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.

Bill Fleckenstein takes the opposite side of John Mauldin’s “Fed Trade”. But both think that stocks are ultimately headed lower.

Fleck says the Fed is done:

As I have said, I don’t believe that the Fed is really worried about inflation at all. But I do believe that the Fed will be extremely concerned about the economy as it slows. Fed chairman Ben Bernanke has his deflation fears, and above all else, we must remember that the Fed is run on the applause meter. Fed members just want to be loved. I think that is the most important thing to keep in mind.

None of these central bankers have one shred of former Fed Chairman Paul Volcker in them. If that were the case, they would have done something about inflation long ago, instead of hiding behind their pet inflation statistic, which purports to show that there isn’t any (thanks to various and sundry “calculated” distortions)…

…In any case, my expectation is that, barring some stunningly strong economic data, our central bank is done with its rate hikes. That ought to allow equities to rally for a little while, especially given all the angst in evidence before the June Federal Open Market Committee meeting.

But the rally may play out in fits and starts, and it will certainly be impacted by economic data that are either hot or cold. Then we’ll be into earnings season. I expect a number of technology warnings for the third quarter, and that may be the catalyst for stocks to start declining again.

Kevin Kerr says it’s inevitable.

Who knows where that will take gasoline prices? Those who have voted “Ain’t nothin’ stoppin’ me and my RV” in our BMB poll had better start saving their pennies.

You’re kiddin’ me, right? They decided the World Cup final game, the biggest soccer game in the world for the next four years, with a shootout??!!??

That’s bogus. Totally bogus.

You don’t decide the Super Bowl by having the kickers exchange field goal tries, or having the quarterbacks throw passes through tires. You don’t decide the NBA finals with a free throw contest or a game of P-I-G. You don’t decide the World Series with a game of 500-up or a home-run derby. I was disappointed that hockey went to the shootout thing during the season, but at least they wouldn’t use it in the Stanley Cup finals.

I just don’t get the whole soccer thing. Maybe they could actually decide the winner of the game if there was a reasonable chance of someone ever scoring another goal. Like, relax that silly offside rule or something. What’s up with that? The offense isn’t allowed to get behind the defense? C’mon!! What would American football be like if the wide receivers weren’t allowed to run past the DBs to try to get open?

Whatever. But I gotta admit, seeing the French guy headbutt the Italian right in the chest was pretty funny.

Items of note on the latest industry moves:

• Not a lot of good things happened this week. Only three groups up more than a percent, but 12 down more than a percent, and three of those down at least three percent.
• Tech stocks continue to fall apart, and oil services suffered as well.
• The decline in the housing stocks seems to have slowed - for now.
• HMOs, REITs, utilities, drug stocks, airlines/transports, oil stocks and gold stocks are holding up the best as of right now.
• Biotechs, at least as represented by the $BTK index (see chart), could be poised for a move higher if the market holds up. That’s a big ‘if’.
• Not a lot of strong charts, either in the stocks or in the indices.
• For a more detailed breakdown of group movement over various time periods, try Prophet.net’s Industry Rankings page.