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.

Energy stocks are still looking good:

And the banks have caught a recent bid to move out of their range:

With today’s move, the Retailers and Networkers are trying to reach new highs:

The Volatility Index had been jostled upward a couple of weeks ago, but has been stomped back into the ground over the past week:

Charts courtesy of StockCharts.com

Let’s just say I’m glad I hadn’t taken any short positions yet…

Stocks put in a strong performance today, rousing themselves out of the recent tight trading range, and sending a few of the indices to new highs:

The slide in the bond market has slowed, but prices were lower again, and yields snuck up a bit further:
6-month: 5.07%   2-yr: 4.73%   5-yr: 4.57%    10-yr: 4.59%    30-yr: 4.72%.

Market internals were, of course, positive. A/D lines fell to about half of where they started, but the end numbers still looked good. Volume was the best of the week, but not by a huge margin - a bit of a surprise. Advances/declines were almost 2 to1 on the NYSE and 12 to 7 on the Nasdaq, while up/down volume was about 4 to 1 on both exchanges. New highs/lows were 346/17 on the NYSE and 154/36 on the Nasdaq.

A solid day for the groups. Retailers (+2.1%), followed by networking (+1.9%), semiconductors (+1.9%), internet (+1.5%), oil stocks (+1.4%), natural resources (+1.3%), transportation (1.3%), oil services (+1.3%), software (+1.2%), commodities (+1.2%), paper stocks (+1.1%), chemicals (+1.1%) and computer tech (+1.0%). Steel stocks (-1.2%) led a short list of losers.

Stocks moved up despite a strong move in crude oil and gasoline. Crude jumped more than a dollar to $62.51/barrel, and gasoline climbed a nickel to $1.67/gallon. Natural gas slipped to $7.56/mmBTU. The dollar had another good day, moving the dollar index up to 83.70. Gold fell to $625/ounce and silver dropped a few cents to $13.72/ounce.

BMB Note: I have to admit I was a little surprised by the strong move in the market today, but it seems that when it comes to options expiration week, anything can happen. Some of the indices moved to new highs, but I’d like to see a few more days like today to be convinced that this is the start of another leg up. The Nasdaq still lags, not having reached new relative highs yet, and volume wasn’t entirely convincing - but remember what we say, you don’t get paid on volume. Price action trumps all.

In the groups, the retailers and networkers look like they’re trying to bust out of their range. The energies still look strong, particularly the major oils and the oil services. Utilities are still looking good as well. Tech stocks rebounded today - let’s see if they can strengthen themselves a little bit. The pullback continues in gold and silver - but they’re not exactly diving.

I thought this little tidbit from Yahoo’s overview page (from Briefing.com) was interesting:

3:00 pm : We’ve seen a pop in the indices in the past half hour that has carried the Dow and S&P to new session highs. The cause for the burst of buying interest was unknown at first, but then talk surfaced that the Empire State Index, a regional manufacturing report, was released early (had been scheduled for tomorrow) and was stronger than expected. That talk proved to be accurate as the New York Fed ended up releasing the data, which showed a reading of 23.1 that was above the consensus estimate of 18.0. The stronger than expected report helped assuage some concerns about a slowdown in the manufacturing sector that were piqued with the national ISM Index slipping below 50.

So they did just release the data early and not tell anybody? Was someone a little quick on the mouse button? The person who was supposed to release the data tomorrow decided to take tomorrow off, and pushed the number out today?

At any rate, the big number of the week comes out tomorrow morning, the Consumer Price Index. I doubt that we’ll get a negative surprise on that one - I think the gov’t has sufficiently doctored that number to prevent any negative surprises from occurring ever again. Inflation will always be under control, as far as they’re concerned. As for options expiration, the last day has tended to be rather quiet lately. We’ll see if that holds true tomorrrow.

OPEC plans another production cut - that news has sent crude oil prices up a buck today, back up to $62.40 or so.

The early movement again today has been positive, but so far, much of the move is sticking. The major indices are showing gains, with the Nasdaq up more than a percent. The Dow and S&P have moved to new highs (will they hold?), the Nasdaq is still reaching for its recent high levels. A/D lines are well into the green.

Many groups showing good gains, the best coming from retail, semis, networkers, internet, software, transports and computer hardware.

Treasuries are a little lower again today, pushing yields up even further. Energy prices are higher as well, starting off strong and then getting another little kick from a bigger-than-expected drawdown in natural gas inventories. The dollar is higher, with gold slightly lower and silver flat.

Deron Wagner has his eye on the oil services and the semis. As for the broader market, he agrees that we still have no confirmation of a top:

As for the broad market, not much has changed on a technical level over the past few days. The S&P and Dow are continuing to consolidate at six-year highs, while the Nasdaq is showing more relative weakness by trading below its November high. The broad market has begun displaying signs that it may be getting tired, but we do NOT yet have any confirmation that a top has been formed. More and more, it is beginning to look like the major indices will correct by time, rather than price. If this is the case, it means we can look forward to a few more weeks of range-bound chop. Perhaps it’s a good time to simply enjoy the holiday season with family and friends and step away from the market until it resolves itself in one direction or the other.

Everything is about the politics. Even a guy in critical condition after undergoing brain surgery.

“But, but, what about control of the Senate???”

Pretty sad.