Dull Start to 2Q

Tonight’s post is shortened by our indulgence in the NCAA basketball championship.  We thought the game might be a little more interesting than it was.  Between the two teams, Florida just couldn’t miss a shot whether it was a three pointer or not while Ohio State just could not get the ball in the hoop.  

Market Action:
The market opened up probably just because it was Monday and the first of the month/quarter.  The price strength was not there and the early buying led no where.  When the ISM manufacturing index showed a slightly lower number than expected, the market sold off a bit.  

The Dow traded in a narrow range on Monday but biased upward while the NASDAQ was biased downward but managed to end positive on the day.  The NASDAQ continues to under perform the Dow and, eventually, this will be more pronounced.  We hope “eventually” means this week.

Real Estate:
With the New Century Financial announcing it needed some protection under the bankruptcy laws, the real estate part of the market didn’t do too well in Monday’s market.  

Last Friday, another company released some news about their mortgage situation.  MTB (M&T Bank Corp) said that they were having some trouble with its Alt-A mortgage loans, specifically that they were having difficulty selling them in the market place.  MTB made some comments about not wanting to mark these assets to market especially when they were not getting the bids MTB had hoped, so MTB had decided to keep them and hope (that word is ours).  

Opinion/Analysis:
With not much in the way of new information from Monday’s trading, we have no additional comments from last week.  The market seems to be struggling to keep its head above water and we think it will fail in that endeavor very soon.  There seems to be a strong bullish contingent that believes the drop we had about a month ago was good for the market because it created some bargains.  Maybe the market will oblige them but we have taken the opposite position—out and short.  

Dow Industrials:  12,382.30  +27.95
VIX: 14.53
HUI:  345.16 (big move +7.50)
QQQQ:  43.59
QQQRR: 1.42 bid
QQQRS: 1.93 bid (own)
RYVNX:   17.15 (own)
RYAIX:  21.67
RYCWX:  36.38 (own)
TLT:  88.10
BEGBX:  13.90