[3:44am ET] One of the defining features of the US equity market over the past several weeks has been the furious sector rotation, with one sector strongly bid from the opening bell, but with no obvious catalyst to fan the bullish flames. On Wednesday the Financials were all the rage, followed by Semiconductors on Thursday, and on Friday the economic recovery trade appeared, as Basic Materials and Oil & Gas stocks (i.e., the inflation trade ex-gold) were in high demand from the outset.
All one-day wonders, i.e., no follow-through as the market seems to have amnesia from one day to the next. So, what’s going on here?
We have to assume these are black box strategies, designed to capture relative value (and incrementally increase returns) or to game the system. Like a gun can be used for different purposes, we don’t know the answer; however, the accompanying lack of transparency in the financial markets today hinders money managers from buying large stakes in a company over time. The week-to-week risk of holding illiquid positions simply isn't worth the reward, so everyone is forced to essentially be a day trader -- Buy what is hot in the morning, close the trade on the bell, come into the office they next day and do it all over again.
This gets tiring.
If the insiders have a scam going on, they simply gap open their stocks, and the rest of us are frozen out. However, this situation cannot continue for long. Market volume will contract as traders become disillusioned with the seemingly randomness of trends, burned out by the stress of trying to anticipate the next pocket of strength over the next 24 hours. Participants have to feel the risk they take is worth the potential reward, or they will take their capital elsewhere.
Even American pro traders might start looking to London, Hong Kong, Singapore or Toronto if this stuff keeps up. Nobody is forcing us to trade US listed securities. At the end of the day, we could leave the NY market to the likes of Goldman Sachs and JP Morgan. Then they get to control New York as well as Washington.
Seriously. Have you seen the volume? It’s HB&B’s black boxes making as much as 40% of all trades. And few of us want to be long more than a day. That ain’t healthy for the equity market. Bring in a transaction tax now and I’m sure they’ll have the casino to themselves, ie, nobody else playing.
Global Economics Review
Weekly International Economic Report .
I put much time and effort into summarizing Econoday’s informative, concise, and objective reports because they actually teach people something that can be used in trading decisions. I 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, which was a very busy one.
US Economic Calendar for the week of Apr. 27.
US Consumer Confidence for April. After the data was released, Econoday reported, “Pessimism may be easing as consumer confidence posted its biggest one-month jump in four years, to 39.2 in April from 26.9 in March (revised higher from 26.0). Expectations really improved, up nearly 20 points to 49.5 suggesting that consumers see recovery ahead. In an important plus on the psychology front, consumers see stable conditions ahead for prices. On the negative side, the current assessment of the jobs market shows no improvement with 47.9 percent saying jobs are hard to get, a reading that points to no let up in monthly payroll contraction… Confidence doesn't always relate one-to-one with spending but these results will raise talk that the worst may be over for the retail sector and in turn for the whole economy. Stocks bounced higher in immediate reaction to the report while Treasuries bounced lower.”
US 1Q2009 GDP index. Econoday reported: “First quarter GDP contracted more than expected but most of the weakness was in lower inventories. The consumer was stronger-than-expected. Overall, spending is not as weak as broad GDP. The Commerce Department's initial estimate for first quarter GDP dropped an annualized 6.1 percent, and followed a 6.3 percent contraction the prior quarter. The first quarter was worse than the consensus forecast for a 5.0 percent decline… The first quarter decrease was led by a $103.7 billion cutback in inventories, followed by a 3.9 percent annualized drop in government spending. The fall in government purchases was due to declines in both defense spending and state & local government spending. Housing continued to fall sharply along with business fixed investment. On the positive side, consumer spending picked up to a 2.2 percent gain after a 4.3 percent decrease in the fourth quarter. Net exports also improved… But in terms of demand, real final sales of domestic product fell only 3.4 percent in the latest quarter (GDP less change in private inventories) while real final sales to domestic purchasers declined 5.1 percent annualized (purchases by U.S. residents of goods and services wherever produced)… On the inflation front, the GDP price index jumped 2.9 percent, after a 0.5 percent annualized increase the prior quarter. The market had projected a 1.8 percent increase. The headline PCE index slipped 1.0 percent, following a 4.9 percent decline in the fourth quarter. Core PCE inflation firmed with a 1.5 boost, after nudging up 0.9 percent annualized in the fourth quarter… Year-on-year growth for real GDP contracted by 2.6 percent after dropping 0.8 percent in the fourth quarter… The bottom line is that the worse-than-expected decline was due to inventory adjustments. The consumer is doing better than expected. This is good news. If the consumer is holding up, the economy will not fall off a cliff. The report should be favorable to equities and also firm interest rates due to better-than-expected consumption. Foreign exchange markets were mixed on the news.”
FOMC policy meeting decision released April 29. Econoday reported, “The FOMC again kept its target rate unchanged at zero percent to a quarter percent and maintained its plan for quantitative easing as announced in recent FOMC meetings. The Fed left the discount rate unchanged at 0.50 percent. Notably, the FOMC made a modest upgrade for the economy, stating that "the economy has continued to contract, though the pace of contraction appears to be somewhat slower." Nonetheless, the Fed sees a sluggish economy continuing with "economic activity is likely to remain weak for a time." There is an expectation that monetary and fiscal policy will lead to stabilized financial markets and economic recovery but no timetable was given. Also, inflation is expected to be subdued… There was no change in the Fed's announced plan for expanding its balance sheet… "As previously announced, to provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of up to $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt by the end of the year. In addition, the Federal Reserve will buy up to $300 billion of Treasury securities by autumn. The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets. The Federal Reserve is facilitating the extension of credit to households and businesses and supporting the functioning of financial markets through a range of liquidity programs. The Committee will continue to carefully monitor the size and composition of the Federal Reserve's balance sheet in light of financial and economic developments." … Some may see the Fed as not being aggressive enough in expanding its balance sheet to inject additional liquidity. Although not stated, this may be due to concern by some FOMC participants that the combination of about $2 trillion in expansion of the Fed's balance sheet with additional deficit spending of $2 trillion by the Treasury in coming quarters is going to be very stimulative at some point. However, the vote for today's Fed action was unanimous, 10 to 0. … Markets saw the statement much as expected as equities were little changed immediately after the announcement. ”
US Personal Income and Outlays data for March. After the data was released, Econoday reported, “Personal income in March fell further as consumer spending retreated from recent gains. Yesterday's GDP report apparently gave a misleading picture of relatively healthy consumer spending. Meanwhile PCE inflation came in mixed. Personal income fell 0.3 percent, following a 0.2 percent dip in February. The March decrease was worse than the market forecast for a 0.2 percent decline. Within personal income, the wages and salaries component fell a sharp 0.5 percent, after dropping 0.4 percent in February. Consumer spending turned negative again with a 0.2 percent decrease after gaining 0.4 percent in February. March spending was below than the market projection for no change… PCE inflation was mixed as the headline PCE price index was unchanged, coming off a 0.3 percent jump in February. Meanwhile, the core PCE price index posted another 0.2 percent increase in March – the same as for the prior two months – and matched market expectations… Year on year, personal income growth fell to 0.3 percent from 1.0 percent in February. Headline PCE inflation dipped to 0.6 percent from 0.9 percent the previous month. However, core PCE inflation held steady at 1.8 percent… The March personal income report is more pessimistic about the consumer sector than yesterday's first quarter GDP report in which spending was up for the quarter. Now, the more current personal income report shows consumers having less income to work with and a pullback in outlays at the end of the quarter. This indicates possible erosion of the consumer sector in second quarter GDP… Today's report should be negative for equities and should ease bond yields. Another record high for continuing jobless claims should have the same impact.”
US Employment Cost Index for Q1. Econoday reported, “Labor costs are subsiding significantly, posing no inflationary risks. Readings across the first-quarter employment cost report are at record lows in more than 25 years of data including a 0.3 percent quarter-to-quarter rise in the main index. The year-on-year rate is also at a record low of 2.1 percent. Wages & salaries rose only 0.3 percent with wages & salaries for financial activities down 1.0 percent. Benefit costs were up 0.5 percent reflecting gains in blue collar groups, groups that are protected by contracts.”
US Business Activity report for Chicago region for April. After the release of the data, Econoday reported, “The rate of descent is definitely slowing in the Chicago area where the purchasers' index jumped nearly 10 points to 40.1, still sub-50 to indicate contraction but nevertheless a big gain. There's improvement across the report led importantly by new orders which jumped more than 11 points to 42.1. Backlog orders also showed less month-to-month deterioration, at 36.9 vs. March's 21.3. The Chicago report draws its respondents from across industries whether manufacturing or non-manufacturing. Order readings from the ISM had been mixed to improving in recent months and today's results point to solid improvement for both ISM reports… Other readings out of Chicago include a faster rate of inventory liquidation, showing that businesses are still resetting to a lower level of demand, and also a drop in prices paid which may be a surprise given this month's firmness in many commodity prices including oil. Stocks are extending opening gains in reaction to the report.”
US Jobless Claims for the week of 4/25. Econoday reported, “A huge jump in continuing claims headlines a mostly negative jobless claims report. Continuing claims in the April 18 week jumped 133,000 to 6.271 million, another record level and the 15th straight increase. A month-to-month comparison, useful for a gauge on the April employment report, shows significant deterioration, up 704,000 from 5.567 million at mid-March… Now the good news. Initial claims appear to have peaked in March, pointing to similar relief ahead for continuing claims. Initial claims totaled a lower-than-expected 631,000 in the April 25 week with the four-week average at 637,250, well down from a peak near 660,000 at the beginning of the month… The Labor Department said there are no special factors distorting the data and that the contraction is evenly distributed across jurisdictions. There was no significant reaction to today's 8:30 headlines but today's claims report does point to deeper lows in next week's employment report.”
US Motor Vehicle Sales for April. After the release of the data, Econoday reported, “Vehicle sales show little month-to-month change in April, at a 6.9 million unit adjusted annual sales rate vs. the same rate in March. Sales at now bankrupt Chrysler show severe month-to-month contraction. These numbers are for North American-made vehicles which make up the bulk of total U.S. sales. Imports sold at a 2.5 million pace, sizably down from 2.9 million in March. These numbers won't raise expectations for a rebound in April retail sales. Chain stores will begin posting their individual results for April through next week with the bulk of reports out on Thursday. Optimism on the economic outlook will not improve if the retail sales report, to be posted at mid month, proves as big of a disappointment in April as it did in March.”
US Consumer Sentiment Index for April. After the release of the data, Econoday reported, “Consumer sentiment picked up in the final April reading, confirming a run of positive consumer confidence readings. The Reuters/University of Michigan index rose to 65.1 from a mid-month reading of 61.9 and a March reading of 57.3. Like Tuesday's report from the Conference Board, today's report shows strength in expectations, at 63.1 vs. 58.9 at mid-month. Strength in expectations indicates that consumers may think the worst is now behind. Inflation expectations eased back a bit but remain stable at 2.8 percent for both the 1-year and 5-year outlooks. Stocks rose in reaction to the report.”
US ISM Manufacturing Index for April. After the release of the data, Econoday reported, “The ISM's manufacturing index continues to show slowing rates of contraction, at 40.1 in April vs. 36.3 in March. In an important plus seen in regional reports, new orders really improved, at 47.2 for a 6 point jump from March. Backlog orders also improved, up 5 points to 40.5. Inventories, needed to fill the rise in existing orders, may now be in balance. The customer inventories index fell back 4-1/2 points to 49.5 to indicate that firms think inventories are just right at other firms… Employment even picked up, rising more than 6 points to a still very weak 34.4. Prices paid, despite firmness in energy prices, continues to indicate steep contraction at 32.0… Stocks got a only bit of a lift from this report. One factor that limits its impact is the pending shutdowns in the transportation sector, a factor that will pull on readings in the coming months.”
US Factory Orders for March. After the release of the data, Econoday reported, “Factory orders fell 0.9 percent in March showing an even mix between a 0.8 percent decline in durables and a 1.0 percent decline in nondurables. Inventories fell 0.8 percent to confirm that destocking is deep, a big plus that points to easing strains ahead for the factory sector. Shipments fell 1.2 percent in the month but this component may show life in April given the big improvement seen in new order data in today's ISM report. This report for March is overshadowed by the ISM report which offers a look at April. But it's the look ahead at shutdowns in the transportation sector, which will begin to hit soon, that clouds the whole outlook for the manufacturing sector.”
Here are the key US economic reports on next week’s calendar.
US Economic Calendar for the week of May 4.
US Construction Spending for March. Before the data is released, Econoday reported, “Construction spending in February fell again but not as much as expected. Construction outlays dropped another 0.9 percent in February, after plunging 3.5 percent in January. Weakness in February was led private residential outlays, which fell 4.3 percent. The single-family subcomponent dropped 10.9 percent while the multifamily portion slipped 2.1 percent. The other two major components actually made partial rebounds. The private nonresidential component rose 0.3 percent after a 4.3 percent drop in January. Public outlays rebounded 0.8 percent, following a 2.4 percent decrease the month before. Looking ahead, the drop in the level of housing starts on average over the last three months indicates that the residential component of outlays will likely continue downward in March, pulling down overall construction spending.”
US ISM Non-Manufacturing Index. Before the data is released, Econoday reported: “The composite index from the ISM non-manufacturing survey in March fell back to 40.8 from 41.6 the month before. New orders also headed in the wrong direction with a nearly 2 point loss to a 38.8 reading. But there could be good news for April if the improvement in the Chicago PMI for April spreads. The Chicago PMI is a measure of both manufacturing and non-manufacturing for the Chicago region and it posted a gain to 40.1 from 31.4 in March. The numbers, however, were still in negative territory.”
US Jobless Claims data, to be released on 5/7/2009 8:30AM For wk5/2, 2009. Prior to the data, Econoday reported, “Initial jobless claims showed improvement in the latest week but continuing claims set another record high. Continuing claims in the April 18 week jumped 133,000 to 6.271 million, another record level and the 15th straight increase. A month-to-month comparison, useful for a gauge on the April employment report, showed significant deterioration, up 704,000 from 5.567 million at mid-March. But initial claims appear to have peaked in March, suggesting that continuing claims may plateau within a few months. Initial claims for the April 25 week slipped 14,000 to 631,000, down from 645,000 the week before.”
US Productivity and Costs for 1Q2009. Before the data was released, Econoday reported, “Non-farm productivity in the fourth quarter declined 0.4 percent annualized while unit labor costs jumped 5.7 percent. While both numbers are heavily dependent on much of the same source data for output as GDP, the hours worked data can lead to notable quarterly differences even if GDP growth is similar for two particular quarters. While GDP fell 6.1 percent in the first quarter - essentially the same as the 6.3 percent fall in the fourth quarter, we may see some improvement in productivity and labor costs due to cutbacks in hours worked.”
US Employment Report for April. Prior to the release of the data, Econoday reported, “Non-farm payroll employment has dropped for 15 consecutive months with March falling 663,000. More than 5 million jobs have been lost since the recession began in January 2008. The civilian unemployment rate jumped to 8.5 percent from 8.1 percent in February and was the highest since the same rate in November 1983. But labor market weakness has softened up wage inflation. Average hourly earnings came in at a monthly 0.2 percent in March with the year-ago wage increase easing to 3.4 percent from 3.6 percent in February. Looking ahead, we are likely to see another sizeable drop in payrolls if the run up in continuing unemployment claims is any indication. Over the past four weeks, continuing claims have jumped 607,000. This also suggests a notable boost in the unemployment rate for April.”
Sector ETF Summary for the International equity markets
The US market boost in the afternoon Friday a week ago gave the international equity markets a boost to begin this week. Same thing occurred in the final 15 minutes of this week. How long can this game go on?
Although this was another strong week in the international markets, there were a few signs of weakness this week. The EWC ETF for Canada gained +3.26% on Friday, which pushed it to a W/W gain of just +2.22%, so it was a loser Monday through Thursday. Russia (RSX) gained +2.96% on Friday, leading to a W/W gain of just +0.28%. Japan (EWJ -0.12%) and China (GXC -0.29%) ended the week losers, although it should be noted that May Day is a major holiday in much of the world and this was a very short week in many countries.
The big winner this week was the UK (EWU +5.52% W/W including a gain of +2.73% on Friday).
US Equity Markets Review
This week the NASDAQ (+1.47% to 1719.20), S&P 500 (+1.30% to 877.52), DJIA (-1.68% to 8212.41), and Russell 2000 (+1.72% to 486.98) closed the week higher with RSI levels headed north for all series (M, W and D). But the Russell small cap 2000 ($RUT -0.12%) did suffer a pull-back in price on Friday.
The public is still clueless regarding Stress Testing of the Big 19 Banks. We ought to discover something this coming Thursday, but the regulators are now in a discussion of semantics, so the whole exercise is probably meaningless. In any case, even though banks will be required to raise capital – Citigroup is rumored to need $10 billion – they apparently have six months to raise it. Give them enough lead-time, and they ought to be able to promote each other’s stock price to inflated levels, although that certainly didn’t happen this week. This week, the Financials were the only losing sector in the US – but maybe REITs had a lot to do with that loss.
This week will see many more speeches from Obama, Bernanke and Geithner, but are they starting to have a negative effect? The Ken Lewis-Henry Paulson-Ben Bernanke dispute will likely be swept under the carpet, so Americans are once again not going to hear the truth about who really runs the country, the US Treasury of Goldman Sachs, and the Fed or JP Morgan? Interestingly, President Obama said that he can’t tell banks what to do, but we know he can fire the CEO of the world’s biggest auto manufacturer, or used to be. We know he can push a group of traders from AIG out the door. However, he admitted he can’t do much about the people who run JP Morgan, Bank of America, Citigroup, Morgan Stanley or Goldman Sachs.
A week ago in this space, I commented that “I suppose anything can happen. This is after all, The Great Reflation. Give it time and prices (but not values) will lift.” Voila, on Friday, the Great Reflation returned to boost the week again.
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 lifted (+$1.17/bbl or +2.27%) to close at 52.72. The 48 level now seems to be solid support.
The sector ETF (XLE) gained +2.65% W/W to close the week at 47.27. But, just like a week earlier, Friday’s gain was +3.25%, which clearly made the week. The same thing has happened three weeks in a row.
The winners this week included Apache (APA +11.4%) and Suncor (SU +6.9%).
There were only two losers in my monitor, and small ones: China National Offshore (CEO -0.9%) and Canada’s Imperial Oil (IMO -1.0%).
There was little that was remarkable here except on Friday.
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 dropped from being the strongest sector a week earlier to being 4th strongest this week, had a gain of +2.47% to close at 25.73.
On March 8, XLB closed the week at 18.40, so it goes without saying there have been some huge moves in this sector.
Votorantim (VCP +10.7%), a successful family-controlled pulp and paper manufacturer in Brazil, stayed on a roll.
Dow Chemical (DOW +20.9%) was the biggest winner W/W in the sector.
Teck Corp (TCK), which a week ago soared +16.8% W/W on positive news of a refinancing of near-term obligations, gained a further +15.1%. Closing at US$11.76, TCK has now gained +78.2% over four weeks and +207.9% over three months, which is clear justification of my railing against newspaper reporters who seemed to be ganging up against management, for dubious reasons, three months ago.
Some of the major steel companies of the world didn’t fare that well this week. Mittal (MT -6.0%) is now down -12.5% over two weeks, and Nucor (NUE) is down -6.2% over two weeks although it did make a small gain this week.
Btw, Vale Mining changes its ticker symbol on Monday from RIO to (what else?) VALE.
http://www.knobias.com/amp/story.htm?request=KNXVJ9qPNdhKxPgeT1XmDA0UsiW...
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 +1.71% W/W) closed at 22.01.
There were some big caps taking the lead this week, including Caterpillar (CAT +10.8%), Boeing (BA +6.4%) and General Electric (GE +4.8%). Textron (TXT -11.4%) took a loss, and is down -15.5% over two weeks.
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 +1.76% W/W to 22.77) was fourth best sector performer this week. The gain on Friday was +2.25%.
As I write this, trader wizard Katie Couric is giving the radio audience a page out of her notebook that says Chrysler going into bankruptcy has its upside, and she quotes President Obama as saying it’s not a bad thing. Pretty soon, I’m expecting Oprah to give the women a tutorial on put writes.
Dummy down America, the writing’s on the wall anyway.
When do Americans get it? Do you recall last week in this space when I wrote:
The big story this week was (the hype over) internet marketers Ebay (EBAY +16.6% to 16.78) and Amazon.com (AMZN +8.2% to 84.46).
http://billcara2.com/tkchart/tkchart.asp?stkname=EBAY,AMZN&ind=rsi&wt=1
http://billcara2.com/tkchart/tkchart.asp?stkname=EBAY,AMZN&ind=rsi&wt=0You’d think these analysts and talking heads had never before seen sliced bread.
http://blogs.barrons.com/techtraderdaily/2009/04/24/amazon-keeps-climbin...There was even a talking head on Bloomberg (paid how much?) who remarked that Amazon.com was (I’ll paraphrase) “the greatest marketing company in the history of the world”. I could call him a bozo, or a son of Bezos, but that would be cruel. But, the TV performance of that guy shows there is no shortage of clowns for the stage.
You guessed what I’m about to write. Yes, despite NASDAQ being up +1.5% W/W, AMZN dropped -6.5% and EBAY dropped -1.6%.
http://billcara2.com/tkchart/tkchart.asp?stkname=AMZN,EBAY&prt=0&wt=1
Btw, Amazon.com (AMZN) is in the Cara 100. When I added it on Jan 7 this year, I wrote:
I have been a repeatedly satisfied customer of … Amazon. I’m not particularly enamored with the style of Amazon’s CEO, but I can live with it, and … all in all, I like the business model.
But enough of the niceties, I also gave you the following heads-up a week ago:
Stochastics and RSI are looking toppy for the XLY, so I’d exercise caution here. At the same time, RSI-7 for both AMZN and EBAY are elevated.
Letterman would be calling for a drum roll but at this time of the night – middle of the morning – the only thing that’s going to roll are my eyeballs.
But I digress, and I have a boat to catch.
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 +2.32% W/W) closed the week at 22.07, which made back the loss of a week ago.
Tell me, does “defensive” mean you don’t lose much money or as much money?
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 +1.55% W/W) closed at 49.22. This would have been the worst performing sector this week except that Swine Flu worries boosted prices of the Hospitals, and a couple drug manufacturers.
The charts show this sector actually has promise – at least for the Weekly, but not so much for the Daily, although it’s not too bad.
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 |
A week the Financial sector was a loser (XLF -1.53% to 10.94), pulled down by Bank of America (BAC -14.2%), Citi (C -12.6%) and Morgan Stanley (MS -12.2%). This week, the big losers were C -6.9%, Deutsche Bank (DB -4.6%), BAC -4.4% and JPM -2.7%, and the XLF dropped a further -2.65% to close at 10.65.
Berkshire’s Charlie Munger says there are still a lot of problems and we’re only a part way through the pain. I’m not hearing that from Humungous Bank & Broker (HB&B). Let’s see; who do I trust? Munger, HB&B, Munger, HB&B…
My answer was posted in this space a week ago:
The question remains as to whether the bank earnings are real, and if they are coming mostly from proprietary trading are they sustainable. I think its speculation mostly at this point. When I see trade volume pick up substantially, plus a lot more recapitalizing of balance sheets and post-stress test analysis that is believable, I will have more interest.
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 +1.57% to 17.43) and Semi-conductors (SMH +0.84% to 20.42) were both laggard performers this week. Where’s the beef in the market this week? It’s – drum roll – Telco #1 and Utilities #2.
As I wrote in this space a week ago:
The technical indicators (RSI and Stochastics) and the high PE multiples are showing elevated risk, but the key, I think, will be the forward trend of the $USD. If it falls here, the techs could lift a bit more, but really the jury is out.
The only thing that stood out for me this week was the write up Pierre Brodeur did in the blog (see Quant tab) on First Solar. The next day, FSLR popped +$$$ and closed the week up +22.7%.
The Motley Fool did a bit of a write-up on First solar.
http://www.fool.com/investing/high-growth/2009/05/01/first-solar-soars-o...
| 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 +4.76% to 17.59) was the #1 winning sector this week. AT&T (+3.4%) and Verizon (-1.5%) went in different directions.
A week ago, I remarked that we had made a high-risk Buy in Russia’s Vimpel-Communications (VIP) at 10.51. Then I said, “Generally, though, we have been closing positions and waiting for something to happen in the broad market”. Yes, drum roll, no actually we got clipped by VIP, and sold it soon after. Right sector; wrong country. Can’t win them all!
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 +4.56%) was #2 sector performer this week, closing at 26.50.
Could a Utility really be like a Telco, a market leader? NOT.
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 | 0.12 | 0.10 | 0.08 | 0.18 |
| 6 Month | 0.27 | 0.26 | 0.28 | 0.38 |
| 2 Year | 0.86 | 0.85 | 0.95 | 0.81 |
| 3 Year | 1.35 | 1.36 | 1.36 | 1.13 |
| 5 Year | 2.01 | 2.01 | 1.93 | 1.64 |
| 10 Year | 3.15 | 3.12 | 2.99 | 2.65 |
| 30 Year | 4.07 | 4.03 | 3.88 | 3.50 |
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 2yr AA | 1.29 | 1.17 | 1.36 | 1.42 |
| 2yr AAA | 1.31 | 0.94 | 1.24 | 1.14 |
| 2yr A | 1.81 | 1.64 | 1.60 | 1.55 |
| 5yr AAA | 1.95 | 1.93 | 1.85 | 2.14 |
| 5yr AA | 2.07 | 2.09 | 2.07 | 2.28 |
| 5yr A | 1.96 | 1.91 | 2.28 | 2.72 |
| 10yr AAA | 3.11 | 3.17 | 2.83 | 3.32 |
| 10yr AA | 3.31 | 3.27 | 2.97 | 3.46 |
| 10yr A | 3.39 | 3.60 | 3.36 | 3.64 |
| 20yr AAA | 4.96 | 4.43 | 4.53 | 4.95 |
| 20yr AA | 4.78 | 4.59 | 4.61 | 4.90 |
| 20yr A | 4.74 | 4.77 | 4.71 | 5.10 |
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 2yr AA | 2.52 | 2.51 | 2.78 | 3.85 |
| 2yr A | 4.80 | 4.74 | 4.37 | 5.93 |
| 5yr AAA | 2.82 | 2.86 | 2.98 | 3.10 |
| 5yr AA | 4.34 | 3.59 | 3.64 | 3.99 |
| 5yr A | 4.91 | 5.03 | 5.00 | 5.17 |
| 10yr AAA | 4.72 | 4.76 | 5.10 | 4.96 |
| 10yr AA | 4.88 | 4.62 | 4.64 | 4.68 |
| 10yr A | 5.43 | 5.36 | 5.56 | 5.66 |
| 20yr AAA | 8.39 | 6.82 | 6.58 | 6.81 |
| 20yr AA | 7.88 | 6.31 | 6.07 | 6.30 |
| 20yr A | 8.57 | 7.00 | 6.75 | 6.98 |
The 20-year Treasury Bonds (TLT -3.45% to close at 97.10) went my way as I told you that we’ve been short TBT. TBT gained +6.48% W/W.
We have been short bonds via the TBT. Hooray.
http://billcara2.com/tkchart/tkchart.asp?stkname=TLT,TBT&prt=0&wt=1
The 30-, 10- and 5- year yields closed the week at 4.07, 3.15, and 2.01 percent respectively, up from 3.88, 2.99 and 1.93 percent, which is a gain of +19, +16, and +8 basis points, respectively.
Three weeks 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.”
Re TLT, the peak was reached at 121.71 in mid-December. I opined at the time that buyers were assuming all the risk and they needed to sell that risk. Those who didn’t are now down (in six months) -20.2% from the peak.
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 |
I’ll continue to state: 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 gained +4.33% W/W to close at 229.04.
The 50d MA is now at 217.68, which is well below the present price. There was a successful test of support a week ago Tuesday as there was near the end of March.
The 200-day MA has dropped from 326.18 to 271.40 over the past 11 weeks.
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 gained +$1.17/bbl (+2.27%) to close at 52.72.
For $WTIC, the 50d MA is at 48.77.
The 200d MA is now down to 68.30, down from 80.84 just six weeks ago. As previously noted here (for several 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.”
We’re starting to see the Black Gold starting to gush.
In the long-term, after $WTIC lifts into the high end of a trading range (I still 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
This week, $GOLD dropped -$26.60/oz (-2.91%) to close at 886.40, close to the 880 support. It’s not looking strong, but has every reason to rally here.
The gold 50d Moving Average is now at 916.32, which now comes into play as possible technical resistance. The 200d MA is 857.60.
My biggest equity positions, by far, are in the goldminers. All the others combined amount to less. My second biggest position is in the oilers. So, while I’m not happy with the goldminers, the oilers did produce good results this week.
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 -$0.38/oz (2.95%) W/W to close at 12.50. But a week ago, it was up +8.46%.
For $SILVER, the 50d MA is now 12.94. The 200d MA is 12.25.
$SILVER is now back in No Man’s Land.
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.
$PLATINUM lost -$77.40/oz (-6.54% W/W) to close at 1106.60. That, like $PALLADIUM, took the big hit in this group.
The 50d MA is now at 1121.12. The 200d MA is now at 1117.00.
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 plunged -$17.50/oz (-7.39%) W/W to close at 219.30.
The 50d and 200d MA is at 215.28 and 232.55, respectively, so the present price is just over the 50d MA, and well below the 200d MA (and NOT ready to be a Bull yet).
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 lost -1.00 (-0.49% W/W) to close at 204.00.
The 50d and 200d MA’s are 183.40 and 217.00, respectively.
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, ETFs and stocks sank this week: $XAU -4.22% to 120.44; GDX -4.65% to 33.04; and XGD -7.55% to 17.26. Thankfully, a week ago the gains were bigger: $XAU +9.35%; GDX +11.88%; and XGD +11.80%.
All these stocks were down this week. The best was Peru’s Buenaventure (BVN -0.8%), while the worst was Agnico-Eagle (AEM -10.8%). They are volatile and have the Fed/JP Morgan against them, but in the end they will win.
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
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 $USD pulled back a bit (84.60 -0.10 -0.12%) W/W, which was about the same as a week ago. The Euro (132.61 +0.04 +0.03%) barely moved. The Pound (149.00 +2.12 +1.44%) and Cdn Loonie (84.35 +1.73 +2.09%) were up on the week sharply against the USD, while the Yen (100.80 -2.00 -1.95%) was significantly weaker.
The 50-day MA of the $USD is now at 86.00. The 200-day MA is 82.61. I noted that the technical support of the 200d MA still held.
Interactive Chart of Weekly U.S. Dollar Index:
Interactive Chart of Daily U.S. U.S. Dollar Index:
The Euro ($XEU) gained +0.03% W/W to close at 132.61.
The 50d MA and 200d MA for the Euro are now 130.93 and 135.99, respectively, so the present price is in between.
Like tennis, we call that No Man’s Land, and both the $USD and Euro are there, but close to breaking out or reversing trend.
Interactive Chart of Weekly Euro Dollar Index, priced in USD:
Interactive Chart of Daily Euro Dollar Index, priced in USD:
The Pound gained +1.44% W/W to close at 149.00, which was a significant rally against the USD.
The 50d and 200d MA is 144.55 and 159.99, respectively.
Weekly British Pound Index:
Daily British Pound Index:
Weekly Japanese Yen Index:
The Japanese Yen ($XJY) lost -1.95% W/W to 100.80.
The Yen’s 50-day MA is now 102.00 and the 200-day MA is 101.65. As noted a week ago, the current price is sitting right on the 200d MA.
Daily Japanese Yen Index:
The Loonie (Cdn Dollar) lifted +2.09% to 84.35.
The Loonie 50-day MA and 200-day MA are now at 80.40 and 85.33, respectively, so the current price is in no man’s land, but looking to breakout to the upside. The “goldbugs” are hoping for an even stronger Cdn Dollar, but this move so far is oil based.
Weekly Canadian Dollar Index:
Daily Canadian Dollar Index:
Here is the China Yuan (CNY) chart.
International Equity Markets Review
The international stock exchange indexes were mixed this week.
Over the past six weeks:
UK FTSE moved from 3842.9 to 4243.2. The German DAX moved from 4068.7 to 4769.5. Aussie All-Ords moved from 3405.0 to 3737.9. HK Hang Seng moved from 12833.5 to 15521.0. Shanghai rallied from 2281.1 to 2477.6. India’s BSE 30 rallied from 8966.7 to 11403.3. Brazil’s Bovespa has rallied from 40076.4 to 47289.5.
These markets all lifted W/W, but some of the gains were minimal. However a May Day shortened week may be the cause of that.
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
The RSI-7’s for the Monthly, Weekly and Daily were all upwards pointing this week, which was quite a reversal.
This week, the DJIA +1.68% to 8212.41), S&P 500 (+1.30% to 877.52), NASDAQ Composite (+1.47% to 1719.20) and Russell 2000 small cap index (+1.72% to 486.98) were all higher.
Traders are now firmly in day trading mode, but not committing much funds to the market, at least until they get their heads around the stress tests of the bankers, and how much dilution is close at hand.
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 two DJIA components, Coca Cola (KO) and Kraft Foods (KFT), which are not Cara 100 companies.
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 May 1: next one is due Jul 31)
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 May 1: next one is due Jul 31)
Here is what I wrote in the WIR #5 (Feb 1, 2009), notable only for my restraint:
With regard to this week’s Value Line review of the Dow 30 stocks KO and KFT, I put the following charts on my screen, as follows:
http://billcara2.com/tkchart/tkchart.asp?stkname=KO,KFT&ind=rsi&wt=3
http://billcara2.com/tkchart/tkchart.asp?stkname=KO,KFT&ind=rsi&wt=1
http://billcara2.com/tkchart/tkchart.asp?stkname=KO,KFT&ind=rsi&wt=0These charts show me a long-term cycle bottom pattern, which will likely result in good share price performance over the next two to three years. However, I don’t follow these stocks, and I don’t trade them.
________________________________________
The Value Line reports seem to be well done for both companies.
These two consumer staples companies are both fundamentally sound and well regarded by long-term oriented defensive traders. There is a relatively high dividend yield in each case that appears safe, so the Total Return (TR), including capital growth and dividend yield, ought to be satisfactory for 2009 and 2010.
To increase my income, if these stocks were of interest, I would buy the stock and write puts on extreme down days.
Beyond that, there is really not much I can add.
The Value analyst for Kraft (KFT $23.49) seems to like the stock as “a descent defensive play in the current market environment”. Maybe he just likes Oscar Mayer because he’s full of baloney. The “market environment” has been pretty good for the past eight years since this company floated an IPO at $31. His report was priced at $22.75. That’s a loss of -27% over eight years. I suppose he likes the accumulated dividend of $7.67 since June 2001. That results in value of $30.42 for a cost many years ago of $31.
He doesn’t point to the obvious, but instead concludes with a warning that their very established brands carry “a private label threat”, so he’s “reluctant to recommend these shares for the long haul”. Whoa fella, do you actually get paid for this analysis? I think maybe you ought to be taking at least the weekend off to visit the stables at Churchill Downs (Kentucky Derby). At least your manure fits right in.
Also, you might want to comment that the pension fund is under-funded to the tune of $2.34 billion, which some people might want to look at. For a company one-third the capitalization of Coca-Cola, its under-funded pension liability is $1 billion bigger, and Coca-Cola is the financially stronger company.
The Value Line analyst for Coca-Cola (KO $42.47) sums up the situation as “challenging operating environment proving a bit difficult”. He says the stock carries top marks for both Safety (1) and Financial Strength (A++) but I think he means the company is considered financially strong, and hence the stock is not speculative quality.
In any case, he is not enthusiastic, and just this week lowered the Technical rating from 2 (good) to 3 (average). I suppose the corporate results speak for themselves.
If the company pays a dividend in 2009 of $1.64 and you have to pay $42.47 to receive it, you would have a dividend yield of 3.86%, which is what you might earn as an interest yield on a 20-year US Treasury bond. But Coca-Cola is financial strong, and the KO dividend is safe and will grow almost every year, and the share price will grow more years than not, so if it’s return you want, I’d stick with KO over DC.
As stock price plays a bigger role in determining Total Return (TR), particularly in the short- and intermediate-term, I’d look at RSI, Stochastics and MACD for the M-W-D data charts before I would decide. Quickly you can see that 39 is a pretty solid floor for KO going into the 1990s. Moreover the Daily data charts show the technical indicators pointing lower, the Monthly indicators showing a bit more bottom work to be done, and the Weekly indicators still looking a bit negative, but the downside is not likely to be excessive.
With all that in mind, and knowing the market has had a seven week run to the upside, I would not enter this stock in the Kentucky Derby. I might want to pick it up in a low-level claiming race in a month or two, with the knowledge I’d then have a stalwart in the barn that I could run long and hard for solid gains in 2010 and 2011, albeit not super-sized ones.
If I was pushed into trading KO, I might buy the stock and write some covered calls or write some call spreads on their own.
Then again I don’t get “pushed” into taking positions in anything.
I never chase a stock; in other words, I don’t buy risk. To the contrary, I make an assessment of what I think the price of an asset would have to be to attract me, and then I wait for weakness, letting the stock come to me.
If I miss a run in the market or the stock price, it is only an opportunity cost. My job is to avoid real losses, and let the gains take care of the overall performance.
Moreover, sometimes it’s true that there is a run-up in prices that I purposefully miss, and that’s because I pre-determined that risk was greater than reward had I made that move. If I miss the reward, I have the knowledge that (i) I wasn’t prepared to take the risk, and (ii) many traders were simply oblivious to risk and were “lucky”. In my career, I have seen many traders think they were “good”, but many of those have disappeared from the scene.
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, and that it is up to us to cut our losses to small ones and let our profits run. We can do this because we (i) get to know the companies we are trading, and (ii) we understand probabilities and are able to rely on our expertise and experience to pull us through in the long run.
Next week, we get to review two Cara 100 companies Wal-Mart and Disney, plus a third that was a Cara 100 three years ago, and which I still like.
The Dow 30 Company links in chronological order of the upcoming reports.
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)
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 Apr. 24: next one is due Jul. 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 Apr. 24: next one is due Jul. 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 May 1: next one is due Jul 31)
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 May 1: next one is due Jul 31)
Wrap-up:
This weekend I have taken off for two days to go out for deep sea fishing in the Exumas. Maybe the mahi-mahi are running and we’ll catch a bull or two! Or maybe some blackfin tuna, white marlin, kingfish or grouper. That would be nice.
Two solid days, which will include a few Kalik.
So, this WIR and the Saturday Report is the result of an all-nighter Friday. Work hard, play hard – something everybody saw at the Cara Bahamas 2009 Conference a month ago.
Btw, on that score, as soon as we’ve given the attendees time to review the slideshow presentation, we’ll upload the final version for all of you. Next week we’ll start to negotiate the venue at Our Lucaya in Freeport, and this time we’ll have a Conference Code to quote when booking, and we’ll arrange sharing well in advance. Funky D will be back, and possibly the Henry Moss jazz quartet. Freeport has its own Junkanoo groups, which we’ll use because Junkanoo was definitely a real hit this year.
And, for those who cannot make it, there will be a daily video presentation. But, after you see the slideshow for this year, you’ll want to be there, and bring several friends.
And we’ll probably even go out deep sea fishing!
Have a great weekend. Mine starts in 30 minutes.
