Monday, October 10, 2005

Stocks Slightly Higher Mid-day as Energy Stocks Resume Decline

S&P 500 1,194.04 -.16%
DJIA 10,308.00 +.16%
NASDAQ 2,091.03 +.03%
Russell 2000 642.25 -.32%
DJ Wilshire 5000 11,922.44 -.16%
S&P Barra Growth 572.70 +.05%
S&P Barra Value 617.54 -.29%
Morgan Stanley Consumer 579.78 +.22%
Morgan Stanley Cyclical 696.00 -1.39%
Morgan Stanley Technology 494.86 -.05%
Transports 3,686.65 +.21%
Utilities 409.72 -.99%
Put/Call .96 +3.23%
NYSE Arms 1.28 +46.06%
Volatility(VIX) 15.08 +3.36%
ISE Sentiment 126.00 -21.25%
US Dollar 89.52 +.39%
CRB 324.80 -.13%

Futures Spot Prices
Crude Oil 61.00 -1.36%
Unleaded Gasoline 179.10 -2.09%
Natural Gas 12.81 -3.15%
Heating Oil 193.75 -1.15%
Gold 477.90 +.04%
Base Metals 133.49 -.09%
Copper 180.60 -.14%
10-year US Treasury Yield 4.35% -.36%

Leading Sectors %
Disk Drives +.93%
HMOs +.48%
Biotech +.41%

Lagging Sectors
Oil Service -1.75%
Energy -2.01%
Homebuilders -2.19%
BOTTOM LINE: The Portfolio is slightly higher mid-day on gains in my Energy-related shorts and Internet longs. I added to my IWM and QQQQ shorts this morning and then covered them, thus leaving the Portfolio 50% net long. The tone of the market is modestly negative as the advance/decline line is slightly lower, sector performance is mixed and volume is below average. Measures of investor anxiety are higher. Today’s overall market action is negative given the decline in energy prices and recent market losses. Shipments of Brent crude, the benchmark for two-thirds of the world's oil, are set to rise 21% in November from October, according to the tanker-loading program. U.S. supplies of distillates heading into the winter are already 2.7% higher than the five-year average for this time of year. This is especially bearish for crude considering global demand is now falling. Look for the International Energy Agency to cut its 2005 world oil demand growth forecast for the fourth consecutive month tomorrow on falling consumption in the U.S. and China. Natural gas storage is also 40 bcf above the five-year average for this time of the year, even with the massive shut-ins in the Gulf. I expect US stocks to trade modestly higher from current levels into the close on short-covering.

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