As I said in the comments it was a very dull day.
There was no market direction set, nothing happened. Some hot stocks (GOOG, AAPL, RIMM, MA, BIDU, GRMN) got bid up but there was a broader sell-off that left me with little confidence. As early as 9:46 I noted: "Lots of big stuff going down, not liking the action at all." and by 10:35 we were resigned to market mediocrity as oil and gas prices rose to kill what little rallying there was.
The week following a witching is typically a bit softer, and the meandering activity displayed today might set the tone for the week. “It isn’t a heavy news week,” said Jay Suskind, co-head of trading at Ryan Beck. A decent amount of M&A activity did nothing for the markets today and the Homebuilder's Index dropped to a 16-year low of 28 (out of 100) which was foretold at 12:01 when I noted that the builders were headed south again.
It turns out Hong Kong is closed tomorrow, which makes today's 565-point gain look a little suspicious.
YHOO got some good news (I guess) as CEO, Terry Semel was finally forced to step down. It's funny how you can see the media mob forming around a CEO and they just won't put down their pitchforks until there's a hanging. Yahoo's brilliant turn-around strategy is to keep Semel on as "non-executive" chairman and bring in co-founder, Jerry Yang as the new CEO and Susan Decker will become President. "Meet the new boss, same as the old boss."
Yahoo also warned that slower growth in display advertising this quarter would offset a better-than-expected performance from its recently upgraded search advertising business. As a result, it expected second-quarter revenue to land in the lower half of its previously stated outlook which, excluding the cost of payments to advertising partners, was projected in April at between $1.2 billion and $1.3 billion.
We had rolled our YHOO Jan $30s this morning to Oct $27.50s as I was concerned the rumors were real. Still the June $27.50s we sold will be solidly in the money this morning but there is no reason to panic and take out the caller, just think of it as very good protection on our longer gains.
Oil posted a $69 close today as the barrel count dropped to just 85M barrels scheduled for July delivery but they churned traded 194M July barrels and many brokers chose today to raise their estimates for the year, mostly to the mid $60s with GS still calling the high at $72.50 ($2.50 higher than TBoone!). I still think either oil or the markets have to break here but we'll see what happens as we test $70 and 13,700 at almost the same time.
Gold is holding $660 but the dollar got rejected from 83 and looks to be retesting the 50 dma at 82.25. Copper is consolidating around $330 and that's another thing the world cannot afford to see break out. In a low-data week, it's amazing how ANY peice of data can become critical and the markets may end up fixating on commodity pricing by mid-week.
