Monday Morning Musings

Stocks opened lower this morning after investors worried about the outbreak of the 'swine flu' and what impact it might have on the global economy. But the fears don't seem to have persisted for long, as the major indexes have already bounced back into positive territory. Talk about being hard to keep this market down--

The energy sector is the biggest laggard today, after a strong last week. And drug and biotech stocks are the strongest on the heels of the swine flu news. There were several more strong earnings reports this morning, including HUM, VZ, WHR, and QCOM. Also, GM is higher after announcing news about progress in its restructuring.

Asian markets were mostly lower overnight; the dollar is mixed vs. the Yen and Euro today; oil and gold are both lower, as well as most commodities; the 10-year yield is lower to 2.98%; and the VIX is 3.7% higher to 38.20.

Trading comment: On Friday, I added the agribusiness etf (MOO) to our portfolios. The fund had a strong bounce on Friday, accompanied by a nice pickup in volume. Hopefully that trend continues. I am still looking for a good entry point on RIMM, GS, and V.

The SPX has rallied to 868 so far today before stalling. Last weeks' high was 871, so watch that level. Also, the high for the month as been 875, so there is a bit of resistance around those levels, and breaking above them would be a strong, bullish signal.

The market is still overbought, but working it off as it continues to cosolidate recent gains in a sideways fashion. There are lots of managers on the Street waiting for a pullback to put cash to work and get more fully invested. Unfortunately, the market seldom accomodates the herd.

long MOO