Quote of the Day
Tuesday, May 08, 2012
May 8, 2012 -- Where did April go? We're into May already, and here in La Jolla it's finally warming up. I can hear the kids shouting and laughing. The kids are down at the cove and the water is still 58 degrees; I don't know how they stand the cold water. We just had a "great white shark" scare, which means everybody's got to stay near shore. The seals are climbing up on the beach, and the great whites love seal meat.
I play the Bloomberg channel on TV all night long, and every few hours I wake up to glance at the futures. I don't know why I do this, because the futures don't tell you anything specific about tomorrow's stock action. It's just a habit picked up after 60 years of watching the Dow and the Transports.
I often wish it all was as easy as it was back in the '40s and '50s when all I had to think about was the three D-J Averages and the Dow Theory. Barron's just asked in a headline, "Is the Dow still relevant?" With the big action in many of the Internet stocks, that's a good question.
My answer is that the Dow is supposed to represent the manufacturing capabilities of the US. A lot of the Internet devices (iPhones) are manufactured in China (Apple) and other Asian spots. So I still like the Dow for what it is. Leave it alone, Dow Jones. Besides, the Dow is "owned" by Dow Jones and so is Barron's. Can you imagine, Barron's doubting its own time-tested barometer. Leave the Dow alone, guys, it's got a long history going back before 1900, and the Internet is "just" a new-comer.
A lot of stocks are sitting on double bottoms, and it wouldn't take much to send these stocks below their double bottoms. A typical example is Google, which you see on the chart below. A price of 590 would break Google down, leading to a test of the last low at 570. Just something to think about. Both MACD and RSI on Google are neutral.
I'm wondering about oil -- the charts of XOM and COP don't look that appetizing. Is this a product of the world deflation that I've been talking about? I've thrown in a chart of Chevron just for emphasis.
Have the people gone mad or are the dictators slipping? In China, a blind human rights protestor asked for American help, and China did not jail him. Mr. Chen asked to go to America on Hillary's plane, and NYU offered Mr. Chen a scholarship to study law.
In the meantime, crowds of Russians rioted as they protested President Putin's inauguration. Only 120 were jailed.
By the way, speaking of Hillary Clinton, I'm convinced that she'll run for president of the US next time around. Furthermore, I think she can win and will win. She's done a great job as Secretary of State: fearless, outspoken and hard-working. She's got my vote. I'll be age 92 when Hillary runs, but I'll get to the voting booth (nah, I vote by mail these days).
Seriously, now that everyone has a cell phone, the world's dictators have to be careful, since whatever they do (legal or not) is flashed around the globe in a matter of seconds -- with pictures. Jesus said, "Then you will know the truth, and the truth will set you free."
The people loved it when money was practically free and everything was leveraged to the hilt. But when the punch bowl sprung a leak, and it was payback time (austerity) they hated it, and voted the austeristas (those who want austerity) out of office.
For a mind-blowing look at the really good times, I recommend the book, Boomerang. The chapter on Iceland is a classic. Boomerang -- you throw it and it returns to you, and if you don't duck it will knock your teeth out or even cut your head off.
Speaking of decapitation, cutting heads off is becoming a favorite with the narcos south of here in the land of fun -- Mexico. I used to go down to Tijuana every weekend on my motorcycle -- either to buy their delicious bread and rolls or to get a haircut and shave (price for haircut and shave back in the 1960s was 25 cents). I don't go to Mexico anymore (and it's not just because I no longer ride bikes).
As for motorcycles, at my age I can look back and say that the thing I miss most of all was riding my Harley Sportster. I've had them all: Suzukis, Hondas and Yamahas. I still like Sportsters. Now I have a little four-wheel scooter. My sister, Kate, says "growing old is not for sissies." Boy, is she ever right.
I just read where this man is 115 years old. But as the song goes, "Who calls it livin' when no gal will give in to no man who's 900 years old." From "It Ain't Necessarily So" (Gershwin) -- and they were talking about Methusala.
Diet info -- I've been living on salads and soups and frozen yogurt, and I've lost 10 pounds over the last month. I eat whatever my insides "want" and I'll develop certain specific desires for specific foods (English muffins, clam chowder, chocolate yogurt, etc.). They call it listening to your body. Your body knows what it needs.
TODAY'S MARKET ACTION:
My PTI was down 6 at 6388. The moving average is 6376, so my PTI is bullish by 12.
The Dow was down 76.44 to 12932.09.
Transports were down 11.07 to 5234.19.
Utilities were down 0.05 to 467.40.
NASDAQ was down 11.49 to 2946.27.
S&P 500 was down 5.86 to 1363.72.
There were 1,190 advances and 1,830 declines on the NYSE.
There were 60 new highs and 82 new lows.
Total Volume on the NYSE and associated exchanges was 4.22 billion.
Bonds: Yield on the 10 year T-note was 1.843. Yield on the long T-bond was 3.035. Yield of the 91 day T-bill was 0.096.
Dollar Index was up 0.21 at 79.81. Euro was down 0.24 at 130.30. Yen was down 0.21 at 125.35. Currency Prices as of 1 PM Pacific Time.
June gold was down 34.60 to 1604.50. July silver was down 0.66 to 29.46.
June light crude was down 0.93 to 97.01.
My Most Active Stocks Index was down 11 at 261.
The Big Money Breadth Index was down 6 at 1010.
GDX was down 1.50 at 42.17.
HUI was down 14.07 at 402.44.
CRB Commodity Index was down 2.33 at 295.13.
The VIX was up 0.11 at 19.05.
Permanent Portfolio Fund (PRPFX) was down 0.07 to 47.95 (previous day closing). YTD Return: 4.04%.
Late Notes -- The Dow was weak all day (down over 100) and at the close -- what? Could help have come from the Fed? The usual late rally and the Dow closed down 78 points with Trannies down only 6. This market reminds me of two men pushing a massive 100 ton truck towards a cliff. It ain't easy, but look -- the truck is slowly moving towards that cliff. What's this, they left the darn emergency brake on.
My PTI is still bullish, despite all the awful news out of Europe. Will Europe survive or will it be the United States of Germany and F-f-f-rance?
Dec. gold down 34.7 but still above 1600. Help, help, keep gold away from that cliff. The mining stocks are a disaster. Some bugs are convinced that if you hold 'em (and hold your nose) they'll be big winners somewhere ahead. I don't have the guts sold my mining stocks on stop losses (down over 8%) and ate the losses.
I'm sitting with cash and PRPFX.
A garment center joke -- and it's back in circulation again:
Moe: "How's business?"
Murray: "Look'n up."
Moe: "Don't lie to your old pal."
Murray: "Yeah, I'm flat on my back -- look'n up."