Tuesday, October 25, 2005

Stocks Lower Mid-day on a Bounce in Energy Prices and Long-term Rates

Indices
S&P 500 1,190.88 -.71%
DJIA 10,332.73 -.50%
NASDAQ 2,097.08 -.88%
Russell 2000 637.56 -1.40%
DJ Wilshire 5000 11,886.40 -.74%
S&P Barra Growth 571.86 -.82%
S&P Barra Value 614.94 -.59%
Morgan Stanley Consumer 581.33 -.73%
Morgan Stanley Cyclical 698.61 -.54%
Morgan Stanley Technology 498.77 -1.31%
Transports 3,719.29 -.15%
Utilities 394.11 -.83%
Put/Call .92 +31.43%
NYSE Arms 1.19 +135.76%
Volatility(VIX) 15.18 +3.05%
ISE Sentiment 206.00 -14.88%
US Dollar 89.25 -.95%
CRB 328.02 +2.07%

Futures Spot Prices
Crude Oil 62.20 +3.20%
Unleaded Gasoline 164.50 +3.85%
Natural Gas 13.98 +7.51%
Heating Oil 188.75 +5.02%
Gold 474.70 +1.65%
Base Metals 133.69 +1.30%
Copper 182.45 +2.24%
10-year US Treasury Yield 4.49% +1.22%

Leading Sectors %
Gold & Silver +2.40%
Oil Service +1.80%
Energy +1.15%

Lagging Sectors
Tobacco -2.64%
Gaming -3.06%
HMOs -5.26%
BOTTOM LINE: The Portfolio is lower mid-day on losses in my Internet longs, Retail longs, Semiconductor longs and Energy-related shorts. I added IWM and QQQQ shorts and increased my OS and SCHN shorts this morning, thus leaving the Portfolio 75% net long. The tone of the market is negative as the advance/decline line is lower, most sectors are falling and volume is slightly below average. Measures of investor anxiety are higher. Today’s overall market action is slightly negative considering the rise in long-term rates and energy prices. The Johnson Redbook same-store sales index rose 3.5% year-over-year last week vs. a 3.5% rise the prior week. This week's gain is up from a 1.5% increase in late April and the 25th week in a row the index has risen 3% or more. This is more evidence that investors should pay more attention to what consumers do than what they say. I continue to expect retail sales to beat lowered expectations this holiday season. I expect US stocks to trade mixed from current levels into the close as bargain-hunting offsets worries over a bounce in energy prices.

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