No. of Recommendations: 4
Well, the Kery bounce for the stock indices of two weeks ago is well over, and we are back into a generally declining market, though the S&P and DJIA eked out slight gains over the week before after hitting a new low for the year on Thursday. There were only 74 new 52-week highs last week (I like to see them at least above 100) in contrast to 145 the week before and even though the indicies did have a nice bounce the week of the Democrat convention there were only 122 new 52-week highs and 181 new 52-week lows. Last week saw 229 new 52-week lows and 178 the week before. I sure like to see those lows under 100, but we aren't even close. Well August is often a poor stock month. If it is bad enough, we may eke out a small gain in September, which rarely is positive for the indices. That is what happened to Clinton in 1998 when an absolutely terrible August (remember the Asian contagion and the Russianbond default?) ended with more than 40% of the stocks on each of the NYSE and NASDAQ hitting 52-week lows (August 31st). Well, at least we aren't that bad, yet. We still have more than two weeks to go. The Federal Reserve Dollar Index declined slightly last week but remains in a trading range between about 87.5 and 90. Alas, this doesn't seem low enough to counteract our current accounts deficit (imports greater than exports). The cumulative daily breadth was positive this last week. Let's call it 105,000.

I switched two to three years ago entirely to dividend paying stocks, mostly to those that increase dividends annually (if not more often like Washington Mutual). So as we wait this market out, at least we will collect something and modestly add to our porflio. Even my gambling stocks pay dividends, examples are Newmont Mining (the largest gold miner) (NEM) with a dividend <1% and Freeport McMoran (FCX) that is most known to mine base metals but happens to have the largest gold mine (and a dividend >2%). True to form when I gamble, the stocks promptly fell about 20% after I bought them, but they add to my inflation hedge, when the inflation really kicks in.

The NASDAQ is even worse with only 42 new 52-week highs this last week (and 96 the week before) and 508 new 52-week lows (and 360 the week before) out of 3445 issues traded. This is getting serious. The cumulative weekly breath ended at -88,097, a new low for the year but still above the -100,000 weeks in mid March of last year.

brucedoe
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