The weekly poll of its members by the American Association of Individual Investors is moving toward a level of bearishness usually associated with market lows, but has some ways to go yet.

This week’s poll was released last night and shows only 23.6% now bullish, and 46.0% bearish. We consider the AAII poll to potentially be in the vicinity of a correction bottom when bearishness exceeds 55% and bullishness is in the range of 16% to 20%.

The Consensus Inc. Sentiment Index, which was at a very bullish 78% in March, above the 75% level that Consensus Inc. says is “overbought bullishness indicating a downside reversal in trend may be imminent”, has cooled off, but is still 61% bullish. Consensus Inc. considers 25% bullish to be the oversold bullish level usually seen at correction bottoms.

And then there is the VIX Index (aka the Fear Index).

As the correction began the VIX began rising out of the extreme low fear zone usually seen at market and rally tops.

But it has quite a ways to go if it is to reach the level of fear usually seen at correction lows, which is at the level of the dotted line in the chart. We won’t dwell on the fact that, as the chart shows, fear can get considerably higher than the dotted line before correction bottoms are reached.

So, based on investor sentiment anyway, it looks like the correction has further to run.

Of course, markets can’t be timed by sentiment alone.

A Tip For Those Planning To Buy Facebook Shares.

Public investors tend to place ‘market orders’ on their trades. That is they are willing to pay whatever the asking price is at the time. In a fast moving market, with orders piling up in the orders books that can be costly.

As Robert Schwartz, professor of finance at Baruch College, is quoted in today’s Wall Street Journal, “The use of market orders, often favored by retail investors who just want to buy or sell quickly at the going market rate, can leave investors exposed. The order book can clear out, and if it does, there’s no safety net.”

That had happened so often to small investors scrambling to get in at any price on a new issue in all the excitement that surrounds an IPO, that the Financial Industry Regulatory Authority (Finra) detailed rules forbidding ‘market orders’ at the opening of new IPO’s in late 2010, but they weren’t implemented until September, 2011.

In the meantime, as one example of many, website Zillow Inc priced its IPO at $20 a share. The first public trades went off at $60 and then fell 25% to $45 just seconds later. Brokers blamed it on an influx of initial public ‘market orders’ to buy at whatever price sellers were asking. As soon as those wild asking prices were cleared out the price dropped.

Investors will apparently get some protection from themselves when Facebook initially trades, since brokers have been reminded of the Finra rule, and will block ‘market orders’ at the opening, only executing ‘limit orders’ that specify a specific price the buyer is willing to pay.

Investors just can’t catch a break from Wall Street.

Here we go again in another correction. The S&P 500 was at 1,415 in March. It closed yesterday at 1,328.

And so far all the way it’s been “Support should be just below at 1,405.” “Support should be just below at 1,400.” Then at 1,389, 1,375, 1,366, or whatever. Never more than a fraction lower than each low reached. It sure works to keep investors in, even those who intended to take profits and even downside positioning in the next correction. Instead it works to keep them ‘buying the dips’ all the way down in corrections.

I look at each of those supposed next support levels and hardly ever see what they possibly could be based on. I look at trendlines, various moving averages, previous lows, Fibonacci retracement levels, whatever, but I guess I am too dumb to spot the potential supports so fractionally close to each other each time the latest is violated.

Subscribers to Street Smart Report: A hotline from last evening, and the new issue of the newsletter are in the subscribers’ area of the Street Smart Report website. And please stay tuned to the hotline for more potential portfolio changes!

To read my weekend newspaper column ‘Plunging Commodity Prices Are Ominous For Stock Market’ Click here.

Yesterday in the U.S. Market.

Another ugly day, with a failed mid-day attempt to recover and then a late day sell-off.

The Dow closed down 125 points, or 1.0%. The S&P 500 closed down 1.1%. The NYSE Composite closed down 1.4%. The Nasdaq closed down 1.1%. The Nasdaq 100 closed down 1.0%. The Russell 2000 closed down 1.4%. The DJ Transportation Avg. closed down 0.8%. The DJ Utilities Avg closed down 0.4%.

Gold plunged another $26 an ounce to $1,557 an ounce.

Oil closed down another $1.69 a barrel at $94.44 a barrel.

The U.S. dollar etf UUP closed up 0.4%.

The U.S. Treasury bond etf TLT closed up 1.4%.

Yesterday in European Markets.

European markets were mixed yesterday. London closed down 0.6%. Germany closed down 0.3%. But France closed up 0.3%.

Asian Markets Plunged Wednesday Night But Bounced Some Last Night.

The DJ Asia-Pacific Index closed down a big 2.3% Wednesday night, Hong Kong and South Korea closing down more than 3%.

The DJ Asia-Pacific Index closed up 0.6% last night.

Among individual markets last night:

Australia closed down 0.2%. China closed up 1.4%. Hong Kong closed down 0.3%. India closed up 0.3%. Indonesia closed down 1.6%. Japan closed up 0.9%. Malaysia closed up 0.6%. New Zealand closed up 0.2%. South Korea closed up 0.3%. Singapore closed down 0.3%. Taiwan closed up 1.7%. Thailand closed up 0.2%.

Subscribers Premium Content Area.

For Street Smart Report subscribers only, used to provide additional info to that provided in the newsletter, mid-week reports, and hotlines.

To obtain access please click on the ‘Subscribe’ link. It will take you to an information page on subscribing to Street Smart Report, a subscription to which includes access to the premium content area of this Street Smart Post blog.

Markets This Morning:

European markets are down again this morning. The London FTSE is down 1.0%. The German DAX is down 0.4%. France’s CAC is down 0.6%.

Oil is up $.65 a barrel at $93.45.

Gold is bouncing back $19 an ounce at $1,555.

This Morning in the U.S. Market:

This week is an average week for potential market-moving economic reports, which include the Consumer Price Index, Retail Sales, Housing Starts, FOMC minutes, the Fed’s Phila Fed Index, etc. To see the full list and times for each release click here, and look at the left side of the page it takes you to.

There were no reports Monday.

On Tuesday it was reported that the Consumer Price Index was unchanged in April, while the core rate (with food and energy costs removed) was up 0.2%. And Retail Sales edged up just 0.1% in April. But the Empire State (NY) Mfg Index bounced back to 17.1 in May from 6.6 in April. The Housing Market Index, which measures the sentiment of home-builders, rose to 29 in May from 24 in April. That was better than forecasts of an improvement to 27, but the index remains pessimistic, well below the level of 50 that indicates that at least 50% of builders are optimistic.

Yesterday’s reports were that new housing starts were up 2.6% in April, no doubt contributing to the improvement in home-builder sentiment in May. But permits for future starts fell 7.0%. And Industrial Production was up 1.1% in April, better than the forecast of a 0.7% increase. But that was helped by March production, previously reported as unchanged, being revised down to minus 0.6%. And the minutes of the Fed’s last FOMC meeting showed the usual debates between Fed governors differing in their assessments of the economy, inflation, and how long the Fed should say it will keep interest rates low, none of which changes what the Fed inferred in its statement after the meeting.   

This morning’s report was that new weekly unemployment claims were unchanged last week at 370,000. The four-week moving average of claims fell by 4,750 to 375,000.

Still to come are the Phila Fed Index, and the Leading Economic Indicator Index, both of which will be released at 10 a.m.

The pre-open indicators have been hovering both sides of unchanged all morning.

Our Pre-Open Indicators:

Our pre-open indicators are pointing to the Dow being up 10 points or so in the early going, not meaningful at all as to direction later in the day.

Subscribers to Street Smart Report: A hotline from last evening, and the new issue of the newsletter of yesterday are in the subscribers’ area of the Street Smart Report website. And please stay tuned to the hotline for more potential portfolio changes!

To read my weekend newspaper column ‘Plunging Commodity Prices Are Ominous For Stock Market’ Click here.

I’ll be back with the next regular blog post on Saturday morning, as usual later than the week-day posts, probably around 11:00 a.m. (eastern time).

Non-subscribers: We believe we can help you not only make more profits, but just as importantly avoid losses, and at very reasonable cost!

Our portfolios were up an average of 9.4% last year, our Seasonal Timing Strategy up 15.8%, in a flat year (S&P 500 unchanged for year) when many, if not most, managers and funds were down for the year. We were on Hulbert’s Ten Best Newsletters of the Year list for the 2nd time in 4 years, and #4 Long-Term Market-Timer in Timer Digest’s rankings. And we are off to an even better start this year, ranked #1 Long-Term Market Timer in 2012 in April.

Market, sector, stock, gold, bond, and dollar buy and sell signals, short-sales, long-side and ‘inverse’ etf’s, mutual funds, two portfolios of recommended holdings (one modified buy and hold, and one market-timing). Street Smart Report Online provides an 8-page newsletter every 3 weeks, an in-depth 6 page interim update every Wednesday on our intermediate-term signals and recommended holdings, an in-depth 4-page ‘Gold, Bonds, Dollar’ update every 2 weeks, and special reports and hotline updates as needed. Highly regarded and in our 24th year. As a bonus for a one-year subscription you will also receive my latest book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.

This blog appears every Tuesday, Thursday, and Saturday morning!

**** End of Today’s post*****

It was reported this morning that the German economy (GDP) grew by 0.5% in the 1st quarter, Austria’s by 0.2%, Finland’s by 1.3%, and Belgium’s by 0.3%.

That was enough to offset the declines in other countries and keep the overall eurozone’s economy flat at 0%.

However, it did not change the European Commission’s forecast that the overall euro-zone will be in a recession this year with its economy shrinking by –0.3%.

On the downside, France’s economy stalled, with its GDP growth at 0% in the 1st quarter. Italy remains in recession with its 1st quarter GDP shrinking by 0.8% for the 3rd straight quarter. Spain slid into recession, its 1st quarter GDP contracting 0.3%, negative for the 2nd straight quarter. Greece remained in a serious recession with its GDP negative by 6.2% in the 1st quarter. The Dutch economy shrank by 0.2% for the 3rd straight quarter. Portugal remained in recession, its GDP down 0.1%.

European countries not members of the eurozone, including Hungary, Romania, and Czechoslovakia, also saw their economies in recessionary contractions in the 1st quarter.

Meanwhile, investor confidence in Germany has declined in May for the time in six months. The ZEW Indicator of Economic Sentiment in Germany fell to 10.8 in May from 23.4 in April.

And that shows up in the charts of the German market.

Europe is becoming the dog wagging the U.S. tail.

If you don’t believe the influence Europe is having on the U.S. market watch how the S&P futures move up and down with the European markets prior to markets opening in the U.S.

This morning was typical. European markets were quite positive in response to the better GDP report from Germany. And the U.S. futures were quite positive too.

But when the European markets reversed sharply to the downside, the U.S. futures reversed to negative territory too in spite of the better than expected Empire State Mfg Index report that had added to the positive look of the futures for awhile.

Quote of the day.

A. Gary Shilling, Money-manager & president of economic consulting firm:
”Don’t buy your first home now unless you’re willing to lose 20% of its value in the next few years. It will take a further 22% drop to return median single-family house prices to the trend identified by Robert Shiller of Yale University that prevailed until the housing bubble began. It adjusts for inflation and the tendency for houses to get bigger over time.”

Subscribers to Street Smart Report: In addition to the information in the premium content’ area of this morning’s blog, the new issue of the newsletter will be available sometime tomorrow in the subscribers’ area of the Street Smart Report website. And please stay tuned to the hotline for more potential portfolio changes!

To read my weekend newspaper column ‘Plunging Commodity Prices Are Ominous For Stock Market’ Click here.

Yesterday in the U.S. Market.

Another ugly day, with a failed mid-day attempt to recover and then a late day sell-off.

The Dow closed down 125 points, or 1.0%. The S&P 500 closed down 1.1%. The NYSE Composite closed down 1.4%. The Nasdaq closed down 1.1%. The Nasdaq 100 closed down 1.0%. The Russell 2000 closed down 1.4%. The DJ Transportation Avg. closed down 0.8%. The DJ Utilities Avg closed down 0.4%.

Gold plunged another $26 an ounce to $1,557 an ounce.

Oil closed down another $1.69 a barrel at $94.44 a barrel.

The U.S. dollar etf UUP closed up 0.4%.

The U.S. Treasury bond etf TLT closed up 1.4%.

Yesterday in European Markets.

European markets were down sharply again. London closed down 2.0%. Germany closed down 2.0%. France closed down 2.3%.

Asian Markets Were Down Sunday Night and Again Last Night.

The DJ Asia-Pacific Index closed down 0.6% Sunday night, and down 0.6% last night.

Among individual markets last night:

Australia closed down up 0.8%. China closed down 0.3%. Hong Kong closed up 0.8%. India closed up 0.7%. Indonesia closed down 0.2%. Japan closed down 0.8%. Malaysia closed down 1.0%. New Zealand closed down  0.6%. South Korea closed down 0.8%. Singapore closed up 0.4%. Taiwan closed up 0.2%. Thailand closed up 1.6%.

Subscribers Premium Content Area.

For Street Smart Report subscribers only, used to provide additional info to that provided in the newsletter, mid-week reports, and hotlines.

To obtain access please click on the ‘Subscribe’ link. It will take you to an information page on subscribing to Street Smart Report, a subscription to which includes access to the premium content area of this Street Smart Post blog.

In the premium content area this morning: Our signals on the U.S. Stock Market & Gold.

Markets This Morning:

European markets gave up early gains and are now down quite sharply again The London FTSE is down 0.8%. The German DAX is down 1.2%. France’s CAC is down 1.1%.

Oil is down $.20 a barrel at $94.58.

Gold is down $2 an ounce at $1,555.

This Morning in the U.S. Market:

This week returns to being an average week for potential market-moving economic reports, which include the Consumer Price Index, Retail Sales, Housing Starts, FOMC minutes, the Fed’s Phila Fed Index, etc. To see the full list and times for each release click here, and look at the left side of the page it takes you to.

There were no reports yesterday.

This morning it was reported that the Consumer Price Index was unchanged in April, while the core rate (with food and energy costs removed) was up 0.2%. And Retail Sales edged up just 0.1% in April. But the Empire State (NY) Mfg Index bounced back to 17.1 in May from 6.6 in April.

Still to come is the Housing Market Index, which will be released at 10 a.m.

The pre-open indicators were fairly positive earlier, bounced further after the reports, but have now given up the gains as European markets have suddenly turned sharply lower.

Our Pre-Open Indicators:

Our pre-open indicators are now pointing to the Dow being down 30 points or so in the early going.

Subscribers to Street Smart Report: In addition to the information in the premium content’ area of this morning’s blog, the new issue of the newsletter will be available sometime tomorrow in the subscribers’ area of the Street Smart Report website. And please stay tuned to the hotline for more potential portfolio changes!

To read my weekend newspaper column ‘Plunging Commodity Prices Are Ominous For Stock Market’ Click here.

I’ll be back with the next regular blog post on Thursday morning at 9:25 a.m.

Non-subscribers: We believe we can help you not only make more profits, but just as importantly avoid losses, and at very reasonable cost!

Our portfolios were up an average of 9.4% last year, our Seasonal Timing Strategy up 15.8%, in a flat year (S&P 500 unchanged for year) when many, if not most, managers and funds were down for the year. We were on Hulbert’s Ten Best Newsletters of the Year list for the 2nd time in 4 years, and #4 Long-Term Market-Timer in Timer Digest’s rankings. And we are off to an even better start this year, now ranked #1 Long-Term Market Timer so far in 2012.

Market, sector, stock, gold, bond, and dollar buy and sell signals, short-sales, long-side and ‘inverse’ etf’s, mutual funds, two portfolios of recommended holdings (one modified buy and hold, and one market-timing). Street Smart Report Online provides an 8-page newsletter every 3 weeks, an in-depth 6 page interim update every Wednesday on our intermediate-term signals and recommended holdings, an in-depth 4-page ‘Gold, Bonds, Dollar’ update every 2 weeks, and special reports and hotline updates as needed. Highly regarded and in our 24th year. As a bonus for a one-year subscription you will also receive my latest book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.

This blog appears every Tuesday, Thursday, and Saturday morning!

**** End of Today’s post*****

We remain on a sell signal for gold.

Our signal was primarily due to deterioration of gold’s technicals, reversals of our momentum indicators (not shown), investor sentiment for gold at the time, the pattern of lower highs and lower lows, and so forth.

But as usual, the fundamentals have caught up to what technical analysis was seeing in February.

Global economies are slowing. Even the U.S. economic recovery is stumbling. So demand for commodities is plunging, as are commodity prices. The jobs picture is deteriorating again preventing pressure from building for higher wages.

And those deflationary effects are taking support out from under gold, the historical hedge against inflation.  

Our original downside target was $1,500 an ounce, which at the time of the sell signal was at the lower limit of the trading band that has formed since last August.

However, gold has been taking its time in getting there, which has given the lower limit of the trading band time to extend further, perhaps indicating a move below $1,500.

Emerging Markets. Buy or Bail?

I’m still hearing a lot of bullish analysis regarding emerging markets as the place to be, given the economic problems and market declines in developed country markets.

“With demand from the developed world tepid at best, trade between emerging markets themselves will accelerate.”

“Emerging markets had a good start in 2012 and our Asian strategists expect Asia to outperform developed markets in 2012.”

Much of the analysis points out how emerging markets even made larger gains than developed country markets in the bull market off the 2009 lows.

True, but that was then, and this is now.

Technical analysis is showing a different picture. 

Emerging markets look to me like they’re possibly in a bear market that began in April of last year, with the rally off the October low to a lower high, potentially being only a bear market rally within an ongoing bear market.

How Far Behind the Curve Is the Average Guy in The Street?

Analysts and markets have been concerned about the economy since the monthly jobs reports over the last few months began showing new jobs in serious declines. 

Yesterday it was reported that the University of Michigan’s Consumer Sentiment Index improved to 77.8 in May from 76.4 in April, topping forecasts of a fractional decline to 76.2.

And interestingly, the report said almost twice as many consumers in the survey reported hearing about the previous new monthly job gains than had heard about recent monthly job losses.

Subscribers to Street Smart Report: In addition to the information in the premium content’ area of this morning’s blog, there is a hotline and in-depth Mid-Week Markets Signals Update from Wednesday evening in the subscribers’ area of the Street Smart Report website. The next issue of the newsletter will be out on Wednesday. But please stay tuned to the hotline in the meantime for more potential portfolio changes!

To read my weekend newspaper column ‘Plunging Commodity Prices Are Ominous For Stock Market’ Click here.

Yesterday in the U.S. Market.

It was a mostly down day yesterday. Volume remained average based on the new normal, with 0.8 billion shares traded on the NYSE.

The Dow closed down 34 points, or 0.3%. The S&P 500 closed down 0.3%. The NYSE Composite closed down 0.5%. The Nasdaq closed unchanged. The Nasdaq 100 closed unchanged. The Russell 2000 closed down 0.2%. The DJ Transportation Avg. closed up 0.1%. The DJ Utilities Avg closed up 0.1%.

Gold closed down $14 an ounce at 1,581.

Oil closed down $1.24 a barrel to $95.83 a barrel.

The U.S. dollar etf UUP closed up 0.2%.

The U.S. Treasury bond etf TLT closed up 0.8%.

Yesterday in European Markets.

European markets were mixed yesterday. The London FTSE closed up 0.6%. The German DAX closed up 1.0%. And France’s CAC closed unchanged.

Global markets for the week.

A negative week, very much so in Asia.

THIS WEEK (May 11) DJIA 12820 - 1.6% S&P 500 1353 - 1.2% NYSE 7816 - 2.2% NASDAQ 2933 - 0.8% NASD 100 2615 - 4.5% Russ 2000 790 - 0.1% DJTransprts 5140 - 1.7% DJ Utilities 472 + 0.8% XOI Oils 1,161 - 2.7% Gold bull. 1,581 - 3.8% GoldStcks 151 - 0.3% Canada 11694 - 1.5% London 5575 - 1.4% Germany 6579 + 0.3% France 3129 - 1.0% Hong Kong 19964 - 5.3% Japan 8953 - 4.6% Australia 4342 - 2.7% S. Korea 1917 - 3.6% India 16292 - 3.2% Indonesia 4114 - 2.4% Brazil 59336 - 2.4% Mexico 38891 - 1.3% China 2394 - 2.4%

LAST WEEK (May 4) DJIA 13038 - 1.4% S&P 500 1369 - 2.4% NYSE 7993 - 2.0% NASDAQ 2956 - 3.7% NASD 100 2737 - 3.8% Russ 2000 791 - 4.1% DJTransprts 5227 - 0.8% DJ Utilities 468 - 0.2% XOI Oils 1,193 - 2.5% Gold bull. 1,643 - 1.2% GoldStcks 156 - 6.0% Canada 11871 - 3.0% London 5655 - 2.1% Germany 6561 - 3.5% France 3161 - 3.2% Hong Kong 21086 + 1.7% Japan 9380 - 1.5% Australia 4459 + 0.6% S. Korea 1989 + 0.7% India 16831 - 1.8% Indonesia 4216 + 1.3% Brazil 60820 - 1.4% Mexico 39408 + 0.2% China 2452 + 2.3%

PREVIOUS WEEK (April 27) DJIA 13228 + 1.5% S&P 500 1403 + 1.8% NYSE 8152 + 1.6% NASDAQ 3069 + 2.3% NASD 100 2741 + 2.4% Russ 2000 825 + 2.6% DJTransprts 5267 + 0.6% DJ Utilities 469 + 1.9% XOI Oils 1,224 + 1.8% Gold bull. 1,663 + 1.3% GoldStcks 166 + 1.2% Canada 12239 + 0.8% London 5777 + 0.1% Germany 6801 + 0.8% France 3266 + 2.4% Hong Kong 20741 - 1.3% Japan 9520 - 0.4% Australia 4433 - 0.3% S. Korea 1975 unchgd India 17134 - 1.4% Indonesia 4163 - 0.4% Brazil 61691 - 1.2% Mexico 39327 - 0.1% China 2396 - 0.4%

Premium Content Area.

For Street Smart Report subscribers only, used to provide additional info to that provided in the newsletter, mid-week reports, and hotlines.

To obtain access please click on the ‘Subscribe’ link. It will take you to an information page on subscribing to Street Smart Report, a subscription to which includes access to the premium content area of this Street Smart Post blog.

In the Premium Content section this morning: U.S. stock market short-term and intermediate-term signals.

Next week’s Economic Reports:

Next week returns to being an average week for potential market-moving economic reports, which include the Consumer Price Index, Retail Sales, Housing Starts, FOMC minutes, the Fed’s Phila Fed Index, etc. To see the full list and times for each release click here, and look at the left side of the page it takes you to.

To read my weekend newspaper column ‘Plunging Commodity Prices Are Ominous For Stock Market’ Click here.

Subscribers to Street Smart Report: In addition to the information in the premium content’ area of this morning’s blog, there is a hotline and in-depth Mid-Week Markets Signals Update from Wednesday evening in the subscribers’ area of the Street Smart Report website. The next issue of the newsletter will be out on Wednesday. But please stay tuned to the hotline in the meantime for more potential portfolio changes!

I’ll be back with the next regular blog post on Tuesday morning at 9:25 a.m. 

Non-subscribers: We believe we can help you not only make more profits, but just as importantly avoid losses, and at very reasonable cost!

Our portfolios were up an average of 9.4% last year, our Seasonal Timing Strategy up 15.8%, in a flat year (S&P 500 unchanged for year) when many, if not most, managers and funds were down for the year. We were on Hulbert’s Ten Best Newsletters of the Year list for the 2nd time in 4 years, and #4 Long-Term Market-Timer in Timer Digest’s rankings. And we are off to a great start this year, and also moved up to #1 Long-Term Market-Timer.

Market, sector, stock, gold, bond, and dollar buy and sell signals, short-sales, long-side and ‘inverse’ etf’s, mutual funds, two portfolios of recommended holdings (one modified buy and hold, and one market-timing). Street Smart Report Online provides an 8-page newsletter every 3 weeks, an in-depth 6 page interim update every Wednesday on our intermediate-term signals and recommended holdings, an in-depth 4-page ‘Gold, Bonds, Dollar’ update every 2 weeks, and special reports and hotline updates as needed. Highly regarded and in our 24th year. As a bonus for a one-year subscription you will also receive my latest book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.

This blog appears every Tuesday, Thursday, and Saturday morning!

**** End of Today’s post*****

We haven’t seen this analysis anywhere else, but it’s looking increasingly like global markets outside of the U.S. rolled over into a bear market last April, and that their rally off the October low was only a bear market rally within an ongoing bear market.

We’ve been saying we expect only another correction sometime this summer, but not the next global bear market until 2013 and 2014. And the U.S. market recovered from last summer’s correction and has gone on to nominal new highs. 

But the FT World Index Ex-USA plunged 22% last summer, exceeding the official 20% decline that defines a bear market. And the rally off the October low only partially retraced that decline before rolling over to the downside again in what could be the beginning of a typical 2nd leg down.

Global markets outside the U.S. have been correctly fearing for over a year now that the eurozone debt crisis, austerity programs, slowing economies, and actual recessions in Europe, were a threat to global economies.

Will U.S. Follow Europe’s Lead in Solving Its Debt Problem?

Luka Katseli, former economy minister of Greece, says, “The euro-zone’s debt program is suicidal, not only for Greece, but for Spain, Portugal, Italy, everywhere. The mistake is being made.”

She is referring to the EU’s German-led year-long insistence that governments tackle their debt and deficits problems by immediately cutting government spending in the midst of slowing economies and even recessions.

Demands for similar cuts and austerity actions to curb its record government debt are being made in the U.S.

Fed Chairman Bernanke has warned Congress several times in the last two years that it needs to have a plan for tackling the debt problems, but the plan shouldn’t be implemented while the economic recovery is still anemic.

In making his points a year ago he said he thought Europe was making a mistake by tackling its debt problems too soon with austerity programs, that it could potentially drop their economies back into recessions, requiring more spending and exacerbating their problems. Seems like he was right.

To read my weekend newspaper column ‘Europe Is a Bigger Problem Than the Slowing U.S. Economy’ Click here.

Subscribers to Street Smart Report: There is a very important hotline and in-depth ‘U.S. Market Signals and Recommendations’ update from last evening in the subscribers’ area of the Street Smart Report website. That is in addition to the important ‘Global Markets’ update from Monday, and the ‘Gold, Bonds, Dollar, Inflation’ report from Tuesday.

Yesterday in the U.S. Market.

Another negative day, but another day that saw weakness in the morning but some recovery in the afternoon. The Dow was down 185 points at its low, but recovered to close down ‘only’ 97 points. Volume picked up some again, with 0.94 billion shares traded on the NYSE.

The Dow closed down 97 points, or 0.8%. The S&P 500 closed down 0.7%. The NYSE Composite closed down 0.9%. The Nasdaq closed down 0.4%. The Nasdaq 100 closed down 0.3%. The Russell 2000 closed down 0.5%. The DJ Transportation Avg. closed down 1.4%. The DJ Utilities Avg closed down 0.1%.

Gold closed down another $9 an ounce at $1,589 an ounce.

Oil closed down $.52 a barrel at $96.49 a barrel.

The U.S. dollar etf UUP closed up 0.4%.

The U.S. Treasury bond etf TLT closed up 0.1%.

Yesterday in European Markets.

European markets came well off their earlier lows to close mixed yesterday. London closed down 0.4%. Germany recovered from being down more than 1% to being up 0.5%. France recovered to close down only 0.2%.

Asian Markets Were Mixed Last Night.

The Asia Dow closed down 0.1%.

Among individual markets last night:

Australia closed up 0.5%. China closed up 0.1%. Hong Kong closed down 0.5%. India closed down 0.4%. Indonesia closed up 0.1%. Japan closed down 0.4%. Malaysia closed up 0.2%. New Zealand closed up 0.3%. South Korea closed down 0.3%. Singapore closed up 0.1%. Taiwan closed up 0.1%. Thailand closed down 1.4%.

Subscribers Premium Content Area.

For Street Smart Report subscribers only, used to provide additional info to that provided in the newsletter, mid-week reports, and hotlines.

To obtain access please click on the ‘Subscribe’ link. It will take you to an information page on subscribing to Street Smart Report, a subscription to which includes access to the premium content area of this Street Smart Post blog.

Markets This Morning:

European markets are bouncing back some this morning. The London FTSE is up 0.4%. The German DAX is up 1.0%. France’s CAC is up 0.6%.

Oil is up $.58 a barrel at $97.39.

Gold is up $6 an ounce at $1,594.

This Morning in the U.S. Market:

This week is a very light week for potential market-moving economic reports, almost none. To see the full list and times for each release click here, and look at the left side of the page it takes you to.

Monday it was reported that U.S. consumers, who had begun to cut back on debt in the aftermath of the 2008-2009 financial crisis, continued to load up on debt in recent months. Consumer debt rose by $21.3 billion in March, the 7th straight month of increases. It was double the consensus forecast for an increase of $10 billion.

Tuesday it was reported that the NFIB Small Business Optimism Index rose to 94.5 in March from 92.5 in February, which returns it to the same level as February of last year.

Yesterday it was reported that U.S. wholesale inventories rose 0.3% in March, while sales rose 0.5%.

This morning it was reported that new weekly unemployment claims fell a fractional 1,000 last week. The more important four-week moving average dropped by 5,250 to 379,000. And the Commerce Department reported the U.S. Trade deficit widened sharply, by 14.1%, in March.

Concerns over the situations (plural) in Europe are receding a bit this morning in Europe and the U.S.

Our Pre-Open Indicators:

Our pre-open indicators are pointing to the Dow being up 80 points or so in the early going.

Subscribers to Street Smart Report: There is a very important hotline and in-depth ‘U.S. Market Signals and Recommendations’ update from last evening in the subscribers’ area of the Street Smart Report website. That is in addition to the important ‘Global Markets’ update from Monday, and the ‘Gold, Bonds, Dollar, Inflation’ report from Tuesday.

I’ll be back with the next regular blog post on Saturday morning, as usual later than the week-day posts, probably around 11 a.m.

Non-subscribers: We believe we can help you not only make more profits, but just as importantly avoid losses, and at very reasonable cost!

Our portfolios were up an average of 9.4% last year, our Seasonal Timing Strategy up 15.8%, in a flat year (S&P 500 unchanged for year) when many, if not most, managers and funds were down for the year. We were on Hulbert’s Ten Best Newsletters of the Year list for the 2nd time in 4 years, and #4 Long-Term Market-Timer in Timer Digest’s rankings. And we are off to an even better start this year, now ranked #1 Long-Term Market Timer so far in 2012.

Market, sector, stock, gold, bond, and dollar buy and sell signals, short-sales, long-side and ‘inverse’ etf’s, mutual funds, two portfolios of recommended holdings (one modified buy and hold, and one market-timing). Street Smart Report Online provides an 8-page newsletter every 3 weeks, an in-depth 6 page interim update every Wednesday on our intermediate-term signals and recommended holdings, an in-depth 4-page ‘Gold, Bonds, Dollar’ update every 2 weeks, and special reports and hotline updates as needed. Highly regarded and in our 24th year. As a bonus for a one-year subscription you will also receive my latest book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.

This blog appears every Tuesday, Thursday, and Saturday morning!

**** End of Today’s post*****

As is the case every election year, I’m seeing and hearing a lot about how election years are always positive, and getting a lot of e-mails from non-subscribers asking if the market’s seasonality ever works in election years, since they’re always positive for investors.

I can tell you how our Seasonal Timing Strategy worked in the three election years that have taken place since STS was introduced in 1999.

The years 2000, 2004, and 2008 were election years.

As shown in the table in the Sample issue of our newsletter, or in its description (Seasonal Timing Strategy) on the Street Smart Report website, our STS was up 2.1% in 2000, when the S&P 500 was down 9.1% for the year (and the Nasdaq plunged 39%). In 2004, our STS was up 8.1%, but the Dow was up only 5.5%. And in 2008, our STS was down only 3.6% when the S&P 500 was down 36% for the year, and the Dow lost 31%. So our version of seasonality certainly worked in the way it was designed even in election years.

Regarding election years in general, as subscribers know, five months ago, in December, I provided a study of election years going back to 1920 for subscribers to keep in mind for this year. You can see it by clicking on this link. The Truth About Election Years! Dec. 16, 2011. It includes a table of each election year since 1920, the incumbent president at the time, his party affiliation, whether the market was up or down for the year, and by how much.

Summing it up:

Of the 23 election years, 15 were positive, or 66.7%.

However, ignoring whether or not they were election years, over those 91 years, 62 were up anyway, or 68%.

Conclusion: The market was up in 68% of years overall, and 67% of election years. So, whether it was an election year or not had no effect on the market’s performance.

Of the 23 election years, the market was up 63.3% of the years when a Democrat was the incumbent president, and 66.7% when it was a Republican.

Conclusion: It makes no difference which party is in the White House at the time of the election.

A BIg-Thank-You to:

Alan Newman, editor of Stock Market Crosscurrents (www.cross-currents.net), for his tribute to our Seasonal Timing System.

In his current issue, Alan covers the market’s seasonality and the ‘Sell in May and Go Away’ phenomenon, in which the market has a very strong history of making most of its gains between Nov. 1 and May 1, and experiencing most of its corrections in the opposite season.

He includes an interesting chart showing how $10,000 invested in the Dow index in 1950, but only in the favorable season each year, would have grown to $657,000 by now, or an average of 14.1% a year. But $10,000 invested only in the unfavorable seasons would be worth only $9,028.

Alan says,

“The pattern of favorable and unfavorable seasonality was initially uncovered by both Norm Fosbach and Yale Hirsch. The baton was later taken up and vastly improved upon by our colleague Sy Harding, who coupled seasonality with a common technical indicator. As distinctive as our chart above might be, Harding’s investment formula based on seasonality has an even more astonishing record.”

Quote of the day.

Confirmation bias is the tendency to see things in your environment that confirm your pre-conceived ideas, and not see things that conflict with what you already believe. From ‘Defending Jacob’, a novel.

To read my weekend newspaper column ‘Europe Is a Bigger Problem Than the Slowing U.S. Economy’ Click here.

Subscribers to Street Smart Report: There is a very important in-depth ‘Global Markets’ update from last evening in the subscribers’ area of the Street Smart Report website tomorrow. The regular in-depth ‘Mid-Week U.S. Market Signals and Recommendations’ update will be there some time tomorrow.

Yesterday in the U.S. Market.

A mixed day. There was no follow through to last week’s decline in spite of the Sunday elections in Greece and France, and the very negative reactions in Asian markets.

The Dow was down 68 points at its low, but recovered to close down only 29 points, or 0.2%. The rest of the market indexes were also down in the early going but they recovered enough to close up fractionally. Volume was light at 0.75 billion shares traded on the NYSE.

The Dow closed down 29 points, or 0.2%. The S&P 500 closed up 0.1%. The NYSE Composite closed up 0.2%. The Nasdaq closed up 0.1%. The Nasdaq 100 closed up 0.1%. The Russell 2000 closed up 0.2%. The DJ Transportation Avg. closed up 0.3%. The DJ Utilities Avg closed down 0.1%.

Gold closed down $6 an ounce at $1,638 an ounce.

Oil closed down $.46 a barrel at $98.02 a barrel.

The U.S. dollar etf UUP closed up 0.1%.

The U.S. Treasury bond etf TLT closed unchanged.

Yesterday in European Markets.

European markets were down sharply in the early going yesterday in reaction to the elections in France and Greece, but closed mixed. London closed down 1.9%. Germany recovered from being down more than 2% to being up 0.1%. France recovered to close up 1.6%.

Asian Markets Plunged Sunday Night But Recovered Fractionally Last Night.

The DJ Asia-Pacific Index plunged 2.1% Sunday night, with individual markets closing down as much as 2.2% (Australia), 2.8% (Japan) and 2.6% (Hong Kong).

But they bounced back up fractionally last night, with the DJ Asia-Pacific Index closing up 0.2%

Among individual markets last night:

Australia closed up 0.3%. China closed down 0.1%. Hong Kong closed down 0.3%. India plunged 2.2%. Indonesia closed up 0.5%. Japan closed up 0.7%. Malaysia closed up 0.4%. New Zealand closed up 0.63. South Korea closed up 0.5%. Singapore closed up 0.2%. Taiwan closed up 0.1%. Thailand closed up 0.3%.

Subscribers Premium Content Area.

For Street Smart Report subscribers only, used to provide additional info to that provided in the newsletter, mid-week reports, and hotlines.

To obtain access please click on the ‘Subscribe’ link. It will take you to an information page on subscribing to Street Smart Report, a subscription to which includes access to the premium content area of this Street Smart Post blog.

In the premium content area this morning: Our signals on the U.S. Stock Market.

Markets This Morning:

European markets are down again this morning. The London FTSE is down 0.2%. The German DAX is down 0.7%. France’s CAC is down 1.6%.

Oil is down $1.04 a barrel at $96.90.

Gold is plunging $23 an ounce at $1,616.

This Morning in the U.S. Market:

This week is a very light week for potential market-moving economic reports, almost none. To see the full list and times for each release click here, and look at the left side of the page it takes you to.

Yesterday it was reported that U.S. consumers, who had begun to cut back on debt in the aftermath of the 2008-2009 financial crisis, continue to load up on debt in recent months. Consumer debt rose by $21.3 billion in March, the 7th straight month of increases. It was double the consensus forecast for an increase of $10 billion.

This morning it was reported that the NFIB Small Business Optimism Index rose to 94.5 in March from 92.5 in February, which returns it to the same level as February of last year.

Concerns over the situations (plural) in Europe are the new focus of the market, replacing the initial reaction to Friday’s dismal jobs report. 

Our Pre-Open Indicators:

Our pre-open indicators are pointing to the Dow being down 70 points or so in the early going.

To read my weekend newspaper column ‘Europe Is a Bigger Problem Than the Slowing U.S. Economy’ Click here.

Subscribers to Street Smart Report: There is a very important in-depth ‘Global Markets’ update from last evening in the subscribers’ area of the Street Smart Report website tomorrow. The regular in-depth ‘Mid-Week U.S. Market Signals and Recommendations’ update will be there some time tomorrow.

I’ll be back with the next regular blog post on Thursday morning at 9:25 a.m.

Non-subscribers: We believe we can help you not only make more profits, but just as importantly avoid losses, and at very reasonable cost!

Our portfolios were up an average of 9.4% last year, our Seasonal Timing Strategy up 15.8%, in a flat year (S&P 500 unchanged for year) when many, if not most, managers and funds were down for the year. We were on Hulbert’s Ten Best Newsletters of the Year list for the 2nd time in 4 years, and #4 Long-Term Market-Timer in Timer Digest’s rankings. And we are off to an even better start this year, now ranked #1 Long-Term Market Timer so far in 2012.

Market, sector, stock, gold, bond, and dollar buy and sell signals, short-sales, long-side and ‘inverse’ etf’s, mutual funds, two portfolios of recommended holdings (one modified buy and hold, and one market-timing). Street Smart Report Online provides an 8-page newsletter every 3 weeks, an in-depth 6 page interim update every Wednesday on our intermediate-term signals and recommended holdings, an in-depth 4-page ‘Gold, Bonds, Dollar’ update every 2 weeks, and special reports and hotline updates as needed. Highly regarded and in our 24th year. As a bonus for a one-year subscription you will also receive my latest book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.

This blog appears every Tuesday, Thursday, and Saturday morning!

**** End of Today’s post*****

This is the weekend when Warren Buffett stages Berkshire Hathaway’s (BRK.A) annual meeting and the release of its 1st quarter earnings. As usual it has achieved its goal of a huge promotional effect personally for the “Sage of Omaha’, as well as for the company’s stock, with a big presence in financial news articles and TV shows. A reported 40,000 investors are attending the annual festival known as the “Woodstock of Capitalism”, in Omaha.

For the first time, this year Buffett will be asked questions by analysts, apparently a panel of three selected analysts who are all positive on the stock, or so it’s being reported, those negative on the stock not represented. 

Berkshire’s 1st quarter operating earning’s were reported yesterday at $2.67 billion, or $1,615 a share. It was one of the few stocks for which Wall Street did not have its forecasts lowered enough. The earnings missed Wall Street’s estimates of $1,780 a share.

But no matter, the earnings were a lot better than the horrible 1st quarter a year ago.

So the headlines just make a guy want to rush out and get hold of some of this stock.

Yahoo Finance: “Berkshire Profits Double As Insurance Losses Fall.”

Wall Street Journal: “Berkshire Hathaway Profit Doubles.”

Financial Times: “Buffett Group Reports 67% Rise in Profits.”

MarketWatch: “Berkshire Earnings Boom.”

But as Bloomberg noted in an article on Thursday, Buffett’s Berkshire Hathaway’s performance has significantly underperformed the market over the last three years, gaining just 32% compared to 60% for the S&P 500. It’s up just 6.3% so far this year compared to 8.8% for the S&P 500.

Yet its price/earnings ratio is 19.2 times earnings compared to the S&P 500’s P/E ratio of 15.7.

The hype seems to work quite well.

And it’s not that it’s a great safe haven stock, or has a great long-term performance any more. Those days were back during the long secular bull market of 1982-2000, when Buffett’s buy and hold style worked so well.

Over the last decade plus it has pretty much matched the market, suffering big declines of as much as 53%. In fact it hasn’t even matched the market since 2008. The Dow, and Nasdaq have both ‘come back’ from the severe 2007-2009 bear market and gone on to at least fractional new highs.

Berkshire Hathaway has not even recovered all the way from last summer’s correction let alone its plunge in the bear market.

Maybe I won’t rush right out and buy it in spite of the headlines.

Interesting Charts.

The heavy week of economic reports, most of which continued to be downside surprises, finally had an effect on the market.

But the market’s worst week of the year (so far) only dropped the 30-stock Dow to the potential support at its short-term 21-day m.a. 

The broader indexes, which were already weaker than the Dow, were affected a bit more. 

Just a short-term one-week blip, or the beginning of something worse intermediate-term?

Gold and the Gold Mining Stocks.

Gold bullion has provided a number of tradable moves in both directions over the last two years.

But has there been a more volatile or worse performing sector than the gold mining stocks over the last 16 months?

Subscribers to Street Smart Report: In addition to the information in the premium content’ area of this morning’s blog, there is an in-depth Mid-Week Markets Signals Update from Wednesday in the subscribers’ area of the Street Smart Report website.

To read my weekend newspaper column ‘Europe Is a Bigger Problem Than the Slowing U.S. Economy’ Click here.

Yesterday in the U.S. Market.

It was a negative day for sure. Volume picked up some to 0.82 billion shares traded on the NYSE. 

The Dow closed down 168 points, or 1.3%. The S&P 500 closed down 1.6%. The NYSE Composite closed down 1.5%. The Nasdaq closed down 2.2%. The Nasdaq 100 closed down 2.5%. The Russell 2000 closed down 1.8%. The DJ Transportation Avg. closed down 1.1%. The DJ Utilities Avg closed up 0.1%.

Gold closed up $8 an ounce at 1,642.

Oil plunged $4.01 a barrel to $98.53 a barrel.

The U.S. dollar etf UUP closed up 0.4%.

The U.S. Treasury bond etf TLT closed up 0.8%.

Yesterday in European Markets.

European markets plunged again yesterday. The London FTSE closed down 1.9%. The German DAX closed down 2.0%. And France’s CAC closed down 1.9%.

Global markets for the week.

A negative week, but mostly in the U.S. and Europe for a change.

THIS WEEK (May 4) DJIA 13038 - 1.4% S&P 500 1369 - 2.4% NYSE 7993 - 2.0% NASDAQ 2956 - 3.7% NASD 100 2737 - 3.8% Russ 2000 791 - 4.1% DJTransprts 5227 - 0.8% DJ Utilities 468 - 0.2% XOI Oils 1,193 - 2.5% Gold bull. 1,643 - 1.2% GoldStcks 156 - 6.0% Canada 11871 - 3.0% London 5655 - 2.1% Germany 6561 - 3.5% France 3161 - 3.2% Hong Kong 21086 + 1.7% Japan 9380 - 1.5% Australia 4459 + 0.6% S. Korea 1989 + 0.7% India 16831 - 1.8% Indonesia 4216 + 1.3% Brazil 60820 - 1.4% Mexico 39408 + 0.2% China 2452 + 2.3%

LAST WEEK (April 27) DJIA 13228 + 1.5% S&P 500 1403 + 1.8% NYSE 8152 + 1.6% NASDAQ 3069 + 2.3% NASD 100 2741 + 2.4% Russ 2000 825 + 2.6% DJTransprts 5267 + 0.6% DJ Utilities 469 + 1.9% XOI Oils 1,224 + 1.8% Gold bull. 1,663 + 1.3% GoldStcks 166 + 1.2% Canada 12239 + 0.8% London 5777 + 0.1% Germany 6801 + 0.8% France 3266 + 2.4% Hong Kong 20741 - 1.3% Japan 9520 - 0.4% Australia 4433 - 0.3% S. Korea 1975 unchgd India 17134 - 1.4% Indonesia 4163 - 0.4% Brazil 61691 - 1.2% Mexico 39327 - 0.1% China 2396 - 0.4%

PREVIOUS WEEK (April 20) DJIA 13029 + 1.4% S&P 500 1378 + 0.6% NYSE 8025 + 1.2% NASDAQ 3000 - 0.4% NASD 100 2676 - 0.9% Russ 2000 804 + 1.0% DJTransprts 5234 + 0.7% DJ Utilities 460 + 1.8% XOI Oils 1,202 unchgd Gold bull. 1,642 - 0.9% GoldStcks 164 - 1.8% Canada 12147 + 0.9% London 5772 + 2.1% Germany 6750 + 2.5% France 3188 unchgd Hong Kong 21010 + 1.5% Japan 9561 - 0.8% Australia 4444 + 0.9% S. Korea 1974 - 1.7% India 17373 + 1.6% Indonesia 4181 + 0.5% Brazil 62494 + 0.9% Mexico 39354 + 2.4% China 2406 + 2.0%

Premium Content Area.

For Street Smart Report subscribers only, used to provide additional info to that provided in the newsletter, mid-week reports, and hotlines.

To obtain access please click on the ‘Subscribe’ link. It will take you to an information page on subscribing to Street Smart Report, a subscription to which includes access to the premium content area of this Street Smart Post blog.

In the Premium Content section this morning: U.S. stock market intermediate-term signals. Gold, and Bonds.

Next week’s Economic Reports:

Next week will be a very light week for potential market-moving economic reports, almost none. To see the full list and times for each release click here, and look at the left side of the page it takes you to.

To read my weekend newspaper column ‘Europe Is a Bigger Problem Than the Slowing U.S. Economy’ Click here.

Subscribers to Street Smart Report: In addition to the information in the premium content’ area of this morning’s blog, there is an in-depth Mid-Week Markets Update from Wednesday in the subscribers’ area of the Street Smart Report website.

I’ll be back with the next regular blog post on Tuesday morning at 9:25 a.m.

Non-subscribers: We believe we can help you not only make more profits, but just as importantly avoid losses, and at very reasonable cost!

Our portfolios were up an average of 9.4% last year, our Seasonal Timing Strategy up 15.8%, in a flat year (S&P 500 unchanged for year) when many, if not most, managers and funds were down for the year. We were on Hulbert’s Ten Best Newsletters of the Year list for the 2nd time in 4 years, and #4 Long-Term Market-Timer in Timer Digest’s rankings. And we are off to a great start this year, and also moved up to #1 Long-Term Market-Timer.

Market, sector, stock, gold, bond, and dollar buy and sell signals, short-sales, long-side and ‘inverse’ etf’s, mutual funds, two portfolios of recommended holdings (one modified buy and hold, and one market-timing). Street Smart Report Online provides an 8-page newsletter every 3 weeks, an in-depth 6 page interim update every Wednesday on our intermediate-term signals and recommended holdings, an in-depth 4-page ‘Gold, Bonds, Dollar’ update every 2 weeks, and special reports and hotline updates as needed. Highly regarded and in our 24th year. As a bonus for a one-year subscription you will also receive my latest book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.

This blog appears every Tuesday, Thursday, and Saturday morning!

**** End of Today’s post*****

On Saturday I said this week’s unusually heavy week of important economic reports in the U.S. and globally would likely decide the market’s direction for awhile.

But so far, even though the reports have been startling in some cases, the market has shrugged them off, and gone into idle mode. The Dow is up 40 points, or 0.3% for the week. The Nasdaq is down 0.3%, and the S&P 500 is unchanged.

Yet some of the reports have been dramatic. Among them, the Chicago PMI Index plunged from 63.3 in March to 56.2 in April. The Dallas Fed Mfg Index plunged from 10.8 in March all the way into negative territory at -3.4 in April. Construction Spending was up only 0.1% in March versus the consensus forecast of an increase of 0.5%, AND the previously reported decline of 1.1% in February was revised to a decline of 1.5%. On the positive side the national ISM Mfg Index rose to 54.8% in April from 53.4 in March.

Then yesterday, the ADP Employment Report was released and showed only 119,000 new jobs were created in the private sector in April, a major miss of the consensus forecast of 175,000, and more importantly a big decline from the average 200,000 monthly new jobs in the 1st quarter. And Factory Orders fell 1.5% in March, the biggest monthly decline in 3 years.

Meanwhile, outside of the U.S., the reports this week have been that Canada reported its GDP growth unexpectedly fell into negative territory at -1.2% in February versus forecasts of at least meager growth of +0.1%. The United Kingdom reported its PMI fell to 50.5 in April from 51.9 in March. (The U.K. had already reported negative GDP for the last two quarters, putting it officially in a recession). The 17-nation euro-zone’s PMI fell to 45.9 in April from 47.7 in March (a number below 50 indicates recessionary contraction). Even the euro-zone’s strongest economy, that of Germany, saw its PMI fall to 46.2 in April from 48.4 in March. France’s PMI remained in negative territory at 46.9.

I found this chart, which first appeared on Business Insiders, to be very interesting.

It shows how similar the current decline in Germany’s PMI is to its declines prior to the global market’s 1998 mini-crash, the 2000–2002 bear market, and the 2007-2009 bear market. 

Negative Divergences Continue.

The Dow, S&P 500, and Nasdaq have recovered all of their losses from last summer’s correction, and gone on to nominal new highs.

But not some of the broader indexes, which still remain below their peaks of last April.

And then there is that negative divergence of most of the other major economies of the world.

To read my weekend newspaper column ‘The Fed Will Come To the Rescue But Deliberately Late’ Click here.

Subscribers to Street Smart Report: A hotline from last evening, and the in-depth Mid-Week ‘U.S. Market signals and recommendations’ report are in the subscribers’ area of the Street Smart Report website from yesterday.

Yesterday in the U.S. Market.

An early negative response to the ugly ADP jobs report and plunge in Factory Orders was reversed in the afternoon to a mixed close. The Dow, which was down 87 points in the early going recovered to close down only 11 points. Most of the rest of the major indexes recovered to close up for the day.

The Dow closed down 11 points, or 0.1%. The S&P 500 closed down 0.2%. The NYSE Composite closed down 0.5%. But the Nasdaq closed up 0.3%. The Nasdaq 100 closed up 0.3%. The Russell 2000 closed up 0.3%. The DJ Transportation Avg. closed up 0.9%. The DJ Utilities Avg closed down 0.6%.

Gold closed down $8 an ounce at $1,654 an ounce.

Oil closed down $.94 a barrel at $105.22 a barrel.

The U.S. dollar etf UUP closed up 0.3%.

The U.S. Treasury bond etf TLT closed up 0.7%.

Yesterday in European Markets.

European markets were mixed yesterday. London closed down 0.9%. Germany closed down 0.8%. France closed up 0.4%.

Asian Markets Were Down Last Night.

The DJ Asia-Pacific Index closed down 0.4%.

Japanese markets were closed for a holiday.

Among individual markets that were open:

Australia closed down 0.2%. China closed up 0.1%. Hong Kong closed down 0.3%. India closed down 0.9%. Indonesia closed up 0.1%. Malaysia closed up 0.1%. New Zealand closed down 1.1%. South Korea closed down 0.2%. Singapore closed down 0.2%. Taiwan closed down 0.2%. Thailand closed up 0.1%.

Subscribers Premium Content Area.

For Street Smart Report subscribers only, used to provide additional info to that provided in the newsletter, mid-week reports, and hotlines.

To obtain access please click on the ‘Subscribe’ link. It will take you to an information page on subscribing to Street Smart Report, a subscription to which includes access to the premium content area of this Street Smart Post blog.

In the premium content area this morning: Our signals on the U.S. Stock Market & U.S. Treasury Bonds.

Markets This Morning:

European markets are off earlier highs but still positive this morning. The London FTSE is up 0.5%. The German DAX is up 0.4%. And France’s CAC is up 0.6%.

Oil is down $.10 a barrel at $105.06.

Gold is down $14 an ounce at $1,639.

This Morning in the U.S. Market:

This week is a very heavy week for potential market-moving economic reports, including the Chicago PMI, ISM Mfg Index, Factory Orders, and what I always refer to as The Big One, the Labor Department’s Monthly Employment Report. To see the full list and times for each release click here, and look at the left side of the page it takes you to.

So far the reports have mostly been a continuation of the pile-up of negative reports of recent months.

Monday it was that Consumer Spending was up 0.3% in March, slower than the 0.8% spike-up in February, while Personal Income rose to 0.4%. The Chicago PMI plunged from 63.3 in March to 56.2 in April, worse than the consensus forecast of 60.8. And the Dallas Area Fed Mfg Index, plunged from 10.8 in March all the way into negative territory, at –3.4 in April.

Outside of the U.S., Canada reported its GDP growth unexpectedly fell into negative territory at –1.2% in February versus forecasts of a meager gain of 0.1%.

Tuesday it was that Construction Spending was up only 0.1% in March versus the consensus forecast of an increase of 0.5%, and the previously reported decline of 1.1% in February was revised to a decline of 1.5%. But on the positive side, the ISM Mfg Index rose to 54.8 in April from 53.4 in March.

Outside of the U.S. on Tuesday, the United Kingdom reported its PMI Index fell to 50.5 in April from 51.9 in March. (The U.K. already reported negative GDP for the last two quarters, putting it officially in a recession). China reported its PMI Index rose from 53.1 in March to 53.3 in April, but that was below the consensus forecast of 53.5.

Yesterday there were two big negative surprises. The ADP Employment Report showed only 119,000 new jobs were created in the private sector in April, a major miss of the consensus forecast of 175,000, and more importantly a big decline from the average 200,000 monthly new jobs in the 1st quarter. And Factory Orders fell 1.5% in March, the biggest monthly decline in 3 years.

Outside of the U.S., the 17-nation euro-zone’s PMI fell to 45.9 in April from 47.7 in March (a number below 50 indicates recessionary contraction). Even the euro-zone’s strongest economy, that of Germany, saw its PMI fall to 46.2 in April from 48.4 in March. France’s PMI

The PMI reports were somewhat more favorable from Asia, at least remaining above 50. But the HSBC PMI for Taiwan fell to 51.2 in April from 54.1 in March. South Korea’s HSBC PMI fell slightly from 52.0 in March to 51.9 in April. China’s official PMI came in at 53.3, up from March’s 53.1, but missing the forecast of 53.6. India’s HSBC PMI picked up to 54.9 in April from 54.7 in March.

This morning’s reports were that new weekly unemployment claims fell a big 27,000 last week to 365,000, better than the consensus forecast. The four-week moving average moved up only fractionally, by 750 to 383,500, but that is the highest level since early December. Meanwhile, outplacement firm Challenger, Gray & Christmas reported that planned future job cuts by large corporations rose 7.1% in April, and planned job cuts are up 9.8% so far this year compared to the same period a year ago. And U.S. Productivity fell 0.5% in the 1st quarter, not as bad as the consensus forecast of a decline of 1.0% .

Still to come is the ISM non-mfg (services sector) Index, which will be released at 10 am.

The market, which was not as concerned as might be expected by the dismal economic reports so far this week, is not showing as much reaction as might be expected from this morning’s positive surprises from the unemployment claims and productivity reports.

Our Pre-Open Indicators:

Our pre-open indicators are pointing to the Dow being down 10 points or so in the early going, meaningless as to direction for the day.

To read my weekend newspaper column ‘The Fed Will Come To the Rescue But Deliberately Late’ Click here.

Subscribers to Street Smart Report: A hotline from last evening, and the in-depth Mid-Week ‘U.S. Market signals and recommendations’ report is in the subscribers’ area of the Street Smart Report website from yesterday.

I’ll be back with the next regular blog post on Saturday morning, as usual later than on the weekdays, probably around 11:00 a.m.

Non-subscribers: We believe we can help you not only make more profits, but just as importantly avoid losses, and at very reasonable cost!

Our portfolios were up an average of 9.4% last year, our Seasonal Timing Strategy up 15.8%, in a flat year (S&P 500 unchanged for year) when many, if not most, managers and funds were down for the year. We were on Hulbert’s Ten Best Newsletters of the Year list for the 2nd time in 4 years, and #4 Long-Term Market-Timer in Timer Digest’s rankings. And we are off to an even better start this year, now ranked #1 Long-Term Market Timer so far in 2012.

Market, sector, stock, gold, bond, and dollar buy and sell signals, short-sales, long-side and ‘inverse’ etf’s, mutual funds, two portfolios of recommended holdings (one modified buy and hold, and one market-timing). Street Smart Report Online provides an 8-page newsletter every 3 weeks, an in-depth 6 page interim update every Wednesday on our intermediate-term signals and recommended holdings, an in-depth 4-page ‘Gold, Bonds, Dollar’ update every 2 weeks, and special reports and hotline updates as needed. Highly regarded and in our 24th year. As a bonus for a one-year subscription you will also receive my latest book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.

This blog appears every Tuesday, Thursday, and Saturday morning!

**** End of Today’s post*****

Added to the importance of this week’s heavy load of economic reports in the U.S. and Europe, the charts are presenting an interesting situation.

For instance the S&P 500 is quite overbought above its long-term 200-day moving average again, as well as nearing the resistance at its previous peak at 1,417 again.

Then there is that stubborn negative divergence of the DJ Transportation Avg. While the Dow, S&P 500, and Nasdaq have completely ‘come back’ from last summer’s correction, and gone on to small gains above last April’s peak, the Transports, which often lead the rest of the market, have not. In addition, in the very short-term while the market is rallying back toward the recent peak of four weeks ago, the Transports have been in a short-term pattern of lower highs.

But then the Transports aren’t the only index that is in negative divergence with the popular averages. When we move out to the broader index of the NYSE Composite, we see that it has also not recovered from last summer’s correction.

It may be time to pay attention to more than whether 1st quarter earnings are beating Wall Street’s lowered earnings estimates.

Top-10 Scams.

The North American Securities Administrators Association (NASAA) lists the ten financial products and practices that have most often been distorted to threaten unwary investors over the last year or so, taking advantage of investors’ worries about the stock market and their willingness to look at other areas.

Products: Distressed real estate schemes, energy-related investments, gold and precious metal investments, promissory notes, and securitized life-settlement contracts.

Practices: Affinity fraud, bogus credentials, unlicensed agents, mirror trading, and private placements. 

David Massey, NASAA President, says “Con artists follow the news and look for ways to exploit the headlines to their advantage. Promoters often offer investors an opportunity to get in on the ground floor of a new technology that’s in the headlines. Unsuspecting investors can be lured into these schemes if the headlines make them sound plausible and familiar.”

He notes some representative questionable claims; “Realize safety and appreciation in gold.” “Wave energy: the future power for our homes.” “Synthetic fuels take the oilman out of our pockets,” “Invest in foreclosed homes, help others and make a fortune.”

Some example cases NASAA lists:

“Affinity fraud (marketing fraudulent products to members of groups or organizations where the fraudster is known and trusted).

“A 73-year old North Carolina man pleaded guilty to 19 felony counts for collecting $18.5 million from 100 investors he knew from church and social circles. The ‘investments’ in unspecified ‘venture capital companies’ were especially attractive because they came with a promissory note guaranteeing annual returns of 10 to 50%. There were no investments. It was a Ponzi scheme, using the money from new investors to pay the promised ‘return’ to previous investors.”

“Unlicensed agents: State regulators have identified a sizable increase in investor complaints of salesmen not licensed as stock brokers or investment advisors giving advice that results in securities transactions.”

“In Missouri, an insurance agent and his manager were recently barred from working in the industry for five years. Regulators received complaints from investors and their brokers that uncovered the liquidation of $7 million in securities investments by 180 investors who were advised by the agent to sell the equities and buy fixed or equity-indexed annuities that had hidden fees and long ‘lock-in’ periods.

“Bogus credentials: State regulators are making efforts to prevent the misuse of credentials, or claims of special expertise or training, in pitching financial services or products, especially to senior citizens."

“Regulators in Utah came across a broker who listed C.H.S.G. after his name on his business card. The broker told regulators it stood for ‘Certified High School Graduate.’ 

“Distressed Real Estate Schemes. While many legitimate investment offerings are tied to real estate, investment pools targeting distressed real-estate have become increasingly popular with con artists as well as investors. Investments in properties that are bank-owned, in foreclosure, pending short-sales or otherwise in distress carry substantial risks. Just like other securities, interests in real estate ventures must be registered with state securities regulators.”

“In Florida a man pleaded guilty to conspiracy to commit mail fraud in a scheme that solicited $2.3 million from 39 investors nationwide, to purchase and refurbish distressed properties and sell them for a profit. Investors also received corporate promissory notes promising returns up to 12% on their investments while they waited. Investigators found the ‘investments’ were used for personal purposes except for a portion used for Ponzi-type distributions to earlier investors.”

To read my weekend newspaper column ‘The Fed Will Come To the Rescue But Deliberately Late’ Click here.

Subscribers to Street Smart Report: There will be an in-depth ‘U.S. Market signals and recommendations’ update in the subscribers’ area of the Street Smart Report website tomorrow.

Yesterday in the U.S. Market.

A negative day. But they brought the Dow back in the final 30 minutes with big buy-programs so it closed down only 0.1%, which covered some of the weakness elsewhere, and allows them to say the Dow at least closed up fractionally for the month of April.

The Dow closed down 14 points, or 0.1%. The S&P 500 closed down 0.4%. The NYSE Composite closed down 0.4%. The Nasdaq closed down 0.7%. The Nasdaq 100 closed down 0.6%. The Russell 2000 closed down 1.0%. The DJ Transportation Avg. closed down 0.7%. The DJ Utilities Avg closed up 0.2%.

Gold closed up $1 an ounce at $1,664 an ounce.

Oil closed down $.16 a barrel at $104.76 a barrel.

The U.S. dollar etf UUP closed down 0.1%.

The U.S. Treasury bond etf TLT closed unchanged.

Yesterday in European Markets.

European markets were down yesterday. London closed down 0.2%. Germany closed down 0.6%. France closed down 1.6%.

Most Asian Markets Were Closed Last Night.

The DJ Asia-Pacific Index closed down 0.7%.

Markets in China, Hong Kong, South Korea, Taiwan, and Thailand were closed for a holiday.

Among individual markets that were open:

Australia closed up 0.7%. Japan closed down 1.8%. New Zealand closed up 0.6%.

Subscribers Premium Content Area.

For Street Smart Report subscribers only, used to provide additional info to that provided in the newsletter, mid-week reports, and hotlines.

To obtain access please click on the ‘Subscribe’ link. It will take you to an information page on subscribing to Street Smart Report, a subscription to which includes access to the premium content area of this Street Smart Post blog.

In the premium content area this morning: Our signals on the U.S. Stock Market.

Markets This Morning:

Most European markets, including Germany and France are closed for the May Day holiday. The London FTSE is up 0.4%.

Oil is down $.23 a barrel at $104.64.

Gold is up $5 an ounce at $1,669.

This Morning in the U.S. Market:

This week is a very heavy week for potential market-moving economic reports, including the Chicago PMI, ISM Mfg Index, Factory Orders, and what I always refer to as The Big One, the Labor Department’s Monthly Employment Report. To see the full list and times for each release click here, and look at the left side of the page it takes you to.

So far the reports have mostly been a continuation of the pile-up of negative reports of recent months.

Yesterday it was that Consumer Spending was up 0.3% in March, slower than the 0.8% spike-up in February, while Personal Income rose to 0.4%. The Chicago PMI plunged from 63.3 in March to 56.2 in April, worse than the consensus forecast of 60.8. And the Dallas Area Fed Mfg Index, plunged from 10.8 in March all the way into negative territory, at –3.4 in April.

Outside of the U.S. yesterday, Canada reported its GDP growth unexpectedly fell into negative territory at –1.2% in February versus forecasts of a meager gain of 0.1%.

This morning the United Kingdom reported its PMI Index fell to 50.5 in April from 51.9 in March. (The U.K. already reported negative GDP for the last two quarters, putting it officially in a recession). China reported its PMI Index rose from 53.1 in March to 53.3 in April, but that was below the consensus forecast of 53.5.

Still to come this morning are the ISM Mfg Index, and Construction Spending, both of which will be released at 10a.m.

Auto sales will be released by individual auto-makers as the day progresses. So far, Chrysler has reported that its sales were up 20% in April.

The market is giving no indications of its intentions this morning, the Dow futures fractionally positive, the S&P 500 futures fractionally negative.

Our Pre-Open Indicators:

Our pre-open indicators are pointing to the Dow being up 10 points or so in the early going.

To read my weekend newspaper column ‘The Fed Will Come To the Rescue But Deliberately Late’ Click here.

Subscribers to Street Smart Report: There will be an in-depth ‘U.S. Market signals and recommendations’ update in the subscribers’ area of the Street Smart Report website tomorrow.

I’ll be back with the next regular blog post on Thursday morning at 9:25 a.m.

Non-subscribers: We believe we can help you not only make more profits, but just as importantly avoid losses, and at very reasonable cost!

Our portfolios were up an average of 9.4% last year, our Seasonal Timing Strategy up 15.8%, in a flat year (S&P 500 unchanged for year) when many, if not most, managers and funds were down for the year. We were on Hulbert’s Ten Best Newsletters of the Year list for the 2nd time in 4 years, and #4 Long-Term Market-Timer in Timer Digest’s rankings. And we are off to an even better start this year, now ranked #1 Long-Term Market Timer so far in 2012.

Market, sector, stock, gold, bond, and dollar buy and sell signals, short-sales, long-side and ‘inverse’ etf’s, mutual funds, two portfolios of recommended holdings (one modified buy and hold, and one market-timing). Street Smart Report Online provides an 8-page newsletter every 3 weeks, an in-depth 6 page interim update every Wednesday on our intermediate-term signals and recommended holdings, an in-depth 4-page ‘Gold, Bonds, Dollar’ update every 2 weeks, and special reports and hotline updates as needed. Highly regarded and in our 24th year. As a bonus for a one-year subscription you will also receive my latest book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.

This blog appears every Tuesday, Thursday, and Saturday morning!

**** End of Today’s post*****