Monday Morning Musings

The market is barely higher in early trading, on relatively light newsflow. There are no economic reports to speak of this morning, and little in the way of corporate news.

The big story in the headlines over the weekend was the CEO of Hewlett Packard (HPQ) Mark Hurd stepping down amid sexual harassment claims. Wall St. liked him, and thus the stock is lower in today's trading. The big debate today is should he still walk away with such a large severance.

Asian markets were mostly higher overnight, except for Japan which is struggling with the Yen near its best levels in the past decade. Japan is a very export driven economy, so a high Yen is problematic for them as it makes their goods more expensive.

The dollar is up fractionally, and commodity prices are mixed. Oil is up a bit over $81, and gold is down a little near $1202. Wheat prices have come off their highs from last week amid the halt in exports out of Russia. I still think that ag stocks have upside.

The 10-year yield is barely off its lows from Friday, trading near 2.82%. The volatility index (VIX) is up +4.7% so far to 22.75.

Trading comment: Last week's action was solid overall. I said after the S&P 500 broke above its 200-day moving average that the best action would be to see some benign consolidation, whereby pullback in the index don't do any real damage to the chart.

If you look below, you can see that the S&P traded in a tight range, and closed every day last week above that key 200-day average. That is textbook benign consolidation, and leads me to lean towards the market pushing further to the upside in the near-term. The next level to watch is the June highs for the S&P at 1131.