Monday, January 25, 2010

After a strong start, markets ended choppy

Bargain hunters gave stocks a boost but there was no follow thru. Dow gained a modest 23, advancers over decliners 3-2 & NAZ was up 5 ahead of Apple (AAPL) earnings expected after the markets close. Buyers returned to bank stocks lifting the Financial Index off its important 190 floor. But late day selling limited earlier gains.


% Change

The Alerian MLP Index rebounded 3+ to the 297s, ready to continue its climb over 300. The Dow Jones REIT Index moved up 1+ on an otherwise gloomy day with the foreclosure on one of the biggest housing projects in the country. The yield on the 10-year Treasury rose 3 basis points to 3.63%. It's been near 3.60% for over 1 month. The VIX, Volatility Index, dropped over 2, bringing it back to the 25s as market fears ease.

Alerian MLP Index --- 2 months

Dow Jones REIT Index --- 2 months

Oil hardly budged, gold was firmer but could not break back thru 1100.

CLH10.NYM..Crude Oil Mar 10..74.59 ..Up 0.05

GCF10.CMX..Gold Jan 10..1,095.20..Up 6.00

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Below are charts for 2 of the biggest banking systems. JPMorgan (JPM) is considered the best of the big banks while Citi (C) is probably one of the worst. Their charts are similar over the last 6 months. JPM is pretty much flattish while C is also flat but with a downward slope, not able to hold $4. These charts mirror the chart for the Financial Index over the same period, bumpy but flat at best.

JPMorgan --- 6 months

Citigroup --- 6 months

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The State of the Union speech on Wed will call for tax breaks on "middle class" incomes. Expectations are high on Apple's earnings report, the stock gained 5.33 bringing it well over 200. Cooler heads are prevailing & Ben Bernanke is expected to retain his job next week. Bulls were talking about the 5% correction giving a good opportunity to "buy on the dips." But there are plenty of bears out there.

Dow Jones Industrials --- 2 months

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