Prechter Reminder… Taking Out DJIA 10,000 (GLD, DIA, SPY, QQQQ, TLT)

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The big technical level in the S&P 500 Index was 1,085, but that feels like some time ago.  There is no magic trick on a technical level of 10,000 on the Dow Jones Industrial Average.  But there is a psychological value to it.  The official closing bell price is not yet set, but the DJIA was down 2.6% or 270 points at 9,999.84 right at the closing bell…. At 4:10 the level is posted as 10,002.18.  The ghost of Robert Prechter’s most recent big call is echoing… “perhaps the last chance to get out of stocks with the DJIA in quintuple digits.”

What the markets are digesting is all forward-looking data rather than economic reports from December and even January.  The jobless claims were growing on both a seasonal and non-seasonal basis.  That is taking away hopes of any real recovery in jobs, and we have unemployment tomorrow with some expected scary revisions for 2009.  Hopes of an employment recovery are softening dismally.

Gold flushed as well, despite the safety-net feature of the shiny yellow metal, as investors went more into dollars.  The SPDR Gold Shares (NYSE: GLD) was down 3.98% at $104.37, a reminder of the George Soros call that gold was a bubble and the same Prechter caution there.  This looks like a 3-month low.  Oil had one of its worst days in months…. $73.01 (-$3.97, -5.1%).

The DIAMONDS (NYSE: DIA) tracking the DJIA had an official closing price of $100.06, indicated an implied 10,000+ close.  The SPDRs (NYSE: SPY) was down 3.1% at $106.44, versus an S&P 500 close of 1,063.11… That is about 2% under the 1,085 technical close.

The Powershares QQQQ (NASDAQ: QQQQ) was down 2.89% at $42.62, which would have been even worse today had Cisco not been strong on earnings as the only gainer from the major tech stocks in the top 10 “QQQQ” holdings.

The 30-Year bond was a gainer as a flight to safety, and the iShares Barclays 20+ Year Treasury Bond (NYSE: TLT) was up 1.58% at $91.78.  At 4:10 the yield on the 30-Year Treasury Long-Bond was 4.545%.

So what are the markets really digesting?  Friday’s unemployment is one negative and the consensus estimate from Bloomberg is for non-Farm payrolls to be flat with unemployment at 10.1%.  Dow Jones indicates roughly the same data.

The US passed the $1.9 trillion debt limit increase.  There are traders now asking about how to protect themselves from sovereign debt default risks in the PIIGS nations, with Greece, Portugal and Spain being the top concerns.  Want to know just how bad it was for the PIIGS, look below at the ADRs that trade in the US:

STOCK (ADR) Close Change Change
PORTUGAL TELECM SGPS $9.95 Down 0.49 Down 4.69%
GOV BK IRELAND ADS $6.72 Down 0.77 Down 10.28%
ALLIED IRISH PLC ADS $3.21 Down 0.30 Down 8.55%
GOV BK IRELAND ADS $6.72 Down 0.77 Down 10.28%
NATL BK GREECE ADS $4.06 Down 0.39 Down 8.76%
HELLENIC TELE ADS $6.48 Down 0.32 Down 4.71%
COCA-COLA HELLEN ADS $22.68 Down 0.18 Down 0.79%
DryShips Inc. $5.36 Down 0.36 Down 6.29%
DIANA SHIPPING INC. $13.48 Down 0.82 Down 5.73%
EXCEL MARITIME CARR $5.52 Down 0.46 Down 7.69%
IBERO-AMERICA FD INC $6.43 Down 0.5511 Down 7.90%
ISHARE MSCI SPAIN IN $40.24 Down 3.3308 Down 7.64%
BANCO BILBAO ARG SA $13.58 Down 1.42 Down 9.47%
BANCO SANTANDER ADR $12.65 Down 1.53 Down 10.79%
REPSOL YPF S.A. $22.44 Down 1.34 Down 5.63%
TELEFONICA SA $68.58 Down 3.54 Down 4.91%

Today was one of those days where it felt like the only good news is that stocks are getting oversold on a near-term basis…. or maybe that tomorrow is at least Friday.

JON C. OGG