Click Here to Subscribe Now! Try a 3-month trial for only $68

Quote of the Day

Friday, January 13, 2012

January 13, 2012 -- "The market always does what it's supposed to -- but never when." An old and tried and true Wall Street proverb.

 

I've already talked at length about the avoidance of pain. The voters don't want to feel pain, the politicians don't want the voters to feel pain, and the central banks don't want to feel the "avoid-pain" pressure from he politicians.

 

On the other side of the fence stand the rating agencies. The agencies are still smarting from their disaster of screwing up on mis-rating the mortgage packages. So to make up for it, the rating agencies are now clamping down on the ratings of the European nations with even France's credit rating being dropped one notch.

 

Turning to another trouble areas, it now seems doubtful that Iran would dare shut down the strait of Hormuz, Ironically, with a world over-abundance of oil, the price of crude is soft.

 

As the world deleveraging process continues, commodity prices turn soft. Deleveraging means that people will be tightening their belts and using less of everything.

 

However, I don't get the feeling that Americans believe that hard or harder times lie ahead. All one has to do is survey the car-filled freeways or check out the crowded restaurants to realize that Americans, for the most part, are still sipping from the punch bowl.

 

As for the timing of trouble, we should have our eyes glued to the stock market. If or when the Dow breaks below 12,000, that would be my first danger signal. Below 11,000 on the Dow would be my second danger signal. And below Dow 10,000 would be my signal for "all out trouble." In the meantime, we wait and watch and avoid doing anything stupid like loading up on stocks.

 

TODAY'S MARKET ACTION:

 

My PTI was down 6 at 6349. The moving average at 6318, so my PTI is bullish by 31.

 

The Dow was down 48.96 to 12422.06.

 Transports were down 33.44 to 5175.95.

 

Utilities were down 0.64 to 450.90.

 

NASDAQ was down 14.03 to 2710.67.

 

S&P 500 was down 6.41 to 1289.09.

 

February crude was up 0.21 to 99.31.

 

Total Volume on the NYSE and associated exchanges was 3.7 bn.

 

There were 1060 advances and 1972 declines on the NYSE.

 

There were 100 new highs and 25 new lows.

The Big Money Breadth Index was down 1 at 970.

 

Bonds: Yield on the 10 year T-note was 1.87. Yield on the long T-bond was 2.91. Yield of the 91 day T-bill was 0.03%.

 

Dollar Index was up 0.69 at 81.46. Euro was down 1.60 at 126.72. Yen was down 0.33 at 130.04. Currency Prices as of 1 PM Pacific Time.

February gold was down 16.90 to 1630.80. February silver was down 0.60 to 29.52.

 

My Most Active Stocks Index was down 8 at 250.

 

GDX was down 0.67 at 54.05.

 

HUI was down 7.35 to 519.38.

 

CRB Commodity Index was down 2.16 at 307.70.

 

The VIX was up 0.44 to 20.91.

Permanent Portfolio Fund (PRPFX) was up 0.11 at 47.32 (previous day closing). YTD Return: 2.67%.

 

 

Late Notes--- Gad, Italy's credit rating dropped two notches, but the US stock market is not interested. The Dow lazily sinks about 60 points and whatever excitement lies ahead will occur over the three-day weekend.

 

This could be an eventful three-day holiday weekend.

 

My very best to all my subscribers Friday to Tuesday -- and my best after that.

 

Russell

 

After working with the Dragon program, I have a sneaking feeling that voice commands are the coming thing. You get home and say "lights on." Then you say "TV on to the History Channel." At any rate, check out a stock with the symbol NUAN, Nuance Communications.