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.

A slight disappointment in the big monthly jobs report, with a gain of 111K jobs, and an increase in the unemployment rate to 4.6%.

But in typical CNBC fashion, the banner reads “January jobs tepid, but wait for revisions.” I guess we’re supposed to assume that the number will be revised upward. Whatever.

Larry McMillan tells us that the market is giving us no reason to give up the bullish scenario. From the free Option Strategist Weekly Updater (sign up):

The market rallied strongly the past three days. Whether it’s due to the “January Seasonal Effect,” (which I believe is the case), or to some other extraneous events — such as the Fed’s benign comments on inflation makes little difference. $SPX has now broken out to yet another new 6- year high. Hopefully, it will be able to make more of it than last week, when it broke out to new highs on the 24th, only to collapse in a torrent of selling on the 25th. If this upside breakout can hold, then the bulls are in charge once again, and the “trading range” scenario can be discarded…

In summary, we expect the market to continue to work higher, as there are no sell signals amongst our technical indicators at the present time. Short-term caution flags might be raised if $VIX closes at or below 10, or if the breadth oscillators break down after a couple of days in which declining issues lead advancing issues. But those are minor points. Bullish positions can be maintained as long as the major technical indicators refrain from sell signals.

Another rough day for the Chinese markets, down around 10 percent on the week:

China’s stocks fell, rounding off the Shanghai Composite Index’s biggest weekly drop in five years.

Lawmaker Cheng Siwei and Haitong Securities Co., China’s fourth largest brokerage by assets, in the last two days said the market is overvalued, and share sales by companies including Ping An Insurance (Group) Co. and Industrial Bank Co. are fanning concern that investor demand will dry up. China Vanke Co. and China Minsheng Banking Corp. led the decline.

“Share sales are making investors even more jittery, adding to fears that the market is too high,” said Zhang Shuntai, who oversees the equivalent of $127 million at Zhonghai Fund Management Co. in Shanghai. “Undoubtedly, a correction is now in full swing.”

Deron Wagner likes the recent action, but would like to see the Nasdaq join the party:

With the broad-based indices that are now trading at new highs, there is a lack of overhead supply to contend with. As such, it will not take a lot of buying pressure to push the market higher. However, the Nasdaq Composite still remains an area of concern because it is having difficulty breaking out above resistance at the 2,470 level that we illustrated yesterday. Things are starting to look more positive overall, but we see no reason to be overly aggressive until the Nasdaq gets in gear.

Gary Kaltbaum says the bulls are in full control. It’s hard to argue that point:

I will repeat a line I have been saying for weeks: UNTIL MAJOR INDICES BREAK SUPPORT AND OR MOVING AVERAGES, THE MARKET GETS THE BENEFIT OF THE DOUBT. I am stating this again because I have seen many turn bearish in the past week over the recent distribution that has occurred in the NASDAQ/NDX. I do not disagree one bit with the fact that the NASDAQ and the NDX have been under pressure. I do not argue with the distribution days. I just argue with everything else.