Monday, May 03, 2010

Monday Morning Musings

The markets are bouncing after Friday's drubbing. There was news this morning that Greece will in fact receive a financial aid package from the EU and IMF to the tune of $146 billion. The problem, and one of the reasons that the euro is still lower today, is that many investors remain concerned that the problems with other European nations still looms despite Greece getting a bailout.

We also saw a strong ISM Manufacturing report this morning, rising to 60.4 from 59.6 in March. This is helping stocks in the industrial sector rally this morning, in addition to the news that United Airlines and Continental will merge.

Commodities are higher, despite a bounce in the dollar index. Oil prices are up to $86.60, and gold has topped $1187. Despite this, the energy stocks are mostly lower, with negative sentiment lingering from the oil spill in the gulf.

Japan and China markets were closed last night, but that didn't stop China from raising its reserve requirement for banks again. China continues to tighten its monetary policy and try to prick the property bubble there. We know that most bubbles don't deflate in an orderly manner, so the situation in China bears close monitoring.

The 10-year yield is higher to 3.69%; and the VIX is -3.75% lower after Friday's bug surge higher, down to 21.22.

Trading comment: I started a new position in GMCR on Friday, but that was about it. Although the markets are bouncing today, the major indexes are still below their 20-day moving averages that were broken on Friday. I still expect more choppiness ahead, and will look to use future down days to pick away at stocks/etfs at lower prices.

long GMCR


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