Monday Morning Musings

The market was much higher in early trading, but the S&P 500 ran into resistance again near the 1090 level, and stocks have pulled back considerably from there such that the major indexes are now back in negative territory on the day.

One of the big laggards today is Bank of America (BAC), which is rumored to need to raise more capital to get out of their TARP loans. This is weighing on the stock, which is currently -5% lower. BAC has a solid Tier 1 capital ratio at current levels, and I think any capital raise they might do will provide a good buying opportunity for the stock.

The market is already back in oversold territory, especially the Nasdaq. So while we could see another down day or two, I think the market is more likely closer to finding support.

The dollar is bouncing today, which is also weighing on stocks, as lately stocks have been rallying on days the dollar slides. Crude prices were up but are now lower, breaking below $80. Gold prices are also lower now, falling to $1053.

Asian markets were higher overnight; the 10-year yield is higher to 3.53%; and the VIX was lower but has also turned higher, now up +7% to 23.84.

long BAC