Friday, April 15, 2011

Uppers and Downers

It's official. This stock market is a yo-yo without anyone pulling the string. It goes whatever direction it (or somebody) pleases, mostly up when it's supposed to be down and vice versa.

Though stocks finished with gains for the day, they were down for the week, but that doesn't really matter in the grand scheme. One would assume, with Google getting smacked down 47.81 points (8.24%) and Bank of America (BAC, 12.82, -0.31, -2.36%) missing EPS estimates by 11 cents, all of the indices would have gotten the clue and headed toward the exits.

But, though it looked like that might be the case early in the day, by the closing bell the major exchanges were showing broad gains, despite obvious signs of a weakening, or at least, stumbling, economy.

The best play has been to not fight the Fed, which continues to mint money and send it out through its proxies, the Primary Dealers, into the market, and that's probably what's driven the last eight months of gains. Advice might include steering clear of equities until the end of QE2, some time in June.

Dow 12,341.83, +56.68 (0.46%)
NASDAQ 2,764.65, +4.43 (0.16%)
S&P 500 1,319.68, +5.16 (0.39%)
NYSE Composite 8,400.31, +26.15 (0.31%)

Gainers outpaced losers, 4353-2152. On the NASDAQ, new highs took over the top spot with 84 new highs and 33 new lows. On the NYSE, there were 108 new highs and 14 new lows. Volume? No, none, non-existent.

NASDAQ Volume 1,794,544,375
NYSE Volume 4,331,161,000

Oil was up again, gaining $1.55, to $109.66. Gold surged $13.60, to $1,486.00, and silver continued its monumental climb, up 91 cents, to $42.57. Gold is at all-time highs and silver at 31-year highs, fast approaching the all-time high of $50/ounce back in the heady days of the Hunt Brothers, circa 1980.

A normal market would not have oil, gold and silver all up and equities rising as well, so the only conclusion to draw is that this is no ordinary market. It's very unusual, to say the least, though stocks still can't seem to do anything more than a Texas two-step, one forward, two back.

Commodity traders, however, have had a field day of late, and for gold and silver bugs and bugettes, they've had a great run for over a decade. In 2000, gold was under $300 and silver traded for $5 or $6 per ounce. The PMs have been the best investments, eleven years running, with no end in sight.

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