Monday Morning Musings

It's already been a volatile morning for the market, on little market moving news. The futures were considerably lower in pre-market trading, but when the market opened stocks rallied higher. The S&P 500 gained as much as +1.75% in the first hour, but has since given up those early gains. But it's still early.

There isn't much news this morning, with no economic reports to speak of. The big news was Schering-Plough (SGP) being bought by Merck (MRK) for $41 billion. That equates to roughly $23.61 a share. SGP is trading roughly +18% higher on the news.

Financials are higher so far, after Capital One (COF) became the latest financial company to cut its dividend (from $0.375 to $0.05).

Asian markets declined overnight, led by Hong Kong (-4.8%). Japan fell -1.2% to a 26-year low. Ouch. The dollar is higher today, which is weighing on gold prices. But oil is also trading higher, nearing $48. The 10-year yield is higher to 2.90%, and the VIX is roughly flat near 49.50.

Trading comment: My near-term outlook remains that the market is very oversold here, and has declined significantly in a short period. I am still looking for an oversold bounce in the market, which I will likely use to add to our etf hedges.