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Quote of the Day

Tuesday, April 24, 2012

April 24, 2012 -- "And while it's Spain on the precipice today," said Matthew O'Brian in the Atlantic.com, "tomorrow it will be Italy. Even France won't be far behind. The longer Germany insists on cuts instead of stimulus for its troubled neighbors, the worse the problems will get." Will the Fed follow Germany and vote for austerity? I don't think Bernanke will go down that path.

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No matter what you hear, the action of the Dow exerts a huge influence on the retail public. When you are asked "How's the market?" the answer is usually given in terms of the Dow. The daily chart of the Dow below is a picture of uncertainty. The Dow has been fluctuating around its 50-day moving average. The important 50-day MA is the average price that people have paid for the Dow over the last 50 days of trading, and it is a measure that all serious investors take seriously.

 

The Dow could easily set the course for the coming presidential election. After all this backing and filling. If the Dow turns decisively down from here, I think it will be telling us that business and the economy will be soft and dreary by election time. If so, Obama will be packing his clothes. BUT if the Dow climbs out of its current sleepy-time posture and heads decisively northward, then I believe we'll be treated to four more years of the Barack.

 

Below, the Dow does a tight-rope act and the 50-day moving average is the tight rope. RSI is neutral at 50.

 

 

 

 

 

The Housing Index is shown below and the index better hold above 116. Note that it is now fluctuating below its 50-day MA.

 

 

 

 

I've been fascinated by the rise in the stocks of gun manufacturers. I showed you Sturm Ruger a few days ago. Here's the other biggie. And far above its 50-day moving average. Is making and selling pistols the hottest game in town? And is everybody going to "stand their ground?" Smith and Wesson is looking tired and has not made a new high since early April. Note the recent drop-off in volume.

 

 

 

 

 

Strange figuring -- Apple now comprises 4.4% of the capitalization of the S&P 500. Only four other stocks have been in the 4% club. They are MSFT, GE, CSCO, and XOM. MSFT, GE, XOM stayed in the 4% club for over a year. CSCO only lasted a month. How long can Apple stay in the 4% club? We'll know soon enough. My bet -- not that long. Apple closed below its 50 day MA.

 

 

 

 

TODAY'S MARKET ACTION:

 

My PTI was up 3 at 6383. The moving average at 6371, so my PTI is bullish by 12.

 

The Dow was up 74.39 to 13001.56.

 

Transports were up 60.92 to 5246.73.

 

Utilities were up 3.08 to 461.70.

 

NASDAQ was down 8.85 to 2961.60.

 

S&P 500 was up 5.03 to 1371.97.

 

There were 2038 advances and 1021 declines on the NYSE.

 

There were 66 new highs and 25 new lows.

 

Total Volume on the NYSE and associated exchanges was 3.6 billion.

 

Bonds: Yield on the 10 year T-note was 1.973. Yield on the long T-bond was 3.127. Yield of the 91 day T-bill was 0.086%.

 

Dollar Index was down 0.17 at 79.36. Euro was up 0.71 at 131.48. Yen was down 0.67 at 123.30. Currency Prices as of 1 PM Pacific Time.

June gold was up 11.20 to 1643.80. May silver was up 0.21 to 30.75.

 

June light crude was up 0.44 to 103.55.

 

My Most Active Stocks Index was up 9 at 288.

 

The Big Money Breadth Index was unchanged at 1020.

 

CRB Commodity Index was up 0.89 at 301.29.

 

The VIX down 0.87 at 18.10.

 

Permanent Portfolio Fund (PRPFX) was down 0.34 to 47.97 (previous day closing). YTD Return: 4.08%.

 

Late Notes -- Lowry's Selling Pressure Index is now a fat 130 points above their Buying Power Index. The "internal stock market" is not looking that healthy. Me, I'm watching from the sidelines. I need my sleep.

 

Dow opened up over 100 points. Closed sloppy -- up 74, with Transports up 60 and Utilities up 3. Breadth 2 to 1 on the upside. But only 66 new highs, showing that upside momentum is easing.

 

Apple closed down 11 to 560 on 34 million shares. The Street after the close is anxiously awaiting Apple's report. How many iPhones and iPads did they sell??? -- ridiculous. Too much hype for one stock. Somebody's going to take a bite out of the Apple.