[5:55pm ET] After being away from the Week In Review for two weeks, last week’s discussion was about the great global reflation now underway. The prior Week In Review (dated March 22) also discussed reflation of the type that occurred in the 1930’s as the way out of the mess caused by Humungous Bank & Broker (HB&B).
To review the market trends we wrote up a week ago, points made by Tony Boeckh, the former owner and editor of the Bank Credit Analyst, and by myself:
1. As the US economy recovers, expect the US current account deficit to explode upwards again, the Chinese and others to buy dollars and, as always, instantly return them to the US money markets. Artificially low interest rates will prevail, and the resumption – with a lag – of credit inflation, in both the surplus countries and the US, will resume.
2. US stocks have likely put in their lows; the excellent rally off the February bottom has taken the S&P back to the long-term falling trend line. During 2009, a re-test of those lows (S&P @ 666) and DJIA @ 6470. 675-700 is possible on a fear-ridden spike. In the 1930’s there were five Bull phases that averaged gains in the DJIA index of almost +100% each, and we are in similar market conditions today, so while the S&P (presently 869.60), now above 850-855 technical resistance, which has become support, and possibly on its way to 950-1000 as the shorts get squeezed further.
3. The 2000-2002 Bear market was effectively stopped by Humungous Bank & Broker’s leveraging credit with the use of derivatives that were backed by useless guarantees. After the credit bubble burst in the summer of 2007, there has been a massive deleveraging; but despite the narrowing of credit spreads, there have been many and will be many more bankruptcies as the global economy struggles to recover.
4. US, European and Japanese markets will be in a wide trading range for a very long time and it will take years before the old highs are exceeded. Much higher volatility is here to stay, which has led to much shorter term trading as a defensive measure. The US (NYSE), UK (FTSE), European (CAC and DAX) and Japan (TOPIX) equity markets will likely under-perform global markets this year as they have year-to-date since they are all down and almost all the others are up. Brazil, India, China, Hong Kong, South Korea, Taiwan, Indonesia, Philippines, and probably Russia, Australia and Canada, will be the leaders.
5. The lows in the pound sterling, Euro and Canadian dollar are in place, but it will be some time before large gains are made. The trade-weighted dollar is still 15% above its 2008 low and will weaken gradually.
6. Gold may rally based on a falling US Dollar scenario or either global deflation from the credit squeeze or inflation from the reflation policies, but the jury is still out. As long as interest rates stay abnormally low, and reflation policies continue, there will likely be a weaker US Dollar and a return at some point to excessive speculation, so the probabilities of higher gold prices are quite significant.
7. Crude oil has put in its long-term low and higher prices will gradually emerge as global economies begin to grow at a normal post-recession pace. OPEC’s spare capacity and high inventories at the present time will prevent major increases for the foreseeable future. Canada, which is a net energy exporter, will clearly be a beneficiary.
8. With lack of demand from mall retailers and from business corporations that are downsizing, the commercial real estate market in the US is likely to be in trouble for several years and should be avoided. America’s second largest mall developer and manager went bankrupt this week.
9. With so much uncertainty and volatility in capital markets today, the political and banking industry leaders have turned to subjective discussion of markets, which has been troublesome for traders and investors who have been seeking transparency, objectivity, investigation and prosecution of the scoundrels who took down the global financial system, and reforms in government that would ensure it doesn’t happen again.
Now, how did the market do this week, and how does it look to us for the next week or two?
I’ll give you a preview here. There are so many "natural" relationships between stocks, industry groups, sectors, country markets, and between equities and bonds and forex markets that are not working naturally at the moment, that what’s left is a mess. The capital market is being screwed over so much these days that independent traders are getting fed up.
Enough already.
Global Economics Review
As political leaders and central bankers struggle for the time needed for recent policy developments to work through the economy, and the economic data being reported can only be referred to as grim, today’s communications to the public have turned decidedly subjective. That seems exactly right for President Obama’s great oratory.
Weekly International Economic Report .
Econoday summarized their Weekly International Economics report with the comment that “signs of stabilization in global economies and financial institutions gave investors greater confidence.” Oh really? I thought this was all about a short squeeze in the Financials, putting HB&B in a favored position for equity issuances that will re-liquefy their balance sheets at least damage to the insider control groups. Or, do you really think I am flat wrong?
Anyway, the following summaries from the Econoday service are the most objective and best presented of any of the economic services I can find. It costs nothing, while its value to me is huge. Anne Picker of Econoday is an economist worth reading because she writes truly informative, concise, and objective reports every week that can actually teach people something that can be used in trading decisions. She draws a link between the macro-economic data and the prices in capital markets, and does it without spin.
I put the time and effort into summarizing the Econoday reports, but leave the links in because the individual reports contain terrific charts and other information, and after the report is published, the link leads to the updated report.
Here are the key US economic reports on last week’s calendar.
US Economic Calendar for the week of Apr. 13.
US Producer Price Index for March. After the data was released, Econoday reported, “The producer price index in March came in very soft due to lower energy prices. The overall PPI fell 1.2 percent after firming 0.1 percent in February. The March drop was well below the consensus forecast for a 0.1 percent rise in the headline PPI. The core PPI rate eased to no change after a 0.2 percent boost in February. The latest core number was lower than market expectation for a 0.2 percent increase. The latest headline number was pulled down by an unexpected fall in energy costs. Energy fell 5.5 percent after a 1.3 percent gain in February. Food declined 0.7 percent after dropping 1.6 percent in the prior month… Major component moves were by gasoline, which fell a monthly 13.1 percent in March while heating oil dropped 13.2 percent. Declines in food prices were widespread. Light trucks declined 0.4 percent and passenger car prices dipped 0.2 percent… For the overall PPI, the year-on-year rate fell to minus 3.6 percent in March from down 1.6 percent the month before (seasonally adjusted). The core rate slipped to up 3.8 percent from up 3.9 percent in January… Today's numbers should be good for bond prices, easing yields. A weak retail sales report this morning also should help soften yields and weigh on equities. Stocks will have a quandary focusing on Goldman's good earnings after close yesterday and the weak economic news this morning.”
US Retail Sales data for March. Following the data release, Econoday reported: “March retail sales were surprisingly negative, calling into question the green shoots theory that recovery is underway. Overall retail sales dropped 1.1 percent in March after a 0.3 percent gain in February. The March decline was sharply below the market forecast for a 0.3 percent increase. Excluding motor vehicles, retail sales decreased 0.9 percent, after a 1.0 percent boost the month before. The ex-auto decrease was worse than the consensus projection for no change. The markets are going to be especially disappointed with the fact that declines were widespread by components. Excluding motor vehicles and gasoline, retail sales fell 0.8 percent after gaining 0.7 percent in February… Sales were weak across the board. But the strongest declines were seen in electronics & appliance stores, down 5.9; motor vehicles, down 2.3 percent; and miscellaneous store retailers, down 2.2 percent… Overall retail sales on a year-on-year basis in March were down 9.4 percent, compared to down 7.9 percent in February. Excluding motor vehicles, the year-on-year rate dropped to down 6.0 percent from down 4.5 percent the prior month… The March retail sales report shows the consumer sector back into retreat mode. Most likely some of the weakness was price related as stores engaged in discounting to bring customers in. But the news still is not good. Equities will not like the numbers but bonds will. The recovery just got a setback today in the consumer sector.”
US Business Inventories data for February. After the data was released, Econoday reported, “Businesses are draining their inventories as fast as possible but they may have more work to do. Business inventories fell 1.3 percent in February against a 0.2 percent rise in business sales to shave two tenths off the stock-to-sales ratio to 1.43. This data again is for February. Early data for March, including this morning's very weak retail sales report, suggest that inventories, despite February's draw, may still be too fat… Inventory data are released in three sections with retail inventories today's final piece. Retail inventories fell 1.2 percent in February vs. a 0.2 percent rise in sales. Today's retail sales report for March shows a 1.1 percent decline, meaning retailers may very well have seen their stocks build back up during the month. The other two previously released sections of the report show very similar results with manufacturers posting a 1.2 percent drop in inventories against a 0.1 percent fall in sales while wholesalers reported a 1.5 percent drop in inventories against a 0.6 percent rise in sales. Again, data for March point to decreases in sales that hopefully will be matched by decreases in inventories. Remember, bloated inventories may add to GDP but they lead to job losses and future production cuts.”
US Consumer Price Index data for March. After the data was released, Econoday reported, “Consumer price inflation in March slowed more than expected at the headline level. The headline CPI declined 0.1 percent in March, following a 0.4 percent gain the month before. The March CPI came in well below the consensus forecast for a 0.2 percent rise. Meanwhile, core CPI inflation remained steady at 0.2 percent, equaling the market expectation… The deceleration in the headline CPI was led by a 3.0 percent dip in energy costs, following a 3.3 percent jump the month before. Gasoline fell 4.0 percent in the latest month. The food component also edged down 0.1 percent… There were a number of cross currents in the core CPI. The indexes for lodging away from home, used cars and trucks, and airline fares continued to decline. Apparel prices fell in the latest month after no change in February. Recreation costs were flat in the latest month. Notably, the core rate would have been significantly weaker had there not been a monthly 11.0 surge in prices for tobacco & smoking products. Also adding upward pressure was a 0.6 percent rise in motor vehicles… Year-on-year, headline inflation fell to down 0.4 percent (seasonally adjusted) in March from up 0.1 percent in February. Meanwhile, the core rate was steady at up 1.8 percent… The latest CPI report show inflation subdued, leaving the Fed room to continue its quantitative easing. The news should be good for bonds but the Empire State manufacturing index came in stronger than expected which may override the CPI news. ”
US Empire State Manufacturing Survey data for April. After the data was released, Econoday reported, “The Empire State manufacturing report shows huge improvement underway in April, though this report has been showing much weaker conditions in prior months than perhaps any other regional business report. The report's general business conditions index rose nearly 25 points to a still contractionary -14.7. New orders showed big improvement from March's -44.8 to -3.9 in April, almost indicating no change in the month-to-month level. Shipments also showed little change from March, at -1.8 vs. -26.7. Manufacturers in the New York region are fighting more fiercely against inventory overhang with the inventory index at -36.0 for a 9 point drop. But price and job readings showed little improvement with both input and output prices continuing to erode at a significant pace as are employee levels and the workweek… A big positive in the report is the six-month outlook where optimism is surging with general business conditions at 33.1 vs. March's 3.1 and February's -6.6. This report indicates that the pace of contraction has steadied in the New York region, offering optimism that the very worst of the recession may be passing. Financial markets showed little reaction to this report or the CPI report which was also released at 8:30 ET.”
US Industrial Production data for March. After the data was released, Econoday reported, “Industrial production in March dropped sharply and significantly more than expected. Overall industrial production fell 1.5 percent, matching the decline in February. The latest contraction was worse than the market forecast for a 0.8 percent drop. The manufacturing component fell 1.7 percent, following a 0.6 percent decrease the month before. Declines were broad-based with the exception of motor vehicles, which advanced slightly… For the other major nonmanufacturing components, utilities in March rebounded 1.8 percent while mining output plunged 3.2 percent. The drop in mining was due to declines in oil and gas well drilling. Manufacturing clearly is taking a hit from a fall in demand in the U.S. and overseas while oil and gas drilling is hurting from lower oil and gas prices making drilling less profitable… The freefall in industrial production has led to both closing of plants and running assembly lines at a much slower pace. Overall capacity utilization in March continued its downtrend, dropping to 69.3 percent from 70.3 percent in February. The March number was lower than the market forecast for 70.0 percent and set an historical low for this series which goes back to 1967… On a year-on-year basis, industrial production in March slipped further to down 12.8 percent from down 11.8 percent the prior month. The March year-ago decline is the weakest since a 16.0 percent drop for July 1946… Manufacturing clearly is taking a hit from a fall in demand in the U.S. and overseas. Today's industrial production report adds to the argument that first quarter GDP growth is going to be quite negative.”
US Housing Starts data for March. After the data was released, Econoday reported, “In March, housing starts reversed course, posting a sharp decline. Starts fell back 10.8 percent in March, following a 17.2 percent rebound the month before. The March pace of 0.510 million units annualized was down 48.4 percent year-on-year. The latest starts number was significantly below the consensus forecast for 0.570 million units. The reversal in starts was led by the multifamily component which plunged 29.0 percent while single-family starts were unchanged… By region, the fall in starts was led by a monthly 26.3 percent drop in the Northeast along with a 16.8 percent decline in the South. Starts rose in the Midwest and Northwest, posting gains of 15.9 percent and 6.3 percent, respectively… Permits also resumed a downtrend, declining 9.0 percent in March, after a rebound of 6.2 percent in February. The March permit pace of 0.513 million units annualized was down 45.0 percent on a year-ago basis… The latest housing starts report shows that this sector remains under pressure from excess supply of unsold homes. This is another number that will help make first quarter GDP quite negative. However, March starts probably have worked beyond large seasonal swings in the prior two months related to unseasonable weather (cold and wet in January in the South and very mild in February). While there has been positive news in housing recently in terms of buyer traffic and refinancing, it probably is too early to expect a rebound in starts. For homebuilders, the negative news of a spike in foreclosure rates will outweigh the recent positives… The fall in March starts should be a negative for equities and help soften interest rates. ”
US Philadelphia Fed Survey for April. After the data was released, Econoday reported, “Contraction in the Philadelphia Federal Reserve's manufacturing economy remains severe but is a little less severe than earlier in the year. The Philadelphia Fed's general business conditions index for April improved more than 10 points to -24.4. New orders, the most important component in the report as it points to future business activity, improved more than 15 points to -24.3. Unfilled orders also improved, up about 3 points to -19.5. The pace of layoffs is also slowing, at -44.9 for the number of employees index, about 7 points better than the prior month. These readings are deeply negative but again indicate that the pace of month-to-month contraction is slowing, which of course is good news but not great news… Measures on current production show increasing rates of contraction. Shipments fell nearly 10 points to -35.7 while the workweek fell more than 10 points to -41.2. But the cutback in output reflects prior contraction in orders. The current improvement in orders points to improvement in output in the months ahead. Price data continue to show unprecedented contraction with input prices edging lower to -31.5 and output prices showing greater deterioration at -41.4. The decline in output prices confirm that manufacturers have no pricing power with their customers. These price readings are record lows for this report which has been published since 1967… Markets showed no significant reaction to the report which points to continued weakness -- but not increasing weakness -- in the ISM's national manufacturing report to be posted at the beginning of next month.”
US U Mich Consumer Sentiment for April. After the data was released, Econoday reported, “Signs of life are appearing in consumer attitudes, offering a hint that the deepest part of the recession may be passing. Reuters/University of Michigan's consumer sentiment index rose solidly to 61.9 vs. 57.3 two weeks ago. Interestingly, one-year inflation expectations shot up 1 full percentage point to 3.0 percent. Gas prices are on the rise, as they typically are as the driving season begins, but the gain also hints that consumers expect economic conditions to normalize. There may also be a hint that some consumers could be anticipating monetary inflation, certainly a factor that has fed investment demand for gold and oil… Details of the report show a particular rise in the expectations component, again an indication that consumers may now believe the worst has passed. The current conditions component also improved. Five-year inflation expectations edged 1 tenth higher to 2.7 percent. The 5-year reading never really buckled, dipping to 2.6 percent vs. a 1.6 percent low for the 1-year reading. Still, consumer spirits remain near historic lows though they are moving in the right direction. Markets showed no significant reaction to the report, at least initially. But the results could help raise appetite for risk through the session.”
Here are the key US economic reports on next week’s calendar.
US Economic Calendar for the week of Apr. 20.
US Jobless Claims for the week of 4/18. After the previous data was released, Econoday reported, “Initial jobless claims for the latest week fell to a much lower-than-expected level of 610,000, down 53,000 from the 663,000 in the prior week. But the latest data are for the holiday shortened Easter/Passover week of April 11. The Labor Department warned that the results were heavily affected by adjustments. The four-week average came in at 651,000. But the really negative news was that continuing claims for the April 4 week jumped again to another historical record, up 172,000 to above 6 million at 6.02 million. This coming week, we may see a jump in initial claims, coming off the holiday week before.”
US Existing Home Sales data for March. Following February’s data release, Econoday reported: “Existing home sales in February jumped 5.1 percent to an annualized pace of 4.720 million units. Bargain prices on foreclosed homes and extremely low mortgage rates are finally having some positive impact. Levels are still low with the year-ago decline at minus 4.6 percent. And supply is still high at 9.7 months. However, prices did firm - although from low levels, rising 0.4 percent in the month. The median price of $165,400 was still down 14.8 percent on a year-ago basis.”
US Durable Goods Orders for March. After the February data was released, Econoday reported, “Durable goods orders rebounded a revised 3.5 percent in February after falling 7.8 percent in January. The rise in durables showed wide gains across components though against easy comparisons with very weak January data. Looking ahead, we are likely to see slippage for March. The new orders indexes in the latest manufacturing surveys for ISM, Philly Fed, and New York Fed improved but remained in negative territory.”
US New Home Sales data for March. After the February data was released, Econoday reported, “New home sales unexpectedly jumped a monthly 4.7 percent in February. The 337,000 million unit annual pace was down 41.1 percent compared to a year ago. Supply on the market fell to 12.2 months from 12.9 months in January, remaining quite swollen. Although the labor market picture is not good for housing, there are signs that sales may have hit bottom. Buyer traffic has picked up and mortgage rates are extremely low. Also, homebuilders appear to be caving in on prices, offering big discounts.”
Sector ETF Summary for the International equity markets
An anomaly occurred with the Brazil Bovespa moving from 45539 to 45778, but the country ETF EWZ dropping -1.90% W/W. EWZ was the only such loser on my board. Of course, there was a loss of -1.59% on Friday in EWZ and there were losses in six of eleven country ETFs that day.
The leaders on the week were China (GWC +3.71%), Canada (EWC +3.50%), Hong Kong (EWH +3.24%) and Russia (RSH +3.04%).
US Equity Markets Review
This week the NASDAQ (+1.24% to 1673.09), S&P 500 (+1.52% to 869.60), DJIA (+0.59% to 8131.33), and Russell 2000 (+2.39% to 479.37) stayed in rally mode, with MACD and RSI levels continuing to rise. But the rally has been extreme, is now six weeks old, and traders are looking around for higher volume, and better corporate and economic data, which would boost their confidence.
A week ago I wrote in this space:
Presently, the trend and momentum charts are telling me that there is a possible 10% to 15% move higher in the S&P before the equities start to pull back, and consolidate the move with profit-taking. At that point, I will be looking to write calls on long positions that I wish to continue holding, or possibly sell them to raise capital to be ready to move into stocks I believe will be better positioned to resist a market decline, and also meet my risk-reward criteria at that point in time. (However) None of us knows when a pull-back will occur, but the data will be the ‘tell’. Raise your stops, and consider employing straddle and strangle options tactics, and remain flexible because you might have to start selling positions. Watch the highest-beta international markets like Brazil, Russia and India for indications. Also, keep watching the NASDAQ 10 that I have outlined for you. The HB&B stocks may have big-sized moves that scare you, but remember that a -10% drop could be just a down-draft after a +35% rally, and that the rally could regain strength the following day or week. So, focus on other parts of the market, like the $USD (which you want to see drop), the action of the highest-beta stocks and international markets, and the market reaction to negative corporate earnings reports, for example.
This week I admitted to being flummoxed by the action of the market. Mostly I see short-covering and programmed trading tactics. What is missing are traditional relationships among the key drivers. The economic data is dreadful, but is also being spun by vested interests to take your eyes off the data so you can listen to their appeals for HOPE. The corporate data is made out to be much better than it really is as we saw with Google (GOOG), which had the first ever quarter reporting a drop in sales. The stock rallied +5.3% W/W. Nokia reported dismal sales and earnings, yet after the CEO opined he thought he was looking at a cycle bottom in dealer inventory levels, the stock rallied hard (NOK +8.48% W/W).
It’s no wonder many traders have taken their marbles from the game.
NASDAQ Composite ino.com chart
NASDAQ Composite stockcharts.com chart
Here is the list of the ten highest-weighted non-financial stocks in the NASDAQ Composite. Put them in a watchlist (see Google Finance Portfolio) and watch them like a hawk:
AAPL MSFT GOOG QCOM RIMM CSCO INTC ORCL GILD EBAY
Daily RSI-7 for the Nasdaq 100 Big-10
Weekly RSI-7 for the Nasdaq 100 Big-10
Monthly RSI-7 for the Nasdaq 100 Big-10
Sector ETF Summary for the US equity market
Here’s the SPY Monthly, Weekly and Daily data charts:
SPY Monthly data: 
SPY Weekly data: 
SPY Daily data: 
The tables I show are for eleven GICS Sector Index Funds (ETF’s), including two for Technology (XLK and SMH), for a total of ten GICS sectors. They cover the full spectrum of the US equity market.
Table 1: Cara ETF List is sorted by price performance Week over Week (W/W), i.e. 1W%N.
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
You can do this table yourself by entering the following string into the Summary window at Billcara2.com and then clicking on the link for Performance.
SPY XLE XLB XLI XLY XLP IYH XLF XLK SMH IYZ XLU .
You can also add more ETFs - up to 30 in total. For a list of components to many ETFs, go to the AMEX.com web site, and click on ETFs.
10 (energy: XLE) 
15 (basic materials: XLB) 
20 (industrial: XLI) 
25 (consumer discretionary: XLY) 
30 (consumer staples: XLP) 
35 (healthcare: IYH) 
40 (financial: XLF) 
45 (technology, semiconductor: SMH) 
50 (telecom: IYZ) 
55 (utilities: XLU) 
Individual Sector ETF Review
Sector 10 (energy: XLE, IYE, VDE, OIH, PBW and IXC)
Here’s the XLE Monthly, Weekly and Daily data charts:
XLE Monthly data: 
XLE Weekly data: 
XLE Daily data: Table 2: Senior oil & gas equities
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
The Crude Oil price dropped (-$2.22/bbl or +4.06%) – about the same as it lost a week ago -- to close at 52.47.
The sector ETF (XLE) gained just +0.39% to close the week at 45.78. But, Friday’s gain was +1.17%, which clearly made the week.
The winners this week included China National Offshore Oil (CEO +10.0%), which a week ago was a loser (-1.6%) and Schlumberger (SLB +5.5%), but there were some heavyweights that took big losses, like Petrobrazil (PBR -5.2%), Chevron (CVX -4.7%) and Exxon (XOM -4.4%), so capital flow was likely out of the sector despite the small gain in XLE.
Oil & Gas Exploration & Production -Canada
Sector 15 (basic materials: IYM, XLB, IGE and VAW)
Here’s the XLB Monthly, Weekly and Daily data charts:
XLB Monthly data:
XLB Weekly data:
Table 3: Senior Basic Materials:
XLB Daily data:
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
Basic Materials (XLB) this week had a gain of +2.56% to close at 24.45. On March 8, XLB closed the week at 18.40.
A week ago Votorantim (VCP), a successful family-controlled pulp and paper manufacturer in Brazil gained +26.8% W/W, so it was not surprising to see that the gain this week of just +0.30% was the smallest on my Basic Materials (non-gold) monitor.
Sector 20 (industrial: IYJ, XLI, VIS, and IYT)
Here’s the XLI Monthly, Weekly and Daily data charts:
XLI Monthly data: 
XLI Weekly data: 
XLI Daily data:
Table 4: Senior capital goods makers and transportation:
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
Industrials (XLI +3.08% W/W) closed at 21.11. There was even a small loss on Friday.
A week ago I wrote up the Textron (TXT) situation. This week there was some profit-taking (-4.6%).
General Electric (GE +9.4%) was the big winner. Do you suppose the boost came from Friends of Obama who appreciated the “Stop Bashing the President” meeting called at CNBGC by owner NBC/GE? Fedex (FDX +4.6%) was also a winner.
Sector 25 (consumer discretionary: XLY, IYC and VCR)
Here’s the XLY Monthly, Weekly and Daily data charts:
XLY Monthly data: 
XLY Weekly data: 
XLY Daily data:
Table 5: Senior consumer discretionary equities
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
Consumer Discretionary (XLY +2.78% W/W to 22.52) was third best sector performer this week, next to Financials (XLF) and then Industrials (XLI), which got the GE boost. The gain on Friday was +1.21%.
The big story a week ago was Tata Motors (TTM -5.5%), which began selling the $2050 Nano in India. A week ago the gain was +26.1%, so this was profit-taking.
The winners were led by Whirlpool (WHR +7.6%) and Carnival Cruise Lines (CCL +6.5%).
Sector 30 (consumer staples: XLP, VDC, RTH and IYK)
Here's the XLP Monthly, Weekly and Daily data charts:
XLP Monthly data: 
XLP Weekly data: 
XLP Daily data:
Table 6: Senior consumer staples equities
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
Consumer Staples (XLP +1.94% W/W) was a winner this week, closing the week at 22.09.
This sector was led by Procter & Gamble (PG +5.0%) and Diageo (DEO +3.8%). Wal-Mart (WMT) had some profit-taking but the big loser was Perdigao (PDA -6.5%). PDA was the big winner a week earlier with a gain of +15.0%.
Sector 35 (healthcare: IYH, XLV, VHT, IXJ, and IBB)
Here’s the IYH Monthly, Weekly and Daily data charts:
IYH Monthly data: 
IYH Weekly data: 
IYH Daily data:
Table 7: Senior healthcare equities
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
The Healthcare sector (IYH +2.34% W/W) closed at 50.36.
No much happening here though. Wellpoint (WPT +5.1%) was the big winner and Amgen (AMGN -1.6%) was the big loser.
Sector 40 (financial: IYG, IYF, XLF, VFH, IXG, VNQ, RWR, IYR, and ICF)
Here’s the XLF Monthly, Weekly and Daily data charts:
XLF Monthly data: 
XLF Weekly data: 
XLF Daily data:
Table 8: Senior financial company equities
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
In the midst of earnings season, the Financial sector (XLF +4.52% to 11.11) was led higher by Citigroup (C +20.1%) and Bank of America (BAC +11.0%) as well as UBS (UBS +14.3%) and Deutsche Bank (DB +12.0%).
The question now is whether or not the bank earnings are real, and if they are from proprietary trading are they sustainable.
Goldman Sachs (GS -3.0%) was down on the week after reporting a quarter that was thought to be a success. But Goldman trading related to their stock offering was dubious at best. Since when does one of the major underwriters of stock not even support their accounts who bought their offering?
Daily charts of electronic brokers and exchanges
Weekly charts of electronic brokers and exchanges
Sector 45 (technology: IGM, IGV, IGW, XLK, VGT, IYW, IGN, IXN, MTK and SMH)
Here’s the SMH Monthly, Weekly and Daily data charts:
SMH Monthly data: 
SMH Weekly data: 
SMH Daily data:
Here’s the XLK Monthly, Weekly and Daily data charts:
XLK Monthly data: 
XLK Weekly data: 
XLK Daily data: 
Table 9: Senior technology equities
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
Tech (XLK +1.37% to 16.96) and Semi-conductors (SMH +1.54% to 20.43) stayed in the groove this week.
(Cara 100) Research In Motion (RIMM +6.5% W/W) was the leader in the Tech space again even though it was not even close to the gains of a week ago (+30.7%). Over four weeks, RIMM is up +61.4%.
In chip stocks this week, Micron (MU +12.4%) was the winner.
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
Sector 50 (telecom: IYZ, VOX and IXP)
Here’s the IYZ Monthly, Weekly and Daily data charts:
IYZ Monthly data: 
IYZ Weekly data: 
IYZ Daily data:
Telecom (IYZ -0.99% to 16.98) was a losing sector. AT&T (-0.6%) and Verizon (-1.0%) were unremarkable, again.
Sector 55 (utilities: IDU, XLU, and VPU)
Here’s the XLU Monthly, Weekly and Daily data charts:
XLU Monthly data: 
XLU Weekly data: 
XLU Daily data:
Utilities (XLU) lost -1.11% to close at 25.78. The winners at up +3.5% W/W were American Electric Power (AEP) and National Grid (Gas) Transco plc. I wonder if AEP is American first and Electric Power second as we heard the CEO of Wells Fargo who told us he was stagecoach first and banker second, as if anybody believed the man.
Here is the list of North American Utilities that I follow:
AEP D DUK ED EXC FE FPL NGG PCG PEG SO TRP
For study purposes, there is a good mix of electric (AEP, D, DUK, FE, FPL and SO), gas (NGG, TRP) and diversified (ED, EXC, PCG, PEG) utilities.
Table 12: US Utilities
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Bonds & Yields Review
Table 10: US Treasury Yields
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 3 Month | 0.10 | 0.11 | 0.16 | 0.18 |
| 6 Month | 0.33 | 0.30 | 0.36 | 0.36 |
| 2 Year | 0.96 | 0.90 | 0.94 | 0.81 |
| 3 Year | 1.35 | 1.27 | 1.36 | 1.10 |
| 5 Year | 1.89 | 1.77 | 1.89 | 1.52 |
| 10 Year | 2.95 | 2.83 | 2.93 | 2.51 |
| 30 Year | 3.80 | 3.71 | 3.75 | 3.52 |
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 2yr AA | 1.37 | 1.29 | 1.20 | 1.62 |
| 2yr AAA | 1.45 | 1.24 | 1.46 | 3.03 |
| 2yr A | 1.61 | 1.60 | 1.46 | 2.13 |
| 5yr AAA | 1.86 | 1.94 | 2.09 | 2.33 |
| 5yr AA | 1.93 | 1.98 | 2.18 | 2.55 |
| 5yr A | 1.91 | 2.01 | 2.33 | 2.59 |
| 10yr AAA | 3.06 | 3.01 | 3.23 | 3.58 |
| 10yr AA | 3.19 | 3.17 | 3.32 | 3.62 |
| 10yr A | 3.48 | 3.45 | 3.51 | 3.65 |
| 20yr AAA | 4.94 | 5.09 | 5.13 | 4.88 |
| 20yr AA | 4.90 | 5.04 | 5.08 | 5.13 |
| 20yr A | 4.70 | 4.88 | 4.75 | 4.92 |
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 2yr AA | 2.76 | 2.88 | 3.24 | 2.97 |
| 2yr A | 4.35 | 4.47 | 4.73 | 5.97 |
| 5yr AAA | 2.93 | 2.90 | 2.92 | 4.60 |
| 5yr AA | 3.59 | 3.65 | 3.91 | 3.68 |
| 5yr A | 4.68 | 4.04 | 4.82 | 4.56 |
| 10yr AAA | 5.00 | 4.86 | 4.93 | 5.60 |
| 10yr AA | 4.54 | 4.50 | 4.64 | 4.44 |
| 10yr A | 5.58 | 5.44 | 5.54 | 5.32 |
| 20yr AAA | 6.62 | 6.51 | 6.76 | 7.79 |
| 20yr AA | 6.11 | 5.99 | 6.25 | 7.28 |
| 20yr A | 6.79 | 6.68 | 6.93 | 7.97 |
The 20-year Treasury Bonds (TLT) dropped a further -0.64% W/W to close at 101.70. The 30-, 10- and 5- year yields lifted +5, +2 and +0 basis points (bp) to close the week at 3.80, 2.95 and 1.89 percent, respectively.
A week ago, and often, I wrote in this space that “Ultimately, a stable market environment will not happen until T-Bill yields lift from the present 0.160 percent level up to the 1.60 percent level. But that’s another story.” The yield dropped further this week to 0.130 percent, and had closed Thursday at 0.107 percent.
As soon as T-Bills pay a reasonable return perhaps more traders will decide to sit out in cash.
Maybe China is giving the Administration a message here by using funds to buy T-Bills instead of long bonds as this is the instrument they could most easily pick up their marbles from the game.
Here is the $USB 30-year Treasury Bond chart.
Interest rates and bond yields.
Interactive Daily data charts:
Interactive Chart of Interest rates and bond yields.
This chart is stunning to long-term observers of the debt markets.
US Bond Funds -- Interactive Monthly Data Charts SHY Monthly data series chart:
IEF Monthly data series chart:
TLT Monthly data series chart:
AGG Monthly data series chart:
LQD Monthly data series chart:
TIP Monthly data series chart:
US Bond Funds -- Interactive Weekly Data Charts SHY Weekly data series chart:
IEF Weekly data series chart:
TLT Weekly data series chart:
AGG Weekly data series chart:
LQD Weekly data series chart:
TIP Weekly data series chart:
US Bond Funds -- Interactive Daily Data Charts SHY Daily data series chart:
IEF Daily data series chart:
TLT Daily data series chart:
AGG Daily data series chart:
LQD Daily data series chart:
TIP Daily data series chart:
Table 11: Interest-sensitive securities
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
No further comment on Fannie and Freddie, at least until politicians stop taking election campaign money in return for votes and committee support. It’s disgusting what those reprobates get away with.
Consumer Finance -USA -- Interactive Weekly Data Charts
Mortgage Finance -USA -- Interactive Daily Data Charts
Commodities Review
The $CRB index dropped -0.89% W/W to close at 225.85, but that is still up from 211.08 in five weeks, which I attribute to reflation policies agreed to at the G-20, FOMC and Bank of Japan meetings.
The 50d MA is now at 216.30, which is below the present price, so it no longer serves as technical resistance, and is now considered short-term support. The longer the period where the current prices stays above support levels, the stronger that support is believed to be.
The 200-day MA has dropped from 326.18 to 282.69 over the past nine weeks. This move leads to more talk of deflation, but the inflation or deflation argument doesn’t matter to traders in the short-term. It’s the degree of the variance from normal that matters. We trade differently when corporations and securities markets operate in normal times versus extreme times. That is 90% of what you need to know.
Actually, deflation in the Great Depression through the 1930’s boosted gold prices more than any other asset class, by a large margin.
Although I use the $CRB (Reuters/Jeffries Index), principally because it’s the oldest, there are many commodity indexes: http://www.crbtrader.com/crbindex/ • Astmax Commodity Index(AMCI) • Commin Commodity Index • Dow Jones-AIG Commodity Index • Goldman Sachs Commodity Index • Reuters/Jefferies CRB Index • Rogers International Commodity Index • Standard & Poor's Commodity Index • NCDEX Commodity Index • Deutsche Bank Liquid Commodity Index (DBLCI) • UBS Bloomberg Constant Maturity Commodity Index (CMCI)
Here is a link to an article that discusses the major ones that have been around for a while: http://www.rogersrawmaterials.com/overviewandanalysis.PDF
Here is a current price summary of the heaviest weighted commodities contracts: http://money.cnn.com/data/commodities/
These indexes change their component weightings perhaps annually or even monthly, for example: http://www.seekingalpha.com/article/43586-the-new-generation-of-diversif... http://tinyurl.com/a5myfj
Interactive Chart of Weekly CRB Commodities Index:
Interactive Chart of Daily CRB Commodities Index:
Oil Review
This week, $WTIC lost -$2.22/bbl (-4.06%) to close at 52.47.
For $WTIC, the 50d MA is at 46.75, which is rising quickly, but still very much below the present price.
The 200d MA is now down to 72.84, down from 80.84 just four weeks ago. As previously noted here (for a couple months), “The price in mid-July hit a record high of $149.90. When the oil market stabilizes, I expect the 200d MA will be under 75, and possibly lower, so even if there is a sharp bounce, I do expect that the oil market will work through a very long bottom phase.”
In the long-term, after $WTIC lifts into the high end of a trading range (I say it’ll be about 75 before year-end), I believe it will fall back a bit and side-track while $GOLD should continue to rally for a couple years. $GOLD is money (ie, liquidity) and is an easily storable commodity, whereas speculators are presently seeking to lease empty tankers to store oil, which is a consumable, playing the contango. http://en.wikipedia.org/wiki/Contango
Contango and backwardation are concepts you need to understand, particularly where there are storage issues.
http://en.wikipedia.org/wiki/Backwardation
Here is the e-miNY Dec-07 Crude Oil chart.
Interactive Chart of Weekly Crude Oil:
Interactive Chart of Daily Crude Oil:
Gold & Precious Metals Review
$GOLD rallied +$22.24/oz four weeks ago, closing at 952.34, looking like it was on its way to testing former highs. I stated at the time that I believe $GOLD will trade at $2,000/oz by year-end. Since then, $GOLD has dropped to 869.10, and I’m struggling to get my groove back.
During this week, the low was 865.00, and the loss was -$9.70/oz (-1.10%), most of which was done on Friday.
I still believe, right or wrong, that $GOLD has bottomed out in the short cycle at these current levels, but I think there is a dynamic happening where I can’t trust the Fed and the bankers that control the contracts market. In the physicals market, there is overwhelming demand apparently, with potential buyers complaining they can’t secure the bullion, but the contracts and spot (cash) markets have been falling. I can’t square that.
Since there has not been an independent audit of the physical bullion held by the Fed, there could easily be illegal trading going on here. It could be that traders have to establish a separate market [similar in respects to what was done for oil in the 1970’s] where only precious metals that have been audited and trading free of debt are permitted.
In any case, a week ago I opined that “should the broad rally continue in equities, as I expect for maybe +10% to +15% before consolidating, I believe that the gold price will pick up steam again, and that the next lift will be notable. (But) the charts are not yet showing that, but then the Interventionists are busy making themselves look like they are in control of the financial system, and that doesn’t bode well for precious metals. So, the jury is out, but I remain positioned for higher gold prices.”
The gold 50d Moving Average is now at 925.23. The 200d MA is 860.37, which is crucial long-term support for the gold Bulls.
Both the 50d and 200d MA’s have dropped this week, which is not a good sign for the gold Bulls. However, I plan to hang in a while longer because the amount of bail-outs and stimuli packages of governments and central bankers all over the world definitely merits a humungous price of gold.
Interactive Chart of Weekly Gold EOD Continuous Contract Index:
Interactive Chart of Daily Gold EOD Continuous Contract Index:
Interactive chart of recent trading for the Gold Bullion index.
Spot silver chart for the week
$SILVER dropped -$0.47/oz (-3.77%) W/W to close at 11.88.
Four weeks ago, I had expected $SILVER to lead the precious metals complex higher from its then price of $13.78/oz, but the opposite happened. $SILVER is a leader, up and down. Watch for the turn.
Chris Start did an analysis of the silver price this week, which was published as a separate article on the blog. Thanks Chris. He, Pierre Brodeur and others from Team CTAB will be invited to add more of their articles on the blog as I try to take time off as the year moves along.
For $SILVER, the 50d MA is now 13.15, up from 12.66 in four weeks, and up from 11.70 eight weeks ago, but close to topping out hereto repeat, I would exercise caution should the 50d MA turn south.
The 200d MA is 12.55, down from 12.97 in four weeks and from 13.18 six weeks ago. I am watching for (or is it hoping for) a reversal to the upside there.
The price closed at 11.88 with a low of 11.82 this week, and the damage was done Thursday and Friday as the price dropped below support. The longer it stays down there, the odds grow that it will fall from there.
Interactive Chart of Weekly Silver EOD Continuous Contract Index:
Interactive Chart of Daily Silver EOD Continuous Contract Index:
Interactive chart of the Silver Bullion index.
$PLAT continued to move against $GOLD and $SILVER (but not $PALLADIUM) this week. It gained +$16.30/oz (+1.36% W/W) to close at 1211.60, up from 1116.90 four weeks ago, and a gain of $47.30 in two weeks.
The 50d MA is now at 1103.90, up from 1024.59 four weeks ago and up from 993.46 over just six weeks.
The 200d MA is now at 1156.48, down from 1239.58 over four weeks and down from 1292.15 over six weeks.
A week ago I noted in this space, “Did you note that both the 200d MA and the 50d MA are now below the current price of platinum? That’s bullish. The trend is higher.”
The split from the trend of gold and silver is another of those weird happenings in the market at this time.
Spot platinum chart for the week
Interactive Chart of Weekly Platinum EOD Continuous Contract Index:
Interactive Chart of Daily Platinum EOD Continuous Contract Index:
Interactive chart of the Platinum metal index.
$PALL gained +$2.35/oz (+1.01%) W/W to close at 234.55.
The 50d and 200d MA is at 212.73 and 243.07, respectively, so the present price is over the 50d MA, but still below the 200d MA.
But, $PALL tracked the higher trend of $PLAT and $COPPER this week. Something’s up.
Spot palladium chart for the week
Interactive Chart of Weekly Palladium EOD Continuous Contract Index:
Interactive Chart of Daily Palladium EOD Continuous Contract Index:
Interactive chart of the Palladium metal index.
$COPPER contracts gained +12.65 (+6.11% W/W) to close at 219.75, which is a two-week gain of almost +16%.
The price was just 179.60 four weeks ago. Five weeks ago in this space, I wrote, “Traders are looking forward to a break-out.”
The 50d and 200d MA’s are 173.33 and 225.92, respectively.
There are many traders who believe the economic growth of China is spurring demand for copper. I don’t have a handle on this. Glencore of Zug Switzerland does because they best know the physicals market. The same thing must happen with precious metals – to get them outside the Federal Reserve System and the control of Interventionists who manipulate markets in their interests. That’s not acceptable; it has to stop.
For those who are keen to study the industrial metals like copper, aluminum and zinc, why not look at the powershares DBB, which trades on the NYSE.
http://finance.google.com/finance?q=NYSE:DBB
Interactive Chart of Weekly Copper EOD Continuous Contract Index:
Interactive Chart of Daily Copper EOD Continuous Contract Index:
Interactive chart of the Copper metal index.
Table 12: Senior gold equities
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
The Goldminer indexes and ETFs were hammered down again this week: $XAU -6.33% to 114.99; GDX -6.27% to 30.97; and XGD -7.63% to 16.70.
I cannot prove this, and therefore really should not be saying it, but I think the trades going on in the precious metals miner ETF’s presently is corrupt. If we had an honest SEC – and maybe there has been a change for the better – there would be a full-out investigation into the trading here. But when HB&B controls the ETF’s and the Fed controls HB&B, this nonsense could happen and the scoundrels would know they have been given a Get Out of Jail Free card.
I don’t think I’m off base here. Give me the power to audit and prosecute, and I believe some people would be going to jail.
In any case, I am not a gold bug; my interest is strictly in having honest markets. I started to blog after I saw stuff going on in 2003 and early 2004 that made me want to come out of retirement and write again. It’s just gotten a whole lot worse.
To watch the moves in precious metal miners, you will have to monitor the individual stock charts, preferably in real-time, as follows: NEM ABX AU GFI GG HMY AUY KGC BVN
LIHR IAG EGO RGLD GOLD TSE_AGI GSS NG WGW AEM
Here are the key Silver miners and the SLV ETF: SLV SIL SVM CDE HL PAAS SSRI SLW MGN
To repeat: I like silver stocks and the metal, especially when the metal is in a bull phase, racing ahead of the gains in gold. A number of you, as did we, make solid gains in trading Silver Wheaton (SLW) after we published our 100-page Briefing in January.
Only I could refer to a 100-page report as a Briefing. :-)
But there could be a trend and cycle reversal in silver stocks soon, and I’ll be quick to make a note of it. What we need to do then is to write puts, more puts and even more puts until the Interventionist shorts get the message that they are going to be squeezed.
Here are the Weekly and Daily Data charts of the indexes:
Interactive Chart of Weekly U.S. Goldminers Index:
Interactive Chart of Daily U.S. Goldminers Index:
The U.S. goldminer share trust ETF trades under the ticker symbol GDX.
Here are the U.S. Goldminer ETF (GDX) index Weekly and Daily data charts:
GDX Weekly data:
GDX Daily data:
The Toronto Exchange-listed goldminer iUnits S&P/TSX Capped Gold Index ETF trades under the ticker symbol TSE:XGD.
Just like GDX on the AMEX, you can trade XGD on Toronto.
Here are the Weekly and Daily data charts for the TSX Goldshares (XGD) index:
Interactive Chart of XGD Weekly data:
Interactive Chart of XGD Daily data:
Forex Review
The $USD is a trade-weighted US Dollar index, we used to call the Morgan Dollar.
You cannot trade commodities that are priced in $USD without studying forex movement. The Forex market is a multi-trillion dollar marketplace every day, which dwarfs the size of the stock and bond markets. In this market, the Euro/USD is the highest volume trader.
The current value of $USD is a mean value of rate fluctuations of six world currencies (Japanese yen, Euro, British pound, Canadian dollar, Swiss franc and Swedish krona) that each trade against the USD.
This week, the US Dollar had a solid gain ($USD +0.38% to 85.99). The other major currencies, except the Euro, all closed higher as well: (Euro -0.95% to 130.42), Yen (+1.23% to 100.85), Pound (+0.78% to 147.98), and Cdn Loonie (+1.00% to 82.49 W/W). Friday’s trading more than made the gain in the $USD and the loss in the Euro.
The 50-day MA of the $USD is now at 86.17, so the price is just below that. The 200-day MA is now 81.96.
Interactive Chart of Weekly U.S. Dollar Index:
Interactive Chart of Daily U.S. U.S. Dollar Index:
The Euro ($XEU) dropped -0.95% W/W to close at 130.42.
The 50d MA and 200d MA for the Euro are now 130.32 and 137.33, respectively, so the present price is in between, but just above the technical support of the 50d MA.
Like tennis, we call that No Man’s Land, and both the $USD and Euro are there, but close to breaking out or reversing trend.
Interactive Chart of Weekly Euro Dollar Index, priced in USD:
Interactive Chart of Daily Euro Dollar Index, priced in USD:
The Pound gained +0.78% W/W to close at 147.98.
The 50d and 200d MA is 144.13 and 162.59, respectively.
Weekly British Pound Index:
Daily British Pound Index:
Weekly Japanese Yen Index:
The Japanese Yen ($XJY) gained +1.23% W/W to 100.85.
The Yen’s 50-day MA is now 103.34 and the 200-day MA is 101.24. Note that the current price is sitting right on the 200d MA.
Daily Japanese Yen Index:
The Loonie (Cdn Dollar) lifted +1.00% to 82.49, and since there was a gain of +1.00% on the previous Thursday (last trading day that week), that’s a gain of +2.00% in six sessions for the Loonie.
The Loonie 50-day MA and 200-day MA are now at 80.08 and 86.17, respectively, so the current price is just above the 50d MA, which is technical support. The “goldbugs like” that as they want to see a strong Cdn Dollar, and they seem to be getting it without a strong oil price, so there is widespread confusion in the ranks of independent traders.
Weekly Canadian Dollar Index:
Daily Canadian Dollar Index:
Here is the China Yuan (CNY) chart.
International Equity Markets Review
Except for Japan’s Nikkei 225 index, international stock exchange indexes were all up around the world gain this week as the Great Reflation has taken hold.
Over the past four weeks:
UK FTSE moved from 3842.9 to 4092.8. The German DAX moved from 4068.7 to 4676.8. Aussie All-Ords moved from 3405.0 to 3728.1. HK Hang Seng moved from 12833.5 to 15601.3. Shanghai rallied from 2281.1 to 2503.9. India’s BSE 30 rallied from 8966.7 to 11052.9. Brazil’s Bovespa has rallied from 40076.4 to 45778.3.
As I remarked in this space four weeks ago, “… there are a bunch of markets around the world that appear to have bottomed and are starting to lift higher.”
India and Hong Kong have had remarkable rallies.
There are 16 country index charts from StockCharts.com (with their formal approval btw) because I think it is important to be watching these markets move through a trend juncture together, and in relation to currency and commodity strength or weakness. I also made some additions to the country-based ETF tables as I intend to focus more on ETF’s in 2009. In time, I will also set up more tables and track the domestic market prices. Now that the Drupal platform is in place, it’s just a matter of time and focus for me to expand these tables, and to possibly have separate blog streams.
Here is the latest session data for the exchanges of the Americas.
Here is the latest chart for the Brazilian Bovespa stock exchange in Sao Paulo.
Brazilian Bovespa stockcharts.com chart
Here is the latest session data for the Toronto Stock Exchange composite index.
Toronto 300 stockcharts.com chart
Toronto CDNX stockcharts.com chart
Europe
Here is the latest session data for the bourses of Europe.
Here is the latest session data for the London stock exchange FTSE.
FTSE 100 stockcharts.com chart
Here is the latest session data for the German DAX.
Here is the latest session data for the French CAC 40.
Here is the latest session data for the Milan Italy stock exchange MIBTEL.
Italian Milan Index stockcharts.com chart
Here is the latest session data for the Swiss market index. Swiss Market Index stockcharts.com chart
Asia-Pacific
Here is the latest session data for the Asia-Pacific stock exchanges.
Here is the latest chart for the Japanese Nikkei 225 index.
Tokyo Nikkei 225 Index stockcharts.com chart
Here is the latest chart for the Singapore index .
Singapore Straits Times Index stockcharts.com chart
Here is the latest chart for the Shanghai Composite index .
Shanghai Composite Index stockcharts.com chart
Here is the latest chart for the Hong Kong Hang Seng index .
Hong Kong Hang Seng stockcharts.com chart
Here is the latest chart for the India BSE 30 index .
Mumbai BSE 30 Sensex Index stockcharts.com chart
Here is the latest chart for the Australian All Ordinaries index .
Sydney All Ordinaries Index stockcharts.com chart
Russia (RTS) stockcharts.com chart
Table 13: International equities via an ETF perspective (in $USD)
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
Japanese equity market ETF: EWJ
Here is the Japanese (EWJ) equity market ETF Monthly, Weekly and Daily data charts:
U.K. equity market ETF
Here is the United Kingdom (EWU) equity market ETF Monthly, Weekly and Daily data charts:
EWU Daily data: 
Canada’s equity market
Here is the Canadian (EWC) equity market ETF Monthly, Weekly and Daily data charts:
Taiwan’s equity market
Here is the Republic of China/Taiwan (EWT) equity market ETF Monthly, Weekly and Daily data charts:
US Equity Markets Review
All four major US equity market indexes were higher again this week. The past six sessions have been outstanding.
As I remarked in this space four weeks ago, “DC is likely to change the mark-to-market rule imposed on the banks, and (the market) was up this week again across the board because of the apparent reflation move by the Fed, which will pour trillions into the economy very quickly.”
This week, the DJIA (+0.59% to 8131.33), S&P 500 (+1.52% to 869.60), NASDAQ Composite (+1.24% to 1673.07), and Russell 2000 small cap index (+2.39% to 479.37) were higher and the Bulls are happy that the small cap Russell 2000 index has been leading the market higher as it did again this week.
However, be wary of these index ETF’s as the Interventionists can use and abuse them to their hearts content. Who has the authority to stop them? Nobody is going to jail if they get caught.
As I remarked a week ago, “So far, at least, portfolio managers are trying to make up some lost ground – even if they don’t have much of a rationale for their buying. To put it bluntly, they are drinking their own bathwater, buying because everybody else is doing the same. But, at this point, there are lots of shorts being covered. I don’t know how much cash is being moved in from the sidelines.”
When the short squeeze comes to an end and profit taking starts, the Interventionists are going to have to use that TARP and TALF money to buy all the paper that gets thrown at them if they want to hold the gains up. Otherwise, it’s going to be a swift ride down the elevator. Nobody by that time is going to listen to the crapola that “the inventory cycle appears to have bottomed” or “the pain in the economic data has passed its worst point”. Independent traders will be taking profits, ie, they will be selling.
The only thing that could hold up the market is for govt to levy a huge transaction tax or to make the short-term trading rules for the public – but not HB&B of course -- even more onerous.
Anyway, this is a competition. I feel like the visiting team, anxious to go into the opponent’s home stadium ready to whip their butts.
Of course, if this was football, we could be made to wear chains and not footwear on our feet. It seems to be getting that stupid. Or, after 30 or 40 years doing this, do I just imagine it? Ha!
Here is a dozen NASDAQ stocks to watch.
Here is the Monthly data chart of the Interactive Chart of Nasdaq Composite, S&P 500, Dow30, and Russell 2000 (small cap) indexes.
Here is the Weekly data chart of the Interactive Chart of Nasdaq Composite, S&P 500, Dow30, and Russell 2000 (small cap) indexes.
Here is the Daily data chart of the Interactive Chart of Nasdaq Composite, S&P 500, Dow30, and Russell 2000 (small cap) indexes.
Table 14: Dow 30 List
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
Here are the links to interactive Dow charts from Billcara2.com that I broke into groups of ten, which you can add technical indicators for as well.
(list one)
(list two)
For those of you who are relatively new at trading, or to this blog, why not pull the ten (10) Cara 100 companies out of the DJIA 30 list, and study the links for just these stocks? Keep a hard copy of the Value Line quarterly report plus a record of the Daily-Weekly-Monthly RSI-7 technical indicator. Study up on what the RSI is so you know it and have confidence that it is just like a football game yardstick that shows you how much risk your team is facing when trying to score points. The Cara 100 high-quality company list has the following ten DJIA components:
Wal-Mart (WMT), Disney (DIS), Johnson & Johnson (JNJ), McDonalds (MCD), Exxon (XOM), Boeing (BA), Procter & Gamble (PG), IBM (IBM), Intel (INTC), and United Technologies (UTX)
There is no rocket science to these high-quality companies. In your typical week, you shopped at Wal-Mart and along the aisles, mostly the personal consumer products were from Procter & Gamble, except for maybe the baby powder from Johnson & Johnson. On the way there, you may have filled-up at an Exxon gas station, and on the way home, maybe you stopped for a Big Mac or a salad at McDonalds. Overhead, you watched airplanes from Boeing. If you were in a high-rise building, you probably rode in an Otis elevator from United Technologies. Maybe you no longer have an IBM PC, but you do know the company, and your present PC is likely powered by Intel. Every parent's kids want you to take them to Disney… All in all, this is just life we're talking about here. If you are alive, you know these companies like your children. You probably even see more of them… So, just quickly read those Value Line reports – one per company every 13 weeks – and keep an eye on the RSI (momentum) and MACD (trend)… Those guys on Wall Street may be worth a gazillion dollars, but they didn't do it the way you and I have to do it. So, stop listening to their stories that financial engineering and out-sourcing is what's making America strong. That is such a crock. So, live life, use common sense, do only what you understand, feel comfortable, and you'll be surprised at how quickly you can take control and free yourself of the shackles of HB&B.
Value Line Report(s) this past Friday
This week, Value Line reported on four DJIA components, none of which are Cara 100 companies, although several years ago Merck and more recently Pfizer were.
The “simple little system” I devised for this blog, which gives notifications when a stock is in the Accumulation or Distribution Zones (ie, when we need to start focusing on the data), and Buy and Sell Alerts (ie, the day we need to be looking at specific strategic and tactical decisions), is a fairly good one that can be easily tailored for different types of users, eg, day-traders, swing traders, long-term traders, etc.
Remember, we trade only because we know we can be wrong, say one time in three, but that it’s up to us to cut our losses to small ones and let our profits run. We can do this because we understand probabilities and because we are able to rely on our expertise to pull us through in the long run.
Alcoa [GICS 15, Dow 30]
(AA: Value Line Report Apr. 17: next one is due Jul. 17)
Dupont [GICS 15, Dow 30]
(DD: Value Line Report Apr. 17: next one is due Jul. 17)
Merck [GICS 35, Dow 30]
(MRK: Value Line Report Apr. 17: next one is due Jul. 17)
Pfizer [GICS 35, Dow 30]
(PFE: Value Line Report Apr. 17: next one is due Jul. 17)
The two Basic Materials companies, Alcoa and Dupont, ran into the same economic problems caused by the credit market squeeze in September 2008: pullback in consumer spending, inventory glut and subsequent lowering of inventories by dealers. Being somewhat more closely linked to the woes of the North American auto industry heading for bankruptcy, Alcoa was worse hit, and probably facing the longer recovery period.
The two major pharmaceutical companies, Pfizer and Merck, faced a different type of problem. Theirs was the law of big numbers and how weakness in the product pipeline and the loss of patent protection of major drug sellers simply could not enable these companies to grow at former high margins and returns on equity that made them investor favorites.
In the Pfizer and Merck situations, the companies both decided that the mergers and acquisitions route would be the savior. Merck will pay $41 billion in cash and stock to buy Schering-Plough, and Pfizer will pay $68 billion in cash and stock to buy Wyeth.
Contrasted with my comments a week ago with one of the Value Line analysts who I think wasted our time with his useless report, I think Douglas Maurer has done a good job with Pfizer and Merck reports this week. Basically, he is saying (i) the M&A deals are speculative, and only time will tell us how they work out, (ii) the fundamental metrics (timeliness) have weakened for Pfizer, partly due to their cutting the dividend from $0.32 to $0.16 to help pay for the Wyeth deal, (iii) Pfizer is the stronger of the two financially, but will also inherit Wyeth’s legal problems, and (iv) the MRK stock looks, on the basis of growth rates for sales, cash flow, earnings and dividends, and possibly the bigger pull-back in share price in the past 15 months, to offer the most attractive potential annual total return (TR).
Frankly the only company I would touch of these four would be Dupont. I have always liked its diversification, and in recent years the company has managed to lift its returns on equity to a high level. However, at this point with the tough business environment, the stock will likely sidetrack for a time until there is clearer indication that the economic recovery will happen within a year.
I think you could make some money if (a big ‘if’) you wanted to hold the stock for the long-run or you wanted to supplement the 5.8% dividend yield with option premium income from regular put writes when the share price dipped in the short-run. However, with a long-term time horizon, and a commitment to frequent put writes, and waiting to enter at an attractive price (such as the $24.32 price used for the report), I think the Value Line 2012-2014 projected annual total return (TR) of 27% (low) to 34% (high) would be achievable. That’s a positive.
The problem is that DD hit a low of $16.05 on March 9. The price today is $28.42. That’s a gain of +77.1% in just five weeks and there is no discernible improvement in operations or operating conditions. In fact, DD has gained +16.9% since the Value Line report was prepared.
Looking at the chart, I believe the stock could test the 24 level, which showed support eight sessions ago. Depending on many other factors at that point, I might be interested in buying stock and writing puts. Further weakness could take the stock down to 22, but I think the 16 low of March is a thing of the past.
The Dow 30 Company links in chronological order of the upcoming reports.
United Technologies [GICS 20, Dow 30, Cara 100]
(UTX: Google Finance file)
(UTX: Yahoo Finance file)
(UTX: StockChart chart)
(UTX: Billcara2 chart)
(UTX: ADVFN Financial Data)
(UTX: Value Line Report Jan. 23: next one is due Apr. 24)
Caterpillar [GICS 20, Dow 30]
(CAT: Google Finance file)
(CAT: Yahoo Finance file)
(CAT: StockChart chart)
(CAT: Billcara2 chart)
(CAT: ADVFN Financial Data)
(CAT: Value Line Report Jan. 23: next one is due Apr. 24)
Coca Cola [GICS 30, Dow 30]
(KO: Google Finance file)
(KO: Yahoo Finance file)
(KO: StockChart chart)
(KO: Billcara2 chart)
(KO: ADVFN Financial Data)
(KO: Value Line Report Jan. 30: next one is due May 1)
Kraft Foods [GICS 30, Dow 30]
(KFT: Google Finance file)
(KFT: Yahoo Finance file)
(KFT: StockChart chart)
(KFT: Billcara2 chart)
(KFT: ADVFN Financial Data)
(KFT: Value Line Report Jan. 30: next one is due May 1)
Wal-Mart [GICS 30, Dow 30, Cara 100]
(WMT: Google Finance file)
(WMT: Yahoo Finance file)
(WMT: StockChart chart)
(WMT: Billcara2 chart)
(WMT: ADVFN Financial Data)
(WMT: Value Line Report Feb. 6: next one is due May 7)
Disney [GICS 25, Dow 30, Cara 100]
(DIS: Google Finance file)
(DIS: Yahoo Finance file)
(DIS: StockChart chart)
(DIS: Billcara2 chart)
(DIS: ADVFN Financial Data)
(DIS: Value Line Report Feb. 13: next one is due May. 14)
3M Company [GICS 20, Dow 30, Cara US 100 June 25-06]
(MMM: Google Finance file)
(MMM: Yahoo Finance file)
(MMM: StockChart chart)
(MMM: Billcara2 chart)
(MMM: ADVFN Financial Data)
(MMM: Value Line Report Feb. 13: next one is due May. 14)
American Express [GICS 40, Dow 30]
(AXP: Google Finance file)
(AXP: Yahoo Finance file)
(AXP: StockChart chart)
(AXP: Billcara2 chart)
(AXP: ADVFN Financial Data)
(AXP: Value Line Report Feb. 20: next one is due May 21)
Bank of America [GICS 40, Dow 30]
(BAC: Google Finance file)
(BAC: Yahoo Finance file)
(BAC: StockChart chart)
(BAC: Billcara2 chart)
(BAC: ADVFN Financial Data)
(BAC: Value Line Report Feb. 20: next one is due May 21)
Citigroup [GICS 40, Dow 30]
(C: Google Finance file)
(C: Yahoo Finance file)
(C: StockChart chart)
(C: Billcara2 chart)
(C: ADVFN Financial Data)
(C: Value Line Report Feb. 20: next one is due May 21)
JP Morgan [GICS 40, Dow 30]
(JPM: Google Finance file)
(JPM: Yahoo Finance file)
(JPM: StockChart chart)
(JPM: Billcara2 chart)
(JPM: ADVFN Financial Data)
(JPM: Value Line Report Feb. 20: next one is due May 21)
Microsoft [GICS 45, Dow 30]
(MSFT: Google Finance file)
(MSFT: Yahoo Finance file)
(MSFT: StockChart chart)
(MSFT: Billcara2 chart)
(MSFT: ADVFN Financial Data)
(MSFT: Value Line Report Feb. 20: next one is due May 21)
General Motors [GICS 25, Dow 30]
(GM: Google Finance file)
(GM: Yahoo Finance file)
(GM: StockChart chart)
(GM: Billcara2 chart)
(GM: ADVFN Financial Data)
(GM: Value Line Report Feb. 27: next one is due May 28)
Johnson & Johnson [GICS 35, Dow 30, Cara 100]
(JNJ: Google Finance file)
(JNJ: Yahoo Finance fle)
(JNJ: StockChart chart)
(JNJ: Billcara2 chart)
(JNJ: ADVFN Financial Data)
(JNJ: Value Line Report Feb. 27: next one is due May 28)
McDonalds [GICS 30, Dow 30, Cara 100]
(MCD: Google Finance file)
(MCD: Yahoo Finance file)
(MCD: StockChart chart)
(MCD: Billcara2 chart)
(MCD: ADVFN Financial Data)
(MCD: Value Line Report Mar. 6: next one is due Jun. 5)
Chevron Corp [GICS 10, Dow 30, Cara 100] (CVX: Google Finance file)
(CVX: Yahoo Finance file)
(CVX: StockChart chart)
(CVX: Billcara2 chart)
(CVX: ADVFN Financial Data)
(CVX: Value Line Report Mar. 13: next one is due Jun. 12)
ExxonMobil [GICS 10, Dow 30, Cara 100]
(XOM: Google Finance file)
(XOM: Yahoo Finance file)
(XOM: StockChart chart)
(XOM: Billcara2 chart)
(XOM: ADVFN Financial Data)
(XOM: Value Line Report Mar. 13: next one is due Jun. 12)
Boeing Co [GICS 20, Dow 30. Cara 100]
(BA: Google Finance file)
(BA: Yahoo Finance file)
(BA: StockChart chart)
(BA: Billcara2 chart)
(BA: ADVFN Financial Data)
(BA: Value Line Report March 20: next one is due Jun. 19)
AT&T [GICS 50, Dow 30]
(T: Google Finance file)
(T: Yahoo Finance file)
(T: StockChart chart)
(T: Billcara2 chart)
(T: ADVFN Financial Data)
(T: Value Line Report Mar. 27: next one is due Jun. 26)
Verizon [GICS 50, Dow 30]
(VZ: Google Finance file)
(VZ: Yahoo Finance file)
(VZ: StockChart chart)
(VZ: Billcara2 chart)
(VZ: ADVFN Financial Data)
(VZ: Value Line Report Mar. 27: next one is due Jun. 26)
Procter & Gamble Co. [GICS 30, Dow 30, Cara 100]
(PG: Google Finance file)
(PG: Yahoo Finance file)
(PG: StockChart chart)
(PG: Billcara2 chart)
(PG: ADVFN Financial Data)
(PG: Value Line Report Apr. 3: next one is due Jul. 3)
Home Depot [GICS 25, Dow 30]
(HD: Google Finance file) (HD: Yahoo Finance file) (HD: StockChart chart) (HD: Billcara2 chart) (HD: ADVFN Financial Data) (HD: Value Line Report Apr. 3: next one is due Jul. 3)
General Electric [GICS 20, Dow 30, ex-Cara 100]
(GE: Google Finance file)
(GE: Yahoo Finance file)
(GE: StockChart chart)
(GE: Billcara2 chart)
(GE: ADVFN Financial Data)
(GE: Value Line Report Apr. 10: next one is due Jul. 10)
Hewlett-Packard [GICS 45, Dow 30]
(HPQ: Google Finance file)
(HPQ: Yahoo Finance file)
(HPQ: StockChart chart)
(HPQ: Billcara2 chart)
(HPQ: ADVFN Financial Data)
(HPQ: Value Line Report Apr. 10: next one is due Jul. 10)
IBM [GICS 45, Dow 30, Cara 100]
(IBM: Google Finance file)
(IBM: Yahoo Finance file)
(IBM: StockChart chart)
(IBM: Billcara2 chart)
(IBM: ADVFN Financial Data)
(IBM: Value Line Report Apr. 10: next one is due Jul. 10)
Intel [GICS 45, Dow 30, Cara 100]
(INTC: Google Finance file)
(INTC: Yahoo Finance file)
(INTC: StockChart chart)
(INTC: Billcara2 chart)
(INTC: ADVFN Financial Data)
(INTC: Value Line Report Apr. 10: next one is due Jul. 10)
Alcoa [GICS 15, Dow 30]
(AA: Google Finance file)
(AA: Yahoo Finance file)
(AA: StockChart chart)
(AA: Billcara2 chart)
(AA: ADVFN Financial Data)
(AA: Value Line Report Apr. 17: next one is due Jul. 17)
Dupont [GICS 15, Dow 30]
(DD: Google Finance file)
(DD: Yahoo Finance file)
(DD: StockChart chart)
(DD: Billcara2 chart)
(DD: ADVFN Financial Data)
(DD: Value Line Report Apr. 17: next one is due Jul. 17)
Merck [GICS 35, Dow 30]
(MRK: Google Finance file)
(MRK: Yahoo Finance file)
(MRK: StockChart chart)
(MRK: Billcara2 chart)
(MRK: ADVFN Financial Data)
(MRK: Value Line Report Apr. 17: next one is due Jul. 17)
Pfizer [GICS 35, Dow 30]
(PFE: Google Finance file)
(PFE: Yahoo Finance file)
(PFE: StockChart chart)
(PFE: Billcara2 chart)
(PFE: ADVFN Financial Data)
(PFE: Value Line Report Apr. 17: next one is due Jul. 17)
Wrap-up:
The Daily Traders Conference Call Notes have been so well received that CTAB decided to invite clients to our conference calls – in small groups, say once a week. What we’d like to do is put ourselves on the hot spot to explain our trades. The strategies and tactics are pretty much what you read here in the WIR. So far, we are winning against Wall Street, and clients get to see the nightly updates.
Yes, unlike Wall Street, we’re just the paid help. We have to produce or else. The others get to cheat, lie, misrepresent, front-run, and, at the same time, get paid humungous bucks.
In time, the public will demand the same from them as they get from us.
Then they’ll feel the pressure we do.
Won’t that be the day to rejoice!
Have a good one. Mine has been spent working all weekend. At least, after the blogging and set-ups in the morning, I’ll be able to take some time off.
We should be able to get out the post-conference report by the end of the week. With holidays involved, we will have to take another week to fix the final date and prices for next year’s Conference. We do know it will be in Freeport Bahamas at the Our Lucaya resort. We will try to out-do this year’s conference – already I can hear the laughing! – but if it’s possible, we’ll do it.
Depending on what I hear back from the Obama talks at the America’s conflab this weekend, if Bahamas is going to be pressured into having an income tax system, then Cara Conference 2011 will be held in Hong Kong – because that’s where I will be located.
Just something to think about. We have a terrific user-pay system here that allows us to have zero corporate and personal income tax. We simply pay in other ways. We pay on consumption, which the wealthy in the high tax jurisdictions would absolutely hate because they can afford to hire lobbyists to get them through the tax legislation loopholes.
Tell me; if 1% of American’s own 34% of the American Pie, do they pay 34% of the taxes? Just something else to think about this weekend. You see, I really enjoyed hard work instead of having to fill out papers for a tax bureaucracy. It pays better.
Wow, it’s almost 6pm.
Now I can say have a good one.
