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Quote of the Day

Tuesday, May 01, 2012

May 1, 2012 -- I listened to Nobel Laureate Paul Krugman on Bloomberg yesterday. Krugman stated that the US debt was no problem -- because in the passage of time the debt would literally disappear. And how would it disappear he was asked. He explained that as prices rise and the GDP grows, the US debt would cease to be a factor. Krugman warned that the US government must continue to spend and to spend on important projects. Never once did Krugman use the word "inflation." So the Krugman formula was to inflate the debt away. Russell comment -- And at the same time say good bye to the middle class in America.

 

In the meantime, with the VIX down to 17.15, volatility has all but disappeared. The retail public, licking its wounds, has left the stock market. The pros are on the sidelines, preferring to wait for more active times. Every day we hear of another hedge fund tossing in its chips. It's a tough market to make money in -- too tough for some.

 

As for gold, it too is dead in the water. The wealthy buy gold as a reservoir of eternal wealth, not as a profit-making vehicle. Gold is where the wealthy keep a portion of their assets. They know gold will still be considered wealth when their great grand-kids inherit it.

 

TODAY'S MARKET ACTION:

 

My PTI was up 6 at 6404. The moving average at 6373, so my PTI is bullish by 31.

 

The Dow was up 65.69 to 13279.32.

 

Transports were up 55.73 to 5285.97.

 

Utilities were up 2.43 to 472.96.

 

NASDAQ was up 4.08 to 3050.44.

 

S&P 500 was up 7.91 to 1405.82.

 

There were 1960 advances and 1097 declines on the NYSE.

 

There were 218 new highs and 9 new lows.

 

Total Volume on the NYSE and associated exchanges was 3.73 billion.

 

Bonds: Yield on the 10 year T-note was 1.924. Yield on the long T-bond was 3.120. Yield of the 91 day T-bill was 0.096%.

 

Dollar Index was up 0.05 at 78.82. Euro was down 0.10 at 132.32. Yen was down 0.64 at 124.72. Currency Prices as of 1 PM Pacific Time.

June gold was down 1.80 to 1662.40. July silver was down 0.086 to 30.93.

 

June light crude was up 1.29 to 106.16.

 

My Most Active Stocks Index was up 7 at 291.

 

The Big Money Breadth Index was up 4 at 1034.

 

GDX was up 0.05 at 46.44.

 

HUI was up 2.03 at 445.30.

 

CRB Commodity Index was up 2.00 at 307.95.

 

The VIX was down 0.58 at 16.57.

 

Permanent Portfolio Fund (PRPFX) was down 0.09 to 48.61 (previous day closing). YTD Return: 5.47%.

 

Late Notes-- Ho hum. Another day with the Dow up over 130, but then came the selling at the close. Nevertheless, the market is making upward progress, it's simply hard on the nerves, but my PTI remains bullish, and that's what counts.

 

Gold closed down 1.80, but still well above 1600. Gold is a measure of wealth, which is basically why wealthy people hold it in large quantities.