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.

The Oakland Raider offense has got to be the most pathetic bunch I’ve seen in quite some time.

Or lack thereof…

The financial media insists, every day, on giving us a “reason” for the market’s movement that day, and it drives me nuts. I am not alone:

Headlines this morning were crediting the new life seen in equities to merger news and lower oil prices. Some headlines still credit lower oil, despite the fact that black gold swung to a better than 1% gain by the end of the day. Obviously, financial journalists can’t break their annoying habit of trying to connect whatever stands out in the news with whatever is going on in equities, nor do they bother to check oil prices after 10:00 ET.

Yeah, I know. This is a finance / market blog, and we do our best to keep it that way. I’ve seen what those political blogs can be like, and they can get ugly. We try to bring politics into the discussion only when it affects the markets, or even more importantly, our own money!

So I’m not going to tell you how you should vote. I have my opinions, and you’re entitled to your own opinions - however misguided they may be… :).

Just make sure you get off your butt and go vote tomorrow, if you haven’t already. It’s the only voice you have - go ahead and speak up.

Gary Kaltbaum has some opinions on tomorrow’s elections, not to mention their possible effect on the markets:

If the Republicans pull a rabbit out of a hat, the chalk is on a further market rally…but what about the DEMS? I am hearing loads of talk about how “business-unfriendly” they are since they have been yelling at companies like Wal Mart and Exxon for the past couple of years. Don’t kid yourself! Do not confuse election rhetoric with reality. Whlle I do believe there are many Dems who are anti-business and some downright socialist with their thinking, keep in mind, every one of these politicians are tied to business one way or another. I suspect if the Dems win, they will be smart enough to lighten the rhetoric against business. At least…I hope.

What about tax policy? That is ultimately my big worry. Did you see what happened to the Canadian trusts in the past week when the govenment propsed taxing the dividends? CRUSHED! So…being 1 plus 1=2…I will be less than thrilled…and suspect markets will be less than thrilled if dividend taxes get hiked back up. I do not know if the reaction will be immediate as this will be phased out down the road.

I am playing it one way…like I always play things. I will let the market decide where it wants to go…regardless of who is in office. I will be keeping all this info in my file manager. The market has its way of doing whatever it wants to do regardless.

	The Nasdaq was teasing the bottom end of its range until today, and has now been pushed back up near the top of that range.
	The Russell 2000 had broken down out of its recent range, but made a nice save today to push it back up within the range once again.

Charts courtesy of StockCharts.com

Stocks caught a pre-election bid today, and were able to work off much of last week’s losses. Strong gains in most of the major indices, with the exception of the Utilities:

Bonds started the day slightly lower, but recovered as the day wore on, leaving yields nearly unchanged:
6-month: 5.17%   2-yr: 4.81%   5-yr: 4.68%    10-yr: 4.70%    30-yr: 4.79%.

Market internals were strong, with volume so-so on the NYSE, but better on the Nasdaq. Advance/declines were 3 to 1 on the NYSE and nearly 7 to 3 on the Nasdaq, with up/down volume 4 to 1 on the NYSE and 5 to 1 on the Nasdaq. New highs/lows were 196/18 on the NYSE and 151/50 on the Nasdaq.

The group picture was painted a deep green, with transportation stocks (+3.0%), followed by steel stocks (+2.9%), HMOs (+2.9%), airlines (+2.8%), brokers (+2.6%), networking (+2.4%), semiconductors (+1.8%), internets (+1.7%), oil services (+1.5%) and computer tech (+1.4%). Gold and silver stocks (-1.2%) led a very short list of losers.

Energy prices were mixed, with crude oil moving up nearly a dollar to $60.02/barrel, and gasoline up a couple of cents to $1.53/gallon, but natural gas slipping to $7.49/mmBTU. The dollar index was near unchanged at 85.75. Gold slid a few bucks to $623/ounce, but silver moved higher, to $12.61/ounce.

BMB Note: I’m not sure what prompted today’s rally. Seemed to come pretty much out of the blue. I thought there would be a bounce coming after the series of down days last week, but this was a little stronger than I was thinking it would be. Volume, while it wasn’t particularly weak, wasn’t any stronger than most days last week, so that casts a little doubt on today’s move.

Stocks made a good effort at gaining back their recent losses, but haven’t finished that task yet. Today’s move didn’t change much in the technical picture. It pushed some of the teetering indices back up into their trading ranges, but there weren’t any real breakout moves. So it just extends the bit of uncertainty for a bit longer.

The energy and commodity areas still look good. As far as other areas are concerned, I’d like to see some of those charts that are in trading ranges right now make a breakout move above those ranges before I’m convinced that there’s more to run here. And the longer the ranges continue, the more meaningful it will be when they finally break out - or break down.

Not much in the way of market moving reports tomorrow, but Wednesday morning could be interesting, depending on the election results. Stay tuned.

Split results compared to last week, with the 3-month coming in at 5.088%, below the 5.108% of last week. But the 6-month pulled 5.180%, compared to 5.153% last week. Still, both short-term notes are holding above 5%. The longer the market hesitates here, the better that 5% looks.

I’m a little surprised that things have moved as much as they have today with the elections being held tomorrow, but it is what it is. The majors are, so far, holding on to nice gains, though things are still short of last week’s highs.

I told you the Dow was due for a positive day after 6 in a row in the red. Major indices are all showing gains, with the exception of the utilities. The Transports and the Nasdaq are leading the way. In the groups, we find steel stocks, transportation, airlines, networkers, gold stocks and brokers leading the way.

Bonds have slipped a little further this morning, edging yields higher. Oil and gasoline are higher, with natural gas lower. Gold is unchanged but silver is higher. The dollar is fairly flat.

More buyouts: investors including a Saudi prince and Bill Gates looking to buy Four Seasons, Abbott Labs buying Kos Pharma, and more tough talk from the Fed.