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.

Some rather bizarre goings-on in the copper market are helping push prices to record highs.

Target says that November same-store sales will be below forecast.

The Federal Reserve quietly announced last week that it will discontinue public release of M3 money supply data. No reason was given.

This has many folks up in arms, questioning the motivation behind the move — especially those who are of the belief that the Fed wants to hide its activities, even to the point of meddling in the stock market.

While I don’t necessarily subscribe to the conspiracy theories, in the interest of transparency, I don’t like the idea of the Fed shrouding itself in even more secrecy than they already do.

So BMB wants to know: why stop publishing the data?

I wonder if GM will ever be able to sell cars without offering incentives again. Expect Ford and Chrysler to follow suit, in some way, shape or form.

Why has it been so difficult to make money in the market over the past year or two? Mainly because the market hasn’t moved. Let’s take a look:

	The Dow has barely budged out of a 1000-point range since January of ‘04.
	The S&P 500 has made slight progress upward, but the trading range has been pretty tight.
	The Nasdaq’s range has been constricting for nearly two years. A break of this pattern, in either direction, should be very meaningful — and will have to come relatively soon.

Someday, the indices will break free of these ranges - we don’t know when that will happen, nor can we know in which direction the patterns will be broken. If the ranges are broken to the upside, it will likely be full speed ahead for the bulls. However, if the ranges are broken to the down side, you might want to stand aside and get out of the way.

Charts courtesy of StockCharts.com

Not much of a day in the market today, with the tone - if there was one - being slightly negative. The Dow managed to finish in the green, moving up 11 points (+0.1%) to 10697, but most everything else was lower — the S&P 500 fell about a point to 1234 and the Nasdaq dropped 2 points to 2201. The Russell 2000 indicated that things were just a little bit more negative than the majors were showing, falling 3 points (-0.4%) to 664. The Dow Transports fell back 0.3% and the Utilities lost 0.4%. The bond market was lower, pushing yields up: the 5-year to 4.54% and the 10-year to 4.60%.

Market internals were mainly negative, with volume up a bit from Friday’s levels on the NYSE but down a bit on the Nasdaq. Advances/declines were 3 to 5 on the NYSE and 8 to 11 on the Nasdaq. Up/down volume was 3 to 4 on the NYSE, but on the Nasdaq, the up/down figure was positive at 7 to 6 (more action concentrated in fewer stocks again…).
New highs/lows diverged on the two exchanges, at 122/172 on the NYSE and 146/54 on the Nasdaq.

Winners and losers were relatively few: on the plus side were paper stocks (+2.0%), oil services (+1.3%) and oil stocks (+1.1%), while losers were led by steel stocks (-1.8%), gold & silver stocks (-1.2%), drugs (-1.1%) and airlines (-0.9%).

Crude oil prices rose 16 cents to $57.69/barrel. The dollar index was up 0.2% to 92.11, and the spot price of gold slipped to $467/ounce.

BMB Note: Hard to take much away from today’s action. We’ll probably see a little more movement as the week goes on, with economic data releases on the way.

Gary Kaltbaum tells you what he thinks is going on, and where you should be looking if you’re a buyer.

Not a lot of movement in the majors yet this morning, with all three sitting just above the flat line. Winners thus far are paper stocks (that index being helped by a 37% boost in GP on a buyout offer to take the company private), oil services, oil stocks, and natural resources. Retailers are getting a bit of a bump from earnings reports by WMT and LOW. Losers are led by the steel stocks.

Bonds just slightly lower, and crude oil up about 50 cents.

The weekly look at technicals and sentiment from Schaeffer’s. In general, things look as though the bullish move could continue, but there are some reasons for hesitation. Just a few things to keep an eye on.