainly could be some bounce from here. If somehow the market can repair itself and get going again, that would be great. I’ll believe it when I see it.

Crude oil back up to $52.79/barrel.

The Consumer Price Index for March rose 0.6%, with the ‘core’ CPI - excluding food and energy - increasing 0.4%, about double what was supposedly expected (but not a big surprise to BMB).

The over-exuberant bond market has been selling off on the news because the inflationary trend means the Fed is likely to continue to raise short-term interest rates. Why that is some sort of surprise to the bond traders is beyond me.

The yield on the 10-year has risen to 4.29%.