Thursday, March 29, 2007

Soft Bounce For Stocks As Oil Jumps Again

After significant selling over the past two sessions, the Dow, NASDAQ, S&P 500 and NYSE all posted modest gains on Thursday. Volume was again moderate, but better than what it has been. Once again, the NASDAQ caught the short straw, making up less than a single point. It's interesting to note that NASDAQ stocks, of which many are young tech companies and thus, somewhat speculative, are the laggards here. Apparently, market movers want more stability than risk. We are still in a risk-averse, tepid market. Gains are going to be difficult to come by.

Dow 12,348.75 +48.39; NASDAQ 2,417.88 +0.78; S&P 500 1,422.53 +5.30; NYSE Composite 9,279.08 +60.55

Advancing issues held sway over decliners by about a 3-2 margin, and there were 237 new highs to 97 new lows, roughly in line with the past few days. As always, a sharp eye is out on the new highs-lows ratio. Nothing remains steady for very long, so when this begins to turn, we'll all be aware that something big is happening.

At the moment, market sentiment is still nervously negative. Upward momentum is far from evident and there hasn't been follow-through on many of the up days.

Today's rise was nothing short of more market pumping by institutions, who still naively believe that mammoth profits for Big Oil must be good for them. It's difficult to wrap one's mind around this kind of clubby thinking, but it exists - today is yet another example as the price of crude leapt ahead $1.95 to close at $66.03 on the NY Merc. Shameful.

Stocks should have taken another wallop, but the manipulators were in early and kept indices in the green all day long. As pointed out yesterday, Big Oil is the bane of the American consumer, and sky high gas prices will send the fragile economy into a death spiral if not contained soon.

To dispel the myth that all commodities move in unison and that markets are not rigged, gold and silver both sold off today, though the hit on gold was larger, drooping $5.30 per ounce to $667.60. Silver lost only 12 cents to fix at 13.34. Both of the shiny metals are still rangebound and nowhere near breakout or breakdown.

Hard to believe tomorrow is Friday and the end of the trading week. The tally for up days vs. down since the beginning of the correction is now close to even at 14 down, 13 up. Regardless of that tight race, the Dow, even after today's gains, is down nearly 450 points over the past 6 weeks. Those number don't lie.

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