Five Things You Need to Know: How Now Dow Jones?; Dollars to Doughnuts; We're Like An Ethanolholic, But for Gas!; Super Rich vs. Super Poor; Glengarry Glenn Ford
What you need to know (and what it means)!
Minyanville's daily Five Things You Need to Know to stay ahead of the pack on Wall Street:
Note: Today's Five Things NOT Sent Wirelessly via Blackberry from T-Mobile
1. How Now Dow Jones?
Yesterday the Dow Jones Industrial Average climbed to within 14 points of its all-time closing high of 12,786.64. Sweet! Man, we were sitting here yesterday afternoon lighting cigars with hundred dollar bills and firing champagne corks at each other... until someone bothered to take a look inside the Dow components. Then reality set in.
- So far this year the Dow is up about 2.5%, nearing it's all time high of 12,786.64.
- But what about the individual components?
- Honestly, when we take a look inside the Dow we find the reality a bit less... charming.
- Essentially, just seven of the 30 Dow components are within arms length of their all-time highs: Boeing (BA), Citigroup (C), McDonald's (MCD), Altria (MO), Procter & Gamble (PG), United Technologies (UTX) and Exxon Mobil (XOM).
- The remaining 23 are decidedly farther away.
- Ok, so what; maybe that means the rest have some catching up to do.
- Sure, that's one way to look at it.
- Another way to look at it is to evaluate each Dow component versus the index itself, or versus another index such as the S&P 500.
- According to data from Investors Intelligence, less than half of the individual Dow components have positive relative strength.
- The Dow Industrials have not only lagged the S&P 500 and the Nasdaq since March 2003, but they are lagging year-to-date as well.
- Since 2003 only 12 of the components have managed to outperform the Dow itself, and only 10 have managed to outperform the S&P 500.
- Year-to-date half the components are outperforming the Dow itself.
- Only 13 are outperforming the S&P 500.
- Bottom line: Cheering for the Dow must be what it's like being a Kansas City Royals fan.
2. Dollars to Doughnuts?
It sure feels that way. And is it just us or are doughnuts far more enjoyable than dollars to count, fold and stuff in ones pockets? Yes, that is a dozen doughnuts in our pockets, and we are glad to see you!
With the imminent collapse of the dollar barely days away, we decided to take a look at the charts with some DeMark indicators overlaid for a bit of extra guidance.
The DeMark TD-Sequential indicator can be a useful guide in evaluating probable exhaustion points.
A DeMark TD-Sequential buy signal occurs when we have 13 price bars where each close is less than or equal to the low two price bars earlier.
The price bars need not be consecutive.
Below is a daily chart of the U.S. Dollar Index via Thomson Financial with the DeMark TD-Sequential indicator overlaid.
The "9" represents a TD "buy" Setup, which is 9 consecutive price bar closes that are less than the close four price bars earlier.
On the daily chart we now have 8 of a potential 13 buy signal, which would - if it occurs - identify a probably price exhaustion area.
The monthly chart, below, shows how in the past this area for the U.S. Dollar has been associated with other downside exhaustion points.
Perhaps this time is different and the "collapse" is upon us, but a daily DeMark buy signal would raise the possibility that those awaiting the dollar's further demise may be disappointed yet again.
3. We're Like An Ethanolholic, But for Gas!
Switching from gasoline to ethanol may create dirtier air, causing slightly more smog-related deaths, a new study says.
- Mark Jacobson, a Stanford University civil and environmental engineering professor, has authored a study suggesting that nearly 200 more people would die yearly from respiratory problems if all vehicles in the U.S. ran on an ethanol fuel blend by 2020.
- Jacobson's study is based on a computer model he created and was published today in the online edition of the peer-reviewed journal Environmental Science and Technology.
- Each year, about 4,700 people die from respiratory problems from ozone, the study claims.
- Moreover, ethanol would actually raise ozone levels, particularly in certain regions of the country, including the Northeast and Los Angeles.
- Meanwhile, Roland Hwang of the Natural Resources Defense Council, said that Jacobson's conclusion is "a provocative concept that is not workable," according to the Associated Press.
- And Matt Hartwig, spokesman for the Renewable Fuels Association, the largest Washington ethanol lobby group, said other research and real-life data show "ethanol is a greener fuel than gasoline," the AP reported.
- Jacobson's study claims that all depends on where one lives.
- Ethanol will actually worsen the ozone problem in most urban areas, he says, because ethanol produces more hydrocarbons than gasoline and longer-lasting chemicals that eventually turn into hydrocarbons that can travel farther than that produced by gasoline.
4. Super Rich vs. Super Poor
The number of U.S. households considered "Super Rich" - those with a net worth of more than $5 million excluding their primary residence - surged 23% to surpass one million for the first time in 2006, according to a survey from the Spectrem Group.
- Meanwhile, according to U.S. Census statistics the number of Americans considered "Super Poor" - those with a net worth of zero or less than zero and living below the poverty line - remains pretty much the same at about 34 million people.
- According to the Spectrem Group, the spending habits of the wealthiest U.S. households show an interest in leisure travel!
- Ninety-eight percent of the Super Rich reporting spending more than $1,000 a year on leisure travel, 55% reporting spending more than $10,000 on leisure travel, and more than 17% spent more than $25,000 a year on leisure travel.
- Meanwhile, the spending habits of the Super Poor show a strong interest in food!
- According to U.S. Department of Agriculture statistics 33 million Americans live in households without an adequate supply of food.
America is a capitalist society where the means of production are largely privately-owned. It is also considered to be a meritocracy where wealth, position and social status are assigned through competition, hard work and perseverance. Consequently, Super Rich American citizens (see above) have demonstrated by virtue of their hard work, competitive spirit and perseverance that they deserve their wealth, position and social status. Logically then, the Super Poor (see right) must have demonstrated through their lack of hard work, failing competitive spirit and inability to persevere that they deserve their lack of wealth, position and social status.... right?
5. Glengarry Glen Ford?
In an effort to get more people to notice its new vehicles, Ford Motor Co. (F) has enlisted the help of filmmaker and Pulitzer Prize-winning playwright David Mamet, perhaps best known for his 1992 film Glengarry Glen Ross, to direct some of its commercials.
- The idea of calling in Mamet came from Ford's advertising agency, J. Walter Thompson, according to Barry Engle, general manager of Ford Division marketing, the Associated Press reported.
- The television spots will feature two men sitting in their Ford Edge crossover vehicles talking out the window about how their vehicles compare with the BMW and Lexus.
- Incredibly, Minyanville has obtained one of the Mamet scripts Ford intends to run as a commercial (see below).
Ford Edge vs. BMW
Two Ford Edge vehicles parked side by side, facing opposite directions. The drivers are each sipping coffee and talking to each other out the windows of their respective cars.
So I said to the guy...
You said to the guy...
This is what I'm telling you. I said to the guy: I don't want the BMW.
You don't want the BMW.
You. You don't want the BMW.
All that I'm saying...
... you don't want the BMW.
I don't want the BMW.
Listen. Listen to what I am saying to you. Because. I want. The Ford Edge.
Because you want the Ford Edge.
This is what I am saying to you. Because I want the Ford Edge.
A man walks between the two vehicles and interrupts the conversation.
You see this watch? You see this watch?
That watch costs more than you car. I made $970,000 last year. How much you make? You see pal, that's who I am, and you're nothing. Nice guy? I don't give a $hi%. Good father? Fv@^ you! Go home and play with your kids.
We don't gotta sit here and listen to this.
You CERTAINLY don't pal, 'cause the good news is - you're fired.
We are fired.
We. We are fired.
You are fired. A-B-C. A-Always, B-Be, C-Closing. Always be closing, always be closing.
What's your name?
Fv@^ you. That's my name.
He slaps a coffee cup out of the hands of the drivers.
PUT THAT COFFEE DOWN. Coffee is for closers.
Voiceover: The Ford Edge. Because coffee is for closers.
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