Monday Morning Musings

Markets are slightly higher this morning after another rally Friday to record levels.  Last Thursday the market started to pull back, and many folks were hoping for at least a little correction.  But stocks came roaring back on Friday continuing to frustrate those hoping for a better buying opportunity.

There isn't much in the way of market moving news out this morning.  The big news this week will be Bernanke's testimony before Congress.  Many investors are wondering when the Fed will begin to taper off their asset purchases and will be paying close attention to Bernanke's comments in that regard.

There was some M&A news this am with Yahoo buying social network Tumblr for $1.1 billion.  That's a pretty nice price tag.  To be honest, I've heard of Tumblr but never looked at the site.

Asian markets were higher overnight.  China new home prices rose 4.9% yr/yr.  Hong Kong's unemployment rate held at 3.50%.  And Japan said its economy is "gradually improving".

Europe's markets are mixed today with peripheral markets lower.  Anti-austerity protests were staged in Rome over the weekend.

The dollar is lower today after a big spike Friday, but commodities remain challenged.  Gold prices are a little lower near $1352, back down near April lows.  Oil prices are a bit weaker to $95.85.  But ag prices are breaking down to new multi-year lows.

The 10-year yield is down a bit to 1.94%.  And the VIX is up 5% but still hovering near this 13 level where it has been bouncing above and below for most of the month of May.

Trading comment: I feel like I have been saying the same thing about the market for weeks now.  While the indexes never seem to pull back in any meaningful way, there continues to be some group rotation beneath the surface.  Today for example, consumer stocks are pulling back while energy issues are rallying.  So there are trading opportunities around these rotations as certain sectors get overbought.  Also, stocks breaking to new highs from recent consolidations also are working well in this market.