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.

…who didn’t quite understand today’s rally. Neither did Mike Hartman:

Stock traders were happy to hear that interest rates won’t be going much higher, but the reasons for ongoing low interest rates should not be good for stock prices. A slowing economy implies recessionary pricing for stocks, not a new bull market.

Yeah, I know that the weak economic data and the Fed guy’s comments led the market to believe that the Fed may be nearly done raising rates. But the economic data was still bad news, and the reason that the Fed would stop hiking rates is because the economy is weakening! Notice to investors: a weakening economy is not good news!

Duh.

DirecTV isn’t making a lot of friends in the football viewing community these days, including yours truly.

I started with DTV 7 or 8 years ago, and being a football fan, have subscribed to their NFL Sunday Ticket package the entire time. The NFL package allows me to watch any or all of the Sunday games, so I can follow my “hometeam” no matter where in the country I live. I think when I first signed up, the package cost $119 for the season. Then it was $139. Then $159. Last season, after DTV signed a new broadcast deal with the NFL, the package cost me $189 - but that included access to the high-definition broadcast of any games that were available in HD. Sadly, I didn’t have HD equipment.

So this season, I was all prepped with some bargain HD equipment (no, I didn’t steal it, but it’s a long story involving lightning, the neighbor’s trash and quite a bit of eBay shopping…). Then came the disastrous news: this season, DTV is upping the price of the Sunday Ticket package to $199 (that’s the early-bird price - latecomers pay $219) and that does NOT include access to the HD games. No, to see the HD games, you have to pay another $99 to get the “Superfan” package. They claim that you get more than the HD games for that $99, but the extra stuff is just some extra channels or interactive junk that you don’t really want anyway, and would never pay for if it wasn’t included with the NFL HD games.

So DTV is raising the bar, trying to see how many folks will fork over the extra bucks for the HD Sunday Ticket. I have a feeling that, in many cases, it isn’t going to work. I, for one, am planning to cancel my Sunday Ticket package and live without my football this season. The $200 sticker price is already pushing the limit - that price is pretty steep, and certainly not worth it if it doesn’t include the HD games. I wouldn’t even consider paying that price plus an extra hundred bucks for the HD stuff.

I refuse to be gouged by DTV just because they paid the NFL too much for their exclusive package rights. There’s a point where they’ll just charge too much, and I think they’ve reached it. So, instead of them getting nearly $200 out of me this season, they’ll get zero instead. Their choice.

Today marks the day that residents of southern states are eligible for their annual free credit report. Residents of the western and midwest states are already eligible, and those in the eastern states and US territories become eligible as of September 1.

Here is some info on how to go about getting your free credit report.

If you looked in the dictionary under “trading range”, you might see a chart of the Dow. As you can see, we’ve gone nowhere for a year and a half now. And you thought we were in the midst of a rally, didn’t you?

Chart courtesy of StockCharts.com

A relatively weak manufacturing report - and comments from a Fed bank president - gave the market reason to believe that interest rate hikes might be near an end, and that lit a fire under stocks this morning. However, a jump in crude oil prices of more than $2 per barrel helped dampen the rally, bringing the major indices back off their best levels. Trading was halted about 4 minutes early on the NYSE due to some sort of communications problem.

The Dow Industrials finished with an 82 point gain (+0.8%) at 10549, the S&P 500 added 11 points (+0.9%) to 1202 and the Nasdaq moved up 20 points (+1.0%) to 2088. The Russell 2000 gained 6 points (+1.0%) to 623, the Dow Transports and Utilities were both up about 1.0%, and the bond market continued to move higher, pushing the 10-year Treasury yield down to a remarkable 3.90%.

The only group to show weakness on the day was the airlines, slipping 1.2%. On the up side, gold & silver stocks led the way with a 2.0% gain, followed by oil stocks (+1.8%), natural gas stocks (+1.7%), steel stocks (+1.6%), chemicals (+1.6%), internets (+1.4%), commodities (+1.4%), retailers (+1.4%), housing (+1.3%), computer hardware (+1.3%) and REITs (+1.3%).

Crude oil prices took a big jump today, moving up to $54.60/barrel. The dollar was strong again, with the dollar index higher by 0.4%, and gold dipped to near $415/ounce.

In other market news, SEC chairman William Donaldson has announced his resignation.

GM and Ford just don’t seem to be doing very well at what they’re supposed to be doing - selling cars.

Google stock has rallied from $180 on April 1 to its current price of $286 on June 1. That’s a gain of 59% in 2 months. BMB thinks that a move of that magnitude might be due for a correction. Make that overdue. Don’t be the last one in.

The ISM data shows that US manufacturing continues to slow, but the psychotic market thinks that’s good news. With the 10-year now down to 3.91%, the Dow is up 85 points.

Comments from the new Dallas fed president implying that the rate raising cycle may be near an end is helping to boost stocks. And no one seems to have noticed that oil prices have moved up near $53/barrel.

Update: Make that $54/barrel on oil…

The bond market continues to defy any logic I can find, sending the yield on the 10-year note down below 4% this morning - with the very short-term fed funds rate at 3%. It’s likely that mortgage rates will continue to stay at low levels, providing fuel for the already hot housing market.

How low will it go? The 10-year has already fallen from a high of 4.693% in March to today’s reading of 3.96%. Recent low water marks were 3.65% in March of ‘04, 3.943% in October, and 3.977% in February of ‘05.