Market Wrap
Week Ending December 23, 2005
Market Indexes
Dow - 10,883.27 (+7.68)
Transports – 4,266.75 (+124.26)
Utilities – 411.65 (-6.18)
Nasdaq – 2,249.42 (-3.06)
NYSE Comp. – 7,841. 90 (+27.9)
Amex – 1,758.77 (-2.21)
S & P 500 – 1,268.66 (+1.34)
U.S. Interest Rates
30 yr. T-Bond – 45.51 (-.10)
10 yr. T-Note – 43.80 (+. 06)
5 yr. T-Note – 43.31 (-. 03)
90 day T-Bill – 38.95 (+. 12)
Indicators
Put/Call Ratio – 0.69 (-.13)
N.Y. Highs/Lows – 77 (-19)
Volatility Index – 10.27 (+. 41)
Advance/Decline – 882.0 (+985)
McClellan Oscillator – 357.08 (-23.5)
Foreign Stock Markets
Dow World – 236.25 (-1.12)
London FTSE – 5,595.40 (-63.9) (-1.2%)
Nikkei – 15,941.37 (+768.3) (+5%)
Currencies
U.S. Dollar – 90.89 (+1.18) (+1.3%)
Euro – 118.62 (-1.39) (+1.15%)
Yen – 86.05 (-.25)
Pound – 173.28 (-3.8) (+2.1%)
Swiss Franc – 76.14 (-1.29)
Canadian Dollar – 85.75 (-.6)
Australian Dollar – 72.83 (-1.48)
Commodities
Gold – $502.80 (-. 10)
Silver – 8.54 (+. 04)
CRB Index – 326.31 (+. 05)
Crude Oil – 58.33 (+. 72)
Gold & Silver Stock Indexes
HUI – 270.88 (+10.92) (+4.2%)
XAU – 125.02 (+2.66)
Market Comments
All in all it was another quiet week. The stock market continues to be content just treading water and hardly changed from last week. The Nikkei made a nice move, however, up 5% for the week.
On the interest rate front the five-year yield declined to 4.315% inverting compared to the two-year note, which closed at 4.355%. The spread between the two-year note and the 30-year bond has decreased to 1.5 basis points. Might this be the harbinger of this to come?
Gold and silver did not see much action, but the gold stocks via the HUI moved a large +4.2%. Note the histograms at the bottom of the chart, which have just barely turned positive.
Newmont has shown good action. Not only has it advanced to new highs for the move, but volume has increased noticeably as well, as the chart below shows.
The gold stocks remain in their up trend, but it wouldn’t take much to change the direction. We are using any further strength as an opportunity to book profits. This is simply business of keeping house – and keeping ahead of the house.
No one has ever lost money booking profits, and no one has ever made money in the markets without taking profits.
Besides the gold stocks the other market that exhibited noticeable action was the foreign currency market. Both the British Pound and the Australian Dollar fell almost 2% and the U.S. Dollar gained 1.3%.
The Fed continues to do what it does best – creating money out of nothing, as M3 advanced $27.3 billion to the unbelievable total of over 10 TRILLION DOLLARS.
With Bernanke taking over the reins from Greenspan you can rest assured that this is one trend that will continue – until it doesn’t – because it can’t. All experiments with paper fiat currency end the same way – in monetary carnage. Gold already senses the storm ahead.
We patiently await the next opportunity. Whatever the market offers, we will be pleased to accept.