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.

	Despite a drop of 15% in oil prices over the past 1-2 months, the Dow Transports have not shown any ability to rally whatsoever. The transports remain a huge dark cloud hanging over this market.
	Investors seem to be split on the question of whether the consumer is alive and well or will soon be dead and buried, at least from looking at some of the restaurant stocks. Chipotle Mexican Grill was hurt today by the commencement of a McDonald’s stock exchange program, but hasn’t exactly been the picture of health lately. MCD, on the other hand, moved to new 52-week highs.
	Painting a very different picture of the restaurant biz is Jack In The Box, which joined McDonald’s on the 52-week high list today.

Charts courtesy of StockCharts.com

Stocks wandered around in positive territory most of the day today, but lacked any real power, making the day look like just a bounce after a couple days of losses. Transports continue to show absolutely no strength at all, despite the continued smashdown of energy prices:

Even with gains in other major indices, the NYSE Composite and the S&P mid-cap 400 were flat.

Bond prices edged higher again, and yields trickled lower:
6-month: 5.10%   2-yr: 4.81%   5-yr: 4.71%    10-yr: 4.78%    30-yr: 4.92%.

Market internals were positive pretty much all day, but volume came in lighter than it did during the past 2 down days. Advances led declines by 3 to 2 on the NYSE and 5 to 4 on the Nasdaq, with up/down volume about 3 to 2 on each exchange. New highs/lows were 69/45 on the NYSE and 59/47 on the Nasdaq.

In the groups, the upside numbers were somewhat limited while the losers got hit a little harder. HMOs (+1.7%) led the winners, followed by software (+1.4%), retailers (+1.2%), internets (+1.1%), and computer tech (+1.0%). Leading the losers were oil services (-3.0%), gold and silver stocks (-2.8%), natural gas stocks (-2.2%), natural resources (-2.0%), oil stocks (-2.0%), commodity stocks (-1.4%) and airlines (-1.2%).

Energy prices continue their now month-long slide: crude oil dropped another buck to $66.25/barrel, gasoline fell a couple of cents to $1.62/gallon and natural gas was lower by 4 cents to $5.68/mmBTU. The dollar index rose to 85.95. Gold fell to $610/ounce and silver dove to $12.13/ounce.

BMB Note: Not much here today - looked a lot like a little light volume bounce up after a couple tough days. We’re going to need to see a lot more strength to be convinced that this market can stay at these levels and move higher. Until then, we remain pretty much in no-man’s land. Not much push upward, and no significant pressure - yet - to the downside.

There’s just nothing to do here until we get some momentum moving in one direction or the other. Breakouts are failing, and breakdowns are failing. Tough to trade that mess.

Consumer borrowing slowed? (Meaning it didn’t continue to RISE as quickly, which some call a slowing…)

It must have rained. Or snowed. Or been too hot. It can’t be that increases in wages kept people from needing to borrow…can people be running out of equity to borrow from? Tired of spending???

BMWife here again.

I always liked scooters. I saw a lot of them when I lived in Japan–lots of students and commuters had them. I think there it was more of a space issue than a gas issue although these days both probably count.

Seems like they are finally gaining in popularity here in the states.

Lennar (LEN) steps up and joins the crowd of homebuilders cutting their forecasts in the past few days. It doesn’t seem to matter much - the stocks of the homies really aren’t budging, having moved mostly sideways since mid-July.

Only a very slight bounce in stocks to start the day. The major indices are just in the green, and A/D lines are holding just above the flat line. HMOs lead the winners so far, and precious metals stocks and airlines lead the losers.

Bonds are edging higher, bringing yields down a little further. Energy prices continue to struggle, with crude, gasoline and natgas all slightly lower. The dollar index has pushed back above 86, and gold and silver are lower again.

Deron Wagner is keeping a close eye on the broader market indices for short opportunities. As for the low volume runup we saw during August:

In just two days, the S&P 500 has given back the gains of the past two weeks. Unfortunately for the bulls, this is what commonly occurs when stocks creep higher with extremely light volume levels. The retail “mom and pop” investors buy stocks in all market conditions, including the summer doldrums, simply because they are conditioned to do so. But hedge funds, mutual funds, and other institutions often see that retail buying interest as an opportunity to sell into strength when they return back to regular trading activity. That is why we were reluctant to buy any ETFs in the latter half of August, other than for quick two to three day momentum plays. It appears our cautious stance was warranted.