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Quote of the Day

Tuesday, April 03, 2012

April 3, 2012 -- "The more certain something is, the less likely it is to be profitable." Jim Rogers.


What is the meaning of the market (really the Dow) selling off at the last half hour during almost every session?


My guess is that this is the big money that has been holding off as long as it decently can -- and then dumping their goods just before the close. I don't think the big money likes this market, and I think they have been slowly exiting this market, as quietly as they can.


The big money takes the long view. The big money tends to look out six months to a year or so, and there is something "out there" that they see -- but don't like. Is it a rise in interest rates, is it the power of the Chinese yuan, is it a further collapse in real estate values? Honestly I don' know what it is, but I'm convinced that there is an ominous something out there waiting to materialize. The big money, the institutional money, doesn't want to be in this market when it (the "thing") materializes.


Yesterday the Dow was up 82 points an hour before the close. At the close the Dow was up 54 points. Who did the selling and why? The mystery continues.



States cannot run deficits like the government. Thirty states will be in the red next year. Federal aid to states, cities, and counties will continue to fall -- 24 billion less by the end of 2013. That's on top of $150 billion in stimulus money that will stop flowing their way by 2013.


Some states are turning to raise income taxes. Calif. is eyeing higher taxes on those making $250,000. Maryland will raise taxes on those making over $100,000. Rhode Island wants to raise taxes on meals. There will be more legal gambling in Mass. and in Md. Sunday liquor sales will be allowed in Georgia. Resource-rich North Dakota and Montana are the only two states that will escape additional pain.


With most states choking on deficits, the good times will draw to a close.




My PTI was down 6 at 6395. The moving average at 6365, so my PTI is bullish by 30.


The Dow was down 64.94 to 13199.55.


Transports were down 10.67 to 5294.83.


Utilities were up 0.09 to 461.27.


NASDAQ was down 6.13 to 3113.57.


S&P 500 was down 5.66 to 1413.38.


There were 1972 advances and 111 declines on the NYSE.


There were 137 new highs and 23 new lows.

May light crude was down 1.22 to 104.01.


Total Volume on the NYSE and associated exchanges was 3.8 billion.


Bonds: Yield on the 10 year T-note was 2.292. Yield on the long T-bond was 3.428. Yield of the 91 day T-bill was 0.081%.


Dollar Index was up 0.55 at 79.37. Euro was down 1.18 at 132.20. Yen was down 1.19 at 120.58. Currency Prices as of 1 PM Pacific Time.

April gold was down 7.70 to 1672.00. May silver was up 0.16 to 33.26.


My Most Active Stocks Index was down 7 at 321.


The Big Money Breadth Index was down 6 at 1046.


GDX was down 1.63 at 48.75.


HUI was down 16.10 to 465.26.


CRB Commodity Index was down 1.50 at 310.75.


The VIX up 0.02 to 15.66.


Permanent Portfolio Fund (PRPFX) was up 0.23 to 48.97 (previous day closing). YTD Return: 6.25%.



Late Notes -- As I write the Dow is down 65 and this time we got the late rally. In the mean time gold continues to consolidate above 1600 with the help of what I believe is a Chinese put. Not much action in these fascinating markets. I like the stock market less and less, but happily my subscribers and I are just side line observers.


The two smartest economists that I know, Richard Koo and Nouriel Roubini, both believe that cutting back on spending now could lead to depression in Europe. They both agree that the European centeral bank must open up the spigots. God save the Euro. The way its going, the Euro is going to need God's help.