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Quote of the Day

Monday, April 23, 2012

April 23, 2012 -- "The strength of the Constitution lies completely in the determination of each citizen to defend it." Albert Einstein


Bears maintain that you can't have a real economic recovery without a healthy housing industry. With this dictum in mind, I thought it was time to study the housing index.


Housing is a huge user of manpower and materials as well as an integral part of banking.


Turning to the housing index below, the housing index quietly rose ABOVE its 50-day moving average back in October 2011. In January the 50-day MA crossed bullishly above its 200-day moving average. From there the housing index climbed steadily above the 50-day MA until very recently, when the housing index broke below its 50-day MA.


The chart now outlines a potential and incomplete head & shoulders top. And whether this potentially bearish pattern is completed remains to be seen.


For the sake of the economy we hope that the housing index rallies back above its 50-day MA. A break by the index below the recent lows will suggest a possible double dip recession. Yes, that's how important this chart is. Note that RSI just dropped to oversold and is now climbing toward neutral at 50.





In November, California voters will have the chance to vote for or against capital punishment. Two months ago the state of Connecticut became the 17th state to abolish capital punishment. Since 1973 46,586 murders have been committed in Connecticut. Of these only 66 have led to conviction. And only nine of the convicted have received the death penalty.


The Russell view -- I'm against it. If the state is going to put people to death and the people vote for it, then show it on TV. The death penalty is shrouded in secrecy and out of sight. I say if the people want it, then show them what they voted for. If it's too ghastly to watch, then it's too horrific to be part of American culture and life.


Join the "educated" crowd. The following nations still use capital punishment: Bahrain, Bangladesh, Belarus, Botswana, China, Egypt, Guinea, Iran, Japan, Libya, Malaysia, North Korea, Saudi Arabia, Singapore, Somalia, Sudan, Syria, Taiwan, USA, Vietnam, and Yemen. We're in good God-fearing company, aren't we?


Of the new, modern civilized nations, only the US still uses the death penalty.




My PTI was down 6 at 6380. The moving average at 6370, so my PTI is bullish by 10.


The Dow was down 102.09 to 12927.17.


Transports were down 48.44 to 5185.81.


Utilities were down 2.13 to 458.62.


NASDAQ was down 30.00 to 2970.45.


S&P 500 was down 11.59 to 1366.94.


There were 821 advances and 2228 declines on the NYSE.


There were 27 new highs and 78 new lows.


Total Volume on the NYSE and associated exchanges was 3.6 billion.


Bonds: Yield on the 10 year T-note was 1.939. Yield on the long T-bond was 3.085. Yield of the 91 day T-bill was 0.076%.


Dollar Index was up 0.17 at 79.36. Euro was down 0.71 at 131.48. Yen was up 0.67 at 123.30. Currency Prices as of 1 PM Pacific Time.

June gold was down 10.20 to 1662.60. May silver was down 1.12 to 30.53.


June light crude was down 0.77 to 103.11.


My Most Active Stocks Index was down 11 at 279.


The Big Money Breadth Index was down 6 at 1020.


CRB Commodity Index was down 0.80 at 300.40.


The VIX up 1.53 at 18.97.


Permanent Portfolio Fund (PRPFX) was up 0.06 to 48.31 (previous day closing). YTD Return: 4.82%.


Late Notes -- The Dow was down over 100 almost all session long, closed above it for a minute, and finally closed down 102. Transports went along for the ride, and closed down 48.


As for June gold, it was down a dime, but is still bullishly holding above 1600. It's a market that opens a certain way and stays there all day long. This time very little change at the close.