Monday, March 20, 2006 will, with little doubt, go down in anonymity. One of the most boring and eventless trading sessions in history appropriately reflected the energy and demeanor or this morning's opening bell ringer, Warren Buffett. The session trickled north and south of even for most of the day and ended with major indices going nowhere.
To be fair, we did see some movement from the home builders sector, which slipped about 2%, erasing a chunk of last week's gains. I didn't see any particular reason for the weakness other than to say that last week's bounce was just that: a bounce. Building Materials Holding flirted with having a serious down day, but recovered to close near even.
Behind the scenes, oil took a 3% spill, slapping energy-related equities with 2-3% losses, depending on which sub-sector you observe. I continue to believe oil will frustrate the energy bulls throughout the year. However, I keep a close eye on the news, both to catch any surprises that may arise and to judge when to get long again.
Overall, market seems to be on hold in preparation for digesting tomorrow's PPI number, which will be the last major economic figure to be released before next week's FOMC meeting. As usual, I will be digesting the market's reaction to the number, rather than the number itself, for clues to the market's current psychological condition. Yes, I will be observing with a bias for clues to get short, but not so much so that I end up seeing what I want to see rather than what's really there.
Disclosure: Short BMHC