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.

Warren Buffett:

I call investing the greatest business in the world, because you never have to swing. You stand at the plate, the pitcher throws you General Motors at 47! U.S. Steel at 39! and nobody calls a strike on you. There’s no penalty except opportunity lost. All day you wait for the pitch you like; then when the fielders are asleep, you step up and hit it.

I don’t hear Congress all up in arms - at least not yet - about the huge bonuses being doled out on Wall Street this year. You would think that with all of the stink being made over oil company profits that the financial firms might try and be a little more discreet. But noooooo. Within less than a week, we find out there’s $40 mil going to John Mack at Morgan Stanley and $53 mil to Lloyd Blankfein at Goldman Sachs.

The politicians have been griping about CEO pay being way out of whack for quite a while now. Will this “holiday” season bring that issue to the front burner again?

PS. Does Hank Paulson, now Treasury Secretary, get a cut? After all, he was at GS until June…

	All hope of the Transports confirming the new highs in the Industrials is certainly gone for now, and some of the Trannies are looking very shortable on bounces.
	Think this market doesn’t look a little frothy? Think again.

Charts courtesy of StockCharts.com

Snooze. Not much action, not much volume, except for the further breakdown in the Transports. Oh, and the Russell got back a few of its lost points.

Not much movement in bonds either - none of these yields changed:
6-month: 5.07%   2-yr: 4.71%   5-yr: 4.56%    10-yr: 4.59%    30-yr: 4.72%.

Internals were positive, but volume lightened up. Advances/declines were about 5 to 4 on each exchange, and up/down volume ran 5 to 4 on each as well. New highs/lows were 249/18 on the NYSE and 98/48 on the Nasdaq.

Upside movement in the groups was minimal, with the REITs (+0.9%) leading the list. Energy and commodity stocks gave back a lot of yesterday’s bounce: Gold and silver stocks (-1.9%), oil services (-1.8%), metals and mining (-1.8%), natural gas stocks (-1.4%), steel stocks (-1.3%), natural resources (-1.2%), oil stocks (-1.1%) and airlines (-1.1%).

Energy prices were split. The new front month contract in crude oil is the February contract, and it ended the day at $63.72/barrel. Gasoline dropped a few cents to $1.69/gallon, but natural gas continued to slide, falling to $6.77/mmBTU. The dollar index moved up slightly, to 83.55. Gold and silver were lower, gold slipping to $620/ounce, and silver back to $12.44/ounce.

BMB Note: Whew. Not much to talk about today. As I said in the midday post, it looks like the market is sliding into holiday mode.

The energy and commodity areas still look pretty touchy. I’d stay away for now - the market took me out of one of my metals positions today, leaving me with a small profit. As Dave Landry would say, that’s a “better than a poke in the eye” trade. And the Transports look terrible - maybe the place to be looking for shorts on a bounce.

With volume starting to fade away, BMB posting will probably lighten up for a few days as well. There just isn’t a lot happening during these holiday periods.

Seems like the market is beginning to slide into holiday mode here. A drift upward with a positive bias, but very little conviction. Looks like volume is starting to dry up. Could be a pretty uneventful next week-and-a-half.

Might as well just put your stops in place and turn off your screens…

Update: The indices are hanging around flat today, with the exception of the Transports. They’re looking pretty ugly, down more than a percent.

I never know if the ‘anecdotal evidence’ really means anything or not. But if nothing else, it’s fun to read it, and compare it to your own experiences. Of course, I have NO holiday shopping experience. I despise Christmas shopping (along with most other shopping), and I don’t spend much money on myself, let alone others. Oh sure, the family still gets gifts - so I don’t Scrooge out completely - but they’re ordered online from the recliner.

Today, Barry relays some anecdotal evidence from Mrs. Big Picture and the folks who share his train ride into the city:

A broken nail led to a visit to the manicurist. The shop was relatively empty, and the gals got to talkin’. At the salon, Mrs. BP asks the salon owner how business is. Michelle responds “Very quiet.” The shop has been slow enough that Michelle gets to go Christmas shopping during her lunch. Store traffic and crowds, she points out, are surprisingly sparse, given its less than 2 weeks to the 25th. And everything is on sale, with prices slashed.

Go read it all.

From the EIA this week, a large drawdown in crude inventories, but builds in gasoline and distillates:

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) dropped by 6.3 million barrels compared to the previous week. However, at 329.1 million barrels, U.S. crude oil inventories remain well above the upper end of the average range for this time of year. Total motor gasoline inventories increased by 1.0 million barrels last week, but remain below the lower end of the average range. Distillate fuel inventories rose by 1.2 million barrels, and are in the middle of the average range for this time of year.

Refineries are operating at 90.7% of capacity. Demand for gasoline and distillates continues to be strong, but there has been some YOY decrease in demand for jet fuel:

Total products supplied over the last four-week period has averaged over 21.1 million barrels per day, or 0.4 percent more than averaged over the same period last year. Over the last four weeks, motor gasoline demand has averaged over 9.4 million barrels per day, or 2.3 percent above the same period last year. Distillate fuel demand has averaged nearly 4.3 million barrels per day over the last four weeks, or 2.0 percent above the same period last year. Jet fuel demand is down 7.2 percent over the last four weeks compared to the same four-week period last year.

A fairly positive open for stocks. Though major indices aren’t showing big gains, A/D lines are solidly in the green for now. The Transports, however, are sagging once more under the weight of a disappointing outlook from FedEx. Bonds are holding steady.

The groups are mostly green, but the numbers aren’t big. Semiconductors and disk drives lead the list, while gold stocks and oil stocks are giving back some of yesterday’s bounce. Energy prices are fairly flat, with natgas down slightly. The dollar is slightly higher, gold and silver lower.