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.

Even though cell phone use won’t be permitted on US airplanes - yet - you will soon be able to browse the internet while you fly. For a fee, of course.

Via Instapundit.

Lemme see if I’ve got this straight: it happens naturally on Mars, but here on Earth, it’s our fault.

Uh-huh. Sure.

	China watch: the Shanghai composite makes it 19 of the last 22, but just by a nose.
	The precious metals aren’t setting the world on fire, but continue to make their way back up after the late-February global selloff. Gold looks ready to possibly retest those February highs…
	…and silver overcame some near-term resistance today with a little breakout move. SLV has a way to go to get back to its recent highs, when silver approached $15/ounce, but today’s move puts it back above the 50-day moving average. Disclosure: BMB own shares of GLD and SLV.

Charts courtesy of StockCharts.com

Boy, I sure am glad that CNBC gives me the time remaining to both the opening and closing bell on the screen down to the tenth of a second. I don’t know what I’d do without that - I might be a few tenths late with the wrap… oh no!!

Snooze. The market is already clearly in holiday mode, as it oozes higher on little to no volume. It’s this type of environment that allows the Nasdaq to finish higher, with its A/D line in the red, but up/down volume 2 to 1. Geez.

Bonds started higher after the morning’s poor economic reports, but gave up much of that move, leaving yields just slightly lower:
6-month: 5.07%    2-yr: 4.59%    5-yr: 4.54%    10-yr: 4.65%   30-yr: 4.84%.

Market internals mixed on very light volume. Advances/declines were 10 to 9 on the NYSE but 4 to 5 on the Nasdaq, with up/down volume 5 to 4 on the NYSE and 13 to 7 on the Nasdaq. New highs/lows were 240/21 on the NYSE and 141/37 on the Nasdaq.

Groups were split pretty much down the middle, with metals and mining (+1.6%) and gold and silver stocks (+1.3%) leading the modest winners, and paper stocks (-2.0%) and disk drives (-1.1%) leading the losers.

Energy prices were mixed. Crude oil held up fairly strong despite the promise of a solution to the Iran/UK mess, slipping back only to $64.38/barrel. Gasoline surged higher again as inventories came in weak, jumping to $2.11/gallon. Natural gas gained a few cents to $7.52/mmBTU. The dollar index fell back to 82.93. Gold and silver both turned in strong days, with gold moving up 10 bucks to $674/ounce and silver running up a quarter to $13.59/ounce.

BMB Note: My feelings exactly. From Yahoo’s market update page today:

Buyers are showing some resolve going into the close, but the lack of volume during a thinly-traded, holiday-shortened week, continues to offer minimal confidence as to the sustainability of recent gains.

That’s the big question, isn’t it: Can the market hold the gains of this light volume holiday week, and continue to move higher in the face of relatively poor economic news? I’m not convinced in either direction just yet. Last time we reached up to these retracement levels (post-Fed meeting), we danced around here for a few days on very light volume, and then sold off. Maybe the same thing will happen this time - and maybe not.

But we won’t get much of an answer until next week at the earliest. There will be more low volatility, light volume action tomorrow, and then a day off Friday - and no trading reaction to the big Friday jobs report. Then earnings season gets underway next week. It should be interesting. Let’s hope so. Days like today and tomorrow can be quite dull.

Update: Oh yeah, I forgot to mention that some of the weakest groups, that had bounced yesterday, were weaklings again today: disk drives, homebuilders, airlines, transports.

BMB mentioned yesterday that the financial media was scrambling all day to come up with a ‘reason’ for yesterday’s rally, and different sources seemed to settle on different reasons: the oil price drop, the Iran situation easing, the pending home sales number, the retail chain store sales figures.

At The Big Picture, Barry relays an opinion from Bill King that the move had nothing to do with the release of the pending home sales numbers, for the foundation had been laid long before the markets even opened:

“A cursory look at a SPM (S&P 500 futures) chart reveals that the rally started just before Europe opened in the wee hours of Tuesday. Yes, that is the window when people tend to commence gaming of the SPMs.

The second wave of the rally commenced about 7AM ET. The third wave of the rally started just before the 10AM ET release of the Pending Home Sales number.”

“After the early rally, stocks traded sideways, amid excruciating ennui, for the balance of the session.

The rally, due to lack of later follow through and vigor, appears to be the handiwork of someone, or more, that exploited this week’s high absenteeism and lack of enthusiasm.

Ain’t high finance grand?”

Grand indeed. And if you think these games don’t go on, think again.

You can just feel the holiday weekend setting in already at lunchtime on Wednesday, as the indices edge higher but volume fades away…

Nasdaq up 10 points, but its A/D line is still in the red.

Mixed data from the inventory report this week, with a build in crude, a drawdown in gasoline, and little change in distillates:

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) rose by 4.3 million barrels compared to the previous week. At 332.7 million barrels, U.S. crude oil inventories are above the upper end of the average range for this time of year. Total motor gasoline inventories declined by 5.0 million barrels last week, and are in the lower half of the average range. Distillate fuel inventories remained unchanged, and are slightly above the upper end of the average range for this time of year.

Refineries operated at 87.0 percent of capacity. Year-over-year demand fell only in the distillate category:

Total products supplied over the last four-week period has averaged nearly 21.0 million barrels per day, or 1.4 percent above the same period last year. Over the last four weeks, motor gasoline demand has averaged nearly 9.3 million barrels per day, or 1.7 percent above the same period last year. Distillate fuel demand has averaged nearly 4.4 million barrels per day over the last four weeks, down 1.9 percent compared to the same period last year. Jet fuel demand is up 3.8 percent over the last four weeks compared to the same four-week period last year.

While the major indices try to make up their mind whether to be above or below the flat line, advance/declines figures are in the red and the groups are split down the middle. Gold stocks lead the winners, while paper stocks and homebuilders lead the losers.

The morning economic data put a little bid into the bond market, sending yields lower. Energy prices are mixed, and are now in the midst of their reaction to the weekly inventory report. The dollar is lower, and gold and silver are making solid moves higher.

A couple of weaker-than-expected economic reports out this morning, the ISM services index and factory orders.

Iran says they’ll free the British sailors.

Obviously, that’s very good news. But it does make you wonder what concessions were made behind closed doors…

“The Federal Communications Commission has officially grounded the idea of allowing airline passengers to use cellular telephones while in flight.”

My biggest concern on the subject isn’t with the cell networks on the ground, or even the aircraft’s navigation systems, but rather for my own sanity. Can you imagine being on a plane where everyone, literally everyone, is talking at the same time? And they’re not even talking to one another?

I’m not sure I’d ever be able to fly again if they allowed cell phone use on planes…

How come Asian markets seem to be getting double scoops lately? They go up one day, then Europe and the US follow suit, and then the Asian markets go up again in response?

Are they leading or following? Both, I guess.

Like everyone else, Deron Wagner has his eye on the indices bumping up against their mid-March highs:

Yesterday, we explained why we were in “wait and see” mode with regard to entering new positions. Even though the last session was bullish and technically significant, we’re still playing it cautiously with new trade entries until we see whether or not the S&P, Nasdaq, and Dow have enough momentum to push through their “swing highs” illustrated above. Traders and investors typically scale back their operations ahead of holiday periods, so we may need to wait until next week to see whether or not yesterday’s gains were merely a relief rally or the start of a new intermediate-term uptrend.