Thursday, January 7, 2010

Markets edge higher without conviction

Stocks were treading water but late day buying brought the Dow to a new 2009-10 closing high, above 10,600. Dow gained 33, advancers ahead of decliners 4-3 but NAZ was off 1. Banks had another good taking, the Financial Index was up 15 from is recent lows of 190. 6 month charts for 2 eminent banks are shown below. That time has been good for many stocks, but not banks.


% Change

JPMorgan --- 6 months

Wells Fargo --- 6 months

The Alerian MLP Index cooled off, retreating 3 to the 292s. Enterprises Products Partners (EPD) is responsible for some off the decline after their large unit offering, the units fell 83¢. The 6 month chart for AMZ is still outstanding, up about 1/3! The Dow Jones REIT Index rose 2, taking it above the previous high in Sep & needing just 8 more to reach a new yearly high. But there are clouds (high vacancy rates) in the sky. Junk bond funds continue hot, many yields have fallen to only 10%. Treasuries were mixed, the yield on the 10-year Treasury bond was up 1 basis point to 3.82%.

Alerian MLP index --- 6 months

Dow Jones REIT Index --- 6 months

Oil & gold had mild pullbacks. But cold weather is working in favor of gold & long term fundamentals are good for gold.

CLG10.NYM..Crude Oil Feb 10..82.62 ..Down 0.56

GCF10.CMX..Gold Jan 10..1,133.10 ..Down 2.80

Gas pump prices have surged past 2009 highs as winter storms & speculative money are sending oil prices higher. The average gallon of gas was $2.71 yesterday, up 90+¢ per gallon from a year ago. In less than a month, crude prices have jumped 20% & yesterday peaked above last year's high dragging pump prices to new 15-month highs.

National Unleaded Average

Current Avg.$2.709$2.876$2.979$2.869$2.332$3.069
Yesterday Avg.$2.685$2.851$2.953$2.847$2.328$3.063
Week Ago Avg. $2.639$2.802$2.902$2.805$2.294$3.018
Month Ago Avg. $2.634$2.797$2.897$2.815$2.268$2.985
Year Ago Avg. $1.727$1.834$1.899$2.418$1.551$2.041

Highest Recorded Average Price:
Regular Unl.$4.1147/17/2008

Source: AAA

Sears Holding (SHLD) was the best performing S&P 500 stock gaining 10.31 (12%) to a 15 month high on a favorable holiday sales report & upward guidance for earnings.

Sears Holdings expects 4Q gains on Kmart strength

Sears Holding --- 6 months

The Federal Reserve issued a warning to banks to prepare for rises in short term interest rates. “In the current environment of historically low short-term interest rates, it is important for institutions to have robust processes for measuring and, where necessary, mitigating their exposure to potential increases in interest rates,” was the official announcement. That means The FED will sell short term Treasury debt, of which it has a lot, driving interest rates up. Markets will shudder when this takes place.

The jobs report tomorrow morning will direct the markets.

Dow Jones Industrials --- 6 months

Nasdaq --- 6 months

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