Quote of the Day
Tuesday, March 27, 2012
March 27, 2012 -- The Fed is a creature of Congress. It exists through the approval of Congress. Fed Chief Bernanke in his most recent speech sounded disappointed with the sluggishness of the US economy. He wants to get the unemployment rate BELOW 7.3%, which is what Obama would like. To the markets this suggested more stimulation or another QE3 -- consequently up went stocks and gold.
Turning to the GOP circus, Romney had a great victory in Illinois, collecting 43 of the state's 54 delegates. This gives Romney almost half the 1,144 delegates he needs to sew up the GOP leadership, this against Santorum's measly 263 delegates. Thus, unless something very unusual occurs, Romney has the GOP leadership in the bag.
At this point it looks to me as though the election is going to be Romney vs. Obama. But can Obama win with unemploymnt in the US over 7.3%? Doubtful. As things stand now, I see an excellent chance of a Romney presidency. That unless Bernanke opens the spigots once more and gives the system another QE3. It's obvious that Obama wants a second term and Bernanke wants more years as the Fed head. Will the Fed oblige?
Dow Theory -- The Dow is close to bettering its March high, but the Transports are lagging badly. Watch for an upside non-confirmation.
TODAY'S MARKET ACTION:
My PTI was down 4 at 6398. The moving average at 6362, so my PTI is bullish by 36.
The Dow was down 43.90 to 13197.73.
Transports were down 12.71 to 5276.31.
Utilities were up 2.13 to 458.23.
NASDAQ was down 2.22 to 3120.35.
S&P 500 was down 3.99 to 1412.52.
There were 1257 advances and 1761 declines on the NYSE.
There were 173 new highs and 8 new lows.
May light crude was up 0.30 to 107.33.
Total Volume on the NYSE and associated exchanges was 3.4 billion.
Bonds: Yield on the 10 year T-note was 2.185. Yield on the long T-bond was 3.300. Yield of the 91 day T-bill was 0.081%.
Dollar Index was up 1.16 at 79.09. Euro was down 0.08 at 133.41. Yen was down 0.40 at 120.46. Currency Prices as of 1 PM Pacific Time.
April gold was down 0.70 to 1684.90. May silver was down 0.13 to 32.61.
My Most Active Stocks Index was down 9 at 318.
The Big Money Breadth Index was down 6 at 1040.
GDX was up 0.72 at 49.91.
HUI was down 6.74 to 475.34.
CRB Commodity Index was up 0.42 at 315.43.
The VIX up 1.33 to 15.59.
Permanent Portfolio Fund (PRPFX) was up 0.36 to 48.98 (previous day closing). YTD Return: 6.27%.
Late Notes-- Dow down 43 at the close. Have we already seen the non-confirmation? The answer is yes, but it's too soon to know whether its serious. Meanwhile gold is holding its own.