Monday, February 08, 2010

Monday Morning Musings

The markets opened on a weak note, but have since rallied back into positive territory. There has not been a lot of market moving news this morning, and just a few earnings reports trickling in.

The dollar is weak this morning, which is helping boost commodity prices. Gold is rising back above $1070, and oil is trading near $71.50.

Among the sector ETFs, energy is leading the way (+0.80%), followed by tech (+0.62%). Utilities and financials (-0.11%) are lagging so far. Among subsectors, homebuilders are rallying +2.86% and oil drillers are up +1.18%.

The 10-year yield is higher to 3.60%, and the VIX is falling back down -2.1% to 25.57 after rallying over 29 on Friday but reversing lower in the final hour of trading.

Trading comment: The market is still pretty oversold, and I like stocks here for an oversold rally. I think we should get a nice bounce this week, but I like em just for a trade. As I said to watch for, sentiment has been approaching some very bearish levels. To wit, the CBOE put/call ratio hit 1.21 on Friday, a high level. Bears in the AAII survey have climbed to 43% (and 29% bulls), and the Rydex Ursa/Nova ratio plummeted to .514 last week, as market timers rushed into bear mutual funds.

I would not be surprised to see us bounce in here for a little while, and then experience another pullback thereafter. I think there is a good chance that second pullback does not make a lower low, and I am in the minority in that camp. That would offer a good buying opportunity heading into Spring.


At 9:05 PM, Blogger stock news said...


Key benchmark indices are likely to open flat note, as global jitters failed to ease. Wall Street tumbled yesterday amid lingering worries about debt problems in the eurozone, sending the Dow Jones industrials to a close below 10,000 for the first time since November 4. Asian markets traded mixed with Japanese stocks sliding, after the Dow industrials closed below 10,000, hit by heightened concerns about the euro zone's sovereign debt troubles. The government yesterday estimated the economy to grow by 7.2 per cent in financial year 2009-10, against 6.7 per cent a year ago, despite contraction in farm production.

According to data released by the NSE, in the last session, FIIs were net sellers of index futures to the tune of Rs 295.75 crore, while they bought index options worth Rs 710.99 crore. They were net sellers of stock futures to the tune of Rs 4.63 crore and sold stock options worth Rs 5.22 crore.

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