Much as it pains me to say so, I have to be honest and say that I do not know what’s going on here. It just feels wrong to me and I don’t like it so I keep making moves that keep everything in neutral, which makes me feel silly every time the market notches up.
I tried to join the party today. I made bullish plays on Sears Holdings (SHLD), Corning Incorporated (GLW), American Express Company (AXP), Amazon.com (AMZN) (well that one was wrong!), TurboChef Technologies, Inc. (OVEN) and even Oil Service HOLDRs (OIH), although that one was selling puts against my puts so not very bullish . . . So I’m trying to enjoy the rally but even with General Electric Co. (GE), a staple of my retirement account, up 3.2%, I just can’t get juiced up about the fundamentals.
• Two The Bear Stearns Companies Inc. (BSC) hedge funds with $20B are close to being shut down as a bail-out fails to materialize.
- See my March 15th take on the nonsense being pulled here, by BSC and others.
• Oil is heading for $70 a barrel.
- Last year, oil at $70 oil at $70 dropped the Dow 500 points (June), in ‘05 $70 oil cost the Dow 400 points (Sept-Oct). Is the Dow now "oil-proof"?
• Best Buy’s (BBY) disappointing earnings come just eight days after Tweeter Home Entertainment Group (TWTR) filed for bankruptcy.
• Despite the "good news" on permits, builders started building houses at the lowest rate since the market crash and builder confidence hasn’t been this low, since 1991.
- Building permits for single family homes fell 1.8%, it was apartments that brought up the number - full of people who can’t afford homes anymore.
• Bush has nominated a guy nicknamed "Knuckles" to be the new Budget Director
- "'They have gone from someone who liked to work things out to someone who is actually confrontational,' said House Appropriations Committee Chairman David Obey [D-WI]. "They have gone to the person who is the legislative architect of their failure to do anything on the budget last year."
• The Senate passed an amendment 70-23 that would subject Saudi Arabia and OPEC to US antitrust laws.
- You would think I would love this, but Bush will veto, people will scream and oil prices will go up, not down in the near term.
• Import prices from China are rising.
- China is reducing export-tax rebates, further increasing prices.
• The IEA President says carbon dioxide emissions cannot be sustained by the environment, but luckily, we will run out of oil very soon - hopefully before we finish destroying the atmosphere!
• The OECD predicts a global backlash over globalization is brewing.
I could go on, but you get the idea… Let’s just say I have a few concerns that prevent me from going all gung-ho bullish, despite the mysterious jump in GE on no news, no earnings, no guidance, nothing. It’s almost as if someone wanted to pump a single stock that would rally the markets.
Our markets were fairly flat today but the NYSE gave us some leadership. The SOX were weak and broader transports fell off, despite an upgrade that lifted the airline sector. The dollar continued to fall and oil continued to rise, but gold started making a small comeback and we have to watch that $666 line once again.
We sold a few positions so far this week, but on the whole, things are still pretty dull: