[5:35pm ET] A word to the wise: penny stock promotions are becoming rampant at this point for the simple reason many of these companies are running out, or have run out, of cash. You have some money and the promoter has a great story. Listen to them more than once and soon they’ll have the money and you’ll have a story.
Too many people are writing me about penny stocks. I am not pleased that shareholders of penny stocks think I might be interested in the least in their fairy-tales. It is laughable that they write me the day after their stock moves up 100%, from 10 cents to 20 cents.
Thirty years ago, almost, a young medical doctor turned stock promoter came into my office to tell me about a stock he was promoting – it was actually being promoted by a famous promoter I knew personally – and he said I ought to buy the stock that Friday because it was going to move from (say) $0.75 to $1.50 after the weekend. I asked how was it that he knew it would be $1.50. Oh, he said, do you want it to be $2.00?
I was born one day, but not yesterday.
There are good promoters, but that guy wasn’t one of them. He should have been shut down. Today he’d be using the Internet chat rooms to do his stuff. If I was working for the securities commission, I’d shut down these down too. The participants there must think the world is oblivious to their deceit.
With the latest penny stock that is being pushed on me – I won’t mention the name but it’s one I happen to know a lot about by the way – I checked the chat rooms to get the latest scoop, and certainly was not surprised to see blatant wrongdoing.
Thirty years ago, this nonsense was confined mostly to stocks under $2.00, but today, with the likes of Tout TV doing the facilitating, the same practices are being used to pump and dump large cap, popular Dow 30 names. The regulators just look the other way. Why? Corruption pervades America and most other countries as people who can do take from others.
Although they claim it to be the case, this is not about stretched budgets of regulators. The fact is that hardly anybody is being prosecuted, and yet there are thousands of cases that are 10x or 100x as damaging as that of Martha Stewart. Prosecutors, I guess, don’t get elected by successfully convicting stock scammers.
I see this farce go on daily even with the world’s biggest banks. Why? Well, today these banks must raise, in the aggregate, hundreds of billions. Like the penny stock companies, many of the banks are short of cash, and they are desperate.
It used to be a function of capital markets that they were used to raise capital. But now we don’t trust them. A sad indictment of life in the capital markets today, isn’t it?
Worse is the fact that we honest, independent traders can no longer invest for a year or two holding period, seeking annual gains of twenty or thirty percent if we are competent. Now we are being forced to day trade for tiny gains, leaving most of the assets on the sidelines because the risk of capital loss is very high. Too many bandits.
In my company, we are traders, not games players. We stick to the stocks of high-quality companies that are not being pumped up in advance of share offerings. Of course, that means we stay clear of most penny stocks.
We will trade a two-dollar stock; but the minute I see the name promoted in a chat room, it’s sayonara. It’s something about phony stock promotion that gets to me, and as I say the same goes on as well with Dow 30 stocks.
Do you recall, back in 2005: “Go, go LeBeau? GM, sold to you at 35!”
http://tinyurl.com/occx6z
GM hit $1.00 this week.
Trading well under $1.00 today is Fannie and Freddie. Do you recall my telling you back in 2007 that I wouldn’t trade FNM or FRE with your ten-foot pole?
http://tinyurl.com/qc4jdu
Dropping from $60-50-40, these stocks plunged to 25 and 30 cents this year.
How many politicians, talking heads on Tout TV, writers, bloggers, advisors, etc, told you these companies were A-OK – after I shouted sell, sell, sell?
The point to covering this old ground is that archives can speak volumes. Valuable lessons can be learned. During the credit market crisis of 2007, Merrill Lynch went to the Singapore sovereign wealth fund Temasek for $5.9 billion in necessary funding. The key man there, Lee Kuan Yew, spoke on May 1, 2008 about his investing, which is available in the following linked video. With what you know today, you can see why investing can no longer be done for 20 or 30 years as he was doing. This year, Temasek sold that holding for $1.25 billion, taking a loss of -$4.6 billion.
http://www.youtube.com/watch?v=kRzMvnk5Y04
We all hope for stable markets, but hope and reality often take a long time to get together, and sometimes never even meet. There is a reason why markets are so volatile, i.e., unstable.
To repeat that word to the wise – if a company needs to come to the exchange-traded market for funding at this point, just turn your head. Keep your money in your account, and leave the stories to other people. There is a lot of heartbreak to come in this market before the banks clean up their act, and the insiders fund the penny stocks with private placement money.
Global Economics Review
Weekly International Economic Report . Econoday reported, “…last week, ECB President Jean Claude Trichet said that the global economy is around the inflection point signaling that the global downturn had bottomed out. Some of the large economies can now put the recession behind them and look forward to renewed growth. His comments added weight because he was speaking on behalf of the world’s leading central bankers, not just for the eurozone. His remarks came as the Organisation for Economic Cooperation and Development (OECD) said there were signs of "a pause” in the economic slowdown in France, Italy, the UK and China… Inflection points always churn out confusing signals — and therefore mixed interpretations. After nine weeks of almost uninterrupted gains, a correction was long overdue. Yet if more unambiguously bad numbers such as those of the last week emerge, a nasty new consensus could build. Investors had a reminder this past week that sometimes economic numbers can come out worse than expected. For two months, severe pessimism created low expectations that were regularly beaten by the data. Now new negative surprises emerged again. For example, on Wednesday, we learned that U.S. retail sales fell last month. They were not supposed to do that. And on Monday, Chinese exports were revealed to have barely risen in April. Now they are running at about the same level that was typical in late 2006. Again, they were supposed to bounce back rather more than that.”
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, when published, contain terrific charts and other information.
Here are the key US economic reports on last week’s calendar, which was a busy one.
US Economic Calendar for last week.
US International Trade data for March. Econoday reported, “The U.S. trade deficit in March widened in line with expectations, but not in the manner expected. And the latest trade numbers bode ill for manufacturing. The overall U.S. trade gap widened to $27.6 billion from a revised $26.1 billion deficit the month before. The March shortfall was close to the consensus forecast for a $27.5 billion deficit. But the widening was not due to a rise in imports as was expected to be boosted by higher oil imports. Exports dropped a sharp 2.4 percent while imports slipped 1.0 percent. Oil imports did rise but were offset by other imports falling. The news for manufacturers is not good as the worldwide recession is cutting into demand for U.S. exports… The drop in exports was led by a drop in capital goods excluding autos and also included declines in consumer goods and autos. Modest gains were seen in foods, feeds & beverages and in industrial supplies… Imports were pulled down by decreases in industrial supplies and in capital goods excluding autos. A moderate rebound was seen in consumer goods but this followed a huge drop the month before. Autos and foods, feeds & beverage imports were little-changed but marginally positive… The oil deficit worsened slightly to $14.1 billion from $13.7 billion in February while the non-oil gap grew to $23.1 billion from $22.5 billion in February… Year-on-year, overall exports slipped to down 17.4 percent in March from down 17.0 percent in February while imports improved to down 27.0 percent from down 28.7 percent the previous month… Although the overall deficit was in line with expectations, equities should not like the fact that exports were so weak.”
US Retail Sales data for April. Econoday reported, “Retail sales in April were surprisingly negative, dashing market expectations significantly for two months in a row. Overall retail sales fell another 0.4 percent in April after dropping 1.3 percent the month before. The April decrease was sharply below the market forecast for a 0.1 percent increase. Excluding motor vehicles, retail sales posted a 0.5 percent decline, after a 1.2 percent plunge in March. The fall in ex-auto sales was far worse than the consensus expectation for a 0.3 percent increase… Declines in sales were broad based but led by electronics & appliance stores, down 2.8 percent; gasoline stations, down 2.3 percent; and food & beverage stores, down 1.0 percent. The downward tug by gasoline sales hardly explains the overall weakness. Excluding motor vehicles and gasoline, retail sales fell 0.3 percent after declining 1.0 percent in March… Overall retail sales on a year-on-year basis in April were down 10.1 percent, down from minus 9.6 percent in March. Excluding motor vehicles, the year-on-year rate worsened to down 7.7 percent from down 6.3 percent in March… Equities will not like today's retail sales numbers. The green shoots view of the economy holds true only if the consumer sector stabilizes. Look for possible flight to safety in the bond market.”
US Import and Export Prices data for April. Econoday reported, “Price inflation is a story split in two, one is a commodity story, most notably energy, which is accelerating quickly, and the other is finished goods, which for now continue to contract. Import prices for April rose 1.6 percent, a fierce looking rate but reflecting energy where prices for petroleum imports jumped 15.4 percent. Judging by ongoing increases in oil, next month's report is also likely to show a major increase for petroleum. But excluding petroleum imports, prices fell 0.4 percent to extend a long run of declines connected to the global recession… On the export side, export prices rose 0.5 percent but reflecting increases for another commodity sector, agriculture. Excluding a 3.6 percent jump in agricultural import prices, prices rose 0.3 percent… Major investment funds across the globe are increasing their exposure to the commodity complex in general, largely on signs of improving demand in China and hopes for improvement in the United States. High energy prices may eventually pass through to prices for finished consumer and industrial goods, assuming the rates of increase continue. Note that high energy prices will also have an unwanted effect on the global recovery, that is cutting off demand. This report was released along with a weak retail sales report so judging its impact on the financial markets is impossible, but the report does point to similar two-sided readings in tomorrow's producer price report and Friday's report on consumer prices.”
US Producer Price Index report for April. Econoday reported, “Producer price inflation in April made a comeback – and this time it was not energy causing the price hike. The overall PPI rebounded 0.3 percent, after falling 1.2 percent in March. The April increase was above the market forecast for a 0.1 percent rise in the headline PPI. Leading the boost was a 1.5 percent jump in food prices, following two months of decline. Meanwhile, energy actually slipped 0.1 percent, following a 5.5 percent drop in March. The core PPI rate also firmed – to a 0.1 percent rise after no change in March. The core gain matched the consensus projection… The 1.5 percent surge in food prices was led by a 43.7 spike in eggs prices with other foods also contributing to a lesser degree. The jump in egg prices was largely due to difficulty in seasonally adjusting egg prices around Easter. Energy costs inched down 0.1 percent despite a 2.6 percent jump in gasoline prices in April. Residential gas dropped 6.2 percent in the latest month while electricity slipped 0.6 percent… Helping the core rate to firm were gains in prices for light trucks and passenger cars – up 1.1 percent and 0.2 percent, respectively… For the overall PPI, the year-on-year rate rose to minus 3.5 percent in March from down 3.6 percent the month before (seasonally adjusted). The core rate year-ago pace eased to up 3.4 percent from up 3.8 percent in March… The April PPI report brings into question how serious a deflation problem is – at least at the headline level. Certainly the monthly numbers have been a little volatile and quite a few components declined although the net impact were gains at the headline and core levels. If oil prices keep nudging upward, the Fed may have to tighten sooner than they currently think. On the margin, PPI inflation may not be as cool as the Fed would like at the headline level.”
US Jobless Claims data for the previous week. Econoday reported, “Reacceleration in job losses, now fed by auto shutdowns, is the unfortunate theme of the latest jobless claims data. First-time claims for the May 9 week jumped 32,000 to a much higher-than-expected level of 637,000 (prior week revised 4,000 higher to 605,000). The Bureau of Labor Statistics, according to Market News International, can not yet quantify the effect of auto sector layoffs but is confirming its impact in the latest data. Continuing claims for the May 2 week soared 202,000 to 6.560 million, the 17th straight rise and yet another record. The unemployment rate for insured workers rose another tenth to 4.9 percent, pointing to a further increase in the overall unemployment rate which stood at 8.9 percent in April. There was very little initial reaction to this report, but it will not raise confidence in the stock market's big two-month rally.”
US Consumer Price Index report for April. Econoday reported, “Consumer price inflation in April was tame at the headline level but the core rate unexpectedly jumped. The headline CPI came in flat, following a 0.1 percent decline in March and matching the market forecast. A 2.4 percent drop in energy costs kept the overall CPI weak. Meanwhile, core CPI inflation posted a 0.3 percent jump in April, after rising 0.2 percent the month before. But according to the Labor Department, over 40 percent of the gain in the core rate was due to a second consecutive hike in tobacco taxes. Apparently, states are trying to make up lost revenue with these taxes. The consensus had expected a 0.1 percent uptick for the core… The 2.4 percent drop in energy costs was led by a 2.8 percent fall in gasoline prices in April. While prices have been rising at the pump, they have been less than expected by seasonal factors. Heating oil dipped 2.1 percent while piped gas and electricity declined 2.2 percent. Food prices decreased 0.2 percent in the latest month… Other notable components included a 0.4 percent surge in medical care costs and a 0.4 percent drop in recreation prices… Year-on-year, headline inflation slipped to down 0.6 percent (seasonally adjusted) in March from down 0.4 percent in March. On a year-ago basis, overall CPI inflation is at its weakest since 1955. Meanwhile, the core rate firmed to up 1.9 percent from up 1.8 percent the prior month… Inflation is still a little firm at the core level but not as bad as at face value due to the tobacco taxes. Nonetheless, if energy picks up strength, overall inflation is at risk of picking of steam.”
US Empire State Manufacturing Survey data for May. Econoday reported, “The Empire State index offers the first monthly glimpse into the manufacturing sector, and the results are mixed. The general business conditions index did improve to -4.6 in May vs. -14.7 in April with shipments showing an actual month-to-month increase, up 1.3, and inventories showing a slowing rate of destocking, at -21.6 vs. -36.0. The drawdown in unfilled orders also slowed, to -10.2 vs. -18.0… Now the bad news. New orders, the life blood of course of any business, show a deepening rate of contraction, at -9.0 vs. -3.9. The employment index continues to show severe rates of month-to-month losses with improvement marginal, at -23.9 vs. -28.0. Prices received offers especially bad news, at -27.3 vs. -18.0 suggesting that the improvement in shipments will not be fully reflected on firms' top line… But there was other good news in the report as the six-month outlook, similar to recent consumer confidence readings, picked up noticeably, to 43.8 vs. April's 33.1 and suggesting that the region's manufacturers are more hopeful than ever that the worst is over. But the current new order reading puts into question the incremental improvements that are expected for the ISM's manufacturing report which has been on a path pointing to a full bottoming by the third quarter. There's been choppy reaction to the 8:30 data headlined by a stronger-than-expected consumer price reading. The Empire State report is a mixed bag that will raise special interest in next Thursday's more closely watched manufacturing report from the Philadelphia Fed.”
US Industrial Production report for April. Econoday reported, “Manufacturing contracted again in April – but at a slower pace. Industrial production in April fell 0.5 percent in April, following a 1.7 percent plunge the month before. The latest number was not as bad as the market forecast for a 0.6 percent drop. The manufacturing component declined a more moderate 0.3 percent, following a 2.1 percent fall the month before… For the other major non-manufacturing components, utilities in April rose 0.4 percent while mining output dropped 3.2 percent… Interestingly, manufacturing actually got a boost from the auto sector – something we may not see again for a little while. Motor vehicles and parts production posted a 1.4 percent gain in April after rising 0.3 percent the prior month. Excluding motor vehicles, industrial production slipped 0.6 percent in the latest month… Overall capacity utilization in April continued its downtrend, slipping to 69.1 percent from 69.4 percent in March. The April rate was higher than the market forecast for 68.8 percent and again set an historical low for this series which goes back to 1967… On a year-on-year basis, industrial production in April improved marginally to down 12.5 percent from down 12.6 percent the prior month… Manufacturing has been on a downtrend since early 2008. Manufacturing output now is 16.0 percent below its recent peak in December 2007. While there are signs that the rate of contraction in this sector is easing, that may not hold true in the near-term as Chrysler and GM deal with restructuring and their suppliers also come to terms with lower demand.”
US University of Michigan's Consumer Survey for first half of May. Econoday reported, “Consumer spirits continue to improve with the Reuters/University of Michigan consumer sentiment index offering the latest evidence, at 67.9 at mid-month May. The index is going up in increments: 65.1 at month-end April, 61.9 at mid-month April, 57.3 at month-end March, and 56.6 at mid-month March. It was mid-month March that the stock market, in reaction to improvement in the banking sector, began to take off, an important factor behind the improvement in consumer confidence… The improvement is centered where it should be: expectations. The report's expectations component jumped nearly 6 points to 69.0, an echo of this morning's outlook numbers in the Empire State report. Confidence is building that the worst is now behind. In contrast, the assessment of current conditions remains very weak, at 66.2 for an actual decline since month-end April. Declines in today's industrial production report offer clear evidence that conditions are in fact currently weak… Price changes do not appear to be a risk, evidenced by today's CPI report and in this report's inflation readings which show no dangerous expectations for either inflation or deflation. One-year expectations did fall 2 tenths to 2.6 percent but 5-year expectations are unchanged at 2.8 percent. There was no significant reaction to this report.”
Here are the key US economic reports on next week’s light calendar.
US Housing Market Index for June.
US Housing Starts data for April.Econoday opined before the data release, “Housing starts fell back 10.8 percent in March, following a 17.2 percent rebound the month before. But going back to January, atypically wet and cold weather in the South depressed starts, leading to the sharp rebound in February - which also was abetted by milder-than-usual weather. Looking ahead, many analysts see a glimmer of hope for housing from the 3.2 percent boost in pending home sales. But supply is still quite bloated and existing homes on the market may be getting heavier with the recent spike in foreclosures. Homebuilders still are likely to keep starts low for some time.”
US Jobless Claims for the Week of May 16. In advance of the data, Econoday reported, “Initial jobless claims for the May 9 week jumped 32,000 to a 637,000. The surge in claims likely reflected auto sector layoffs. But continuing claims were even worse for the May 2 week, soaring 202,000 to 6.560 million, the 17th straight rise and another record high.”
US Leading Economic Indicators index for April. In advance of the data, Econoday reported, “The Conference Board's index of leading indicators fell 0.3 percent in March, offering no signal of a turnaround in the economy. Components showing sizeable negative contributions were building permits, vendor performance, the factory workweek, and jobless claims. But we are likely to see some improvement with April's stock market jump.”
US Philadelphia Fed Region survey for May.Before the data release, Econoday reported, “The general business conditions component of the Philadelphia Fed's business outlook survey index for April improved more than 10 points to minus 24.4. Looking ahead, there are signs of possible further improvement in May. The April new orders index rose more than 15 points to minus 24.3. Also, the Empire State manufacturing index already posted a sizeable gain for May, almost climbing back to the breakeven mark.”
Summary for the International equity market ETFs
For several weeks, every single country ETF I monitor was up significantly. This week, they were all down, which is not surprising because all the domestic exchanges in those countries were down as well, except for India where the Bombay 30 Sensex index lifted from 11876.4 to 12173.4, largely on satisfaction there was, from early indications, a very strong mandate given to the ruling party in the national election.
Strange then that the India ETF, IFN, was down this week -9.94%, which was second worst to Australia, EWA, which was down -8.36%. Japan (EWJ) dropped -1.09% W/W, but the rest were down at least -4.08% (UK’s EWU). Not surprisingly, there was a rally in the $USD. It seems that when the $USD falls the international equity prices get a boost, something we have stated here on many occasions.
Anyway, you had the heads-up here last weekend: “Here’s a heads-up. Those markets will tire from profit taking, and then the $USD will rebound, and then kaboom, the market will implode – starting with the riskiest ones first.”
Ka-ching.
US Equity Markets Review
This week the S&P 500 (-5.0% to 882.88), DJIA (-3.6% to 8268.64), NASDAQ (-3.4% to 1680.14), and Russell 2000 small caps (-7.0% to 475.84) closed the week sharply lower with RSI levels all now lower W/W across all series (M, W and D).
The indicators of these charts are showing me SELL, SELL, SELL at this point. The selling started on Monday, abated Tuesday, continued Wednesday, abated again on Thursday, and then closed the week with a bit more selling. All in all it was not a good week for the Bulls.
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 sank (-$2.74/bbl or -4.59%) to close at 57.00. That’s less than half the previous week’s gain.
As I say, the 60-75 level now seems to be the target for the producers. A lower $USD leads to a higher price, and I think that’s to come.
The sector ETF (XLE) lost -7.41% W/W to close the week at 48.00. Friday’s loss was -2.14%. That’s the first Friday pull-back in the past five weeks.
There were no winners this week. Big US Oil (XOM) and Chevron (CVX) were down -2.4% and -5.1% respectively, and these were the best in my large cap oil monitor.
The worst of the losers were from Canada’s western O&G group, Suncor (SU -11.6%), EnCana (ECA -11.1%) and Imperial Oil (IMO -11.1%). A week earlier, SU and ECA had soared +18.6% and +17.9% respectively. Now that’s volatility!
I said a week ago, “There were no losers in my monitor, but the major US Oil companies were muted, as you would expect when it was the plunging $USD that moved most of the international oil company stocks this week.” This week, the $USD was up +0.6% W/W, so it’s not surprising to see some profit-taking in the O&G stocks, particularly more so in the non-US ones.
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 -3.62% W/W, but there was a small gain of +0.35% on Friday, to close at 25.83.
VCP dropped -12.0% W/W to 10.29. The $USD lifted, which hurt the share price. A week ago, I wrote, “As long as the $USD is falling, Votorantim (VCP +29.5%), a successful family-controlled pulp and paper manufacturer in Brazil, can stay on a roll. A week ago, the gain was +10.7%. The gain was +23.6% the week before that.”
Same thing happened to Teck Corp (TCK -15.9% to 12.10). A week ago I stated, “Teck Corp (TCK), which has been soaring, was up +22.3%, and is now up +230.6% over the past quarter.”
So, if you want to trade these international large cap energy and basic material stocks, you also need to have a handle on the trend and turn action in the $USD.
Btw, the table 3 data for RIO is wrong!!! I will correct it asap. The company changed the ticker symbol to VALE, like the company name. That will end the confusion of the RIO ticker being like another giant mining company Rio Tinto, which uses RTP as the symbol. RTP, btw, dropped -14.5% this week.
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 -7.27% W/W) closed sharply lower at 21.80.
The losses were across the board, from 3M (MMM), which was down -3.6%, to much bigger losses in Embraer (ERJ -14.0%) and Fedex (FDX -11.8%).
You can pretty much play FDX off the relevant economic data, like Industrial Production.
A week ago, I opined, “The 50-day MA’s in the Weekly data charts for XLI, XLB and XLE (the commodity price sensitive sectors) all now present stiff resistance to prices moving much higher here.” This week the results were: XLI -7.27%, XLB -3.62%, and XLE -7.41%. Somewhere else, though, I had also opined that gold and the goldminers would be higher this week, and they were, so the down-draft for Basic Materials (XLB) was muted, as expected.
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 -7.75% W/W to 22.13) was another serious sector loser this week; worst in fact except for Financials (XLF).
The losers here ranged from Bed Bath & Beyond (BBBY -2.4%) and Ebay (EBAY -2.7%) down to Brunswick Corp (BC -26.3%) and Whirlpool (WHR -15.7%).
A week ago, Brunswick Corp (+11.3%) was a big winner. Like WHR, BC tends to lift and fall when XLF is lifting and falling.
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 -1.71% W/W) closed the week at 22.37, was a market laggard this week as expected when the indexes were getting smashed. Staples are as the name implies defensive because through thick or thin people tend to buy this stuff – like baby powder, soft drinks, food, booze, cigarettes…
Perdigoa (PDA +7.5%) and Coca Cola (KO +4.8%) were winners. Whole Foods (WKMI -11.6%) was not but then in a serious recession, there is a difference between packaged and fast food and expensive, wholesome food.
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 -0.93% W/W) closed at 51.39, was pulled down by “the debt-heavy healthcare provider sector, which, like the Consumer Discretionary, usually tracks the bank stocks fairly closely”. Yes, I wrote that a week ago when the Banks and the debt-heavy healthcare providers and insurers, like Aetna, United and Wellpoint were the strongest. This week they were the weakest, down -7.1%, -4.7% and -4.1% respectively.
A week ago I wrote, “The sector leaders were United Health (UNH +25.7%), Aetna (AET +24.9%) and Wellpoint (WPT +15.3%). Thanks to the banks.”
Are you starting to get the hang of this?
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 |
I have been having some fun with the Banks in recent weeks. Here is what I wrote here a week ago:
Imagine what can happen in the course of a couple days. To illustrate my point, let me repeat what I wrote in this space a week ago:
A week ago 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.
The volume is still not there, and what there is largely HB&B-driven algo trading, using AUM resources. The cover stories are the upgrades coming from so-called professional research people at HB&B. It’s amazing what a cornered rat will do to get out of a jam.
This week XLF soared +22.35%, including +7.35% on Friday, to close at 13.02.
The law of small numbers at work. That and small minds, and Big Swinging Dicks on Wall Street, as Michael Lewis penned in Liar’s Poker.
http://en.wikipedia.org/wiki/Liar's_PokerIt’s been said this book defined Wall Street as it was in the 1980’s. What’s changed?
So, this week, you discovered that the least pecunious players at the table were playing from a deck comprised only of face cards, which was needed of course to reverse their fortunes: Bank of America (BAC +62.9%), Citigroup (C +35.4%), HSBC (HBC +23.1%), JP Morgan (JPM +19.9%) and UBS (UBS +14.8%). Wells Fargo (We’re Americans first, bankers second +43.7%), SunTrust (STI +50.4%), Key Corp (KEY +18.5%), Bank of New York (BK +24.1%)
http://billcara2.com/tkchart/tkchart.asp?stkname=GS,MS,WB,JPM,KEY,STI,US...
I must have had a few believers because this week was a return to form, like a filly at the Preakness.
This week, Financials (XLF -11.44% to 11.53) were crushed. Blame it on the banks, broker-dealers, Insurers and REITs, but mostly blame it on the big US banks: Bank of America (BAC -24.7%), GM (which still has part of a bank) down -32.3%, American Express (AXP -14.7%), Citigroup (C -13.4%), GE (which has GE Capital) down -11.5%, and JP Morgan (JPM -10.4%).
UBS which doesn’t have its head in the alps, but rather on the beaches of the tax havens, also dropped -15.8%.
Interestingly, erstwhile BMO Harris analyst Don Coxe says he has his eye on the US regional banks (KRE), which have been far under-performing the Humungous Banks & Brokers (HB&B) since early March, which can be seen in these charts:
http://finance.yahoo.com/echarts?s=kre#chart1:symbol=kre;range=3m;compar...
http://www.stockcharts.com/charts/performance/perf.html?KRE,$BKX,xlf
For a month now, it’s been looking a lot like the Obama Administration would like to interfere with the regional banks to force them to lend or take TARP or whatever. But President Obama is pretty good at that stuff you know. He can actually accuse law-abiding citizens of causing him an “outrage” and if a manufacturing company CEO is pissing his favorite union leaders then wham bam that CEO is history. This is a man who can actually smile in your face while putting the knife in your forehead. Rule of law, you say? No longer in America. Ask Don Coxe.
Anyway, not being among a list on a wall in Grand Cayman, I’m safe – Obama will have to come visit his friends in Lyford Cay or maybe Oprah or Michael Jordan, who I hear have homes on Paradise Island. Maybe he’ll get more financial help from Fannie and Freddie, and move down here with Frank, Reid and Pelosi. Tim Geithner would love the place. He wouldn’t have to do his tax returns… sorry, I forgot… all Americans have to do tax returns unless you are a cheater or wealthy enough to hire KPMG to find you a gazillion loopholes. Timmy Terrific had to take the former path through life. Now he’s holding the hammer.
Anyway, I think it will pay to keep an eye on the moving gap between KRE and $BKX. If these relatively small banks can make it through to year-end without having Jamie Dimon’s wolfpack (ie, the Fed) pay them a visit, maybe 2010 could really be a good year for the XLF, in which case I’ll bow to Coxe and call him da man.
Don’t get too excited in the meantime, particularly for a couple months. The 200-day Moving Averages for HB&B and XLF is likely to through up some fierce resistance.
One of the banks that had a winning week was India’s ICICI Bank (IBN +4.2%). Well, actually the whole gain and then some was made on Friday (+4.9%), which makes me doubly question why the IFN etf was down so much on Friday – remember the Sensex 30 of Bombay was the only international equity index I follow that was up W/W.
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)
Tech (XLK -1.70% to 16.80) and Semi-conductors (SMH -2.79% to 19.18) were both losers, but relatively stronger than most. In fact, Tech was next strongest to Healthcare.
India’s InfoSys (INFY +2.8%) and Cognizant Technology Solutions (CTSH +2.3%) were tech leaders as well, which makes me question the loss of -6.94% in the IFN. Cognizant may be headquartered in New Jersey, but most of the company is located in Chennai India.
http://en.wikipedia.org/wiki/Cognizant_Technology_Solutions
I like this company. Started only in 1994, it’s not even old enough to drive, yet is growing its global IT services business faster than anybody. The Weekly RSI-7 is up to 76.6 as the stock has lifted from about 15 to 27 in six months, last at 25.76. Maybe it pulls back to 24, and then maybe to 21, but I don’t think lower. Then watch this baby go. If you can work in long stock, long calls and short puts at or near the cycle bottom test, your portfolio ought to look a whole lot better in a year or two. But, check it out. Every company has their weaknesses. This just happens to be one I like. And I like India, the economy, the people, and the market trading a lot too.
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 |
| 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)
Telecom (IYZ -4.52% to 17.52) was a serious loser but also a market performer this week. I figured it might come off a lot in that a week ago I wrote in this space, “IYZ was #1 winning sector a week ago before the Financials launched their full-court press. This week, they were just average performers, or so we are told. Tell that to the holders of AT&T (-2.9%) and Verizon (-2.3%), which both were losers.”
Here’s the IYZ Monthly, Weekly and Daily data charts:
IYZ Monthly data: 
IYZ Weekly data: 
IYZ Daily data:
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 -4.81%) was #2 sector performer a week ago. I wrote here, “Could a Utility really be like a Telco, a market leader? NOT.” XLU closed at 25.94 this week. I was joking also about telco’s, btw.
The best and worst this week were National Grid (NGG +1.2%) and FirstEnergy (FE -14.5%).
http://billcara2.com/tkchart/tkchart.asp?stkname=NGG,FE&prt=0&ind=rsi
The chart shows that NGG peaked and started its Bear in December 2007, while FE did the same 7 months later. Ergo; NGG will likely start its Bull ahead of FE.
NGG’s RSI-7 on the Weekly data has bounced to 60 while FE’s got hammered back at 50 and has fallen to just under 30.
These are things to watch for when sizing up ‘Mo’, which is a trader term for momentum. FIFO is always good with Mo. But it’s just an indicator and you need to use additional tools to be effective.
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
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
Bonds & Yields Review
Table 10: US Treasury Yields
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 3 Month | 0.13 | 0.13 | 0.15 | 0.12 |
| 6 Month | 0.24 | 0.25 | 0.28 | 0.31 |
| 2 Year | 0.85 | 0.84 | 0.93 | 0.85 |
| 3 Year | 1.30 | 1.28 | 1.44 | 1.21 |
| 5 Year | 2.00 | 1.96 | 2.13 | 1.70 |
| 10 Year | 3.13 | 3.09 | 3.28 | 2.76 |
| 30 Year | 4.08 | 4.05 | 4.27 | 3.66 |
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 2yr AA | 1.29 | 1.19 | 1.22 | 1.12 |
| 2yr AAA | 1.36 | 0.98 | 1.20 | 1.07 |
| 2yr A | 1.93 | 1.74 | 1.74 | 1.68 |
| 5yr AAA | 1.94 | 1.92 | 1.91 | 2.02 |
| 5yr AA | 2.12 | 2.11 | 2.12 | 2.16 |
| 5yr A | 2.30 | 2.24 | 2.31 | 2.06 |
| 10yr AAA | 3.21 | 3.22 | 3.10 | 3.12 |
| 10yr AA | 3.31 | 3.33 | 3.27 | 3.39 |
| 10yr A | 3.45 | 3.50 | 3.39 | 3.72 |
| 20yr AAA | 4.67 | 4.54 | 4.67 | 5.14 |
| 20yr AA | 4.73 | 4.81 | 4.78 | 5.10 |
| 20yr A | 4.71 | 4.72 | 4.71 | 4.83 |
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 2yr AA | 2.34 | 2.40 | 2.10 | 2.90 |
| 2yr A | 3.36 | 3.68 | 4.13 | 4.74 |
| 5yr AAA | 2.73 | 2.73 | 2.97 | 2.79 |
| 5yr AA | 3.84 | 3.69 | 3.59 | 3.65 |
| 5yr A | 4.44 | 4.08 | 4.14 | 4.84 |
| 10yr AAA | 4.44 | 4.39 | 4.93 | 4.77 |
| 10yr AA | 4.62 | 4.57 | 4.66 | 4.44 |
| 10yr A | 5.43 | 5.49 | 5.31 | 5.46 |
| 20yr AAA | 7.18 | 7.91 | 7.90 | 6.98 |
| 20yr AA | 6.66 | 7.40 | 7.39 | 6.47 |
| 20yr A | 7.35 | 8.09 | 8.07 | 7.15 |
The 20-year Treasury Bonds (TLT +3.27% to close at 98.04) put on some gains. They had been on a run, but I warned, “But these charts are looking like it could be time for a relief rally in Bonds. They are down to support levels and TBT is at resistance levels… More likely, the bonds are likely to sidetrack here.”
So the bonds did rally a bit and now may settle in for the sidetracking for a bit.
The 30-, 10- and 5- year yields closed the week at 4.08, 3.13, and 2.00 percent, respectively, down from 4.27, 3.28, and 2.13 percent a week ago. Interestingly, we are back close to the rates of 4.07, 3.15, and 2.01 percent of two weeks ago.
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 lost -2.87% W/W to close at 236.24.
The 50d MA is now at 224.20, which is still well below the present price.
The 200-day MA has dropped from 326.18 to 262.65 over the past 13 weeks.
As I say, “commodity prices had been lifting across the board because of excessive money printing, and a falling $USD, not demand factors at this point”. The Fed controls these prices at the moment, I believe. It won’t be until demand becomes more of a factor before the market has more influence.
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 -$2.74/bbl (-4.59%) to close at 57.00. A week ago the gain was +12.29%. The loss on Friday was -4.07%, so I wouldn’t pay the current price much attention.
For $WTIC, the 50d MA is at 51.85.
The 200d MA is now down to 64.84, down from 80.84 just eight 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.” Later I wrote, “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 lifted +$14.80/oz (+1.61%) to close at 931.30, which is showing some Bullishness. A week ago, the rally was +30.10/oz.
Two weeks ago in this space, I wrote: “It’s not looking strong, but has every reason to rally here.”
The gold 50d Moving Average is now at 909.36. The 200d MA is 856.63. When these lines were crossed by rising prices, I wrote in this space, “so technical resistance was crossed, and higher prices are expected.”
Two weeks ago I wrote here: “My biggest equity positions, by far, are in the goldminers. All the others combined amount to less. My second biggest position is in the oilers. So, while I’m not happy with the goldminers, the oilers did produce good results this week.” Drum roll because this week the goldminers ($XAU +14.82) soared and so too did XLE (+9.67%). My next biggest position was the short in long US Treasury Bonds and that trade has worked out very well indeed.”
$XAU, GDX and XGD this week were mixed (-1.08%, +0.40% and +2.89%, respectively W/W). All three were losers on Friday when the $USD was very strong (+0.81% on Friday, but only +0.59% up on the week).
It’s a harder call right now, but I tend to think the gold price will have a quite surprisingly strong spurt, attracting interest in the goldminers. Pop and then it’s over. I plan to sell into strength as I see no reason, at this point, that traders are anxious to buy gold to the moon, especially as I think the rest of the broad equity market is facing a real tough couple months.
You know, with margin calls, brokers sell out the whole portfolio. There is no hesitation or picking over what you are hoping they don’t sell. Hope only works on the south side of Chicago.
Be careful not to get sucked in should gold and goldminer prices have a run to the upside here. It’s the full cycle you have to be accountable for.
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 was like palladium, platinum and copper this week; it was down – down just 3 cents/oz or -0.21% to 13.97, but down nonetheless. I was telling my traders on Friday morning that I had the closing number 14.50 in my head, but the $USD strength never let that happen. Let’s see what next week brings.
I have said that Silver would lead the rally, and relative to gold that’s true.
For $SILVER, the 50d MA is now 13.01. The 200d MA is 12.06.
$SILVER looks to me like its trying to whip-saw some traders, getting them out before the run.
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 -$37.70/oz (-3.29% W/W) to close at 1109.80. A week ago it had run up +$51.00/oz.
The chart, unlike for gold, silver and palladium, which are in Bull territory, is for $PLAT in No Man’s Land.
The 50d MA is now at 1134.70. The 200d MA is now at 1075.86.
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 dropped -$15.25 (-6.26%) W/W to close at 228.20. A week ago, there was a gain of +$28.45/oz (+13.23%).
The 50d and 200d MA is at 221.23 and 222.26, respectively, so the present price is still over both the 50d MA and the 200d MA (ie, still a Bull).
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 -12.80 (-5.97%), closing at 201.75.
The 50d and 200d MA’s are 194.57 and 209.29, respectively, so technically the price is back in No Man’s Land.
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 powered north this week: $XAU -1.08% to 136.79; GDX +0.40% to 37.65; and XGD +2.89% to 19.55. A week ago, the prices had soared, so a pull-back was healthy. There was a loss on Friday, due to a soaring $USD, or else the three indexes would have had good gains.
Most of the goldminers were up. Agnico-Eagle (AEM +5.2%) was up a bit more than most, but there was nothing remarkable here.
I still believe there will be a Bull run based on an injection of capital into markets in the coming weeks (that will flood into stocks), hoping to help the banks that are trying to float as much new stock into the market as possible at this point. The recent few days has set an all-time record. That has to be a positive for gold.
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 lifted (82.97 +0.59%) W/W. On Friday, the gain was +0.81%, which caused the commodities markets and international equities markets to sink as US Dollars were purchased by the Fed to tighten the market before flooding more capital into it next week as part of the banker bail-out programme.
The 50-day MA of the $USD is now at 85.03. The 200-day MA is 83.14. Technical support of the 200d MA did not hold, and this rally week did not change the dynamics.
Interactive Chart of Weekly U.S. Dollar Index:
Interactive Chart of Daily U.S. U.S. Dollar Index:
The Euro ($XEU) lost -1.00% W/W to close at 135.01.
The 50d MA and 200d MA for the Euro are now 132.58 and 134.87, respectively, so the present price is still above both, meaning the Euro is in a Bull phase.
I don’t see that changing next week.
Interactive Chart of Weekly Euro Dollar Index, priced in USD:
Interactive Chart of Daily Euro Dollar Index, priced in USD:
The Pound lost -0.52% W/W to close at 151.60.
The 50d and 200d MA is 146.31 and 157.60, respectively, so on technical terms the Pound is still strong, but has a way to go before it can be said to be in a Bull phase.
Weekly British Pound Index:
Daily British Pound Index:
Weekly Japanese Yen Index:
The Japanese Yen ($XJY) soared +3.50% W/W to 105.10.
The Yen’s 50-day MA is now 101.93 and the 200-day MA is 102.12. The current price is now above the 50d and the 200d MA, so it’s in a Bull relative to the USD.
Daily Japanese Yen Index:
The Loonie (Cdn Dollar) dropped -2.16% to close at 85.05, but the gains of the prior two weeks amounted to over +5% in total.
The Loonie 50-day MA and 200-day MA are now at 81.74 and 84.68, respectively, so the current price is technically considered to be in a Bull phase.
Weekly Canadian Dollar Index:
Daily Canadian Dollar Index:
Here is the China Yuan (CNY) chart.
International Equity Markets Review
The international stock exchange indexes, with the exception of India, sank this week. India’s BSE 30 rallied from 11876.4 to 12173.4.
But, in a downward direction, UK FTSE moved from 4462.1 to 4348.1. The German DAX moved from 4913.9 to 4737.5. Aussie All-Ords moved from 3919.6 to 3758.9. HK Hang Seng moved from 17389.9 to 16790.7. Shanghai moved from 2625.6 to 2645.3. Brazil’s Bovespa moved from 51396.0 to 49007.2.
After a huge run-up for about eight straight weeks, it was one week ago that I wrote in this space, “These are Humungous moves. Caveat emptor.”
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
A week ago in this space, I opined, “The RSI-7’s for the Monthly, Weekly and Daily started all pointing upwards a week ago, which was a reversal. This week there is more RSI movement to the upside. The buying phase at elevated RSI-7 levels is what we call “a high-risk buy”, which usually means it is short and sweet. Yes, the gains can be huge, but the trading is speculative, and we saw that this week as the stocks of the highest quality corporations were down and the Banks were way up, and the weakest quality of those dubious banks was up the most. Bull markets are not made of this kind of trading, particularly when volume is so anemic.”
You were warned.
This week, the DJIA (-3.57% to 8268.64), S&P 500 (-4.99% to 882.88), NASDAQ Composite (-3.38% to 1680.14) and Russell 2000 small cap index (-7.03% to 475.84) were all smashed.
A week ago I wrote here, “up with a bullet – from Wall Street. Something to do with Stress Testing we are told. (But) As I commented here a week ago, traders are firmly in day trading mode, and not committing much funds to the market, at least until they get their heads around the capital needs of the bankers, and how much dilution is close at hand.”
The amount of paper that is being sold to HB&B at humungous discounts just to push it into nervous accounts is, well, humungous. The capital market has never in history seen so much paper being sold, and I question why the media is not playing this up as Story #1. Instead we get yet another speech from Obama, Mr or Mrs. And, the crowds cheer.
They cheered some savory figures in history at times of great stress too. Caveat emptor.
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, Disney (DIS), which is a Cara 100 company, and 3M (MMM), which was one until June, 2006, but remains one of my favorites, nonetheless.
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 May 15: next one is due Aug. 15)
Regarding Disney, here is what I wrote in the WIR #7 (Feb 15, 2009):
With respect to Disney, Pierre Brodeur updated his quant notes this week.
http://tinyurl.com/cmvkg7Here is what I wrote on Nov 16 2008 in WIR #46:
Re Disney, the Value Line report was done at $26.02 and the DIS closed the week at $21.08, so the numbers are so out of whack, the analysis doesn’t make sense... The corporate balance sheet is just so-so. It’s rated A, but doesn’t look that strong. I don’t care for the deficit working capital ratio in tough economic times. A severe recession could hurt the stock further. But I do like the management, and will keep the company on the Cara 100 list.
The DIS stock is now down to $18.52, hitting a 52-week low of $18.03 on Feb 12. The loss in 13 weeks of -$2.56 in 13 was -12.14%, so I was right to avoid this.
Going forward here is a tough call. Steve Jobs owns 7.4% of the stock and we don't know much about his health. The recession is squeezing the consumer and even though fuel costs have come down so much in the past six months, I don't see longer lines at the Disney theme parks. And who knows where the television advertising business is going? Yes, I like the share price at $18.52, but there could still be more rocky days ahead.
I suppose the question is would you be happy buying this stock at $15.75 in the next five months. If so, you ought to write the July 17.50 puts for $1.75 (ie, a bullish perspective). One and two months out, the 17.50 puts would get you $0.62 and $0.95. At a present price of $18.52, what are the probabilities of that occurring?
The RSI-7 Monthly-Weekly-Daily is presently 15.8/23.8/33.4 (and falling). It wouldn't take much to drop the Daily below 30 and then rally into a BUY ALERT on the Daily-Weekly.
If I was a 2 to 3-year long-term oriented trader, I'd probably write the puts, then add to stock after I got a Buy signal. Probably the put premiums would be earned and make my cost basis quite low. In a Bull market, it wouldn't take too much to realize annual Total Returns of +30%.
As a short-term risk-averse trader, I would be carefully monitoring the Consumer Discretionary sector before I jumped in. If I didn't see the casinos, hotels, cruiselines, etc, also breaking to the upside, I would stay out of the fight. I hate to lose.
By mid-May, DIS had performed pretty much how I figured. The stock did drop from $18.52 to a subsequent low of $15.14 on March 10. Any trader using the simple little RSI-7 system would have used a BUY ALERT on the Daily-Weekly to either acquire the stock at under $17 or to write the puts. If you had written the puts immediately after I published the WIR and later had the stock put to you at $15.75 in March, two months later the stock hit a high of $26.29 for a potential gain of +73.6% in that period. But, I don’t want you to get caught up in that mindless game many traders and writers play where tops and bottoms are calculated, and sought. It is the principles of trading that are important here. I nailed it with DIS, repeatedly, and most important to me I showed you how to do the same. I’m not using this blog to tell you what to do, but how to do it.
To study DIS, In addition to re-reading my previous notes, I put the following current charts on my screen, as follows:
http://billcara2.com/tkchart/tkchart.asp?stkname=DIS&ind=rsi&wt=3
http://billcara2.com/tkchart/tkchart.asp?stkname=DIS&ind=rsi&wt=1
http://billcara2.com/tkchart/tkchart.asp?stkname=DIS&ind=rsi&wt=0
The current DIS price is $23.41.
These charts show me a short-term SELL based on the Weekly-Daily RSI-7 breakdown at about $24.75 on Monday May 11. The stock dropped -$0.75 that day to close at $24.71, and it was obvious that the Weekly and Daily had violated the 75 level for the RSI-7. Sayonara. I would not return until the Weekly-Daily RSI-7 have dipped below 30 and returned above it, along with similar patterns for peer group stocks.
From the latest Value Line so-called research report, the analyst Damon Churchwell is a bit misguided. He concludes: “Disney shares offer attractive long-term appreciation potential.” Pardon me, but what is long-term? Five years? We could be dead in five years. As the price of 23.15 (report date) or 23.41 (latest)? I think not! You know I like the company, but I hate to lose money and this analyst seems to have his head stuck somewhere in Cinderella’s Castle. Where, for instance, is he writing about the shareholders’ outrage over CEO Iger’s unconscionable compensation? Whereas I wrote after the last report, “The recession is squeezing the consumer and even though fuel costs have come down so much in the past six months, I don't see longer lines at the Disney theme parks” and now the analyst states, “Disney posted a sharp earnings decline for F2Q… [because] theme park and film studio results plummeted 50% and 97% respectively, we have lowered our 2009 share-profit estimate by [only] a nickel [from $1.80 to $1.75]. What??? Only a nickel? And he likes the stock as it offers “long-term appreciation potential”!!!
Here’s what I think: (i) the VL analyst was probably a Disney theme park usher or sweeper when he was a young lad because otherwise I cannot square much of what he’s written here, or what he ignored but should have written, and (ii) if the price drops maybe -20% to maybe the $18 level, I think it offers “attractive long-term appreciation potential,” in which case I would be looking for a BUY ALERT to buy the stock and write puts.
I like the company, but this is one stock you have to be really patient on. I do think there will be another significant buying opportunity later this year. Until then, the only movie that’s likely to play out here will be a sad one for a couple months.
As you have come to see by following my reports, I never chase a stock or a market; in other words, I don’t buy risk. To the contrary, I make an assessment of what I think the price of a high-quality asset would have to be to attract my buying interest, and then I wait for weakness, letting the stock price 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 people 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 are able to 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.
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 May 15: next one is due Aug. 15)
Regarding 3M, here is what I wrote in the WIR #7 (Feb 15, 2009):
Here is what I wrote about 3M Company on Nov 16 2008 in WIR #46:
With 3M, I note the Balance Sheet is stronger than it’s been for a few years. The dividend is well protected. But the earnings and cash flow per share are sliding and will continue to fall through the recession. They ought to stay weak until sometime in 2010. So I’d avoid it for now. Still, MMM is down -18.9% over 6 months, so the stock should recover a bit on broad market rallies. The company could (even) be a corporate acquisitor as it holds $3 billion in cash. I noted that the Value Line report was done when the stock price was $65.61, and the close a few days later was $63.06.
The MMM stock is now down to $49.42, hitting a 52-week low of $48.64 on Feb 12. If you remove the dividend, adjusting the price three months ago to $62.55, the loss in 13 weeks of -$13.13 was -20.99%, so I was right to avoid this.
It's the mark of a good trader to avoid the rough patches, and be ready with cash to take advantage of the opportunities for gains.
Now, I feel is the time to write puts (ie, a bullish perspective). I am not satisfied that the lower sales and reduced operating margins in this recession will permit the stock to roar out of the gate, but I do really like the financial strength, and I think the management is doing an effective job under the circumstances. The stock price is back to 2001 levels and yet this company is so much stronger today. The price has fallen -40.6% from its 52-week high of $83.22 on Apr 18, 2008. MMM stock has not fallen so much since maybe Oct 1987 (somebody please check), and the earnings are likely to come in near the Value Line estimate of $3.85, so with an average annual PE ratio of 16.0, I am confident that if my puts get exercised at 45, and the option premium I take in is going to reduce my cost basis to a very attractive PE.
For example, say I write the July 45's, meaning that the stock would have to drop a further -9.0% in 5 months before I would have to buy it at $45, but with the option premium presently at $3.60, my cost basis would be $41.40, and the $3.85 in earnings would translate to a PE of 10.75, which is well under this company's average of 16.0. So, I'd be comfortable with this put write.
I'd also write the March and April 45 puts to take in $1.00 and $1.80 because I don't think the stock is going to drop -9.0% in 30 to 60 days. As I say, it's already fallen more in % terms off the 52-week high than probably any year since 1987, but the company itself is quite diversified and rock solid, and is going to make a good profit, so I'm not concerned, should it be exercised and fall lower, if I have to own it for a few weeks or months (from the put premium adjusted acquisition cost) to work back to a profit position.
The $2.00 dividend for 2008 was just 41% of earnings, so even as earnings for 2009 will come off, the Value Line estimate is for a pay-out ratio of just 53%. I think the dividend will be raised a bit, just to retain investor confidence in management, but even if the rate stays at $2.00 for 2009, if I buy this stock at the present price of $49.42, my dividend yield is 4.05%, which would take me more than two years holding a 5-year US Treasury to earn. I'd put my confidence in Minnesota.
Presently the Monthly-Weekly-Daily RSI-7 for MMM is 14.7/26.4/32.8, which is not that much different than DIS. But, just like DIS, 3M is a company that is highly correlated to the economy.
For short-term trades, seeking +10% gains, I like the high-quality Industrials, if you can pick your spots. The major US exporters are generally helped when the $USD falls, making it easier for foreigners to make purchases, and I think the prospects of a falling $USD are fairly food. The USD may lift, but not so much that 3M's foreign sales (64% of total revenues) are cut back. In that respect, the global economy is the bigger issue, being correlated 80% to sales.
In any case, the 3 to 5-year Value Line stock price projection is 90 to 110, resulting in an Annual Total Return of +17% to +23%. I don't see too many money managers doing those kinds of numbers these days, but I think in this case, the target is a fair one. Also, I think the Value Line analyst Jeremy Butler has written a sound report. He's knocked management for being overly optimistic, and I like that. But he's also a believer, like me, in the quality of this company.
All in all, one-and-a-half thumbs up. Tim Geithner has me a little bent these days. :-)
By mid-May, MMM had performed pretty much how I figured, just like DIS. The stock did drop from $49.42 to a subsequent low of $40.87 on March 6. Any trader using the simple little RSI-7 system would have used a BUY ALERT on the Daily-Weekly to either acquire the stock at about $43.50 or to write the puts. If you had written the 45 puts immediately after I published the WIR and later had the stock put to you at a cost basis of $41.40 in March, two months later the stock hit a high of $60.23 for a potential gain of +43.5% in that period.
But, again, I don’t want you to play wouda-couda-shouda games where tops and bottoms are calculated. It is the principles of trading that are important. I nailed it with MMM, just like DIS, again repeatedly, but very important to me I showed you how to do the same.
I do not ever use this blog to tell you what to do, but only how to do it.
To study MMM, in addition to re-reading my previous notes, I put the following current charts on my screen:
http://billcara2.com/tkchart/tkchart.asp?stkname=MMM&ind=rsi&wt=3
http://billcara2.com/tkchart/tkchart.asp?stkname=MMM&ind=rsi&wt=1
http://billcara2.com/tkchart/tkchart.asp?stkname=MMM&ind=rsi&wt=0
The current MMM price is $57.92.
These charts show me a short-term range SELL in the past week at about $59. It is too late to write calls. Like DIS, I have no interest at this time in MMM.
Jeremy Butler, the Value Line analyst, is also somewhat out of touch with reality. He opines, “For the more conservative long-term investor, this is a wonderful buying opportunity. This is a rare chance to acquire part of a top-quality company at a bargain-basement price.”
What utter balderdash. I can’t spit far enough to rid my mouth of the crapola this guy has written here. First of all, you are not buying part of a company unless you are Bill Gates or Warren Buffett. You are a trader of prices, not an investor acquiring companies.
At the VL report price of $58.43 (or today’s price of $57.92), this is not “a wonderful buying opportunity”. The stock is headed south over the next couple months – maybe -15% to -20% -- where in the mid to low 40’s it will become “a wonderful buying opportunity” to some people and “a reasonable buying opportunity” to most of us.
Sales people use hype jargon like “wonderful” – not respected Value Line analysts. More talk like that and I’ll have to start thinking of avoiding these reports.
Why is Mr. Butler so hot on this stock anyway? The earnings per share are crapping out, which he acknowledges: 1.17 to 0.77 for 4Q08 over the prior year’s quarter; 1.38 to 0.74 for 1Q09; 1.33 to 0.85 estimated for 2Q09; and 1.41 to 1.00 estimated for 3Q09. He even states that Q1 earnings and sales dropped -46% and -21% respectively and he was surprised by the profit plunge – YET he states, “Despite the worse-than-expected profit drop, we are leaving our 2009 share-net target unchanged at $3.85. How does he square this? He estimates for 4Q09 a +63.6% leap of eps to 1.26 from 0.77 in the prior year period. He doesn’t tell you how. The guy even states, “We look for the company to start its earning’s recovery in 2010.” Then he provides a growth estimate for 2010 over 2009 of just +14.3%. Amazing.
First dibs on this guy’s job. There are probably 100,000 analysts out there who would do better that that. At least they would not write totally unsupported crapola like, “We have ample reason to believe that by 2012-2114, 3M will be earning $6.00 a share… and the smooth-ride there should be sweetened by the well-funded dividend.” Migawd, send this guy to Hollywood or Washington where he can write about hope. The man’s an expert.
The Dow 30 Company links in chronological order of the upcoming reports.
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 22)
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 22)
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 22)
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 22)
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 22)
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)
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 May 8: next one is due Aug 8)
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 May 15: next one is due Aug. 15)
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 May 15: next one is due Aug. 15)
Wrap-up:
The Cara Bahamas 2009 Conference slideshow is now available on the website. The attendees had a great time, but many of them say they don’t see how I can do a better job for Grand Bahama 2010.
Ha! I love the challenge.
I promise you, 2010 will be better than 2009! More people will mean more break-out sessions. So the training and the information will be deeper and more specific to your interests. We’ll have an on-line, real-time computer room for trading, checking things and even telephoning friends and family all over the world. The parties will be bigger and more of them. We’ll all be in one resort, with plenty of opportunity to choose accommodations from family-oriented rooms, or inexpensive shared quarters, to high-end suites. There is an adjacent marina for boaters from Florida who will like the fact the place is only 70 miles from West Palm Beach. We’ll organize a regatta. For those who don’t like to fly, there is an inexpensive day ferry where we can start your party in Florida and pick you up by tour bus to bring you to the conference. We’ll also try to arrange a group fly-over with private plane owners. This is a terrific resort with everything you could want, including two lush golf courses, four world-class tennis courts (copies of the French and US Opens and Wimbledon), a three-story 50,000 s.f. spa and health center, and amenities of every type. There is no need for a rented car or taxis. We have many months to negotiate sponsorships for the buy-out of restaurants for breakfasts, lunches and dinners for the attendees. We’ll have a few international shipping owners and analysts of these companies. There will be a large Chinese contingent, and probably the Ambassador to Bahamas from China will be there. We are going to invite everybody to bring their musical instruments to play along with pro’s like Funky D and Henry Moss and others. There will be the local Junkanoo, plus police and defense force marching bands, and deep-sea fishing in the nearby waters. Our co-hosts will be the resort owner, Hutchison Whampoa, who also own an interest in 80,000 acres of sub-divided property, much of it ready to be built, with canal lots and sea-walls already done. We want you to come for a week next year, and we intend to make it worth every minute. Believe me; I can hardly wait! I’ll have the dates, prices and reservations code ready in a few days. Then we can start planning. Canadians will be happy to see that we will have WestJet scheduling weekly or twice weekly service non-stop from Toronto to Grand Bahama.
And for those who also will book early, there will be an early-bird special discount. Yes, I can hardly wait.
On a serious note, there will be a funeral service for our friend Hywel Jones. Not being in the mob, Hywel included, it’s really hard for any of us to conceive that in this day and age, a planned execution of that kind, right as he was about to go into his office at 9:30am, is possible. Not in our remotest thinking did any of us expect that to happen to a fellow who was so good to people, and so popular. At 55 and in his prime, he was so young, and had so much to live for. He will be missed at Cara Grand Bahama 2010. All I would have had to do was e-mail the request, and like a friend he would have been there, no questions asked, no payments expected. I would have done the same for him.
His final email to me was in reply to mine:
Great to hear from you Bill – obviously you have recovered from the conference!
I was in Jamaica for Easter got back on Tuesday. I am around this weekend and have a friend in town who is in the investment business and I would like you to meet him. How about Saturday?
Best wishes
I had written him April 15:
H: some evening we should get together. Drop by. I'll serve a nice Ruffino Ducale Oro Grappa.
I think you'll like it./Bill
He wrote me back on Friday. I wasn’t able to get to his meeting, and he followed up on the night before he was murdered by phoning to say things were looking very good on his legal front and he wanted to meet to discuss things, etc. I said the grappa was on ice, and he said he’d drop in on his way back from the office. He has to pass my place on his way to his. That was the fateful day.
Too shocking for words.
I have always said that life is about the memories. I had a lot of good ones with Hywel. We all did. He spoke well at the Cara Conference, making more friends as he always did. I’ll dedicate next year’s conference to Hywel – if I can get the words out.
