Thoughts on Markets

Thursday, April 15, 2010

Big Up Day in General Market Yesterday!

Folks, BYD Company is putting on a poor performance at present. I will be selling some and look for buying back in at lower prices.
This daily graph of BYD shows the drop better.
DRD Gold is having a rough time along with many of the miners. It is a time for caution with the mixed, confusing markets of today.

Yesterday the market was up strongly. Both the Dow Industrials and Transportations were up triple digits. A very strong day, but I believe it is deceptive though many have declared it a return to the general market bull. There is too much debt and too many unbacked dollars flooding the market. Even with the de-leveraging, there are oodles of dollars sloshing out in the pool of unbacked currencies. This will come home to roost and could come with a big drop in purchasing power of the dollar. When? Is the big question.

I agree with the Daily Pfennig today reporting on the economy, etc.; as follows: "With all of the positive news out of the US, risk was back on. Global investors moved funds out of the dollar, pushing higher yielding currencies up. But the Fed Beige book started to cool things off a bit when it was released late in the trading day. The Fed's assessment of the US economy was a bit less optimistic than the data released earlier yesterday morning. "Overall economic activity increased somewhat since the last report across all Federal Reserve Districts except St. Louis, which reported 'softened' economic conditions," the Fed's Beige Book reported. So maybe that is why we are a bit more pessimistic about the economic recovery here on the trading desk in St. Louis; our area's recovery just isn't going as well as the rest of the country. Or maybe we just are just living up to our state motto; our license plates used to have 'Show Me State' across the bottom. Folks in these parts aren't easily convinced; we tend to want to see it for ourselves. So it is not really surprising that we are the only Fed District which is still looking for the recovery which is mostly just hope and hype.

Fed Chairman Ben Bernanke didn't sound too excited about the economic recovery during remarks yesterday. He told lawmakers there are 'significant restraints' on a recovery he said will be 'moderate' over the coming quarters. The labor markets will probably stay weak for a while, and with no worries on inflation there is no reason for the FOMC to change a pledge to keep interest rates low for an 'extended period'."

From Bloomberg.com:

U.S. Foreclosure Filings Rise 16% as Bank Seizures Set Record

April 15 (Bloomberg) -- Foreclosure filings in the U.S. rose 16 percent in the first quarter from a year earlier and bank seizures hit a record as lenders stepped up action against delinquent homeowners, according to RealtyTrac Inc. Read it HERE.

From Ed Steer's Gold and Silver Daily: "There were no changes reported in GLD yesterday... but the SLV had another whopping amount of silver taken out of it. This time it was an eye-watering 3,431,792 troy ounces. That's two full days of world silver production! Since February 26th... 14.4 million ounces of silver have been withdrawn from SLV by the 'authorized participants' because silver in quantity is not available anywhere else."

That is a significant amount of drop in SLV's holding. Wonder if they have enough left to meet their contracted obligations with shareholders.

Miners from Scottrade.com:
Currencies from Kitco.com:
Some prices: BYDDF 9.29; FVITF 2.80; TBT 48.51; UUP 23.58; EXGMF (looking at this one now.) 3.144; DOW up 11.94 to 11134.82; Gold up 4.1 to 1158.9; Silver up 0.02 to 18.44.

The markets are giving us mixed signals, but the general market seems quite strong for the time being. It is the underlying threats of expanded Middle East Wars. Israel may be on the verge of an attack against Iran. Can't blame them much, though. There is also the expansion of anger among the US citizens over the White House and Congress lack of knowledge of what the citizens want and need. If fact, many believe we are being ignored completely. Of course, the elite always know what we need more than we do. NOT!

Keep your focus on King Jesus and all will be well in the longer run of time, say eternity!

Best to each, Doug

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