[11:40am ET] This week's report on Personal Income & Outlays, according to Econoday, “indicates that fiscal stimulus is bolstering the consumer sector somewhat-but not as much as hoped for as consumer spending is lagging the income gain significantly. But the unspent income will help support spending in coming months. Equities should like the numbers while bond yields rose on the news. But equities could head in any direction with the restructuring of the Russell 2000 and the end of the quarter looming.”
There is a problem here in that the economic stimulus programs are putting money into people’s savings deposits rather than into cash registers of companies as planned by govt, which is causing a corporate earnings growth lag, delaying economic recovery and threatening an equity market pull-back. If people were less frightened of possible home foreclosures and lost employment, they might spend more.
Those with a crystal ball for the Q2 earnings season ought to be well positioned for significant gains. I wish they’d tell us whether the S&P in going to break 880 on the downside or 960 on the upside. For the present, we’re stumped.
I had a lengthier than usual review of the stock charts this weekend, some 2000 in fact, as I tried to put my own crystal ball to work. Alas, there were more observations than conclusions.
Clearly there is an improvement in the macro-economic data, and our knowledge that govts around the world have undertaken probably the greatest quantitative easing in history, which has led to a pump action in share prices since early March, but, as the TV comedians say, the easy money has been made. Don’t you laugh whenever some idiot in a $100 suit trots out that line?
My belief is that, sometime early in June, we came to the end of the first up-leg in a Bull market that started with lower prices in the commodity price sensitive sectors, Energy, Basic Materials and Industrials. In every case, the XLE, XLB and XLI etf’s had lower June lows than occurred in May. None of that happened in the interest rate sensitive Utilities, Telecom or Financials (XLU, IYZ, or XLF) or economically sensitive consumer sectors (XLP, XLY, or XLV/IYH) or Technology (XLK). Following the usual sector rotation, starting with the interest rate sensitive sectors, we are now likely in the final part of this phase. Either that or else commodity prices will have to start lifting here soon.
One of the keys will be to focus on Gold, It’s possible that precious metals prices could get a little crazy here – a good time, but not for a long time, perhaps. It’s a key because Gold at that point is either the last one off the dance floor and the music stops for a couple months or else liquidity is pumped heavily into the system by central bankers (where they also sell off some gold) and the music plays on through the summer.
As I have been saying all along in recent months, this is the Great Reflation play. Too much liquidity being injected into the system could bring about a massive inflation and either higher interest rates or much higher gold prices. Central bankers cannot have their cake and eat it too. They bake it and we eat it. We just don’t know at this point how much they want to give us. The key to that is how many and which banks do the central bankers believe are sufficiently well funded to survive the next round of interest rate hikes, which ultimately must come because we are not going to see virtually zero central bank rates forever.
So, look for central bankers giving warning signals to the banks to get themselves funded or else. That’s why there is a wild scramble right now in asset sales at some banks, like Barclays for example, which has sold or is selling units like iShares Funds (the largest family of ETFs) and its asset management division, Barclays Global Investors, and so forth. It’s not as if these banks want to sell their prime assets; they are being forced to.
Accordingly, during this recent period of heightened uncertainty, I went from a program of put writes, watching markets side-track, to one where we bought some short-duration calls, particularly in the precious metal stocks, trying to catch the final pitch as the ball was being thrown to us. It started well, but we kind of dropped the ball a couple times on Friday. We figured that by the end of the week, or so, there would be a few of the goldbugs up to the plate swinging for home runs, possibly taking the Price of Gold to the 1000-1020 foot mark, at which point we were going to accept that as a home run and throw the ball back as it were, by selling our calls and heading for the parking lot.
Well, the game is still on, so maybe we’ll see a few new hitters early in the week. If Gold does lift here, we will then be watching the interest rate sensitive sectors to see if they have lower lows in July than June. If so, I believe the Consumer sectors will follow and the broad market indexes will sink. That’s the time, having closed out our calls that we rush into a put buying program – again, for a good time, but not a long time.
Just remember that markets don’t trade in a vacuum. One price change affects another, which affects yet another. We don’t know how fast the changes will come – that’s a function of credit/speculation from the banks and the interventionist programs of the Treasury (to fund govt spending) and the so-called stabilization programs of the Fed – but we do know that change is constant. Prices are always in motion.
If only the capital market system wasn’t so hot, as it is today, the price action would settle down and we would not have to trade so actively. That brings me to my final point; Lou Gerstner the former CEO of IBM was interviewed this week on Bloomberg TV touting a trader tax. The man may have been an expert in management practices (or maybe not), but he obviously knows little to nothing of trading. Capital markets are the world’s price discovery system. The system gets under pressure at times when bankers and Interventionists get out of hand, but the system is not broke. Don’t try to fix it if it ain’t broke. Fix the bad management practices of reprobate financial people who have caused the failure of the credit markets and the regulators who permitted that to happen. Then we talk.
Whenever I see market amateurs like Lou Gerstner tell traders he knows they are over-trading, I see somebody’s axe being grinded. It’s all politics. Well the politics of money ought to stay in Washington and Wall Street, and out of Main Street. The capital of the capital market is not owned by Washington or Wall Street. Those people are the servants. The owners of the capital live on Main Street, the capital market belongs on Main Street, and sooner or later people like Lou Gerstner and his crowd are going to realize it. If they push too hard with extra taxes on traders, that capital is going to move to another country, and that, my friends, will be the end of the American Empire as people have come to know it.
Little by little, the Empire is coming apart. The final blow will likely come when all the US taxpayer money handed to Henry Paulson, Timothy Geithner and Ben Bernanke go down the tubes as bankers move their business to Europe or the BRIC countries in search of the capital that we, the owners of that capital, have decided to put there. Trading is virtual; we don’t have to work within a US system to trade our capital. It’s about time these people who grind axes realize that fact.
Now, let’s get focused on the events and price action of this week, the final one in the first half, one that’s certainly had its ups and downs.
Global Economics Review
Weekly International Economic Report .
Econoday reported,
Central banks took center stage last week as the Federal Reserve’s Open Market Committee met and made no policy changes, the leadership of the Bank of England testified before parliament, the Swiss National Bank moved aggressively to weaken the Swiss franc and the ECB pumped funds into the euro-zone banking system. Also influencing markets were the June OECD forecasts that revised its initial 2010 outlook upward.
While all Asia/Pacific indexes followed here were up last week, those in the U.S., UK and Europe declined. Investors were quixotic and ignored better than expected data while at the same time, shrugging aside disappointing data. Stocks in Europe and North America began the week with hefty losses after the World Bank lowered its 2009 forecast and recession worries returned. The indexes tried — and for the most part failed — to make up Monday’s losses during the rest of the week. The World Bank expects the global economy to shrink by 2.9 percent this year compared with a previous estimate of a 1.7 percent contraction. Equities, commodities and emerging market currencies suffered hefty losses as risk-averse investors shifted to the perceived safety of the dollar, the yen and government bonds.
There was also some disappointment that the Fed offered little in the way of fresh insight following its latest policy meeting. The Fed repeated that interest rates would remain low for some time and made no change to its quantitative easing policies.
Both the FTSE and DJIA indexes are down year-to-date, which is now half over. So much for passive investing among the green shoots! Shot down?
Here are the key US economic reports on last week’s calendar.
US Existing Home Sales data for May. Following the data, Econoday reported, “Existing home sales weren't that bad in May, up a sharp 2.4 percent but to a 4.770 million annual rate that is below expectations for 4.850 million. Supply is down which is good news, at 9.6 months vs. 10.1 in April. Prices also firmed, up 3.8 percent in the month to a median $173,000 though the year-on-year decline actually deepened slightly, at -16.8 percent. Data are steady from region to region with the Midwest leading the month. Of note, Realtors report a steep drop in the proportion of distressed sales, at about one-third of all sales vs. half in prior months. The text of the report didn't know what to make of the drop, suggesting that it may not be meaningful. But the report noted strongly that unrealistically low appraisals are scuttling sales and slowing the housing recovery. There wasn't much initial reaction to this report. New home sales, where the median price was down 14.9 percent in the last report, are out tomorrow.”
US New Home Sales for May. Econoday opined after the data release, “Home prices are firming up, the good news in another disappointing report from the housing sector. New home sales fell 0.6 percent in May to an annual rate of 342,000 which is 23,000 below expectations. Add to that 24,000 in downward revisions to the prior two months. Sales actually rose in three of four regions during the month, but not in the South where sales fell 8.5 percent. New home sales in the South, at 184,000, make up more than the other regions combined… The median price rose strongly for a second straight month, up 4.2 percent in May to $221,600. Prices are down only 3.4 percent from a year ago in what is evidence of stability. Prices on the existing-home side, in data released yesterday, also firmed. Supply on the market isn't getting worse, at 10.2 months in a small improvement for new home sales and at 9.6 months for existing homes, also a small improvement… It's been hard for the housing sector to put together a string of good reports, and another example is today's report which follows strength in existing home sales and in housing starts. Today's report keeps the jury out on the housing sector and has cut short what was a morning rally for the stock market.”
US Durable Goods Orders for May. Econoday reported, “New factory orders for durables in May came in unexpectedly strong – even after discounting transportation. Durable goods orders increased 1.8 percent in May, following a rebound also of 1.8 percent drop in April. The boost in April initially had been estimated to be 1.7 percent. The May gain came in well above the market forecast for a 0.5 percent decline. Excluding the transportation component, new durables orders posted a 1.1 percent boost after rising 0.4 percent the month before… The rebound in new orders was widespread but was led by machinery, up 7.7 percent, and transportation, up 3.6 percent. Also making gains were primary metals, and computers & electronics. Declines were seen in fabricated metals, communication equipment, electrical equipment, and "other." …Another sign of optimism was that capital goods orders rebounded. Orders for nondefense capital goods jumped 10.0 percent in May after a 2.9 percent dip the month before. Even excluding aircraft, nondefense capital goods orders rose 4.8 percent after a 2.9 percent drop in April… Year-on-year, overall new orders for durable goods improved slightly to down 23.3 percent in May from down 24.5 percent the previous month. Excluding transportation, new durables orders rose to down 22.4 percent from down 23.6 percent in April… The May report on durables orders showed broad-based strength for new orders. While the gain in new orders will take a little time to impact production, the latest numbers add to the argument that the recession's bottom is near. This still does not change the likely fact that the recovery will be sluggish. Nonetheless, equities should like today's numbers. Treasury yields firmed on the news.”
US FOMC Meeting announcement. After the news, Econoday opined, “While noting that the pace of economic contraction is slowing, the FOMC kept its target rate unchanged at zero percent to a quarter percent. In its unanimous decision, the Fed said that "economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period." Basically, the FOMC continues to tell markets that rates are not going to be raised for some time… On the Fed's evaluation of economy, there was very little meaningful change in the wording. The Fed sees the contraction slowing but with further signs of stabilization in household spending. But the consumer sector is still constrained by ongoing job losses, lower housing wealth, and tight credit. One positive change in the Fed's view is that businesses "appear to be making progress in bringing inventory stocks into better alignment with sales." This could be interpreted as meaning that the economy is marginally closer to recovery than at the previous FOMC meeting… Although recognizing that energy and other commodity prices have risen lately, the Fed sees substantial resource slack dampening cost pressures and keeping inflation subdued for some time… With the effective fed funds target essentially zero, policy action is now quantitative easing. The Fed kept its previously announced plans for expanding its balance sheets. This was generally expected since the Fed has not yet met its previously announced goals.
"As previously announced, to provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of up to $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt by the end of the year. In addition, the Federal Reserve will buy up to $300 billion of Treasury securities by autumn. The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets. The Federal Reserve is monitoring the size and composition of its balance sheet and will make adjustments to its credit and liquidity programs as warranted."
The Fed left the discount rate unchanged at 0.50 percent where it has been since December 16, 2008… Overall, today's report should be neutral to the markets since it was so close to expectations and there was no dramatically new language on the economy. ”
US GDP final report for 1Q09. Following the data release, Econoday reported, “For the Commerce Department's final revision to first quarter GDP, growth was revised up marginally to an annualized 5.5 percent contraction from the prior estimate of a 5.7 percent decline. The revised estimate came in higher than the market forecast for a 5.7 percent drop… The smaller decrease in real GDP in the first quarter than in the fourth primarily reflected an upturn in PCE and a larger decrease in imports that were partly offset by larger decreases in private inventory investment and in nonresidential structures… Year-on-year growth for real GDP contracted by 2.5 percent, after falling 0.8 percent in the fourth quarter… Turning to inflation, the GDP price index was unrevised at an annualized 2.8 percent which matched the consensus. The headline PCE index posted a 0.9 percent decline for the latest quarter while core PCE inflation came in at an annualized 1.6 percent increase… Today's report was largely as expected. As was the case last month, the upturn in consumer spending points toward getting out of recession soon as does the drop in inventories. Businesses will have to replace those down the road.”
US Jobless Claims for the week of June 20. After the data release, Econoday reported, “The labor market appears to be improving in June but, based on jobless claims data, the degree of improvement is limited. Initial claims rose for a second straight week, up 15,000 in the June 20 week to a higher-than-expected 627,000. Add to this a 4,000 upward revision to the prior week. The Labor Department noted the latest week included unexpected claims from the educational services sector, a sector that often shows seasonal variability at the end of the school year. Continuing claims, after finally breaking a six month streak of week-to-week increases in last week's report, were unable to show a second week of improvement, up 29,000 in the June 13 week to 6.738 million… A mid-month to mid-month comparison with May shows initial claims lower by 24,000 and by 13,000 for the four-week average. On the continuing side, the comparison shows a 13,000 improvement with however the four-week average up 161,000. There was no reaction to today's report which was posted along with a slightly better-than-expected first-quarter GDP headline. May's payroll report, offering the firmest evidence yet of economic improvement, was a blockbuster for the financial markets. June's report, at least based on claims data, looks to be less spectacular.”
US Personal Income and Outlays for May. After the release, Econoday reported, “Personal income in May surged far more than expected but it was nearly all related to temporary fiscal stimulus. However, consumers did open up their wallets for a modest spending jaunt. Personal income posted a huge 1.4 percent gain in May, following a 0.7 percent boost in the month before. The rise in the latest month topped the market projection for a 0.4 percent increase. The advance in personal income was led by one-time payments under the American Recovery and Reinvestment Act of 2009. However, the wages and salaries component slipped 0.1 percent after an increase of 0.1 percent in April. Consumer spending actually made a moderate comeback with a 0.3 percent gain after no change the month before. The May spending boost matched market expectations… The boost in consumer spending was led by a 0.8 percent jump in durables in May after dropping 1.3 percent the prior month. For the latest month, non-durables rebounded 0.5 percent, following a 0.3 percent decline in April. The services component was flat in May after jumping 0.4 percent the previous month. Spending growth has been lagging income growth as indicated by large spike in the personal saving rate to 6.9 percent in May from 5.6 percent in April and 4.3 percent in March. Consumers are being cautious with the one-time payments from a special Social Security based stimulus package (which is not being funded from the Social Security trust fund). However, the additional income will likely help consumption in coming months… PCE inflation remains quite modest. The headline PCE price index edged up only 0.1 percent, equaling the rise in April. Meanwhile, the core PCE price index eased to a 0.1 percent increase in May after gaining 0.3 percent the prior month. The markets had expected a 0.1 percent rise in core inflation… Year on year, personal income growth slipped to 0.3 percent from 0.8 percent in April. Headline PCE inflation eased to 0.1 percent from 0.5 percent the prior month. Year-ago core PCE inflation also slowed--to 1.8 percent from 1.9 percent in April… Today's report indicates that fiscal stimulus is bolstering the consumer sector somewhat-but not as much as hoped for as consumer spending is lagging the income gain significantly. But the unspent income will help support spending in coming months. Equities should like the numbers while bond yields rose on the news. But equities could head in any direction with the restructuring of the Russell 2000 and the end of the quarter looming.
”US Consumer Sentiment for June. Following the end-of-month data release, Econoday reported, “Consumer spirits are improving but only very slightly. The Reuters/University of Michigan consumer sentiment index rose 1.8 points from mid-month to end the month at 70.8, up only 1.9 points from May. The index had jumped nearly 4 points in May and nearly 8 points in April… The worst part of the June report is that expectations have stalled, at 69.2. Expectations often point to the future direction of the headline index. The current conditions index, the other component in the headline index, is improving, up 5-1/2 points at 73.2 -- the gain hopefully reflects improvement in the jobs market (note that Tuesday's consumer confidence report from the Conference Board will include consumer assessments of the jobs market). Inflation expectations firmed with 1-year expectations up 3 tenths to 3.1 percent. But the gain is seasonal, tied to rising pump prices during the driving season… Big gains for consumer confidence in April and May made for expectations that the big gains would continue into June, but they haven't at least based on the Reuters/University of Michigan report. The S&P 500 dipped about 3 points in reaction to today's report.”
Here are the key US economic reports on next week’s calendar.
US Chicago Purchasing Managers report for June. Ahead of the data, Econoday reported, “The Chicago PMI Business Barometer for May came in weaker-than-expected at 34.9. This reading was well below 50, indicating a significant month-to-month contraction in business activity. Signs are that the overall index will not be improving in June. New orders fell nearly 5 points to 37.3 while backlog orders fell nearly 11 points to a very depressed 26.3.”
US New Home Sales for May. Econoday opined before the data release, “Housing starts in May showed surprising strength-even in the single-family component. Starts rebounded 17.2 percent, following sharp 12.9 percent drop the month before. The May pace of 0.532 million units annualized was down 45.2 percent year-on-year and was above the market projection for 0.500 million units. The rebound in May was led by the multifamily component which posted a 61.7 percent comeback after falling 49.4 percent in April. But the single-family component gained 7.5 percent, following a 3.3 percent rise the month before… By region, the rebound in starts was led by a monthly 28.6 percent surge in the West. Other regions also saw gains with the South up 16.8 percent, the Midwest rising 11.1 percent, and the Midwest gaining 2.0 percent… Permits also made a comeback, gaining 4.0 percent in May after slipping 2.5 percent the month before. The May permit pace of 0.518 million units annualized was down 47.0 percent on a year-ago basis… Markets had expected some rebound in the multifamily component in starts but the increase was notably more than expected. But the really good news was the sizeable rise in the single-family component. This is good news for the green shoots advocates and should provide lift to equities. But before equity markets open in the U.S., we have to get past the industrial production release at 9:15 a.m. ET.”
US Consumer Confidence for June. In advance of the data, Econoday reported, “The Conference Board's consumer confidence index jumped sharply for the second straight month May, rising to 54.9 from 40.8 in April. Once again, the gain was lead by the expectations index component, which at 72.3 had risen more than 20 points for a second straight month. But the assessment of current conditions showed only the slightest improvement.”
US FOMC Meeting announcement. Ahead of the news, Econoday opined, “The FOMC announcement for the June 23-24 FOMC policy meeting is expected to leave the fed funds target range unchanged at zero to 0.25 percent-a range remaining since being put in place at the December 2008 policy meeting. Market focus will be on comments in the statement about the status of the economy and whether there are any changes in the Fed's goals for balance sheet purchases. Lately, the Fed has been aggressive with its purchases of longer-term Treasuries, agency debt securities, and mortgage-backed securities.”
US ISM Manufacturing Index for June. Before the data release, Econoday reported, “The Institute for Supply Management's manufacturing index continued to rise toward positive territory, improving to 42.8 in May from 40.1 in April. Although the latest reading is still in negative territory, it is the highest level since September 2008 at 43.4. Looking ahead, we may seen a further advance in June as May's new orders index crossed over into positive territory. The new orders index rose to 51.1 from 47.2 in April. The latest figure was the first time in 17 months that this index has topped the 50 breakeven mark, indicating actual growth in new orders.”
US Construction Spending for May. Ahead of the data release, Econoday reported, “Construction spending unexpectedly surged in April, advancing 0.8 percent after rebounding 0.4 percent in March. The boost in outlays in April was led by a 1.8 percent increase in private nonresidential outlays with private residential construction spending rebounding 0.7 percent. The public construction outlays component, however, fell 1.8 percent, following a 2.8 percent boost the month before. Looking ahead, the odds are greater for a decline that another gain. While, housing starts jumped 17.2 percent in May, the residential component in outlays will still be impacted by prior declines in starts of 12.9 percent in April and 9.2 percent in March. Nonresidential outlays are under downward pressure from low cash reserves with businesses while state and local governments are having revenue shortfalls. Meanwhile, federal fiscal stimulus for public construction has been slow to be put into progress.”
US Jobs Report for June. Prior to the release, Econoday reported, “Nonfarm payroll employment in May was unexpectedly and significantly less negative than in recent months, falling only 345,000. The number of job losses has actually shrunk four months in a row since January's 741,000 plunge. But the bad news was that the civilian unemployment rate jumped another five-tenths to 9.4 in May. There is speculation that the spike in unemployment was largely due to college and high school graduates not being able to obtain employment and due to the difficulty in seasonally adjusting jobless numbers this time of year. The May rate was the highest since 9.5 percent last seen in August 1983. Wage inflation remained very soft in May as average hourly earnings posted only a 0.1 percent gain. Looking ahead, job losses are likely to continue in June but the key question is whether the rate of job loss will slow. Although many analysts expect the unemployment rate to continue to rise, we could get a modest technical reversal in June as there is not as much of a surge in college graduates entering the job market.”
This report is usually published on the first Friday of the month, but markets are closed Friday for US Independence Day.
US Jobless Claims for the week ending 6/27. Ahead of data release, Econoday reported, “Initial jobless claims rose for a second straight week, up 15,000 in the June 20 week to a higher-than-expected 627,000. The Labor Department noted the latest week included unexpected claims from the educational services sector, a sector that often shows seasonal variability at the end of the school year. Continuing claims, after finally breaking a six month streak of week-to-week increases in last week's report, were unable to show a second week of improvement, up 29,000 in the June 13 week to 6.738 million. Looking ahead, we could see a downtick in claims related to educational services, pulling down overall initial claims.”
US Factory Orders for May. Prior to the release, Econoday reported, “Factory orders in April rose 0.7 percent with a jump in durables more than offsetting a slip in non-durables. Overall orders should post a sizeable increase in May, given that new factory orders for durables increased 1.8 percent in May and based on an uptrend in oil prices which should boost the dollar value of non-durables orders.”
Note that I put much time and effort into organizing and summarizing Econoday’s informative, concise, and objective reports because they actually teach people something that can be used in trading decisions. You must agree that Econoday does a stand-out job.
I leave the links in because, when published, the individual reports contain terrific charts and other information. When I think it is important, I try to add comments, but for the most part, Econoday does an exceptionally fine job.
Summary for the International equity market ETFs
Here are the links to interactive charts from Billcara2.com for the key country ETFs, which you can add technical indicators for as well.
Group 1:
(list one)
(list two)
Group 2:
(list one)
(list two)
Among the international ETFs this week, there was an interesting split. India, Hong Kong and China and Russia made significant gains while Europe especially and Canada and to a lesser extent the US were losers.
Next week, we have to watch for whether one group or the other fall in line. Which group will be the leader?
The world of money is quite small and getting smaller by the day. There are billions of dollars, euro, yen, etc, that will move in a heart-beat today. As I wrote a week ago, typically in a developing bear phase, it is almost always the case that the riskiest markets are the first to cave in.
I stated here in the past two weeks, “Unless the Daily RSI’s start breaking down here, the rally could continue. But the point is that this market is very overheated”. It remains hot, so it will pay to focus… In that regard, all ETN’s dropped on Friday, except for France, which gained +0.05%...” Then, “This week, those RSI-7 numbers dropped even more. Friday happened to be an up day for all these country ETFs (except China), so watch Monday morning in the overseas markets and the follow-through with the ETFs in New York. Any further decline in the RSI-7 will put serious pressure on the Bulls.”
So, yes, the Asian market ETFs did follow through this week, and the market is still undecided as to trend.
US Equity Markets Review
One week ago, the S&P 500 (-2.64% to 921.23), DJIA (-2.94% to 8539.73), NASDAQ (-1.69% to 1827.47) and Russell 2000 small caps (-2.68% to 512.72) were hammered. I said it was the second speed wobble in three weeks. Further, I opined that “nothing’s changed. It’s still Buyer Beware at this point. Until the S&P 500 drops decisively through 920 or closes modestly below it for three consecutive days, we still believe the market is in a trading range, albeit with a little more indication that prices are having difficulty holding up.”
This week, the S&P hung right around that 920 mark, closing at 918.90. There was a scare for the Bulls on Monday as prices collapsed, leaving the S&P to hit an intra-day low of 888.86 on Tuesday. But then the Interventionists bootstrapped the market higher as the Fed apparently bought most of the record Treasury offering of 2-, 5- and 7-year notes, leaving the bankers and their friends sufficient funds, oh say $100 billion, to pump the market back up. That’s cool; I’m just amazed that the price of gold didn’t soar on that news. Well, maybe it was because there wasn’t much news. We are told repeatedly the Fed is the most transparent market operator in the world, but we traders know they are one of the worst. Only their Wall Street cronies at JP Morgan and Goldman Sachs are filled in with what the Fed is up to. Otherwise, how would those firms be making billions every quarter.
So, it’s hurry up and wait – wait to see if world’s central bankers want the S&P to stay in the present trading range or what. The signs are good that they do. This week, the European Central Bank provided a new one-year credit facility to its banks of almost US$1 trillion (not quite but what’s a couple hundred billion here or there? Barney Franks wouldn’t know.) available at 1 percent. Now this isn’t overnight money at zero to one-quarter percent, which could be demanded back say overnight. No, this is almost a trillion laid out at 1 percent fixed for a year. Now, you tell me if there isn’t a single independent trader who could not make a fortune with that kind of money at a cost of one percent. So, the only conclusion I can come to is that, the day after the European equity market started to crash, the ECB pumps it back up with an amount of funds never before seen in Europe. Why? Because the major banks in Europe have still not raised the capital they need to withstand the next economic cycle when interest rates start to revert to long-term norms. Those banks need time to get themselves flush. If only they would all wave a flag when they deem themselves fit once again. Then, kitty bar the door because unless the economy is also back to normal – with 5% 10-year Treasuries, not the current 3.54%, and unemployment rates down to a what economists call full employment – then the equity market is going to fall.
In other words, the only things propping it up today are central bankers.
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 and NYSE.com web sites, 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
For these charts, at points in time when I think that market conditions might be changing, I’ll switch from RSI-7 to the more sensitive (but similarly constructed) indicator called Stochastics. These charts include the %K (fast) and %D (slow) stochastics. It will pay you to look at times when %K is above the %D and rising to stay with your price a bit. Let the force be with you. These charts show the numbers and the lines, so it’s not rocket science to follow.
Sector 10 (energy: XLE, IYE, VDE, OIH, PBW and IXC)
Here’s the XLE Monthly, Weekly and Daily data charts:
XLE Monthly data: 
XLE Weekly data: 
XLE Daily data: Table 2: Senior oil & gas equities
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
The Crude Oil price dropped -$2.73/bbl a week ago. This week, there was a further loss of -$0.86/bbl (-1.23%) to 69.16. For a while it was looking worse, hitting a low this week of 66.37.
The energy sector ETF (XLE) was the worst performer a week ago, plunging -8.04% W/W, and this week it was also the worst performing of the ten sectors, falling -2.76%, closing at 47.85. The next worst was Industrials, which fell only -1.04%, and that was due to a certain aircraft called the Dreamliner that turned American industrial giant Boeing into a pipsqueak.
So this week, the heat was on the Oils as it were.
Two weeks ago, I gave a heads-up when I remarked, “XLE was 3rd best performer, and Crude soared +4.31/bbl…At the same time, the $USD fell -0.61% W/W, which helped contribute to the rise in the oil price… I noted some weakness in Exxon (XOM) as well, although the stock was up +1.1% W/W and held up +0.4% on Friday when the rest were getting hit.” Then the following week, Exxon (XOM) dropped -3.70% W/W and Chevron plunged -6.34%. This week, XOM and CVX dropped -2.81% and -3.10% respectively.
From a technical and fundamental perspective, I still think the Oils are the most vulnerable on the board should the S&P 500 not hold the 920 support over the next week or two. But as I wrote off the top, there has to be pull backs in the interest rate sensitive sectors and consumer and tech sectors as well if the S&P drops down out of primary support at 880.
There was nothing remarkable among the oil stocks other than the two I noted. Those two are the biggest market caps, so let them do all the talking unless you see some of the others up or down more than say 5% W/W and that didn’t happen this week.
As my surgeon once said, “If I can’t see it, I cannot operate.”
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 -0.84% to close at 25.85. A week ago, the hit was -6.96%.
Not even Friday’s weak $USD (-0.72%) helped push up XLB.
The winner in this group this week was Brazilian pulp and paper company Votorantim (VCP +8.8% because Friday’s gain was +5.2%).
The loser was the Brazilian base metals giant, Vale (VALE -3.7%).
Brazilian steelmaker Gerdau (GGB +3.9%) had a good week.
Within Basic Materials, I guess the rest of the world ex-Sao Paulo was sleeping.
Sector 20 (industrial: IYJ, XLI, VIS, and IYT)
Here’s the XLI Monthly, Weekly and Daily data charts:
XLI Monthly data: 
XLI Weekly data: 
XLI Daily data:
Table 4: Senior capital goods makers and transportation:
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
Industrials (XLI -1.04% W/W to 21.97) was 2nd worst performer of the ten sectors. It was 3rd worst a week ago, and 2nd worst two weeks ago.
Those durable goods orders may be improving, which is economist-speak, but the equity market is speaking too.
The best company stock performer of the lot this week was Fedex (FDX +7.7%). How many times have I written here that when the manufacturing/durable goods data comes in better than expected that’s when FDX puts the planes in the air as it were. The price lifts. And vice versa when that piece of economic data looks bad.
Talking about planes in the air or NOT. Boeing apparently has been building a Nightmareliner, which they are afraid to test fly. With 162,200 employees and revenues of $68 billion, Boeing is not an insignificant US manufacturer, and the 787 is their great American hope. That’s why BA tanked -13.5% this week. Not to put too fine a point on it; but 700 million shares just dropped $6.56 each this week. After trading in the 48-50 range, the price shot to a low this week of $41.09.
Do you recall June 21, when reviewing BA, I warned, “But let’s just see if the Dreamliner can fly…” My crystal ball at work I guess. Actually, the Dreamliner didn’t show up at the Paris Air Show and it wasn’t because the company didn’t want orders. Wouda, couda, shuda took on a new meaning with Boeing this week.
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 -0.65% W/W to 22.98) was pulled down by Friday’s loss of -0.61%. So the last day made the week. You’ll see the same thing in the S&P too.
Brunswick Corp (BC +10.0%) was a winner as if anybody other than BC cares. Yes, I admit it; I care.
Bed, Bath & Beyond (BBBY +8.8%) was up on strong results and so was JC Penny (+6.7%), but the latter was probably more to do with their friends on Wall Street. I can’t believe the action in that stock, something like a urinal handle in a sports stadium, non-stop.
Nike (NKE -10.3%) was stopped in its tracks. Swoosh… thud.
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 +0.61% W/W) closed the week at 23.03.
Kroger food stores (KR +4.1%) rang the cash register, but neighbor Walgreens drugstore (WAG -5.2%) did not. Go figure.
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 +0.91% W/W) closed at 54.09, which was second best sector performer. A week ago, IYH was the only winning sector.
A week ago I reported, “Myriad Genetics (MYGN -1.3%) was one of the few losers (again).” This week, MYGN dropped a further -7.2%.
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 |
This week, Financials (XLF -1.00% to 11.92) was 3rd worst sector performer.
A week ago I wrote, “The damage in the Financials this week came from the Swiss, Saudi and German banks (UBS -10.7%), Citigroup (:-) (C -8.7%) and Deutsche Bank (DB -7.6%). You see, they don’t have the Goldman clout in Treasury or the JP Morgan clout at the Fed.”
This week, UBS dropped a further -7.2%. Can you tell which banks need to get more financing in place?
India’s ICICI Bank (IBN +3.6%) was a winner this week. Of course, IBN did have a gain of +4.5% on Friday. Maybe they heard at the end of the week that my trading company is likely going to get into the market there in Hyderabad and Bangalore. At least, I’m talking.
http://en.wikipedia.org/wiki/Hyderabad,_Andhra_Pradesh
http://en.wikipedia.org/wiki/Bangalore
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 +0.22% to 18.16) and Semi-conductors (SMH -0.14% to 21.36) were almost stationary this week.
Among tech stocks this week, Indian or India-centric companies InfoSys (INFY +4.2%) and Cognizant Technology solutions (CTSH +3.4%) were the winners.
First Solar (FSLR -7.3%) got hit. Wait a day until the sun rotates in the sky, and FSLR will recover. Up, down, up, down… you think it would be tracking the sun.
Among the semi-conductors, Linear (LLTC +5.5%) was actually following a line north, while Advanced Micro (AMD -6.5%) was not advancing, obviously headed south.
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 +1.13% to 17.90) was the best performing sector. Amazing what 20 cents will buy you in America these days.
Large caps AT&T (T +3.2%) and Verizon (VZ +4.5%) worked well together this week.
A week ago, after T and VZ dropped in price, I remarked, “This Tuesday through Thursday, the Treasury is coming with a record offering of 2-, 5- and 7-year Notes. Ought to be interesting to see how much the Fed has to take down in order to keep rates low… Just might have an impact on the telcos.” Well, gollleee, as Jim Nabors would say. Imagine that. The Fed buys most of the Treasuries in order to keep rates down (2-year down -10 basis points; and 5-, 10- and 30-yields down -24, -23 and -17 bp respectively) and bingo the telcos lift.
http://en.wikipedia.org/wiki/Jim_Nabors
So, this is another one of those market relationships you need to remember. After you ring up about 100 of them, I assure you that your cash register will be ringing too.
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 +0.91%) closed at 27.72, up from 27.47 (I noted a typo in last week’s price).
Not much happening here except that the lower yields in the fixed income market did help boost the prices of high dividend paying utilities and telcos.
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 | 0.14 | 0.15 | 0.15 | 0.14 |
| 6 Month | 0.27 | 0.27 | 0.30 | 0.28 |
| 2 Year | 1.10 | 1.12 | 1.20 | 0.98 |
| 3 Year | 1.62 | 1.64 | 1.81 | 1.49 |
| 5 Year | 2.55 | 2.58 | 2.79 | 2.43 |
| 10 Year | 3.54 | 3.53 | 3.77 | 3.73 |
| 30 Year | 4.34 | 4.33 | 4.51 | 4.63 |
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 2yr AA | 1.49 | 1.32 | 1.58 | 1.09 |
| 2yr AAA | 1.20 | 1.14 | 1.27 | 1.01 |
| 2yr A | 2.35 | 2.64 | 2.32 | 1.77 |
| 5yr AAA | 2.21 | 2.29 | 2.52 | 1.89 |
| 5yr AA | 2.32 | 2.31 | 2.68 | 2.10 |
| 5yr A | 2.72 | 2.71 | 3.15 | 2.36 |
| 10yr AAA | 3.42 | 3.42 | 3.53 | 2.95 |
| 10yr AA | 3.64 | 3.57 | 3.58 | 3.26 |
| 10yr A | 4.34 | 4.19 | 4.57 | 3.45 |
| 20yr AAA | 5.17 | 4.71 | 5.25 | 5.16 |
| 20yr AA | 5.42 | 5.22 | 5.48 | 4.80 |
| 20yr A | 5.12 | 5.15 | 5.40 | 4.57 |
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 2yr AA | 2.08 | 2.28 | 2.53 | 2.24 |
| 2yr A | 3.11 | 3.22 | 3.24 | 3.54 |
| 5yr AAA | 2.95 | 3.16 | 3.23 | 3.03 |
| 5yr AA | 4.00 | 4.21 | 4.37 | 3.91 |
| 5yr A | 4.80 | 5.09 | 5.15 | 4.44 |
| 10yr AAA | 4.35 | 4.37 | 4.58 | 4.88 |
| 10yr AA | 4.91 | 5.02 | 5.46 | 5.04 |
| 10yr A | 5.87 | 6.16 | 6.35 | 5.99 |
| 20yr AAA | 5.83 | 5.92 | 6.09 | 6.73 |
| 20yr AA | 5.32 | 5.41 | 5.58 | 6.22 |
| 20yr A | 6.01 | 6.10 | 6.27 | 6.90 |
The 20-year Treasury Bonds (TLT +3.20% W/W to close at 94.62) lifted for a third straight week. With the previous Friday’s gain of +0.90%; the gain is about +6.2% over eleven days. Only the Fed can do that.
The 30-, 10- and 5- year yields closed the week at 4.34, 3.54 and 2.55, down from 4.51, 3.77, and 2.79, respectively, one week ago and from 4.64, 3.83, and 2.83 percent three weeks ago, so these yields have moved a lot.
The T-Bill yield closed the week down at 0.140, down from 0.150 a week ago, which had been up from 0.140 two weeks ago. Well gollee, only the Fed can keep a market so in check.
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 stumbled again, falling -0.59% to 251.31, after being down -3.61% the previous week, and -1.47% on the previous Friday, so in eleven days, there has been a loss of -5.7%. The Fed has even managed to do this as the $USD has fallen. Amazing. They must have friends on Wall Street who keep squeezing the hedge fund traders in oil and gold.
Actually, I suggest that, but mostly it’s a matter of market forces. The Fed is a powerful force in that they print the money and he who controls the money controls the market. One thing leads to another as I remarked earlier.
The 50d MA for $CRB is now up to 243.40, and the 200-day MA has dropped to 243.30. Did the Fed have 243.35 in mind?
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 dropped -$0.86/bbl this week to close at 69.16. A week ago the price sank -$2.73/bbl (-3.75%) to close at 70.02.
I remarked at the time, “The psychological 70 level was sliced through like a hot knife through butter on the way up. Now we have to see whether previous weak resistance will become weak support.”
For $WTIC, the 50d MA is at 61.79, up in six weeks from 51.85.
The 200d MA is now down to 58.03 from 64.84 six weeks ago, down from 80.84 just fourteen weeks ago.
Until a week ago, I had not changed my views on Oil for many months. We have now been selling and ready to go short if technical support does not hold up.
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
A week ago I wrote in this space, “Previously, $GOLD pulled back by -$40.10/oz after rallying into the 989-990 range a week ago.” This week, $GOLD gave back a further -$4.70/oz to close at 934.50, but there is a different feel to this market, as in it now looks ready to pop from a flat base.”
This week, $GOLD lifted +5.40/oz (+0.58%) to 939.90. At times, it looks ready to soar, but something is holding it back, probably the Fed, IMF and any number of Interventionists who are concerned that the $USD get too weak too quickly.
The gold 50d Moving Average is now at 928.97 and the 200d MA is 873.91, both rising.
Last week I wrote, “A week ago I remarked that on extreme weakness, we’ll be writing puts and also buying calls as higher precious metal prices are still likely. We started to do that.” With the early in the week pop in the price of gold, we closed those bullish short puts and moved into even more bulling long calls. Everything was fine until Friday.
But, let’s see what Monday brings.
$XAU, GDX and XGD this week were higher (+1.52%, +2.11% and +3.92%, respectively W/W). This week the $USD was down -0.60%, which fits.
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
This week, $SILVER dropped -$0.14/oz or -0.98% W/W to close at 14.08. That’s four straight weeks of losses, and I’m surprised that silver didn’t lead gold higher on the group reversal.
As before, we are buying the dips as our long-term outlook is still bullish. We like Silver Wheaton (SLW).
For $SILVER, the 50d MA is now 14.02, and the 200d MA is 12.82, both rising.
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 -$4.40/oz (-0.36%) to close that week at 1210.70, but the loss was unremarkable.
The 50d MA is now at 1179.26, and the 200d MA is at 1036.20.
Spot platinum chart for the week
Interactive Chart of Weekly Platinum EOD Continuous Contract Index:
Interactive Chart of Daily Platinum EOD Continuous Contract Index:
Interactive chart of the Platinum metal index.
$PALL gained +$1.05/oz (+0.43%) to close at 247.20.
The 50d and 200d MA is now at 237.39 and 211.76, respectively, so the present price is still higher than both the 50d MA and the 200d MA (ie, 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 gained +4.75 (+2.10%) to close at 230.90. Over the past five weeks there had been a gain of +41.30.
The 50d and 200d MA’s are 216.74 and 192.84, respectively, so technically the copper price is in Bull territory, just like the precious metals.
For those who are keen to study the industrial metals like copper, aluminum and zinc, why not look at the powershares DBB, which trades on the NYSE.
http://finance.google.com/finance?q=NYSE:DBB
Interactive Chart of Weekly Copper EOD Continuous Contract Index:
Interactive Chart of Daily Copper EOD Continuous Contract Index:
Interactive chart of the Copper metal index.
Table 12: Senior gold equities
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
The Goldminer indexes and ETFs this week were as follows: $XAU +1.52% to 143.80; GDX +2.11% to 39.20; and XGD +3.92% to 20.13. All had been very strong on the previous Friday, so I started getting near-term bullish.
We are still watching the $USD, the metals futures and spot prices and the peer group gold & silver miner stocks, to decide on re-entry points. Despite a setback this week, we do feel that the Great Reflation era has not come to an end – not even close. So, we are patient and stand aside while watching for indications of money flow returning to this industry.
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.
The $USD was down -0.60% W/W to 79.83, but there was a loss of -0.72% on Friday, so we’ll have to watch closely for Monday morning indications of direction.
Since $USD lost -0.34% on the prior Friday, that is a loss of -1.0%.
The 50-day MA of the $USD is now at 82.01 (still falling). The 200-day MA is 83.67 (still rising, but barely). The spread was quite narrow a couple weeks ago, but now is widening (bearish) even more.
As I remarked three weeks ago in this space: “If all the central bankers could act in unison, I’m sure we’d see a pronounced move in one direction or the other. But the fact is these central bankers are acting in opposition, so the markets are volatile when each country’s economy is being so closely scrutinized by their governments. I think they’d all like to see a lower currency to help exports and in-bound foreign direct investment and tourism. But they also don’t want to see commodity prices soar either… Meanwhile we wait to see what happens.”
Pro traders don’t take big stakes unless they see a break-out one way or the other. A break below 79 or above 83 would be major.
Interactive Chart of Weekly U.S. Dollar Index:
Interactive Chart of Daily U.S. U.S. Dollar Index:
The Euro ($XEU) rallied +0.89%) this week after a couple weeks of losing ground in its Bull phase, which explains the reversal of gold prices this week. The Euro closed at US$1.4057.
The 50d MA and 200d MA for the Euro futures are now 136.85 (still rising) and 133.65 (falling, but barely), respectively, so the present price is still well above both, meaning the Euro is in a Bull phase, but needs a rising 200d MA to be called a real Bull. As the spread narrows, the risks of a short-term reversal move decrease.
Interactive Chart of Weekly Euro Dollar Index, priced in USD:
Interactive Chart of Daily Euro Dollar Index, priced in USD:
The Pound lifted +0.23% W/W to close at 165.23. The gains in the past two weeks have not been much, but the week before that had a big gain against the USD (+3.0%).
The 50d and 200d MA is 156.54 (rising rapidly) and 154.10 (slowly falling), respectively, so it is in a short-term Bull phase, about to take on a full Bull definition.
Weekly British Pound Index:
Daily British Pound Index:
Weekly Japanese Yen Index:
The Japanese Yen ($XJY) soared +1.19% W/W to 105.10, after gaining +2.22% the prior week.
That is very hurtful to Japan’s manufacturing exporters like the auto companies.
The Yen’s 50-day MA is now 103.22 (rapidly rising) and the 200-day MA is 103.87 (rising). The current price is now above both the 50d and the 200d MA, so it’s in a Bull relative to the USD.
Typically, a Bull run for the Yen is the time when I have noticed that gold is under pressure. That relationship is only an observation of mine and not a fact (unless someone is able to prove a case empirically). But let’s watch what happens the next day there is a lower $USD and a Yen that is weaker than the USD. Will $GOLD pop?
Daily Japanese Yen Index:
The Canadian Dollar had been bearish in the past six sessions. Up until this week, there was a loss (-1.22% to 88.11) and the previous Friday’s loss was -1.60%. So that was a loss of almost -3.0% in six sessions, which is hard on the gold bulls. And this week the Loonie plunged -1.60% to close at 86.70, which is harder again on gold. Again, let’s see what happens to the price of gold when the Loonie starts to fly.
The Loonie 50-day MA and 200-day MA are now at 86.74 (rapidly rising from 84.57 three weeks ago) and 83.83 (falling), respectively.
Trading forex is a dicey game, but the price trends and cycles must be studied nonetheless as they serve as confirmations -- or anomalies -- of other prices. In the latter case, the relationship needs to be studied further.
Weekly Canadian Dollar Index:
Daily Canadian Dollar Index:
Here is the China Yuan (CNY) chart.
International Equity Markets Review
The international stock exchange indexes made modest changes this week.
Over the past six weeks, the UK FTSE moved from 4348.1 to 4365.3 to 4417.9 to 4438.6 to 4442.0, to 4345.9, and now to 4201.0, back below where it started.
The German DAX moved from 4737.5 to 4918.8 to 4940.8 to 5077.0 to 5069.2, to 4839.5, and now to 4776.5, which is also lower over six weeks.
Aussie All-Ords moved from 3758.9 down to 3755.4, but then up to 3813.3 to 3969.0 to 4061.5, before falling to 3894.4, and this week to 3899.5, which is just a tad stronger than it was six weeks ago.
HK’s Hang Seng moved from 16790.7 to 17062.5 to 18171.0 to 18679.5 to 18889.7, down to 17920.9, and now up to 18600.3, which is considerably stronger than six weeks ago, but weaker than three weeks ago. This is an exchange that seems to be able to more accurately forecast trends and cycles than most of the others. So, I’ll be watching to see if it gives back some of those gains early this week.
Shanghai moved down from 2645.3 to 2597.6, and then in a three day holiday shortened week up to 2632.9 and then to 2753.9, to 2743.8 and to 2880.5, before closing at 2928.2 this week, for a very healthy six week run. Shanghai was the only exchange index that lifted W/W a week ago.
Brazil’s Bovespa moved from 49007.2 to 50568.5 to 53197.7 to 53341.0 to 55558.2, and then down sharply to 51373.8, before closing this week at 51485.6, which was not much of a move.
India moved in four weeks from 12173.4 to 13887.2 to 14625.3 to 15103.6 to 15237.9, which was outstanding. But, a week ago, the Bombay BSE 30 Sensex index dropped to 14521.9, and then rallied to 14764.9 this week. So this index has dropped over three and four weeks ago.
I will repeat my remarks of the past month; “Caveat emptor.” A massive change in currency will likely send this equity market haywire. Unless the $USD collapses here – say below 79, which would send the Energy, Basic Materials and Industrials higher – I don’t see the broad equity market lifting in the US. A stagnant $USD will also continue to hold $GOLD from a possible move to former highs just above 1000, possibly keeping it in the 940-1000 range.
As with a week ago, “if you see India and Brazil exchange indexes move robustly higher along with the Cdn Loonie and the Aussie Dollar, with the $USD below 79, then we’ll probably have a continuation of bullish trends for equities and precious metals… Also watch the $SILVER price because if that one is lifting faster than the $GOLD price day to day then I don’t think the US equity market is going to fall to where we need to protect our portfolios with puts.”
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
In the US equity market, the bigger picture is still taking shape. A week ago in this space I remarked, “Volume is low. RSI-7 is now giving mixed signals, which follows a quite bullish phase,” indicating that prices were possibly ready to drop to test support levels (like S&P at 920), and that’s what happened.
Not much at all happened this week for the NASDAQ, DJIA, S&P 500 Russell 2000 small cap index. It was like watching paint dry.
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: AT&T (T), and Verizon (VZ), my two least favorites.
I still remember that movie when George Segal and Jane Fonda, I think, robbed the telephone company in front of the line up of customers paying their bills. The people in the theater cheered. How many years ago was that anyway? Has anything changed?
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 Jun. 26: next one is due Sept. 25)
Always before I study a company, I take a quick look at the Monthly-Weekly- and Daily charts:
http://billcara2.com/tkchart/tkchart.asp?stkname=T&ind=rsi&wt=3
http://billcara2.com/tkchart/tkchart.asp?stkname=T&ind=rsi&wt=1
http://billcara2.com/tkchart/tkchart.asp?stkname=T&ind=rsi&wt=0
The RSI-7 for the Monthly/Weekly/Daily is 32.2 / 49.1 / 63.1 vs the RSI-7 for VZ at 44.8 / 60.7 / 73.0, which could indicate that VZ has gotten ahead of the pack, and maybe due for a sharper correction.
I also look back at my previous notes, but now I see I had none because that was the weekend of the Cara Bahamas 2009 Conference, 13 weeks ago now. My, how time flies. Seems just like a telephone call, at the speed of light. :-)
As for my assessment of T and VZ, I believe they will have another leg down, but I would not go short because the Monthly and Weekly RSI-7’s are mid-range and rising. That means after another short-term pull-back, these two stocks ought to be fairly low risk purchases for the long run. As for me, I wouldn’t buy them (they lack the quality I’m looking for), but a series of put writes in a Bull phase ought to work out pretty well.
As for the Value Line analysis of AT&T, they lowered the Timeliness and Technical to 3 and 4 respectively in the past 4 weeks, but did the same for Verizon this week. That might cause some extra selling in VZ.
The T is trading at 24.82 and the report was written at 24.22 when the dividend yield was 6.9%. That’s very high and likely secure despite the relatively high payout ratio.
The T dividend will likely be $1.64 this year, up a tad from 1.60 in 2008, and likely not going to be more than about 1.68 in 2010.
Only mobile is selling well, but the company has a strong offering of wireless.
I can see more cost-cutting here, which means higher productivity. So, I’m not as negative as I usually am. It’s just not prime time for T to shoot higher.
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 Jun. 26: next one is due Sept. 25)
Here are the Monthly-Weekly- and Daily charts:
http://billcara2.com/tkchart/tkchart.asp?stkname=VZ&ind=rsi&wt=3
http://billcara2.com/tkchart/tkchart.asp?stkname=VZ&ind=rsi&wt=1
http://billcara2.com/tkchart/tkchart.asp?stkname=VZ&ind=rsi&wt=0
The RSI-7 for the Monthly/Weekly/Daily is 44.8 / 60.7 / 73.0 vs the RSI-7 for T at 32.2 / 49.1 / 63.1.
So after the next short-term pull-back, of these two stocks, I’d be writing puts in T as by then the RSI-7 across the three time horizons would be lower, meaning my risk is less.
The Value Line report was written at 29.54 and the stock is now 30.99, which was the #1 performer in the DJIA index this week. In fact, T was #3.
The dividend yield is about 6.0%, and the dividend is likely to increase from 1.78 in 2008 to 1.87 this year and maybe 1.95 in 2010.
Just like T, the high dividend protects the stock price on the downside as the cash flows of these companies are relatively stable.
Like T, the earnings of VZ are not exciting in terms of growth, but they are fairly stable.
One more leg down on the Daily charts and the stock will be looking very good for long-run positioning. I’d not buy the stock due to it’s lacking the quality I need, but I would consider writing a series of puts after every short-term price pull-back.
About Boeing (BA):
A week ago I wrote up Boeing, where I opined that I would not be interested in buying the stock, but if the plane was found not to be able to fly (for a while yet at least), there might be a sharp pull-back at which point maybe some put writes might be in order.
I don’t care much for the broad market trading environment in terms of making acquisitions right now, but if there were another pull-back, I would recommend a program of put writes, call purchases, and outright stock purchases. Of course, we all have to see whether the Dreamliner can actually fly as advertised. We shouldn’t have to wait long for that.
Well, there was a delay in the test flight this week and BA got hammered. You see, I think I can smell risk. I hate taking risk. BA is a good example. The stock plummeted -13.54% this week, closing at $41.88.
http://stockcharts.com/charts/gallery.html?ba
I might suggest some put writes, but I won’t. I haven’t looked at the stock at all this week. Too busy.
About the Oil stocks:
Two weeks ago, I wrote up some negative comments about XOM and CVX. Well, the Oil ETF (XLE) has been the absolute worst sector performer for each of the past two weeks, and XOM is down -6.41% and CVX down -9.25% over that time.
I wrote:
In the past 13 weeks, Crude Oil contracts have lifted in price from $47.03 to 72.75, which is a +54.7% gain, hitting a high this Thursday at $73.90. Pretty close to 75.Suffice to say that 100% of our extensive put writes programs (this past quarter) were enormously profitable. CVX, which has a beta of 0.90 increased in price +15.51% from 62.91 to 72.67, while XOM, with a beta of just 0.75 increased +9.79% from 67.20 to 73.78.
The difference here is the recent resistance to higher prices in XOM, reflected by the sharp drop in Daily RSI-7.
The XOM Daily RSI-7 has dropped below the 70 line, indicating a first level sell alert in the Distribution Zone. As the Weekly RSI-7 for XOM is just 65.0 and side-tracking, it is likely a time to lighten up or sell covered calls or sell call spreads or just sell the position outright. These are all bearish decisions, which will be dictated by oil prices, peer group price action, and broad market price trend and cycle analysis. I would not buy puts because the broad market direction is still up, and the price of XOM could fall back a bit, which would take the Daily RSI-7 down quite a bit, and then have another run higher. Meanwhile, in that possible event, time decay would eat you up, and you’d likely lose 100% of your premium.
Important:
My associate Pierre Brodeur has written up an extensive technical study of XOM that confirms the downward pressure in the short-term, but within a generally sideways trading pattern he anticipates. So, this is not a good time to buy calls, or even to take a long-term bullish position in the stock that will not become a more attractive entry point in future months.Pro traders make decisions all day every day, going with their overall assessment of capital markets and individual stocks. But, every move they make is, or should be, based on risk management. That is the reason I don’t like to buy puts unless it’s clear to me and you that we are looking at break-downs across the board and technical support levels are being smashed. At that point I know all those stop orders have been taken out, and the owners of those trades are psychologically down and maybe out. You may not want to hear this but it’s only when the market is writhing in pain do I want to kick it.
…One final comment about Exxon; it’s been called the world’s greatest company by the Goldman Sach’s analyst, and the greatest company in the history of the world by a Motley Fool analyst.
http://www.fool.com/investing/dividends-income/2009/06/12/the-greatest-c...That’s enough to scare me!
Then a week ago I added this comment:
Some of you were surprised I made that bearish call when I was saying we were buying the oil stocks, etc. Well, proof is in the pudding. This week XOM dropped -3.70% from 73.78 to 71.05. Now the Monthly RSI-7 is rolling over, about the spin downward to follow the Weekly and (recent) Daily. We stopped buying the oils and started selling.
It may be a tad early, however, to buy puts; but not by much.
Yes, I do see a time soon ahead, but not quite yet, when we will have to be aggressive in our pursuit to protect wealth. I feel that before buying puts you should wait until you feel the opponent’s pain before giving them a swift kick. This is down-in-the-trench combat you know.
At times like this; it’s your bayonet against theirs, and it’s not often they get into such a vulnerable position. “They” obviously are HB&B, and the hedge, pension and mutual funds, and “we” are the independent traders who want to manage personal wealth.
So, get locked and loaded. Under cloudy economic skies, and the noise of politicians whining, we’re about to get oil on our hands.
XOM is now down to 69.05 from 73.78 and CVX down to 65.95 from 72.67 over two weeks. I guess those puts would have worked out well after all. The problem is the risks were very high. Besides the premium has really come out of the put and call options going into the summer. Now is actually a better time to buy options; you just need to get the timing right.
The Dow 30 Company links in chronological order of the upcoming reports.
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)
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 May 22: next one is due Aug. 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 May 22: next one is due Aug. 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 May 22: next one is due Aug. 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 May 22: next one is due Aug. 22)
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 Aug 29)
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 Jun. 5: next one is due Sept. 4)
Chevron Corp [GICS 10, Dow 30]
(CVX: Google Finance file)
(CVX: Yahoo Finance file)
(CVX: StockChart chart)
(CVX: Billcara2 chart)
(CVX: ADVFN Financial Data)
(CVX: Value Line Report Jun. 12: next one is due Sept. 11)
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 Jun. 12: next one is due Sept. 11)
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 Jun. 19: next one is due Sept. 18)
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 Jun. 26: next one is due Sept. 25)
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 Jun. 26: next one is due Sept. 25)
Wrap-up:
Well, Cara Trading Advisors is a bit closer to being able to provide trading services to Canadians. Our associates, if we conclude this deal, are absolutely top drawer. Clients must, however, be Accredited Investors.
I have the current definition for Accredited Investor as set out in National Instrument 45-106, which applies in all provinces. E-mail me for a copy if you’d like.
I’ll start there and then I’ll move toward the rest of the market with a series of managed ETF’s that will be listed on the Canadian National Stock Exchange. That way, the public would be able to invest in ETF’s that fit their interest, in small amounts, like $1000, at a time.
But, we must walk before we run. First we must publish our performance results to date. We’ve doubled the S&P 500 performance since we started in late November through May, and we’ll have a good month for June as well. Our Sharpe Ratio, which is a measure of performance against volatility, will be very good. But, a major factor will be how relatively small cash we have committed to our positions during this period in the market when prices have been so unstable. Our clients sleep at night.
http://en.wikipedia.org/wiki/Sharpe_ratio
We are also in discussions to be represented in India as we will be in Singapore, Malaysia, Indonesia and Philippines. I guess that’s a pretty big step moving into Canada and India.
I am obviously proud of what we have accomplished, but the truth is that, in this free blog, I try to lay out the same strategies and tactics and stocks we trade in for the consideration of anybody who wants to take the time to read and follow along.
You see, I don’t believe trading is rocket science; it’s mostly just avoiding risks and exploiting extreme market movements. It’s about understanding price relationships. That’s really important.
With the right grounding, secondary school students can succeed at trading, and a couple teachers in top-notch schools have told me that they have done so after discussing this blog and following the disciplined ground rules if you will.
There is no question that I put a lot of effort into writing, but I also do the work to help my trading. It all fits. Putting it out there for you is my challenge to myself to continue to try to do better. Learning never stops. We are all students of the market, even me.
Tonight I expect to thoroughly review a couple thousand charts. I may add some notes tonight, but more likely will do that in the morning before the market opens.
Have a great weekend. btw, today is the 40th wedding anniversary for Pat and I!!
