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Quote of the Day

Friday, April 13, 2012

April 13, 2012 -- What is it about my PTI? I started constructing my PTI back in 1969. The reason I came up with it was that I wanted (needed) a device that was mine and my subscribers alone, and one that nobody else could steal or copy. Around the same time in the 1960s, technical analysis was becoming popular, actually far too popular. Those were the days when everyone followed the odd lots and the Confidence Index. I became almost sick of technical analysis, and began experimenting with an "indicator" of my own.


After six months of testing, I came up with my primary trend index or PTI. I wanted a vehicle that included both the external market (the stock averages) and most importantly, the internal market, (which included all the statistics that the vast majority of market followers did not track). The result was my PTI, which I have computed on a daily basis ever since 1961.


I don't know how many of my subscribers keep an eye on my PTI, but the charts appear every day, in three sections, each section covering a short to longer view. I include the three sections below. The first (top) chart is a daily chart, and you can see that it is still very bullish. The middle chart includes a lesser distance and shows my PTI sinking as well, but still above its moving average. The bottom or third chart includes just the months of October, 2011 to the present, and here again we see my PTI approaching, but still well above its moving average. The conclusion is that my PTI is faltering but is still definitely bullish.


Question -- at what point would I classify my PTI as bearish? First, I want to make this statement. "My PTI is taken to remain bullish as long as it is above its moving average and as long as it is trending ABOVE its moving average. To turn bearish, my PTI would have to break BELOW its moving average and then trend lower from there.


Where are we now? My PTI is fluctuating between its recent high of 6401 (Apr. 2) and its recent low of 6375 (Mar. 6). The last trend of my PTI was bullish, and I will consider my PTI as staying bullish as long as it remains above its 89-day moving average (MA). But remember, to turn bearish my PTI must break below its moving average -- and then decisively head down from there.


The reason I would want my PTI to trend down, following a break below its MA, is that I want to avoid whip-saws.


Below are the three charts you can find by clicking on the link to my PTI.






Note that the market's action over the last few weeks has been erratic, indecisive and rather bearish, but through it all, my PTI has remained bullish. 


Why has the market been so erratic? The reasons are multifold: (1) The giant US deficits. (2) The confusion over whether the southern European nations can pay their debts. (3) The shaky position of America's consumers. (4) The direction of interest rates. (5) The vacillations in the various fiat currencies. (6) The problem of Iran wanting nuclear capabilities. (7) The revolution in Syria. (8) The question of whether the US will ever emerge from recession. (9) Whether the Fed will provide further stimulants. And I’m sure that I’ve left out a few other disturbing items.


Note -- I guess subscribers have noted that when the Fed is providing QEs, the market rises. When there is no QE (as now), the market hesitates or moves down. 




My PTI was down 6 at 6381. The moving average at 6368, so my PTI is bullish by 13.


The Dow was down 136.99 to 12849.59.


Transports were down 51.16 to 5197.04.


Utilities were down 1.29 to 452.10.


NASDAQ was down 44.22 to 3011.33.


S&P 500 was down 17.31 to 1370.26.


There were 709 advances and 2320 declines on the NYSE.


There were 41 new highs and 31 new lows.


Total Volume on the NYSE and associated exchanges was 3.47 billion.


Bonds: Yield on the 10 year T-note was 1.988. Yield on the long T-bond was 3.134. Yield of the 91 day T-bill was 0.086%.


Dollar Index was up 0.54 at 79.83. Euro was down 1.17 at 130.83. Yen was down 0.48 at 123.36. Currency Prices as of 1 PM Pacific Time.

June gold was down 20.40 to 1660.20. May silver was down 1.13 to 31.39.


May light crude was down 0.81 to 102.83.


My Most Active Stocks Index was down 12 at 288.


The Big Money Breadth Index was down 10 at 1018.


CRB Commodity Index was down 2.76 at 302.85.


The VIX up 2.35 to 19.55.


Permanent Portfolio Fund (PRPFX) was up 0.55 to 48.52 (previous day closing). YTD Return: 5.27%.


Late Notes -- With the hope of QE3 dying, the market sold off at the close with the Dow down 136 and Transports down over 50.


As for June gold, it was down 20 bucks, but still closing above 1600. The bull market in gold remains intact. Somebody keeps buying gold on any weakness -- (China?)