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.

Another unconvincing but positive day in the market, with the major indices inching up just a bit further. The Dow Industrials moved to a new high for the year, gaining 31 points (+0.3%) to 11059. The S&P 500 added 4 points (+0.4%) to 1280 and the Nasdaq gained 14 points (+0.6%) to 2276. The Russell 2000 gained 5 points (+0.8%) to 725, but the NYSE composite was flat. The Dow Transports continue to amaze, moving up 0.8% to yet another new high, while the Utilities were flat. Bonds were mixed, moving yields in different directions, depending on the maturity: the 6-month is at 4.68%, the 2-year at 4.70%, the 5-year at 4.60%, the 10-year at 4.60% and the 30-year at 4.58%.

Market internals were positive, but volume was less than spectacular on the Nasdaq again. Advances/declines were about 12 to 7 on each exchange, with up/down volume 3 to 2 on the NYSE and 13 to 5 on the Nasdaq. New highs picked up a bit: highs/lows were 149/18 on the NYSE and 131/27 on the Nasdaq.

Looking at the industry groups, we see more green than red, but the list of big winners is relatively short: biotechs (+1.8%), hospitals (+1.7%), airlines (+1.7%), brokers (+1.2%), retail (+1.1%) and disk drives (+1.0%). On the losing end were commodity stocks again: precious metals (-2.4%), oil services (-2.3%) and natural resources (-0.9%).

Crude oil prices were hurt further after the morning inventory data was released, sending oil down to $57.68/barrel. Gasoline stayed around $1.39/gallon, and natural gas is hovering near $7.08/mBTU. The dollar got a bit of a boost when Bernanke said that rate hikes may continue - the dollar index moved up to 90.72. The price of gold fell back to $540/ounce.

BMB Note: Well, the market has managed to move higher over the past few days, but the S&P and the Nasdaq haven’t quite broken their downtrend yet. And the lack of volume on the Nasdaq is a bit concerning - perhaps it’ll pick up and kick the Nasdaq higher. We’ll see. But where is the big money? And what are they waiting for?

If you’re willing to put money into this market (I’m not), I’d be sticking with the strongest groups, those being the brokers and the transports right now. I’m willing to sit on my hands and wait for stronger evidence that there really is another leg up from here.

HPQ earnings after the bell tonight. And BMB will be off tomorrow.

A morning rally has given way to some selling, although the damage doesn’t appear to be any too severe at this point. The Dow is giving back only a small part of its gains from yesterday, and the Nasdaq is still hanging right near the flat line. Advance/decline figures have pulled back to the flat line as well, and things are in a downward move at the moment. I can’t say how much of the change can be attributed to Fed Chairman Bernanke’s testimony before Congress, which is still in progress.

Group gains have mostly faded, with only the hospitals hanging on for a decent move at this time. Leading the losers are the precious metals stocks, oil services and steel stocks. Bonds are moving lower on the short end, with not much movement on the long end. The dollar is hanging on to recent strength, and gold prices are lower. Energy prices are mixed, with crude and nat. gas lower, but gasoline unchanged.

Gary Kaltbaum gives us his view of what the market needs to move higher. I’ll believe it when I see it.