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Typical Bears Versus Conventional Bulls

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Treasuries have been paid a visit from buyers this AM, as the 10- Year yield (TNX.X) dropped -0.20 to 3.960%, while the 30-Year yield was also down -0.03 at 4.812%.

The weekly MBA Mortgage Applications composite number slid slightly for the second week in a row. The composite number came in at 1059.5, down from 1079.7 one week ago. Interestingly, the refinancing portion of the composite dropped, falling to 5159.6 from 5355.4. Unlike last week, the purchasing index rose slightly to 359.7 from 344.7. Overall the housing market still remains very stout, as long as interest rates remain below 7%.

The Chain Store Snapshot grew 0.5% in the last week, which was the first gain in three weeks of decline. The numbers come as temporary relief with retail sales lagging in August. The Bank of Tokyo-Mitsubishi is projecting growth of only 1.5%, which implies only 3% real growth...enough to keep the economy growing.

Briefing.com reported at 12:09 that they were hearing a rumor that the Secret Service issued an alert for a man with explosives, who was believed to be heading for Washington D.C.

National Semi reported results inline with analyst expectations of 0.01 cent per share. The further commented on potential "pockets of opportunity", but made cautious comments for the following holiday season. The stock was trading at $14.68, when it was halted at 12:04 EST. Resuming trading at 12:41 EST, National Semi reopened at $14.25.

Chart of: Market Volatility Index, Daily.

Once again the VIX is over 40 after yesterday's trading, and is on our radar screen of things to be concerned about. With the MACD turning up out of the negative region, and the daily Stochastics entering the overbought region, bears are keeping a close eye on this one. The VIX has a normal range of 20-30, where 20 is a regular market bottom and 30 is an ordinary market top. However, given this markets outlandish moves, we are far above what would be "typical".

Mark Whistler
Option Investor


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