Monday, February 22, 2010

Stocks Slightly Lower into Final Hour on Tax Hike Worries, Political Fears, Profit-Taking

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Technology longs, Financial longs and Biotech longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is slightly positive as the advance/decline line is mildly higher, sector performance is mixed and volume is slightly below average. Investor angst is high. Today's overall market action is bullish. The VIX is falling -1.8% and is around average at 19.67. The ISE Sentiment Index is below average at 119.0 and the total put/call is around average at .81. Finally, the NYSE Arms has been running around average most of the day, hitting 1.32 at it intraday peak, and is currently 1.12. The Euro Financial Sector Credit Default Swap Index is rising +1.99% to 88.08 basis points. The North American Investment Grade CDS Index is falling -1.94% to 90.55 basis points. The TED Spread is up +1 basis point to 17.0 basis points. The 2-Year Swap Spread is down -2.0% to 27.99 basis points. The Libor-OIS Spread is up +2 basis points to 10.0 basis points. The 10-Year TIPS Spread is down -2 basis points to 2.26%. The 3-Month T-Bill is yielding .09%, which is unch. today. Energy shares are relatively weak today, notwithstanding flat oil. Market leading stocks are mixed again today. Natural gas has broken down through its recent trading range. Shanghai was unable to rally last night, after reopening from the holidays, despite recent global equity strength. On the positive side, HMO, Education, Bank and Networking shares are relatively strong, rising .5%+ today. Today's broad market action is indicative of a healthy consolidation after recent gains. However, I am still concerned with China hard landing/trade fears and Euro region sovereign debt worries. I still expect stocks to trade mixed at best this week. Nikkei futures indicate a down -40 open in Japan and DAX futures indicate an up +4 open in Germany tomorrow. I expect US stocks to trade mixed-to-lower into the close from current levels on tax hike worries, political concerns, profit-taking and more shorting.


Chris said...

Looks like someone hit the "Customize Design" button on their blog. I like it.

Anonymous said...

Thanks Chris.

Gary said...