Updated late Tuesday and Friday nights
Tuesday’s Close for May 12th, 2009
Written by: Mike Coval

Monday started with a new pretend selloff and then… nothing. It seems like every time the market gets up enough nerve to take a plunge, it quickly losses its nerve and returns to the previous highs. How long will this last? I keep saying that we are short term overbought and ready for a pullback. Until that happens I would suggest that any bullish trades are done in a conservative manner.

To watch a video of Tuesday’s market action, along with my thoughts, Click here. The DOW closed up 50 points at 8,469 while the NASDAQ closed lower by 15 to finish the day at 1,716.

Energy: Not a lot going on over in the slippery pits. Oil prices were fairly flat. Late in the day, the price of crude futures was trading up $0.31 at $58.81 a barrel. Track the price of crude with the Oil ETF, USO.

If we can’t get the markets to go down, then we’ll look for something else to fall.

Economic News: Home prices fell in 134 out of 152 metropolitan areas during the first quarter, according to the latest data released by the National Association of Realtors. Recent monthly data had begun to suggest a bottoming out of the market, but the lower-resolution data failed to suggest an improvement.

Financials: Shares of Citigroup, C fell $0.20 on Tuesday. The stock remains the most heavily shorted on the NYSE, according to data from the exchange. But after sliding to just about $1 in early March, the stock has rallied nearly 300% to trade near $4, frustrating the positions of short sellers.

The financial sector continued to rally through April and early May, and through last week, when the government released the details of its so-called "stress tests" of the banks. Finance ETF, XLF also pulled back a bit.

Technology: Advanced Micro Devices, AMD gained $0.13 as it continues to gain strength. Market research firm IDC issued a report saying that shipments of PC processor chips slid by 13% during the first quarter compared to a year ago, but AMD was able to pick up some market share. So how about selling the June $4.00 puts for a bullish trade?



Services: InterContinental Hotels shares, IHG rose 5%.The hotel operator said a firm hand on costs helped the firm beat wall Street's expectations even as its profit dropped 56%. Competitors WYN, HOT and MAR all closed down.

Gannett, GCI, the media giant fell $0.42 on increased selling. The industry group remains sluggish as more and more tech savvy consumers look for new alternatives to traditional advertising.

Good and or bad stocks to watch: WAG, CONN, TWGP, FDS, PFS

Homework: None Today

Cheers,
Mike