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.

Jim Jubak is already talking about the commodities rebound, and is even offering up a few stock picks.

I’m not in a big hurry. I’ll be watching to see how things play out, and waiting to make sure these things have found some sort of a bottom.

If we aren’t going to do anything to help ourselves, then we get what we deserve when it comes to energy prices.

Even though the day wasn’t all that impressive, under the circumstances, today’s action looked pretty good. The Dow Industrials edged up 16 points (+0.1%) to 11144, the S&P 500 got back 5 points (+0.4%) to 1267, and the Nasdaq was “most improved”, up 14 points (+0.6%) to 2194. The Russell 2000 picked up 4 points (+0.6%) to 723. The Dow Transports were unchanged, and the Utilities put together a 0.9% gain. Bonds had a very strong morning, but slacked off as the day went on, and yields moved higher on the short end and came down a bit on the long end: 6-month 4.99%, 2-year 4.96%, 5-year 4.96%, 10-year 5.06% and 30-year 5.14%.

Market internals were positive - for a welcome change - and volume picked up, which is somewhat typical for options expiration. Advances led declines on both exchanges: 7 to 5 on the NYSE and 5 to 4 on the Nasdaq. Up/down volume was about 3 to 2 on each exchange. New highs/lows were 20/133 on the NYSE and 52/139 on the Nasdaq.

Mostly green in the groups today. The winners were led by the semiconductors (+3.2% - boosted by a 13% gain in MRVL and an 11% gain in AMD), paper stocks (+1.9%), disk drives (+1.6%), brokers (+1.5%), retailers (+1.4%), airlines (+1.3%), networking (+1.0%), natural gas stocks (+1.0%) and telecom (+1.0%). Leading the downers were transportation stocks (-1.0%) and gold & silver stocks (-0.6%).

Energy prices were mixed, with crude oil down nearly a buck to $68.53/barrel, gasoline up a couple of cents to $2.04/gallon and natural gas lower by a few cents to $5.96/mmBTU. The dollar rallied in the morning and fell back in the afternoon, but still finished with the dollar index higher at 84.88. Gold took it on the chin today, falling about $23 to $657/ounce. Silver slipped to $12.42/ounce.

BMB Note: Glad that week’s over. Let’s hope there aren’t too many more like it. If we’re going to have “down”, let’s have a little more controlled “down”.

It’s been a rough 10 days. Today was much better - except for many of the metals stocks - but that doesn’t mean that everything is going to be fine. There has been some pretty serious damage done to an awful lot of stocks.

It would seem that an awful lot of folks got pretty serious about the “sell in May and go away” plan this year. Cash is looking better and better every day. I won’t be too anxious to be buying back in here - you may choose to try and play the bounces that may or may not occur - if you like. I think I’ll be watching to see which groups bounce strongly and which bounce weakly - and the weak bounces will be where the best shorts will be. I don’t think this “down” is over yet.

The dollar rally today has a lot to do with Japan backing off their talk of raising interest rates:

The dollar climbed to an almost two-week high versus the yen and rallied against other major foreign-exchange counterparts Friday after comments from Bank of Japan Governor Toshihiko Fukui were viewed as less hawkish than expected.

The Bank of Japan on Friday kept interest rates unchanged at 0%. Fukui dampened expectations of a June rate hike and gave no indication of when rates might rise. He also reiterated that rates would be kept low after the central bank ended its zero-rate stance.

That 21% of Gulf oil production, and 13% of gas production, has never come back online in the aftermath of Hurricanes Katrina and Rita? From the MMS website, as of May 3rd:

Today’s shut-in oil production is 324,445 BOPD. This shut-in oil production is equivalent to 21.63 % of the daily oil production in the GOM, which is currently approximately 1.5 million BOPD.

Today’s shut-in gas production is 1.295 BCFPD. This shut-in gas production is equivalent to 12.95% of the daily gas production in the GOM, which is currently approximately 10 BCFPD.

And apparently the MMS doesn’t believe that those numbers will be changing, to a significant degree, anytime soon:

Given the relatively small variations in the shut-in statistics and the fast approaching 2006 hurricane season this will be the final report for Hurricanes Katrina and Rita. In the last few days there has been minimal improvement in the production numbers and this appears to be a trend that will continue with incremental movement over the next several months.

Another somewhat volatile day, encompassing all the markets. In stocks, the major indices are just above the flat line, and internals are running near flat as well. In the groups, semis, paper, disk drives and airlines are up, while metals stocks are getting hit once again. Bonds are rallying, and yields are moving even lower - the 10-year to 5.04%.

Energy prices are down - crude is down about a buck on a statement by Iran that they will cooperate with the IAEA (yeah, right) . The dollar is higher, and the precious metals are taking a tumble.

The base metals seem to be encountering some trouble this morning - Bob Pisani reported on CNBC that copper, aluminum and zinc were struggling this morning, with copper prices limit down in both London and New York. That explains some of the further trouble being seen in metals stocks.