Investment Rarities Incorporated
History |  Q & A  |  Endorsements  |  Portfolios  | Flatware | Gold Coins  |  Silver Coins  |  Contact |  Home

Products

Jim Cook

 

RUNAWAY SOCIAL SYMPATHY

Every once in a while I switch the TV channel from Fox to CNBC to see what the liberals are saying.  After listening awhile I get a deep sense of hopelessness and foreboding for our country.  The most important thing for the left is giving money to people.  They are happy to see the growth of food stamps, disability payments, housing subsidies, free healthcare and all the other welfare benefits.  They utterly fail to see the damage it is doing to the recipients.  Whole cities that once flourished have deteriorated into rotting eyesores populated with shambling hulks of chemically dependent drones.  These people are no longer employable.  They have become incompetent and helpless and the liberals can’t see that it’s their doing.

..Read More »

The Best of Jim Cook Archive

 
Best of Richard Russell
March 5, 2012
archive print

What we're seeing now is flagrant divergence in the D-J Averages with volume sinking precipitously. This is a dangerous situation -- acute divergence in the Averages on sinking volume -- not good, not good at all. I feel that low volume in this case is highly significant. It's as though the very heart of the market is whispering "caution," as the smart money pulls back on its buying. It's notable that volume picks up on days when the market is down (a sign of institutional selling).

I've been reading two issues of my favorite magazine -- The Economist. They read like doomsday editions. Car makers in Europe (Germany is an exception) are doing poorly. The electronics business in Japan is lousy. Taxis in NYC are having a hard time -- a medallion in the City cost over a million bucks! The pharmaceutical industry is seeing hard times. Britain is nearly in depression. The Greek mess is still far from settled.

It seems to me, after reading the Economist, that the world is definitely being affected by deflation. Yet the strange thing is that the price of art and jewelry is going through the roof. Why? It's obvious (at least to me) that multi-millionaires and billionaires are placing huge amounts of money in tangibles and auctioneers can't believe the prices some of their top items are bringing in.

All of which reminds me of why I find my business, and economics in general, so fascinating. Here we are with the Dow perched on the 13000 level and no one knows whether the Dow will hurdle 13000 or whether the Dow will fail miserably. My good friend Joe Granville states that according to his on-balance-volume figures the "internal" market hit its peak on January 3, and that more than half the stocks on the NYSE are well below their highs. Joe believes the "external" market (the Dow) will soon follow.

Lowry's Selling Pressure Index (supply) is still above their Buying Power Index (demand), which, at least, allows for a sudden drop in the market.

All of which I find fascinating. Here we are, edging in on a presidential election, and the stock market may be predicting the winner. If the Dow breaks above 13000 and keeps on going, Obama will almost surely be with us for another four (ugh) years. But if the Dow breaks down from here, almost any GOP character will be our next Prez.

Yet with trillions of dollars on the line, nobody knows with any certainty which way the market is heading. We can only guess about the results -- once the true direction of the Dow is finally known.

www.dowtheoryletters.com

(858) 454-0481

Richard Russell’s Dow Theory Letters

PO Box 1759

La Jolla, CA 92038

17 Letters Per Year