Monday Morning Musings

The market is hovering near positive territory after a brief dip in the red in early trading.

Treasury Secretary Paulson spoke this morning about working with the mortgage industry to provide help to homeowners facing the loss of their homes. Despite his comments, the bank index and financials are lower so far.

Vivendi announced it is buying Activision (ATVI), sparking speculation about who will be the next video game company to be acquired. And a surprising loss by Chavez in Venezuela is helping oil move lower again, now dipping below $88. That still sounds like a high price, but it is well of the $100 mark everyone was looking for.

Asian markets were mixed overnight, and the Yen is slightly higher today. The 10-year yield is falling again, now at 3.88%. The fed fund futures are pricing in a rate cut for Dec. 11, and the odds of a 50 basis point cut are rising. This week's employment report will be big.

Investor sentiment remains cautious. The put/call ratio is back above 1.0, and the ARMS Index is elevated at 1.29. I wouldn't mind another consolidation day today before a push higher this week.