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.

Tim Middleton at MSN says you should “Hedge this wild market with commodities“. He recommends DBC, the Deutsche Bank Liquid Commodity index ETF - which is about 50% crude oil and heating oil.

Interestingly enough, this comes from the same man who, back in April, told you to “leave the new oil ETF to the pros.” BMB, of course, told you to ignore him.

Is it just me, or is there a glaring inconsistency in Mr. Middleton’s message?

In Matt Davio’s opinion, the Fed should just allow the economy to work:

As we leg into the slow summer months, what this new environment does offer is renewed volatility. Earnings are upon us once the 2nd quarter closes and more rate hikes should also follow. The momentum specialists like IBD and Cramer are having a hard time getting the ball rolling again as the liquidity that was created the past 3.5 years is now being taken away by the esteemed Fed. If the FOMC would have raised rates more aggressively in the past two years, I firmly believe we wouldn’t be in the “conundrum” phase we are clearly stuck in.

To me the end result of said conundrum is “damned if you raise ‘em now and damned if you don’t”. That’s what happens when the Fed chooses not to allow the markets to run their course and squeeze out the weak hands. If you try and satisfy all players you are likely to end up like Japan. Why the FOMC doesn’t believe in deep, cleansing recessions — as we haven’t had one since late 80’s — I have no idea. Capitalism allows the strong to survive and the weak to find new niches of success.

And the longer you try to put off those recessions, the tougher they are likely to be.

Jim Baen (the publisher) suffered from a serious stroke and is in the hospital. Here’s a link to Galleycat which has the few details that have been released. If you ever read science fiction or fantasy, you probably read something from Baen. Jim belongs to a different era, running his publishing company as he sees fit, often following his own ideas, rather than copying bigger houses.

	Utilities have stalled as interest rates have moved higher again. I still think the move in the utils may have been a pure defensive play.
	Consumer Staples are a reflex defensive play as well. Just not a lot happening here.
	Industrials had the best week, and have taken over the top spot YTD from the energy stocks. But I don’t think I want to get mixed up in this chart at the moment.
	Techs had the second best week, but the chart isn’t exactly screaming “buy”.

The numbers as we wait for things to sort themselves out a bit:

Charts courtesy of StockCharts.com