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 satellite radio stocks appear to have been in deteriorating orbits of late. Both SIRI and XMSR are hitting new relative lows, and the downward spiral has picked up rather than slowed down. Both of these companies are going to have to figure out a way to make some money, probably sooner rather than later. If market conditions were to worsen for any length of time, these stocks could burn up on re-entry.

Charts courtesy of StockCharts.com

The market managed to escape any serious damage from the Google mess, and good earnings news from Boeing boosted the Dow. The 30 Industrials finished up 89 points (+0.8%) at 10954. The other majors didn’t fare quite as well: the S&P 500 gained 2 points (+0.2%) to 1282 and the Nasdaq gained 5 points (+0.2%) to 2311. The Russell 2000 added 2 points (+0.3%) to 735. The Dow Transports fell 1.1% despite a drop in energy prices, and the Dow Utilities index gained 0.2%. Bonds were lower again, pushing yields up, and the 2 and 10-year yields inverted once again: the 6-month stands at 4.60%, the 2-year at 4.58%, the 5-year at 4.51% and the 10-year at 4.56%. No matter what the stock market says, this is not good news.

Market internals were positive, with volume just a few ticks lower than yesterday’s. Advances/declines were 9 to 7 on the NYSE and 8 to 7 on the Nasdaq, with up/down volume 3 to 2 on the NYSE and 7 to 4 on the Nasdaq. New highs/lows still holding up, at 300/33 on the NYSE and 233/27 on the Nasdaq.

The set of group winners contained a few we haven’t seen in a while: HMOs (+2.1%), networking stocks (+1.8%), defense (+1.2%), paper stocks (+1.2%), semiconductors (+1.0), internets (+1.0%), hospitals (+1.0%) and disk drives (+1.0%). Losing ground on the day were oil services (-3.7%), oil stocks (-2.4%), natural resources (-1.7%), airlines (-1.5%), commodities (-1.4%), natural gas stocks (-1.3%) and transports (-1.1%).

Energy prices moved lower after the morning inventory data showed builds in crude oil and gasoline. Crude oil prices fell to $66.30/barrel. Gasoline was trading at $1.71/gallon, and natural gas fell to $8.82/mBTU.

BMB Note: The market, even though it isn’t making huge gains, isn’t giving much back either. There is some short term rotation going on between the groups, but there doesn’t seem to be any real breakdowns either. I’d be a little more encouraged if the Nasdaq and S&P could break to new highs, instead of hanging here at the highs of a couple of weeks ago. The trip has been been sideways now for a few weeks. A break to new highs might put a little life back in the general market, although a few groups have had good success of late.

Or maybe a Bear-lert, in this case. For the third time in the past month-and-a-half, the 2-year yield has moved above the 10-year. You can keep an eye on the yields on Bloomberg’s rate page.

Another mixed bag to start the day. We find the Dow up 30 points, but nearly all of that move is a result of a 3.50 move up in Boeing on their earning. The Nasdaq is down 5 and the S&P is flat. A few groups are up, including HMOs and drug stocks. On the down side are airlines and internet stocks - GOOG is down 36 bucks, or more than 8%.

On the bond side, we’ve now got an inversion in the 2 and 10-year yields again, with the 2-year at 4.55% and the 10-year at 4.53%. We’ll see where that goes. Energy prices are holding, waiting on the weekly inventory numbers out in about 10 minutes. The dollar is higher and gold is down a few bucks.

If you watch the various industry indexes to keep an eye on what’s moving and what isn’t, don’t be too confused by the bizarre numbers in the Philadelphia Housing Index today. The PHLX has split the HGX two-for-one.