Some Thoughts on the S&P 500 and the U.S. Dollar Index
Wall Street Overview with Jim Puplava & John Loeffler
(5:00) Friday's numbers. Small business index declined. All major indexes back into negative territory for the year. Corporate earnings season over, focus is back on economic numbers and unemployment. Worsening trade deficit, rising jobless claims. Good news: ECRI leading index is ticking back up. Global stock markets lost 2 trillion this week. Fed says growth will moderate. Winner this week was bond market. Yields fell across the board. Mortgage rates at record lows. Refi's accelerating. Energy markets down this week. Oil lost 6.6%. Worst week in a month and a half. Dollar rallied on spread in Europrean debt markets, weighing on oil price. Gold for Dec delivery down as dollar rose. Gold up 1% for the week. Premiums for gold and silver coins rising again. Gold Eagles $98 above spot price. Silver Eagles at a $7 premium. Bullion business is still robust.
Looking at Divergences with Ronald Griess
Ronald Griess, proprietor of The Chart Store, is an investment professional with over 40 years of experience in portfolio management, investment and economic research and sales. Ron began his career in 1969 and has always been fascinated with the "big picture." This week Ron discusses the inverse correlation between the dollar index and the S&P 500 during swings in the market. Ron also discusses a chart of the S&P 500 that shows the possibility that a head and shoulders top may be forming.
Summary of Jim Puplava & Ron Griess's Discussion of the Charts
(11:22) Ron Griess speaks about troubling divergences in the MACD (Moving Average Convergence Divergence) Oscillator on S&P and USD. Charts pertaining to the discussion can be found in his recent article "Some Thoughts on the S&P 500 and the U.S. Dollar Index." Still has concerns going forward until MACD turns positive. Head and shoulders pattern setting up. Could very easily see a sharp correction if breaking support line. Ascending wedge also forming. Very strong correlation between USD and asset classes.
Dividend Investing, Strategic & Tactical Allocation with Jim Puplava & John Loeffler
(23:30) How to invest in a zero-interest environment. Danger of annuities and bond funds. What are the fees? Stability of insurance company offering the annuity. General recommendations: diversified among bullion as hedge against dollar risk, high-quality bonds in foreign governments of commodity-producing countries, high-quality equities producing good dividends, having strong balance sheets, large moat, global franchises less affected by the business cycle, i.e. utilities.
Financial Sense Newshour Host Jim Puplava Responds to Listener Questions
(48:00) (Jim's responses not shown).
- 1st call: Fed Bullard switches from inflation to deflation, promoting QE2. Fed is hoping to push cheap money into private sector. Jim's thoughts?
- 2nd call: Says value-added tax is not compound.
- 3rd call: Last week's interview ("Urban Survival" with Chris Martenson), gold is too expensive in terms of urban survival, role of silver?
- 4th call: In response to Aug. 7th interview, recommends website for seeing how all representatives voted and correlation between campaign contributions: maplight.org.
- 5th call: Any good agriculture investments, funds in farming? Jim: Two ETFs: MOO and DBA.
- 6th call: Recommends a show on what would a gold standard look like today, possible song for show.
- 7th call: When does Congress normally announce budget?
- 8th call: Would like to hear about power of money lenders, Federal Reserve, relationship to Bible, Christian theology, and how gold is true money.
- 9th call: Anything that would change your mind on peak oil and bullishness on gold?
Note: Thanks to FSO Staff Member Cris Sheridan for his summaries of the Financial Sense Newshour content.