Downer Day

The SPX closed down a little more than 0.5%. Volume ran considerably lighter than Friday, which was quadruple witching day, but still qualified as an accumulation day.

Energy stocks led today from start to finish. Oil had its sharpest spike in nearly 10 years, rising more than $4 to $67. This spooked the equity market, which was already skittish ahead of the FOMC meeting tomorrow. The prospect for Hurricane Rita to cause more damage in the Gulf is growing worrisome.

After the close Leggett & Platt (LEG) reduced FY05 guidance quite a bit, citing higher costs for raw materials and energy. This could weigh on industrials tomorrow, like GE, HON, EMR, etc.

Retail stocks have been tremendously weak recently, despite the fact that Target (TGT) maintained their outlook for comp sales +4-6%. I am looking to start building up a couple retail longs on further weakness.

I am still greater than 50% long.