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Quote of the Day

Friday, May 11, 2012

May 11, 2012 -- "Reflect upon your present blessings -- of which every man has many -- not on your past misfortunes, of which all men have some." -Charles Dickens

 

Suddenly, Asia is in the picture, and billions of Asians are vying with each other and the West to produce goods. And don't kid yourself, Asians are as smart or smarter than we are, and they are workers and learners. Look at China twenty years ago and today, and that goes for all of Asia. It's now getting so competitive that I understand that Chinese companies are shifting some of their productive capacities to Thailand and Cambodia. The sum total of all the above is world deflation. Too many outfits are producing too many goods. More than the world can use.

 

I always like to confirm my statements with charts. So here goes --

 

Below we see Dr. Copper, so named because he is used in making almost everything. Analysts who don't know what's going on watch Dr. Copper. When copper is in a downtrend, it's a sign that things are slowing down. Note, copper has fallen below both its moving averages. Note there is an increase in volume on the last day.

 

 

 

 

 

Copper not enough for you? Then study this chart of the Commodities. Looks deflationary to me.

 

 

 

 

Oil is having its troubles, mostly because of the weakening purchasing power of the dollar.

 

 

 

 

Below is a chart that bothers me. It's Morgan Stanley's chart of world markets minus the US market. What I see here is a down-sloping head-and-shoulders formation that is breaking down, and breaking down below both its 50-day and 200-day moving averages.

 

 

 

 

 

More on Costco: Their biggest seller is -- toilet paper. Each year they sell enough toilet paper to circle the earth twelve times. What's more, I like this stock, which is now moving into Europe. I think it's the new Wal-Mart, and I grade it as a long holding. Visit one of their stores before you buy it.

 

  

 

TODAY'S MARKET ACTION:

 

My PTI was up 1 at 6384. The moving average is 6376, so my PTI is bullish by 8.

 

The Dow was down 34.44 to 12820.60.

 

Transports were up 6.89 to 5140.70.

 

Utilities were up 0.22 to 472.01.

 

NASDAQ was up 0.18 to 2933.82.

 

S&P 500 was down 4.60 to 1353.39.

 

There were 1,209 advances and 1,828 declines on the NYSE.

 

There were 62 new highs and 48 new lows.

 

Total Volume on the NYSE and associated exchanges was 3.86 billion.

 

Bonds: Yield on the 10 year T-note was 1.848. Yield on the long T-bond was 3.017. Yield of the 91 day T-bill was 0.096.

 

Dollar Index was up 0.170 at 80.28. Euro was down 0.29 at 129.24. Yen was up 0.05 at 125.23. Currency Prices as of 1 PM Pacific Time.

June gold was down 11.50 to 1584.00. July silver was down 0.288 to 28.89.

 

June light crude was down 0.95 to 96.13.

 

My Most Active Stocks Index was down 7 at 257.

 

The Big Money Breadth Index was unchanged at 1008.

 

GDX was down 0.67 at 42.42.

 

HUI was down 6.94 at 404.30.

 

CRB Commodity Index was down 2.79 at 291.80.

 

The VIX was up 1.06 at 19.89.

 

Permanent Portfolio Fund (PRPFX) was unchanged at 47.40 (previous day closing). YTD Return: 2.84%

 

Late Notes -- The news today was all about JPMorgan's $2 billion dollar loss. Russell opinion -- it was just a one-time disaster, and it won't happen again. JPM is still a great bank. The market lazed around all day while rumors of JPM hogged the news -- that along with Obama's OK on gay and lesbian marriage. To my mind, Obama's new stand on gay and lesbian marriage strands Romney as a has-been and a fuddy duddy. Romney already appears ill at ease. I think he's on the losing side. They say that as much as 10% of the US population is gay or lesbian -- they'll all vote for Obama. Too late for Romney to do a flip-flop, but better late than never.

 

By the way, I have a daughter who is a lesbian, and I love her madly. She'll be starring on the coming TV series (on Showtime), "The Real L Word" -- it will start in July. The "L" in L Word stands for lesbian.

 

Gays and lesbians who are "out" are now so common among the kids, particularly among college kids, that they are widely accepted. Half the TV comedy shows now include either a gay or a lesbian. Hey, it's no big deal any more.

 

Late, Late Notes -- After spinning around and going nowhere, the Dow closed down 34 points while the Trannies closed up a fraction. The Euro is still below 130 at 129.28. Wasn't it supposed to go to par with the dollar? Apple down 3, Google down 8, JPM down 3.78 to 36.96. June gold down to 1584.00.

 

Anything else of interest? Yeah, China, below, is falling apart, plunging below both its moving averages.