Stocks Pause After Another Strong Week
The market is lower in early trading, likely on profit taking after a huge rally this week. I heard on CNBC that this has been the strongest bounce (I think they said 20-day) over such a short period since 1938. Kudos to my buddy Doug Kass who nailed this bottom call.
The dollar is strong this morning, which is weighing on commodity prices, including oil and gold. The Baltic Dry Index has now fallen for the 11th straight day. This weakness is showing up in the energy and materials sectors, which are lagging.
There are no new Congressional testimonies today, but Obama is talking to some of the nation's top banking executives, so we could see some headlines come out of those meeting. These guys sure have been busy lately. I wonder what Hank Paulson is up to these days? Probably sunning in Hawaii, if that guy even knows how to relax.
Asian markets were mostly flat overnight; oil is down to $52 while gold is just below $925; the 10-year yield is lower to 2.72%; and the VIX is still hovering near 41.1, right at its 200-day support.
Trading comment: Yesterday I added more to our biotech (XBI) positions, which look good to me. I also bought a trading position in RIMM in our aggressive accounts. There still feels like there is a strong bid under the market, likely due to the large cash balances that portfolio managers are trying to invest prior to quarter end. No one wants to look like they missed out on this huge rally. So for now, 'buy the dips' is the strategy du jour.
As an aside, the rumors this morning are that CNBC's Dylan Ratigan has quit the network. If you Google "Dylan Ratigan quits", you can find some juicy snippets. I used to converse with Dylan via email, but I admit that I often found his rants from the floor of the NYSE unsettling, as I felt he should be focusing more on objective reporting and less on injecting his opinions. But maybe that's just me--
long GOOG, RIMM, XBI