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.

Peter Schiff says that we Americans have it backwards — that we are far more obsessed with consumption than production, and that consumption is not the secret to a building a strong economy:

In fact, Wall Street economists are so obsessed with consumption that they have hopelessly confused the tail with the dog.

You know, he might be right.

A rather quiet day in the market today, which left the major indices with split results. The Dow Industrials fell 35 points (-0.3%) to 10878, while the S&P 500 gained less than a point to 1265 and the Nasdaq added 6 points (+0.3%) to 2273. The Russell 2000 also picked up less than a point, closing at 691. The Dow Transports fell 0.5% and the Utilities dropped 0.1%. Bonds drifted higher and yields fell slightly, the 5-year to 4.45% and the 10-year to 4.52%.

Market internals were mixed, on much lighter volume than yesterday. While advances/declines were very near flat on both exchanges, the two diverged considerably on up/down volume: 9 to 10 on the NYSE and 5 to 3 on the Nasdaq. New highs/lows were 190/54 on the NYSE and 177/35 on the Nasdaq.

Not much movement in the groups: airlines (+1.9%) and paper stocks (+1.2%) were the biggest winners, while gold & silver stocks (-1.6%) and steel stocks (-1.1%) led the losers.

Crude oil prices moved up another 85 cents to $59.32/barrel, but the biggest news in the energy markets was a 16% jump in natural gas, to $13.93/mBTU, a gain of 90 cents. The dollar index gained 0.1% to 91.91, and the price of gold ended the day around $503/ounce.

BMB Note: Pretty much a do-nothing day, with the market refusing to give back much, if any, of yesterday’s gains. The big news of the day is the move in natural gas - if energy prices start to spike, that could put a wrench in Wall Street’s plans to push the market higher by year’s end. Other than the energy concern, I hear a lot of folks saying that the plan will be to try to push prices higher, because the people on the Street get paid for performance, and it hasn’t been that great a year up until now. I know you’d probably like a more solid reason for prices to move up and draw investors in, but hey, that’s the business. Just keep in mind what happened the first day of trading last January…

The market correction, that is. Even after yesterday’s rally, Larry McMillan isn’t sure — it might not be, but it could be. Confused??

The bottom line is this: the intermediate-term state of the market is still bullish, because we have no sell signals from our indicators. However, the fact that breadth didn’t turn negative is somewhat analogous to $SPX not pulling all the way back to support. It sort of leaves a nagging feeling that maybe the correction didn’t finish yet. In any case, though, if $SPX closes at a new high (as QQQQ did), then the correction is clearly over.

The above is from McMillan’s Option Strategist Weekly Updater. You can sign up here.

The biggest news I can see today is the big move up in natural gas prices. Currently, the price is up another 92 cents to $13.95/mBTU. Turn down those thermostats, or you’re going to be in for a surprise when the gas bill shows up.

The market so far today is digesting yesterday’s large gains, with little movement spurred by the morning jobs report. Major indices are hovering right near unchanged levels. Gains in the industry groups are slight, with only a couple of groups — airlines and paper stocks — making solid gains at this point. Steel stocks are bringing up the rear of a tight pack. Internals are just slightly negative, with volume backing off from yesterday’s.

Bonds, too, are unchanged. The dollar has posted modest gains, and gold hangs right around $504. Energy prices are also slightly higher.

The Labor Department reported an increase of 215,000 non-farm payroll jobs in November, with September numbers revised upward and October downward. The separate household survey showed the unemployment rate still at 5.0%.

Take it or leave it. Whether you believe these numbers to be accurate or not, they’re the ones we get.