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.

Barry’s not buying the retailers’ excuse about Easter coming “too early” this year:

When the Retailers made their forecasts for April sales, they already knew that Easter was in March. Despite making adjustments for that calendar variation, they STILL MISSED ESTIMATES BY A WIDE MARK.

Sorry retailers, I think he’s got ya there.

	A bad day for the indices today, but the S&P’s uptrend still hasn’t been broken convincingly, and it hasn’t even fallen back to the 20-day MA yet.
	The Russell 2000 and the Transports are on much shakier ground, however. Both of these indices have been unable to clearly take out their February highs, and today’s big drop pushes them back to the bottom of their recent ranges.

There was some notable damage done in the health care area today:

And the weak groups remain weak. The homebuilders (again) and REITs look to be on the brink of trouble, and the disk drives and airlines are already gone:

Charts courtesy of StockCharts.com

Ever Green turned Fire Engine Red today.

We knew that eventually this market was going to have to pull back a bit, and we definitely got some of that today. All the major indices dumped more than a percent, and the Russell fell nearly two percent, on horrible internals and a pickup in volume.

Not a pretty sight for the bulls today:

Bonds rallied as stocks fell, and yields moved lower:
6-month: 4.94%    2-yr: 4.68%    5-yr: 4.55%    10-yr: 4.64%   30-yr: 4.83%.

Market internals were, in a word, horrible, and volume ticked up above yesterday’s levels. Advances/declines were worse than 1 to 3 on both exchanges, and up/down volume was 1 to 8 on the NYSE and 1 to 7 on the Nasdaq. New highs/lows were 144/32 on the NYSE and 118/87 on the Nasdaq.

The group picture was all red - nowwhere to hide today. Gold and silver stocks (-3.0%) led the long list of losers, followed by metals and mining (-2.6%), steel stocks (-2.4%), disk drives (-2.3%), homebuilders (-2.3%), drug stocks (-2.2%), semiconductors (-2.1%), biotech (-2.1%), networking (-2.0%), oil services (-2.0%), oil stocks (-1.9%), health care (-1.9%), commodities (-1.8%), natural resources (-1.8%), health care products (-1.8%) and transportation (-1.7%).

Energy prices were mostly higher, with crude oil up to $61.81/barrel and gasoline up a dime (ouch!) to $2.33/gallon, but natural gas was flat at $7.73/mmBTU. The bounce in the dollar continues, with the dollar index moving up to 82.24. Gold stumbled to $666/ounce and silver got smacked back down to $13.00/ounce.

BMB Note: So we see that ’stretched’ doesn’t always stay ’stretched’ - sometimes it lets go and snaps back. That’s why we’re not real eager to buy in when things are all stretched out.

How important is today’s action? It’s the first day in quite a while where the sellers have been able to push the market down and keep it down, giving us the worst closing A/D line since mid-March. So I think it’s important, but not quite as important as it might have been had the market already been in a more weakened state, and not so overbought. We were in a similar position just last week, after last Monday’s action, where it looked like the market had had enough, yet it bounced right back and moved higher over the rest of the week. If we were already in a position where the charts had started to break down or roll over, I’d say it was time to stick a fork in it - but I’m not convinced we’re there yet.

That said, today very well could lead to more pullback and/or downside testing, and possibly to something worse down the road - I just think it’s too early to tell. We should get a hint in the next few days - watch to see if we get some follow-through to this downside move that sticks. Last Tuesday, we got follow-through to the downside, but that move reversed by the end of the day and we were off to the races again. That could happen here.

(Disclaimer: You should also consider that I am a complete amateur at this, that I am making this all up as I go along, and I may have absolutely no idea what I’m talking about. Then again, I’m not sure many of the pros do either…).

Today we got some lousy retail numbers that appeared to be somewhat of a catalyst (or maybe just an excuse) for the selling. Tomorrow, we get the government’s read on retail sales, and the Producer Price Index - the headline view of which could be pumped up by higher energy prices. If the PPI comes in too hot and the retail sales too cold, we could get a repeat of today. But we won’t know until we get there.

Over at Minyanville, Jeff Macke has a roundup of all of the SSS (that would be same-store-sales for those that might ask) numbers put up by the retailers today.

The numbers, in general, weren’t nearly as good as the expectations, which probably has a lot to do with today’s market dip - not that there wasn’t going to be a dip sooner or later, anyway.

Here’s a sampler:

Gap (GPS): reported -16.0 vs. -7.3 exp.

“Turnaround” looking more like a “Loop-de-Loop” with the net result being that the Gap is now hurtling towards the earth at an even greater rate of speed. Even misguided leadership is better than leaving an interim CEO in place for six months.

Hot Topic (HOTT): reported -9.1 vs. -5.8 exp.

Reaffirms 1Q net loss of ($0.01)-($0.04) (vs -$0.02 consensus). “We’re still lousy but at least we’re reliable.”

Dress Barn (DBRN): reported -6.0 vs. -6.0 exp.

Nothing says fashion like the word “Barn.”

A little bit of pullback in stocks today, as the major indices have given back most or all of yesterday’s gains at this juncture, and advance/decline lines hang well into the red. Most of the groups are red as well, with the exception of the airlines, which are up a bit. The homebuilders, disk drives, gold stocks and metals lead the losers at the moment.

Bonds are near unchanged. In energy prices, crude and gasoline are higher, natgas flat. The dollar is higher, gold and silver lower.

According to this article, the same-store-sales reports rolling in today aren’t all that uplifting. What’s to blame? Silly question. It’s always the calendar or the weather. Or both:

…the sorry combination of yucky weather, an early Easter and tough year-over-year comparisons would spell trouble for the final tab of same-store sales numbers in April.

But here’s one way to look at it. If you want the numbers to look better, just squint your eyes real hard, so you mash a couple of months together:

Thomson Financial’s Jharonne Martis warned investors not to take the month’s results to heart, urging them instead to combine March and April - what some analysts call “Mapril” — for a clearer picture of how consumers are spending.

On the morning ticker display, CNBC has replaced Japan’s Nikkei index with the Shanghai Composite. I guess if you’re not at all-time highs, you’re no longer worthy of coverage.