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Quote of the Day

Friday, May 25, 2012

May 25, 2012 -- "The art of leadership is saying no, not yes. It is very easy to say yes." Tony Blair, British politician.

 

Yesterday was a banner day. It broke the long string of Dow declines. It may be a long time before we see a freaky string of Dow declines like the one that ended yesterday. The 33 point positive close of the Dow yesterday must have stepped on the toes of many shorts. Therefore, I was betting that today should be a rising market, maybe a sharply rising affair. Of the 19 indices that Dow Jones covers every day, five were down at the close yesterday.

 

I note that most of the talk on Bloomberg has to do with the European fundamentals, while few of the experts discussed what was going on in the stock market (bonds did come up for discussion). What this tells me is that most so-called experts do not feel comfortable talking about the actual markets.

 

Everyone is guessing about a safe place to put money. In Europe, many choose German bonds. Second choice is Treasuries going out around ten years, which pays you almost nothing, but the hope is that you'll get your money back in a decade. Of course, how much of anything your dollars will buy in ten years is another guess. But when people are scared and confused, any harbor feels safe.

 

Just for the fun of it, I'm including a daily chart of the Dow below. RSI says it's oversold, but not heavily so. MACD looks as though its heading for a cross-over buy. Any rally should meet resistance around 12700, but short covering could easily drive the Dow higher. It will be important to see the quality of any advance from here.

 

  

 

The P&F chart of my PTI halted just short of the arrow, so we narrowly escaped the big sell signal. I have to halt here -- to run out for a doctor's appointment. Will have to call in late notes to the office.

 

 

 

 

TODAY'S MARKET ACTION:

 

My PTI was unchanged at 6365. The moving average is 6374, so my PTI is bearish by 9.

 

The Dow was down 74.92 to 12434.83.

 

Transports were down 28.56 to 5079.84.

 

Utilities were up 0.44 to 467.35.

 

NASDAQ was down 1.85 to 2837.53.

 

S&P 500 was down 2.86 to 1317.82.

 

There were 1548 advances and 1452 declines on the NYSE.

 

There were 35 new highs and 31 new lows.

 

Total Volume on the NYSE and associated exchanges was 2.75 billion.

 

Bonds: Yield on the 10 year T-note was 1.744. Yield on the long T-bond was 2.843. Yield of the 91 day T-bill was 0.094.

 

Dollar Index was up 0.057 at 82.40. Euro was down 0.08 at 125.18. Yen was down 0.12 at 125.59. Currency Prices as of 1 PM Pacific Time.

 

June gold was up 11.40 to 1568.90. July silver was up 0.229 to 28.38.

 

July light crude was up 0.20 to 90.86.

 

My Most Active Stocks Index was up 5 at 217.

 

The Big Money Breadth Index was down 8 at 975.

 

GDX was up 0.28 at 44.91.

 

HUI was up 3.064 at 427.91.

 

CRB Commodity Index was up 0.03 at 281.95.

 

The VIX was down 0.22 at 21.76.

 

Permanent Portfolio Fund (PRPFX) was up 0.09 at 46.28 (previous day closing). YTD Return: 0.41%

 

Late Notes -- As of today, the Dow was down 15 out of the last 18 sessions. But this time the Dow closed nearer it's low than it's high. We seem to be drawing ever closer to some kind of a climax. What will it be? Greece exiting the Euro zone sounds too easy, too expected. Maybe Spain banning bull fighting

 

June gold at 1568.90. Is it nailed down at that price, or will it ever get back above 1600?

 

Get on the Dow down-escalator. The 50-day MA stands at 12,957.61. Note volume rising as the Dow falls.

 

 

 

 

 

 

 

 

Below, 10 days of Zuckerbook, dropping like a load of lead. And I'd wait to look at it until it's around 18 to 25.

 

 

 

 

Below, Apple, and it should be ready to rally -- at least back to 600.

 

 

 

 

When a butterfly flaps its wings in China, does that set off a hurricane in Europe?

 

Adios, and have a fabulous three-day vacation ---

 

Your harried editor,

Russell