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.

This post from Ron Sen ties in with the ‘all news is good news’ idea we’d been tossing around the last couple of days (here and here):

From Marc Faber’s TOMORROW’S GOLD

“…the opinions expressed by commentators (most of whom have an interest in keeping the market from declining) are extremely simple and repetitive in nature - productivity-led growth, no inflation, interest rates declining from their peak, stocks always go up, weakness is a buying opportunity, technology will drive the economy, corporate profits will remain strong, Greenspan (the leader) has already achieved a soft landing, oil prices will fall again, and so on.”

“And therefore, it should come as no surprise that good news is usually heavily promoted, while bad news is frequently dismissed as irrelevant.”

Just keep that in mind next time the market starts to head south.

This one has been making the rounds the last few days. If nothing else, it’s a pretty neat animation.

Hey, it’s a slow holiday weekend. Why not go for a ride?

Note: The years are displayed in the lower right-hand corner, but they’re obscured by the YouTube logo. For a clearer view, go here.

Hmm. Here we go again. News out on a Friday - at least today they didn’t have to wait until after the close, since the market isn’t even open.

What a surprise. It’s not very good news, at least not for American Home Mortgage:

American Home (AHM) said that first-quarter earnings will be roughly 40 cents to 60 cents a share, down from its previous view of $1.11 to $1.17 a share. For 2007, it forecast earnings of $3.75 to $4.25 a share, compared with the $5.40 to $5.70 a share it previously predicted. The company also announced that it is cutting its quarterly dividend to 70 cents from its previous level of $1.12 a share.

“During March, conditions in the secondary-mortgage and mortgage-securities markets changed sharply,” said Michael Strauss, American Home’s chief executive, in a statement. “While the market may recover … our working assumption must be that current market conditions will persist.”

American Home also indicated that it continues to be affected by the high cost of delinquencies, especially on Alt-A mortgages, and that it’s been forced to repurchase some of these loans.

So what do we say now? That the subprime problems are ‘contained’ in the subprime area, and the Alt-A problems are restricted to the Alt-A space?

Thanks to Calculated Risk.

Larry McMillan this week:

The broad market successfully tested support and moved higher. Specifically, $SPX dropped all the way down to 1410 (intraday), and then managed to stage a rather impressive rally for the remainder of the week. The 1410 area, of course, is what we had previously mentioned as the important level — and it remains so, although now it is well below current prices. The chart of $SPX has taken on a bullish shape, with higher highs and higher lows. Some are saying that this past week was not representative of the “true” state of the market since it was a holiday week. That sounds more like an excuse than an analysis. What we do know is that $SPX has exceeded the highs of a couple of weeks ago, and that makes the chart bullish. The next important resistance is the February highs at 1460.

For now, the market’s pointed up, and the safest bet is that it will continue to go up, until it changes its mind.

A better-than expected March jobs report has the bulls a little frustrated that the market isn’t open. The report has sent bonds lower and the dollar higher.

Ok, let’s analyze as only the pundits can. Stocks have supposedly been getting a bid on the hopes of a Fed rate cut. Remember, just yesterday CNBC was running a segment all day that asked if a bad economy was good for stocks.

But this jobs report puts a big dent in those rate cut plans, at least for now:

Federal funds futures fell after the report. The slim odds that the market had priced in for near-term rate cuts have been almost completely erased. The May contract is indicating the rate will remain at 5.25% in May, while the July contract is pricing in a 12% chance for a rate cut to 5% at the June meeting, down from 20% odds Thursday.

But don’t you worry. You can be guaranteed that this jobs report is “good for stocks” too, as it shows that the economy is still strong, and as long as people have jobs they’ll keep spending.

See, you can have it both ways. Just don’t expect to get the clear picture from these people if things ever get into real trouble. Not only will they never see it coming, they’ll never see it at all. Or if they do, they certainly will never tell you about it.