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 seems that when it comes to Mr. Greenspan, the retiring Fed chairman, people pretty much either love him or hate him. Guess which side Peter Schiff is on:

During Greenspan’s tenure America was transformed from the world’s largest creditor to its greatest debtor, from the world’s mightiest industrial power to a second rate service provider, and from a nation of responsible savers to one of reckless spenders. Self-sacrifice has been replaced by self indulgence, hard work by paper pushing, and genuine productivity by accounting gimmickry.

Martin Goldberg makes the case that there are some areas of the market that are even more overbought than the precious metals right now. After all, isn’t this wave 3?

We’ll see.

It’s about time for an interest rate update, what with the FED just updating the overnight rate:

Paypal: 4.38%
HSBC: 4.8%

ING: I’d report this number, but ING has gone to a lame marketing effort–where “new” money gets a certain higher rate, and “old deposited” money a lower rate, and the new rate is only until the end of April–come on guys. They not only lose bragging rights with this dumb, cheap marketing attempt, they lose the free advertising they were getting when I posted their rates on this site.

Capital One 4.00%

Again, some of these are savings accounts, some are money market, so know the difference.

Another consideration is to buy short term treasuries (you can buy them from directly from the treasury department by opening an account with them.) Rates on 3 and 6 month treasuries are paying decent money these days–and the 6 month is paying a higher interest rate than 2, 5 and 10 year bonds.

Larger brokerage houses usually have a way you can buy treasuries through your existing account without having to open a new account at the treasury direct site.

By just looking at the PHLX Housing Index, you don’t get the impression that the housing stocks are in much trouble. Sure, the chart has dipped of late, but the uptrend is still somewhat intact, and the index had been holding above its 50-day moving average until today.

But if we look behind the curtain at the homebuilding stocks themselves, the picture gets quite a bit uglier, especially over the past few weeks. The only explanation for the behavior of the $HGX (components) is the contribution of companies that are not homebuilders, but rather suppliers of materials and title insurers. The presence of stocks like PMI and TIN in the index are helping to hold it up, while most of the builders themselves are heading south (symbols: BZH, CTX, DHI, HOV, MTH, PHM, RYL and TOL).

Charts courtesy of StockCharts.com

Not a pretty day today, with selling dominating the action nearly across the board. The Dow Industrials dove 102 points (-0.9%) to 10852, the S&P 500 fell 12 points (-0.9%) to 1271 and the Nasdaq dropped a big 29 points (-1.3%) to 2282. The Russell 2000 also lost ground, losing 9 points (-1.3%) to 726. The Dow Transports fell 0.9% and the Utilities tumbled 1.5%. Bonds were relatively steady, leaving the yield curve still looking pretty upside-down: the 6-month at 4.60%, the 2-year at 4.58%, the 5-year at 4.50% and the 10-year at 4.56%.

Market internals were pretty horrible, as you might expect, but volume ticked down a bit from yesterday. Advances/declines were about 2 to 5 on the NYSE and 1 to 2 on the Nasdaq. Up/down volume was 1 to 3 on the NYSE and 3 to 7 on the Nasdaq. New highs/lows show the highs dropping quite a bit, and just a few more lows: 151/47 on the NYSE and 182/34 on the Nasdaq.

Only one group was spared today, that being the airlines, up 2.0% as oil prices dropped. Leading the long list of losers were steel stocks (-2.2%), housing stocks (-2.1%), oil stocks (-1.8%), computer hardware (-1.7%), natural gas stocks (-1.7%), software (-1.6%), computer tech (-1.6%), utilities (-1.5%), semiconductors (-1.5%), internets (-1.5%), disk drives (-1.4%) and chemicals (-1.4%). Should I go on? I think you get the idea.

Energy prices apparently don’t move the market much anymore, since the market fell as energy prices came down. Crude oil fell to $64.68/barrel, gasoline pulled back to $1.67/gallon and natural gas was down to $8.40/mBTU. The dollar index dropped 0.2% to 89.38, and gold nudged up to $572/ounce.

BMB Note: Well, today changes the picture a bit. The indices (S&P and Nasdaq) made new relative highs back around Jan. 11-12, then drifted down and fell hard on Friday the 20th. They worked their way back up, failed to reach the old highs, and have now topped in the short-term with the S&P putting in its lower high on Jan. 30th. For now, we have to be a bit concerned that the market can’t seem to work its way higher. Now we need to pay attention to support levels on the down side, which would be the lows of last week: 1259 on the S&P and 2241 on the Nasdaq. The Nasdaq 100, after spending a few days back above its 50-day MA, violated it again today. Keep an eye on the 1670 mark there.

As far as the groups go, it looks like the energies and maybe some of the commodities want to pull back here. I’d hold off getting too agressive in those areas until we see how far this goes, but for now, it’s just a pullback. A few other areas that look like they may have topped are the banks, hospitals, housing, utilities and computer technology (I’m referring here to the $XCI computer tech index, which is about 49% MSFT, INTC, IBM and CSCO - basically the big-cap tech names). Those groups would be on my “very avoidable” list for now.

Amazon reported earnings after the bell, and the stock is getting socked pretty good. Of course, AMZN stock was already down 15% from its December highs.

Update: I forgot to mention that tomorrow is the big monthly jobs report, almost always a market mover. I’m hearing some estimates of +250,000. I have a feeling many folks will be disappointed again, unless some seasonal factors come into play. We’ll find out at 8:30 ET/ 7:30 CT.

Yikes. Some early weakness has turned into some pretty significant selling, with the major indices suffering some losses at the moment. Advance/declines have turned from weak to pitiful - we’ll see how the rest of the day plays out. As of now, the biggest hits are coming in the energies, namely oil stocks, oil services and natural gas stocks, but nearly every group is lower at the moment.

Bonds are holding steady, keeping yields where they are for the most part. Energy prices are lower as well, but that isn’t helping stocks. The dollar is slightly lower, and gold is slightly higher.

If this action holds, it would appear that the major indices will be successful in putting in a new “lower high”. That would leave us keeping a watch out for a violation of last week’s lows…

If you’re tracking airline stocks, you can put United Airlines back on your list, as they exit bankruptcy after three years. The restructured airline will be trading on the Nasdaq under the symbol UAUA.

A few things that may drive the market today:

• Mostly good news from the retailers and their sales numbers.
• Weekly jobless claims numbers fall to 5 1/2 year low.
• “Productivity” fell in December for the first time in nearly five years.

You know, I’m pretty suspect of government numbers, for the most part. But this “productivity” number — it just has to be the most bogus of them all.

For those users of StockCharts.com, the Beta 7 release of their new charting engine (SharpCharts 2) is available for your experimentation. They’ve done some nice things with the new charts, and added quite a few features that aren’t in the current charts. This is likely the last ‘beta’ release before they move the new charts to the main page.

If you’d like to play around with the new stuff, here’s a link to the Beta 7 charts.