Ho hum.

I'm sure glad football has started.  I'm getting a bit bored with the market.  The S&P 500 is up 1.5% this year.  We've had some ups and down but overall there hasn't been a lot of action all year.  At this time last year I was anticipating a big rally and we closed the year with a 16% rally in the S&P.  That would be fun.  I am anticipating a move like that again but I'm still thinking we have a bit more consolidating to do before we get there. 

The short term indicators have gone from extreme overbought and an extreme bullish sentiment near the end of July, to extreme oversold and extreme bearishness the day after Hurricane Katrina.  Now the recent rally has put us somewhere between neutral to overbought.  And after all of that the S&P 500 is up 1.5% for the year.  Ho hum.

Intel came out with their mid-quarter update after the close yesterday.  Sometimes that can be a market mover but this one was pretty neutral.  No big number to report and nothing terrible to worry about.  Ho hum. 

So what will be the next catalyst?  We know Greenspan has to make a decision on interest rates in a couple of weeks.  That should be fun.  Will he raise?  Some say that the hurricane and gas prices should be enough to get him to stop but this is Greenspan.  He seems to have inflation control as his primary objective so that is why he may continue raising.  But even if he does raise again, a suggestion that he is done, or close to it, could spark a rally.  Until then, I don't see what will light a fire under the market. 

If you looked at the charts you can probably find as many reasons to be bullish as reasons to be bearish right now.  Here's one for the bearish case;  The OEX option traders, usually considered "smart money" (not a contrary indicator) are buying puts at a rate not seen since December 2004, just prior to a selloff.


                            Chart provided courtesy of www.decisionpoint.com

Looking at the very short term indicators the market should rally off of any more declines.  That would mean we are still consolidating.  If we do get oversold and the market does not bounce back, that could be a sign that we could have some longer term trouble ahead.  I would welcome that as it would put us closer to a longer term buy rather than this up and down thing. 

Oil and the dollar were up slightly yesterday.  Bonds were flat.  I wish I had more to say.  Ho hum. 

That's all for today.  Currently 100% G fund.  Thanks for reading.  Have a great weekend!