Dow Funny Business

Realistically, a 152-point rise on the Dow will divert most people's attention away from the systemic economic problems faced by the US economy and the cynical pumping of selected stocks by the PPT (Plunge Protection Team, Working Group on Financial Markets).

Anyone paying a little closer attention (like me) would notice that the Dow outperformed the NASDAQ and NYSE Composite by nearly a full percentage point on the day and dragged the S&P 500 up 0.72% due to the overlap between the indices.

Dow 13,362.37 +150.38 (1.14%); NASDAQ 2,553.87 +7.60 (0.30%); S&P 500 1,465.81 +10.54 (0.72%); NYSE Composite 9,572.87 +18.37 (0.19%)

Also, only two of the 30 Dow stocks finished in the red. Contrast that to the broader market, where declining issues led the way over advancers, 3748-2602, or roughly 3-2. Hmmm... a 28-2 upside trouncing by Dow stocks, but a 3-2 downside whipping for the overall market? Somebody's toying with us.

Surely. Absolutely. Without a doubt.

There were 861 new lows to just 95 new highs. So, where's the happy pill? The US equity market is about as phony as a Tennessee 3-dollar-bill. Maybe worse. A quick study of the Dow chart for Wednesday, August 1, tells the real story.

The Dow zig-zagged across the flatline until about 3:30, when the Dow was down about 50 points. Since the manipulators could not stomach another down day (make that 5 up and 6 down since the most recent record-high close), they pumped it a full 200 points in the final 35 minutes of trading. Nice! But not really. There are serious problems, as evidenced by the numbers just presented and the late day rally was designed to keep the stock market and our failing economy off the evening news and front pages of newspapers.

Speaking of newspapers, one should begin to be vary wary of anything emanating from the Dow Jones newswire, now that mogul Murdoch has his claws firmly entrenched. The deal was supposedly struck yesterday - or the day before - and it's just another knife into the already-exposed hide of American journalistic integrity. Forget that. You now simply cannot believe anything you read, anywhere. It's all subject to spin and headline writers, wrappers and margin noters. US media is a near-total sham. (Trust me. I at least try to give your the truth.)

While the markets were toying with our psyches, pressure on oil prices eased, losing $1.68 on the day, to close at $76.53. Thank goodness. And you can call off the gold rush. It was down $3.40 to $675.90. Silver dipped 6 cents to $12.96. Those minimal drops may be just small enough to pique some buying interest. Considering the coming banking fiasco, I'd be buying the metals here. A year from now, it could look like a very prudent move. Besides, there really isn't much downside risk in either gold or silver at these levels. You may not make a killing, but you shouldn't lose any value to inflation either.