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Quote of the Day

Friday, March 23, 2012

March 23, 2012 -- Ah Friday, blessed Friday. I feel nervous when I can make an argument for the market -- either way -- bullish or bearish. I stated on yesterday's site that I've had my fill of this market. Let the Dow go to a new high over 14,000, and I'll just heave a sigh of relief.

 

I listen to the Bloomberg TV station most of the day, and I'll admit that I get rather tired of all those uber experts talking and predicting what the economy is going to do. The fact is that the market moves roughly six months to nine months ahead of the economy, so if you want to know what lies ahead for you and me, you'd best study the action of the stock and bond markets and forget about what the US or European or Asian economies are doing or going to do. I trust the wisdom of the stock market and distrust the experts and the news of the day.

 

At present, I have no particular or specific thoughts about what the market may be telling us. But my faithful PTI remains bullish, and as I've said maybe a thousand times before, "My PTI is smarter than I am."

 

From a Dow Theory standpoint, neither the Industrials nor the lagging Transports have bettered their recent March highs. I'd feel a lot more confident if they would leap over their March highs -- and if that happens I may add more to my DIAs.

 

At any rate, at the speed the Dow is climbing, it could be the next New Year before the Dow tops its old 2007 high of 14,164.53, so I'll just wait it out and go along with my PTI. Of course, it would help if the dividend yield on the Dow was attractive, rather than the below 2.5% level where it is today. I grew up in the era where you were tempted to buy a stock when it was selling at ten times earnings with a dividend yield of 6% or more. But "them days are gone forever."

 

I've been reading books by a few of the old time metaphysicians -- Florence Scovel Shinn and Emmet Fox. Wonder why I've had the urge to read them? Of course, they were writing during the dark Depression days, and much of their writings were colored by hard, and I mean very hard times.

 

I can't be the only one who's worried about the prevailing era of violence. Smith & Wesson, Colt and Sturm Ruger all manufacture guns with an emphasis on hand pistols. Sturm Ruger sold over a million "units" during the first quarter of 2012, and Sturm has now stopped accepting new orders. And that gave me food for thought.

 

I still have my GI issue Colt 45 and a pocket sized 32 cal. Beretta to remind me of the "good ol' days," which I remember all too well.

 

Technically, both the US and Europe are dead broke, and their GDPs would have to run wild on the upside to make the debt to GDP ratio more acceptable. How will it all end?

 

It will end with the central banks churning out junk fiat inflation-adjusted "money" in order to service the debts. Meanwhile, the precious metals and other tangibles are being bought up by millionaires and billionaires as they await their turns to feast on the remnants.

 

During the Depression wealthy individuals husbanded their dollars, and later got rich buying the battered remains of the Jazz Age of the twenties. It may not be that easy and cut and dried this time around. This time history may not Rhyme.

 

To end the story, I'll rely on my PTI, a mechanism that I've calculated on a daily basis since 1961. It hasn't turned bearish yet, so why should I? It reminds me of the old song, "I'll string along, as long as I have you."

 

As for gold, it continues to creep up toward the 1700s. Come to think of it, this is a creepy market. Nothing's moving fast -- just endless creeping.

 

Good night and have a fab weekend, and maybe buy a Sturm Ruger product, while you can still get one.

 

The world markets are under long-time pressure from deleveraging, correction, and contraction. This is because a corrective bear market was halted temporarily by the frightened Fed, which fed trillions of dollars into the system. Against this, stocks have pushed up as they responded temporarily to the actions of the Fed, which gives us the confused picture that we are now dealing with.

 

TODAY'S MARKET ACTION:

 

My PTI was up 3 at 6396. The moving average at 6360, so my PTI is bullish by 36.

 

The Dow was up 34.59 to 13080.73.

 

Transports were down 2.99 to 5217.82.

 

Utilities were down 0.03 to 452.76.

 

NASDAQ was up 4.60 to 3067.92.

 

S&P 500 was up 4.33 to 1397.11.

 

There were 2146 advances and 880 declines on the NYSE.

 

There were 67 new highs and 10 new lows.

May light crude was up 1.52 to 106.87.

 

Total Volume on the NYSE and associated exchanges was 3.4 billion.

 

Bonds: Yield on the 10 year T-note was 2.237. Yield on the long T-bond was 3.307. Yield of the 91 day T-bill was 0.081%.

 

Dollar Index was down 0.42 at 79.31. Euro was up 0.82 at 132.70 Yen was up 0.13 at 121.32. Currency Prices as of 1 PM Pacific Time.

April gold was up 19.90 to 1662.40. May silver was up 0.92 to 32.27.

 

GDX was up 1.01 at 49.76.

 

HUI was up 8.08 to 473.42.

 

CRB Commodity Index was up 2.20 at 314.47.

 

The VIX down 0.75 to 14.82.

 

Permanent Portfolio Fund (PRPFX) was down .36 to 48.28 (previous day closing). YTD Return: 4.75%.

 

Late Notes -- Not a bad closing, with the Dow up 35, and sadly, Transports lagging. The feature of the day was gold, with April gold closing up almost $20. And little mister silver up almost a dollar. Are they thinking about inflation somewhere ahead? I think so. Remember, the precious metals may rise well before obvious signs of inflation. They call it "discounting."