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Quote of the Day

Friday, March 30, 2012

March 30, 2012 -- "There are no friends; There are no enemies; There are only teachers." An old metaphysics saying.

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In the next five years, a total of $5.9 trillion in debt will come due. The average rate of interest on the US debt is 2.2%. The average maturity on the Treasury's marketable debt is 62.8 months. The interest expense on US publicly held debt is $454 billion. We're compounding ourselves into eternity. What happens if or when interest rates rise, which they will?

 

I note that Thursday night the Dow futures were quoted down 5 dollars. The market will probably open down (at least for the Dow). Then for the rest of the trading session we'll see the Dow grinding higher, finally turning plus by the end of the day. 

 

I think what we're seeing is the retail public buying stocks on the basis of well publicized "good" earnings. The public acts on the obvious news of the day and on immediate or near-term prospects. Big, sophisticated money is selling into this slowly rising market. Big money is selling, not buying, which is why volume is so low. When stocks fall, the big money comes in and buys a bit, but the big boys never allow the market to fall hard. Eventually the institutional buying will dry up (they've sold enough) -- and the market will dump.

 

Churning -- when there's a lot of excited activity and volume, but the market is going nowhere.

 

No, this is not my kind of market. I like a market that opens a bit higher and keeps on climbing. I'll be perfectly happy to sit on the sidelines and watch the action. If the Dow goes to new highs, so be it, it will go to new highs without R. Russell. I like my sleep, and I'm not (at least I don't think I am) greedy.

 

Meanwhile, gold seems content to consolidate above 1600, which, I think, is good action. Of course, I'll be happier if gold climbs into the 1700 range.

 

TODAY'S MARKET ACTION:

 

My PTI was up 4 at 6393. The moving average at 6364, so my PTI is bullish by 29.

 

The Dow was up 66.22 to 13212.04.

 

Transports were down 3.05 to 5253.16.

 

Utilities were up 2.89 to 458.93.

 

NASDAQ was down 3.79 to 3091.57.

 

S&P 500 was up 5.19 to 1408.47.

 

There were 1754 advances and 1822 declines on the NYSE.

 

There were 116 new highs and 11 new lows.

May light crude was down 2.63 to 102.78.

 

Total Volume on the NYSE and associated exchanges was 3.77 billion.

 

Bonds: Yield on the 10 year T-note was 2.215. Yield on the long T-bond was 3.348. Yield of the 91 day T-bill was 0.071%.

 

Dollar Index was down 0.25 at 78.92. Euro was up 0.47 at 133.39. Yen was up 0.67 at 120.78. Currency Prices as of 1 PM Pacific Time.

April gold was up 17.00 to 1671.90. May silver was up 0.49 to 32.48.

 

My Most Active Stocks Index was up 9 at 319.

 

The Big Money Breadth Index was up 8 at 1044.

 

GDX was up 0.48 at 49.54.

 

HUI was up 5.11 to 472.89.

 

CRB Commodity Index was up 2.52 at 308.46.

 

The VIX up 0.02 to 15.50.

 

Permanent Portfolio Fund (PRPFX) was down 0.01 to 48.52 (previous day closing). YTD Return: 5.27%.

 

Late Notes -- Dow is up 60, all during the session, and "softened" as usual near the close.

 

I'm very impressed with gold's action, and I'll have some important thoughts on Monday's site regarding gold and China. The real surprises for gold have yet to be seen. Is there a Chinese put under gold?