Monday Morning Musings

The market opened sharply lower this morning, but is seeing a strong bounce as I type this post. The Nasdaq has already moved back into the green, after being down nearly -2%.

Last week was an odd week for the Nasdaq, in that the S&P 500 rose +5.9% for the week, while the Nasdaq 100 actually fell -0.2%. That is quite a divergence, and something that could correct itself over the next few weeks. The main reason for it was the surge in banks and financials after the govt. stress tests.

There were no major earnings announcements nor economic reports this morning. Here is a quick summary of the early action:

• Stock averages declined in early trading, with the market getting hit by some profit-taking.
• The S&P 500 rose nearly 6% last week, and was up 37% in the last nine weeks heading into today.
• The Dow was down as many as 151 points in the first hour of trading.
• The Nasdaq has been down as many as 29 points.
• General Motors declined 14 cents to 1.47 as the automaker released a statement saying a bankruptcy filing is more probable.
• Bank stocks are in the spotlight again. BB&T dropped 1.15 to 25.18 after announcing a plan to cut its dividend by 68%. U.S. Bancorp and Capital One Financial were both lower after announcing they will sell stock. U.S. Bancorp dropped 82 cents to 19.72. Capital One Financial was down 2.80 to 28.54.
• Alcoa retreated 53 cents to 9.48 and energy stocks declined as oil and metals prices fell.
• Copper dropped the most in almost two weeks in London.
• The NYSE was 5-1 negative on issues, 10-1 negative on volume.
• The Nasdaq was nearly 3-1 negative on issues, nearly 2-1 negative on volume.
• The 10-year Treasury note was up 23/32 to yield 3.20%.
• Asian markets were mostly lower overnight; the dollar is mixed this morning; oil prices are lower, after a big move higher last week; gold prices are also down slightly; and the VIX is up +3% to 33

Trading comment: Investors are still looking for that illusive pullback. On Friday, I took partial profits on HANS and added to our CELG long a bit. I am still looking to add some etf exposure, but have not pulled the trigger yet.

long CELG, HANS