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.

It doesn’t really matter whether you’re a dollar bull or bear or gold bug or not. It doesn’t even matter if he’s right or not. This is still a good quote - from a Marketwatch.com article:

“The Fed has become quite predictable and the market response has become even more so,” said Dale Doelling, chief market technician at Trends In Commodities.

The euro climbed a bit following the announcement, and that “cements the fact that the dollar is dying and those traders who are now long the major foreign currencies are about to do a serious tap dance on the heads of the dollar bulls,” he said.

In turn, “this will eventually allow the precious metals to break out of this consolidation range and take prices to levels not seen in decades,” Doelling said.

Hey, I’m watching Cramer’s show for a change - I don’t watch it much, since 1) I don’t want his advice, 2) I can’t stand his delivery, and 3) it didn’t take long to figure out he was doing nothing but pumping the stocks he was pushing to his paid subscribers. Tonight, he spent the whole first twenty minutes talking about speculation, but didn’t recommend a single stock. Now he’s off into some silly “Am I Diversified” exercise, and still hasn’t offered up his usual 4 or 5 “gotta buy” stocks. And I kinda miss watching those symbols scroll by on the screen as the lemmings go chasing after them.

Makes me wonder, and maybe somebody who watches the show more often can help me out - is this just an off night, or a new ’style’ for the show? Or did Cramer get a few calls from the SEC on what he was doing to some of those stocks…??

Seems to me, if he can’t keep pumping individual stocks on his show, it’s dead.

Google, everyone’s favorite “my price target is higher than yours” stock, has been showing some strain lately. GOOG made a few treks above $300 that got CNBC all excited, but the stock has since pulled back for a net gain of zero since the beginning of June. In late July, the stock fell through its 20-day moving average and has remained there ever since. The past two sessions have seen closes below the 50-day MA for the first time since April. A break below current levels looks like it could be trouble, but this stock has looked vulnerable before and not broken. We’ll see what happens this time around, now that some of the Google ga-ga has been replaced by Baidu.com babble. Incidentally, BIDU got smacked for 15% today.

Chart courtesy of StockCharts.com

A bit of a disappointing day for those looking for a big bounce. The market started strong out of the gate, but just couldn’t get a lot of momentum. Stocks surged a bit after the Fed’s interest rate announcement, but that strength didn’t last either, and things pretty much cruised into the close. The Dow finished up 79 points (+0.8%) at 10616, the S&P 500 was up 8 points (+0.7%) to 1231 and the Nasdaq hung back a bit, gaining 10 points (+0.5%) to 2174. The Russell 2000 didn’t play along, grabbing back less than a point to close at 660. The Dow Transports were up 0.3%, and the Dow Utilities earned the ‘best bounce’ award with a gain of 1.1%. The bond market didn’t move rates much in response to the Fed move (as has been the pattern), with the 5-year at 4.24% and the 10-year at 4.39%.

Market internals were more positive that we’d been seeing, on about average volume. Advances led declines on both boards, at 9 to 7 on the NYSE and 10 to 9 on the Nasdaq. Up/down volume was better, at 2 to 1 on the NYSE and 9 to 5 on the Nasdaq. New highs are still contracting, with highs/lows coming in at 101/37 on the NYSE and 78/35 on the Nasdaq.

More winners than losers in the industry groups, but the winners didn’t win real big. On the up side were the HMOs (+1.5%), broker/dealers (+1.3%), semiconductors (+1.2%), health care (+1.1%), utilities (+1.0%), housing stocks (+1.0%), networkers (+1.0%) and drug stocks (+1.0%). The only group to lose significant ground was the oil services, falling 1.1%.

Crude oil pulled back from its overnight move above $64, finishing at $63.07, down 87 cents. The dollar went nowhere today, with the dollar index finishing at 87.87. The price of gold held steady as well, above $434/ounce.

The groups that needed to bounce today - housing, REITs, retail - started to do so, but that move fizzled a bit. Each of those groups gained back 1 percent or less, which doesn’t make for a very brisk recovery. Right now, it doesn’t look like there are any other groups that are ready to step forward and push things higher either. I remain cautious.

Cisco, Disney report after the bell.

Gary Kaltbaum tells you which areas of the market to keep your eyes on.

Not that different from what we’ve been telling you here at BMB - oil and interest rates are important, and retail and real estate are on the defensive. But you’re more likely to believe him than me.

Um, no. No surprise at all. The Fed raises its Fed Funds rate another 1/4 point to 3.5%, and the language of their statement remained very similar to previous statements.

These guys have no imagination. Zippo.

Out of the gate, we’ve got a bit of a bounce back in the major indices, up a half-percent or so. It will be an interesting test of the market to see if it can hold the gains.

Sectors recovering a bit are the biotechs and retail. On the down side are the airlines, disk drives and precious metals stocks.

Oil hit a high of $64.27 before pulling back to its current price of $63.67.

BMB didn’t want to get up that early in the morning to see the shuttle landing so I didn’t. Then when I did get up, I found that they obviously couldn’t get the thing on the ground without me - since they hadn’t gotten it done - so I had to help. We got the big bird down safely in California. Welcome home to the crew of Discovery, and job well done.

Don’t forget, Fed meeting today. Lemme guess, the Fed funds rate will go up a quarter-point. I’m really sticking my neck out here.