100 Point Advance

The Dow Industrials mounted a substantial rally today, up almost 100 points.  Days like this can help people forget the likes of last Friday when we saw a drop of more than 200 points.  The headline that GM lost $4.8 billion in the fourth quarter wasn’t enough to get any notice whatsoever.  The bold bulls decided it was largely a nonevent and bought them from the bell.  Of course, GM was down hard on the day.

The GM news hit the market about the same time as the durable goods orders were released.  The durable goods orders were up 1.3% on expectations of about 0.9% with demand higher for airplanes, machinery, CARS, and capital goods.  So, when GM loses $8.45 a share during a strong durable goods period, one could make the case that if durable goods orders were not so strong that GM could sell less vehicles and lose even more money.  Earnings were negative $8.45 a share on a stock that is trading at $23.  

On a little brighter note, MSFT (Mr. Softie to you, or is it Microsoft) announced some stronger earnings after the close and gave the after hours market a lift.  As we write this, the futures are up strongly and could put some upward pressure on stocks in the early going on Friday.  

Of course, during the day, Chipotle made its debut breaking underwriting at $22 and opening around $45.  McDonalds decided to spin off part of the company and had a great day doing so.  They retained a controlling interest in the company so they are smiling I’m sure.  

We, ever the contrarians, were disappointed in one article that said that Ralph Acampora thought the Dow was headed for 8400.  We have rarely agreed with Mr. Acampora on a short term basis so we were happy to read that he thinks this pullback to 8400 will set the market up for a large bull move, in his quantitative words “a gangbuster move going into the latter part of 2006, all of 2007, and probably 2008.”  At least you could be bullish under his interpretation of the up coming Years.

In spite of the sage advice of Mr. Acampora, the market is teasing the bulls again, rallying strongly on Thursday.  We are of the opinion that we have a little pop here due to the “oversold” (in some opinions) market and the end of the month happy time.  The test for the market is to climb above the highs of the month.  We don’t have an opinion on the actual attempt but will comment on any progress towards that goal if it develops.  We still recommend you Be careful…

Dow Industrials:  10,809.47  +99.73
RYVNX:  18.38
RYAIX:  21.79
TLT:  90.51
BEGBX:  13.30