Monday, April 16, 2012

Why the Market Was Mixed Today

The market was a tale of two tapes, with the Dow rising and the Nasdaq falling.

Reason du jour? Anxiety! ("it’s got me on the run, anxiety") From Reuters via Yahoo finance, by Angela Moon, quotes James Dailey portfolio manager at TEAM Asset Strategy Fund from Penn-sly-vannia: “The market behavior is fairly manic today and investors are confused after a mixed set of data, Spanish yields, and momentum stocks like Apple losing ground. The confusion is leading to anxiety, and that’s why we are seeing the blue chips, the large caps, outperform

Really? Anxiety? Maybe it's the long bull run reaching marginal new highs in the month of April, just before May, when we tend to have our annual Spring-Summer market correction. Maybe the profits are being booked. Not saying James is wrong, though. All these things are in the trough. I'm not sure it's that confusing. Get out before the whole thing falls apart!

The belles of the ball fell hard today. Apple was down 4%, is below $600 a share, and now down five days in a row. And you thought the Dodgers had a streak going! Priceline was also down about 4%. How much is William Shatner worth, though? Meanwhile, The Google also was tripped up for a few percent. Well the high beta stocks go up faster, and come down faster during corrections, too.

Speaking of, check out the SPHB (High Beta) ETF vs. the SPLV (low beta) ETF. Money seems to be moving in one direction over the other. And that's not a healthy sign. But those low beta stocks are the big cap dividend paying MONSTERS. (Oh, JNJ before the bell tomorrow. Gird your loins, dividend investors!)

And it's not like the Fed was out trying to jawbone the tape higher, either. You never know. I was half-expecting Janet Yellen to announce that rates would be near 0% until 2016. Up the ante, JY!

The Slope of Hope: US Economy: US retail sales up .8%, sharper than expected.

(Excluding the Apple store, retail sales were down 100%. Just kidding, but you know I'm not the only one thinking that isn't too far out of the realm of possibilities.)

Check out Proctor and Gamble, Wal-Mart, and that sort of thing. Toothpaste and Chinese imports, right?

The Wall of Worry: Spain – rising borrowing costs. The Spanish 10 year govt bond is above 6% for the first time since early December. The country also noted that it has probably slid into its second recession since 2009. Italian yields also surged somewhere near 6%. I think 7% is the number where folks worry about stuff hitting the fan.

Socialism works everywhere they try it! As long as you never run out of people to tax, it keeps on chuggin' along...

As for me: Still with a lot of cash and low beta stuff.


I tried a podcast/audioboo on the dog walk, but it was a disaster with the outdoor noise and wind. Taking it to the keyboard while watching the Voice!

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