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Quote of the Day

Wednesday, March 07, 2012

March 7, 2012 -- I've been reading three or four detailed reports on the "coming great depression that the US is heading into." The depression will be based on China and the rise of the yuan as the world's new reserve currency. Already China has arranged swap trading with a number of countries whereby China and these nations can do business with each other using the yuan without having to convert to dollars first. Thus the yuan is gaining popularity as an international trading currency and and at the same time it is edging the dollar out.

 

But wait, if a depression looms, shouldn't the stockmarket be discounting such an enormous and destablizing event? We already know that the stock market passed its peak of upside momentum on January 3. Yesterday the Dow showed its first crack in the structure when the Dow fell 203 points in the day. I wrote that the test would be on the following day. Would the Dow continue down or not? Last night, the Dow futures bounced back 58 points, but this recovered only 29% of Tuesday's Dow losses. The futures are one thing, but the actual close of the market tells the real story. The close of the market actual Dow and the S&P give us the "external" story, and the volume tells us the "internal" story.

 

Time to take a look at Dr. Copper, so-named because copper is used in almost everything that is made worldwide. When the economic world is humming, copper heads north. When the world's economy is slowing down, Dr. Copper heads south. The chart below shows copper trending up through January. Then we have the stretch from January to the present in which copper appears to have had second thoughts. Under 370 and copper will appear to have topped out. We'll keep a close eye on Dr. Copper.

 

 

 

TODAY'S MARKET ACTION:

 

My PTI was up 4 at 6379. The moving average at 6349, so my PTI is bullish by 30.

 

The Dow was up 78.18 to 12837.33.

 

Transports were up 26.41 to 5073.66.

 

Utilities were down 0.35 to 452.18.

 

NASDAQ was up 25.37 to 2935.69.

 

S&P 500 was up 9.27 to 1352.63.

 

There were 2392 advances and 645 declines on the NYSE.

 

There were 57 new highs and 13 new lows.

April light crude was up 1.46 to 106.16.

 

Total Volume on the NYSE and associated exchanges was 3.5 bn.

 

Bonds: Yield on the 10 year T-note was 1.97. Yield on the long T-bond was 3.12. Yield of the 91 day T-bill was 0.086%.

 

Dollar Index was down 0.17 at 79.69. Euro was up 0.43 at 131.49. Yen was down 0.70 at 123.14. Currency Prices as of 1 PM Pacific Time.

April gold was up 11.80 to 1683.90. May silver was up 0.80 to 33.58.

 

My Most Active Stocks Index was up 9 at 283.

 

The Big Money Breadth Index was up 4 at 1016.

 

GDX was up 0.20 at 52.67.

 

HUI was up 0.46 to 502.86.

 

CRB Commodity Index was down 0.21 at 314.24.

 

The VIX was down 1.80 to 19.07.

 

Permanent Portfolio Fund (PRPFX) was down 0.57 at 48.34 (previous day closing). YTD Return: 4.88%.

 

Late Notes -- Dow recovered less than half of yesterday's losses, leaving the picture unclear and frustratingly neutral.

 

As for gold, up 11 dollars today but under 1700. I'm just staying with my own position. I think time is on the side of the patient holders.