[10:56pm ET Saturday] This was an impressive week for the New Age day trading market, false break-outs in both directions, trading done for the day in less than an hour off the opening bell, the rest of it just for show. It’s strange to be pondering events that seem so manipulated on this day, of all days, Independence Day in the USA.
What I think is happening here is that Humungous Bank & Broker (HB&B) is trying to stay in control of market trends and cycles, at least until they fill their coffers with new funds and where they have the time to see how the new securities industry rules and regs are going to play out.
But, the bottom line, I sense, is that HB&B has lost its trading edge, and now has to pump and dump daily to screw over the Great Unwashed. Now that the public realizes the importance of technical analysis and has killed the myth that was buy-and-hold (so-called) ‘investing’, what’s a banker to do?
I’ll tell you what I think is going to happen – just my observations from watching and reading the mainstream media, which is controlled by HB&B – and it’s not good for independent traders.
Ha, and you thought America was independent and free. Well, had you read my book Lessons from the Trader Wizard, you would have noted the People are really spenders first and thinkers second, only realizing later that spending more than after-tax income makes them dependent on banks, and also chattels of governments (federal, state and local) that spend more than they can tax and have to make up that deficit by borrowing, also from banks and the fortunate few who can afford to live on fixed income even at ridiculously low yields.
Now that we know our place in the world order – slaves mostly – just when we start to get ahead by beating the trading pants off HB&B in the capital markets, we are, I fear, about to get burdened with a trader tax. If you want to day trade, ie, battle hand to hand in the trenches against these banks, you will soon have to pay a price in the form of a transaction tax that for all intents and purposes will be an eradicator of competition from the independent trader.
You see, when banks day trade, and they do and will continue to do that forever, regardless of taxation, because that’s how they make their profits, trading against the client, they will also pay that tax; but who really pays any tax on bankers? That, my friends, will be the customers, in the form of higher costs, and the shareholders, due to lower profits, who shell out. In other words, you will pay for the bank. The bankers will still compensate their staff the same personal bonuses regardless. In fact, now that the public is on to that bonus charade, the banks are doubling the salary components of their employees. Nothing, it seems, will keep those bankers down.
Now, as for you independent traders, you may soon find yourself paying transaction value fees, like a half percent in and a half percent out. If you are lucky enough to make say two percent on a short-term trade, if the added transaction tax is one percent and the income tax is much of the rest, you can see the uphill fight ahead. Moreover, that’s only if you are a good trader. If you happen to be one of the many – in fact probably the majority as studies showed about ten years ago that maybe 80 percent of day traders actually lose money – then you will still be hit with that asset-based transaction tax. The bankers’ lobbyists will not want a transaction income tax legislated because that would mean the majority of traders would have tax loss credits against other income, and so they might stay in the game.
Ultimately, the banks want to have this capital market to themselves and that’s the plan. It’s no different than the monopoly they have on banking and the use of the word ‘bank’; how they intend to treat you as an Asset Under Management (AUM) is with a number, just like an ATM number or credit card number. Yes, the only independence permitted will be your PIN number.
Now, all this is not happening just this week, and this is supposed to be a Week In Review, but it is happening and it’s on my mind. I haven’t a clue as to the legislation being drafted, but I can feel it in my bones. I know my enemy, and I know they are bullies who refuse to fight fair and square. It’s going to be up to us in this dark hour to pull together to fight the good fight.
Yes, we’ll have to look our elected representatives in the eye and tell them they are crooks who are taking money under the table from HB&B to give them legislation and securities industry rules and regulations that put us at a disadvantage. They won’t like that, but just like Barney Frank when accurately accused by Fox TV’s Bill O’Reilly of being bought off by Fannie and Freddie, it will be water off the duck’s back. These people are, after all, politicians and they know the public polls already show them as having less credibility than a used car salesman (not that selling anything these days is bad). So, they don’t care what you call them, including to their face. They will still lie through their teeth as we saw with South Carolina Governor Mark Sanford, who apparently thinks he has done nothing wrong. Isn’t his case all too common in politics?
http://www.miamiherald.com/news/politics/AP/story/1126722.html
Well, same for bankers. After changing their status from SEC-regulated investment bank to Fed-regulated bank holding company so they could take down tens of billions of taxpayer monies from the US taxpayer, these banks are now stating, quite clearly, they never really needed those funds, but Treasury Secretary Paulson made them take billions. Why? They refuse to honor the deal with the warrants sold to the government along with the stock they now, profits in hand from trading those billions in capital markets, intend to repay to Treasury. You see, no longer is a transaction a transaction once a banker is involved. It’s a maybe transaction. It’s either they win or else you lose. Bankers don’t lose unless they are incredibly stupid, and stupid people don’t get to head these banks. And, with their people ensconced in the White House and in many of the central banks of the world, these bankers do not intend to play fair and, with the help of legislators in Washington, they don’t have to.
HB&B caused the global financial crisis, along with their lackeys in the government, the regulators and the media who conveniently looked the other way as they greased the skids, and now they are busy re-writing the history books and creating PR campaigns, hoping the public soon forgets. But, je me souviens, I remember, and I hope you do too the next time you see legislation intended to shore up the defenses of HB&B.
On this historic day in America, we must understand that fighting for freedom is a continuous struggle. Yes, it’s important to celebrate freedom today because of the great people in history that won it for you – none of whom, to my knowledge, were bankers -- but freedom to be self-reliant is a precious notion that can also be taken from you unless you continue the good fight.
Now, let’s get focused on the events and price action of this week, the first one of the second half, one that is starting out with a lot of question marks.
At the end of the day, while I could be wrong, I think we’ll discover, despite Thursday’s rather large sell-off, there is still ample power in the US equity market to boost the S&P from 896 to 950, and perhaps even 1000, but beyond that there are still numerous negative economic and corporate issues that need to be addressed and resolved. After the shocks of 2008 and February-March 2009, market stabilization may take time. It’s a process. So I continue to look for sector rotation as the S&P tests 880, and briefly lower possibly as short sellers get set up to be squeezed.
Yes, I see 880 ahead. After all, that’s only 16 S&P points (-2%) away. Whether this test is a legitimate break-through to the cyclical Bear phase that many believe is somewhere ahead nobody knows. If I see $GOLD spike to 1000 and then crash, along with $WTIC (Crude Oil), and a higher $USD, then, yes, I believe it will be game over for the Bulls and the lights will be turned out in the old ball park for a couple months.
But, you know me; I like to stay until the end of the game, to finish what I start.
Global Economics Review
Weekly International Economic Report.
Econoday reported,
Investors were inundated with a barrage of new economic data. And what they saw was a mixed bag of results — typical of economies reaching this stage in a business cycle. Although stocks ended the first half of the year with a whimper thanks to a disappointing U.S. consumer confidence survey, there was little to complain about in overall second quarter performance which reversed first quarter losses and a lot more. Many global stock markets had their best quarterly performance in more than 20 years, with a sharp rally from March lows that was powered by hopes of economic recovery. Emerging markets benefited from renewed investor appetite for riskier assets as evidenced by the Shanghai Composite which gained 24.8 percent on the quarter. Stocks have been buoyed by news that indicates a slower pace of contraction along with more stable financial markets… For the month of June however, the results were more mixed as many indexes declined, breaking their streaks of three consecutive months of increases. Most Asian indexes bucked the trend however, with only the Kospi and Sensex recording minimal declines while the Taiex fell back by 6.6 percent. The three European indexes were down for the month while in North America, only the Dow lost ground… For the week ending on Thursday, equities in Asia were mixed while in both Europe and North American stocks were down.
Here are the key US economic reports for the past week.
US Chicago Purchasing Managers report for June. After the data, Econoday reported, “Rates of contraction eased in what is still a very weak report from Chicago's purchasers whose headline PMI rose 5 points to 39.9. New orders rose but are still very weak, at 41.6 for a 4.3 point improvement that does point to continuing overall improvement in the months ahead. Contraction in backlogs also slowed as did price contraction. It's impossible to know how much the auto sector is affecting this report as the sample is small and includes an unknown mix of manufacturing and non-manufacturing companies. There was no reaction to the report which has been lagging steady and predictable improvement in the ISM's PMI which, by all indications, is on its way to a 50 reading sometime in the third quarter.”
US New Home Sales for May. Econoday opined following 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 Consumer Confidence for June. After the release of the data, Econoday reported, “The consumer sector appears to have crumbled in June, according to this morning's chain-store reports and most prominently by the Conference Board's consumer confidence index which fell 5-1/2 points to 49.3. This index, along with other consumer readings, had been showing big improvement as consumers grew increasingly less pessimistic on current conditions and especially on the outlook. But the expectations component fell back in June, down 6 points to 65.5. The assessment of the present situation, in another setback, fell nearly 5 points to 24.8… High unemployment and high gas prices are two central reasons for the pessimism. Those saying jobs are plentiful fell 1.3 percentage points to a microscopic 4.5 percent. Those saying jobs are hard to get rose nearly 1 percentage point to 44.8 percent. These readings are not promising for Thursday's employment report. Inflation expectations jumped 3 tenths in the month to 5.9 percent fed by a roughly 5 percent rise in pump prices during the month. There's no indication that concern over monetary inflation is at play in inflation expectations… This report points to another jump higher in the unemployment rate which in May stood at 9.4 percent. June was a damp month for the weather and from early indications looks to have been a poor month for green shoots.”
US FOMC Meeting announcement. Following the announcement, 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 ISM Manufacturing Index for June. Following the data release, Econoday reported, “The PMI rose as widely foreseen, up 2 points to 44.8. The index was expected to climb by roughly 2 points a month until hitting the month-to-month breakeven level of 50 sometime in the third quarter. But that view may have changed given a nearly 2 point decline in new orders to 49.2, a sub-50 reading indicating that a greater share reported a month-to-month decline than a gain… Customer inventories are very positive, down 2-1/2 points to 43.5 as more purchasers see inventories at their customers as too low. The separate inventories index, which measures inventories at respondents' firms, also shows de-stocking, at 30.8 for a more than 2 point fall. Continued de-stocking will limit future layoffs, which are continuing but at a slowing rate based on the employment index's 6.4 point improvement to 40.7. Production is an important plus in the month, up 6-1/2 points to 52.5 and is the biggest factor in the PMI's improvement… Inventories are drawing down while production is picking up in the manufacturing sector, key elements of the ISM's report on June. Another important factor is a big gain to a dead-even 50 reading for prices paid, one that will quiet concern over deflation. Markets showed limited reaction to the report, likely reflecting the weakness in new orders.”
US Construction Spending for May. After the data release, Econoday reported, “Construction outlays in May slipped back into contraction after April's unexpected boost. Construction spending declined 0.9 percent after gaining 0.6 percent in April. The fall in May was worse than the market forecast for a 0.5 percent drop. The reversal in outlays in May was led by a 3.4 percent drop in residential outlays, followed by a 0.6 percent decline in public construction. Nonresidential outlays gained 0.5 percent… On a year-on-year basis, overall construction outlays slipped to minus 11.6 percent in May, from minus 10.9 percent the month before… Overall, construction is still is in recession as homebuilders wait for unsold supply to dwindle, commercial builders are still hamstrung by reduced corporate profits, and public outlays have been curtailed by a decline in government revenues. On today's news, bond yields were little changed while equities eased slightly. But the markets had much to digest as the ISM manufacturing index improved and came in close to expectations while the pending home sales index edged upward. Net for the morning, the economic news points closer to the bottom of recession.”
US Jobs Report for June. Following the release, Econoday reported, “The labor sector continued to contract in June with payroll jobs falling more than expected while the unemployment rate rose just marginally. Non-farm payroll employment in June declined 467,000, following a fall of 322,000 in May and a decrease of 519,000 in April. The June contraction in jobs was worse than the market forecast for a 350,000 decrease. May and April revisions were up a net 8,000. Payroll losses were widespread… By major categories, goods-producing jobs dropped 223,000 in June, led by a 136,000 drop in manufacturing employment with motor vehicles & parts down 27,000. Construction decreased 79,000 while natural resources & mining slipped 8,000. Service-providing payrolls dropped 244,000 in June after falling 107,000 in May. Weakness was especially pronounced in professional business services which plunged 118,000. Notable declines were also seen in trade & transportation, down 51,000, and in government, down 52,000… On a year-ago basis, payroll jobs were down 4.1 percent in June, compared to down 3.9 percent the month before… Wage inflation was nonexistent in June as average hourly earnings unchanged after rising 0.2 percent in May. The latest gain was lower than the consensus forecast for a 0.2 percent rise. The average workweek slipped to an extremely weak 33.0 hours from 33.1 hours in May… From the household survey, the civilian unemployment rate rose to 9.5 percent from 9.4 percent in May and was lower than the consensus forecast for 9.6 percent. But the number of unemployed hit 14.7 million, a record high. The June unemployment rate is the highest since 9.5 percent for August 1983… The June employment report was only a little worse than expected net, taking into account the smaller-than-expected rise in the unemployment rate. Also, jobless claims released at the same time were not as bad as expected. Overall, the markets have to mull over a steep drop in payroll jobs in June versus an easing in claims at month end. Markets may go back and forth today, trying to decide the net impact of this morning's numbers. But at the release of the numbers, the focus was on the worse-than-expected payroll loss, with equity futures headed down.”
US Jobless Claims for the week ending 6/27. After the data release, Econoday reported, “June's payroll data are a disappointment but not jobless claims data which do show weekly and monthly improvement. Initial claims totaled 614,000 in the June 27 week, down 16,000 from the prior week for a 615,250 four-week average that's down nearly 17,000 from May's average. Continuing claims for the June 20 week totaled 6.702 million, down 53,000 from the prior week for a four-week average of 6.752 million which is a bit below where it was at the end of May. Stocks were retreating this morning as were commodities in reaction to the monthly employment data. But next week focus will return to this report and whether improvement in initial claims is extending into this month.”
US Factory Orders for May. Following the release of this data, Econoday reported, “May was a good month for manufacturing as orders jumped 1.2 percent to an adjusted $347.9 billion in the month. New orders for durable goods rose 1.8 percent while orders for non-durable goods, boosted only modestly by higher oil-related prices, rose 0.7 percent. May was a strong month for aircraft and defense excluding which orders were still very solid: machinery, a sizable group at $22.2 billion, was up 7.1 percent in the month while the larger computers & electronics group, always fighting against price depreciation, posted a rare gain… Outside of new orders, however, the news isn't so good. De-stocking slowed slightly but inventories still fell 0.6 percent in May. Yesterday's ISM manufacturing report showed deepening rates of de-stocking in June. Optimists say inventories will have to be restocked given the strength in new orders and wider outlook for economic recovery. But pessimists can warn that businesses are drawing down stocks in case demand does not improve… Shipments fell 0.6 percent while unfilled orders fell 0.2 percent. Despite all the contraction, the strength in new orders points to wider strength ahead. But the headline for the next report may come in flat given the flat new orders reading in yesterday's ISM report. May in many ways may prove a better month than June.”
Here are the key US economic reports on next week’s rather light calendar.
US ISM Non-Manufacturing report for June. Ahead of the data, Econoday reported, “The composite index from the ISM non-manufacturing survey edged up 3 tenths to 44.0 in May. This is the best reading since October 2008 which came in at 44.6. But looking ahead, we may see a modest reversal in June as the new orders index declined in May to 44.4 from 47.0 in April. The backlogs index also fell back, slipping 4 points to 40.0 in May.”
US Consumer Credit for May. Econoday opined before the data release, “Consumer credit outstanding contracted very severely in April, dropping $15.7 billion. The drop was about split evenly between revolving credit, down $8.6 billion, and nonrevolving credit, down $7.1 billion. Consumer credit has contracted three months in a row and in seven of the last nine months. Banks and credit card companies have been tightening available credit while consumers have pulled back on spending-either due to job loss or the fear of it. A positive number for May could indicate that consumers are starting to loosen up while another negative figure likely means the consumer is still retrenching.”
US Jobless Claims for the week ending 7/4. Ahead of data release, Econoday reported, “Initial jobless claims for the week ending June 27 declined 16,000 to 614,000. Continuing claims for the June 20 week totaled 6.702 million, down 53,000 from the prior week. After last week's worse-than-expected payroll job losses, markets will be paying closer attention than usual to the unemployment claims report.”
US International Trade for May. Prior to the data release, Econoday reported, “The U.S. international trade gap in April worsened to $29.2 billion from the $28.5 billion deficit the prior month as exports fell faster than imports. Exports declined 2.3 percent while imports slipped 1.4 percent. The widening in the trade gap was seen in both petroleum and nonpetroleum components. For May, oil prices jumped about $9 per barrel on a seasonally adjusted basis and this likely will lead to a spike in the petroleum deficit and overall deficit for the month.”
US Consumer Sentiment for early July. Prior to the data release, Econoday reported, “The Reuter's/University of Michigan's Consumer sentiment index rose a modest 1.9 points in May to 70.8 in June. While the gain is good news, the degree of improvement slowed from recent months. The index had jumped nearly 4 points in May and nearly 8 points in April. Markets will be giving the consumer sentiment report more attention than usual this report because the June consumer confidence index from The Conference Board actually fell back. Any news that the consumer is less worried about the economy will be welcomed by the markets-especially after the latest Conference Board report.”
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. 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, only India (IFN +6.74% W/W) was higher, but there was a big loss on the final day of the week (Thursday), down -3.91%.
Over the week, Hong Kong dropped the most (-3.54%), and all of that happened on Thursday.
Thursday was not a good day for the Bulls. The rest were down W/W from -1.2% to -2.7%.
A week ago I wrote here that Hong Kong, China and Russia made significant gains while Europe especially, Canada, and to a lesser extent the US, were losers, and that “we have to watch for whether one group or the other falls in line”.
Well, Hong Kong and Russia fell in line, with losses along with more losses from the others, but who truly knows whether this market is likely to rise or fall? I used to have lots of confidence in that regard, but decisions today seem to be made around a boardroom table of G-7 Treasury Ministers and Central Bankers, although Germany’s president would like to see that event be a matter for the G-20 to decide, which obviously would lessen the US impact in those negotiations.
US Equity Markets Review
Two weeks 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.”
A week ago, the S&P hung right around that 920 mark, closing at 918.90. There was a scare for the Bulls on that Monday as prices collapsed, leaving the S&P to hit a low of 888.86 on the Tuesday. But then, I noted, “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… 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… the only things propping it up today are central bankers.
Well this week, the S&P 500 dropped about -2.5%, although the issue was undecided until the final day of the week, when on Thursday the S&P dropped -2.9%, all at the start of the day. Why? As I say, who knows? The broad market looks like it wants to sink, but somehow doesn’t unless the selling spurt lasts about 30 minutes.
Just when you think it will get worse, there is a 30-45 minute pop at the next open and voila it’s a new game.
Who wants to trade like this? I know I don’t. I really do prefer to be fully invested, making decisions quarter to quarter based on corporate earnings reports and changes in important economic data series. But it is what it is. We independent traders didn’t cause the problems and we’re not the authorities who are trying, they say, to stabilize it.
At the end of the day, and I have been saying this for a couple years, the G-20 authorities need to establish a General Agreement on Currencies that permits fair trade and opportunities to plan trade between international corporations without governments and bankers intervening.
We may be traders, but assuredly the corporate decision-makers are miffed as well. And it’s not just the big corporate players, like the Japanese workers at Toyota, but all those down to the smallest, like the smallest Chinese manufacturing shops or the Canadian travel tour operators, the international meeting planners and convention people, and all business travelers.
Hotels today are in dire shape. People who cannot plan ahead, don’t travel. I read this week where possibly as many as 20% of hotel owners would be defaulting on mortgages by the end of 2010, which is incredible because the mortgage rates today are at record lows.
Yes, it is what it is because the Interventionists have failed the markets. Political power corrupts, obviously, and the people are paying the price. So, this situation is not just about whether the S&P 500 is lifted back to 950 or allowed to drop through 880, which will impact you and me; it’s about how a boardroom of politicians and bankers are holding the world at bay while they decide what to do next. It’s a travesty.
Sooner or later, this economic pressure will be felt throughout the market. Look no further than the two DJIA components analyzed this week by Value Line in the material I cover later. Employing a combined almost 500,000 employees, mostly in America, Home Depot (HD) and Procter & Gamble (PG), headquartered in Atlanta and Cincinnati a few miles apart on the I-75, in the heart of America, normally pillars of American business, are suffering. Revenues of Home Depot are going to be down about -$6.3 billion (-9%) and earnings down -20% this year. For P&G, the damage will be -$1.5 billion in lower revenues, and only with extreme cost cutting and more share buy-backs will earnings per share lift a bit. These companies are doing the best they can; this is no way to run America. Imagine what will happen to less financially strong, less ably managed companies. Many of them will take their turn in line at bankruptcy court, and nobody wins at that game – other than maybe a few lawyers.
I point out the realities here because there has been a partial retracement of the Bear phase and many people are thinking Bull market. But, just like higher prices for houses in 2005 didn’t do anything except cause higher property taxes and real estate transaction fees and led to speculative property flips with no increase in material wealth, higher share prices that are not supported by growth in revenues, cash flow, earnings and dividends are not sustainable. As we noted a couple years ago with real estate prices, speculative gains may be good for a short time, but end badly.
Think about this the next time you decide to chase a stock with a Weekly and Daily RSI-7 technical indicator above 70. If you plan to hold for long, you might want to emulate a banker or businessman and start reserving for losses.
Now these comments are directed to the US equity market, which is the topic. But it could also be for the UK, Western Europe and Japan as well.
The world is in a mess; I don’t care what the market indices are showing today. We are not going to have a normal economic recovery and that will negatively impact on the market because ultimately share prices must be based on fundamentals.
Technically speaking, look down through the Monthly charts below and note how many prices are running up against falling Moving Average lines and how many RSI-7s and MACDs are rolling over, as trading volumes decline.
No, this market is not out of the woods yet.
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.
Sorted by 1-Week Price Performance Symbol Close 1Day
Change1Day
%Change1W
%Change2W
%Change4W
%ChangeYTD
%Change3M
%Change6M
%Change12M
%ChangeYou 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. And when the %K crosses down through %D, it’s time to consider selling or taking other defensive action.
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:
Sorted by 1-Week Price Performance Symbol Close 1Day
Change1Day
%Change1W
%Change2W
%Change4W
%ChangeYTD
%Change3M
%Change6M
%Change12M
%ChangeFor the prior two weeks, the Crude Oil price dropped -$3.59/bbl. This week, there was a further loss of -$2.43/bbl (-3.51%) to 66.73.
A week ago, the $WTIC hit an intra-week low of 66.37. This week it was just 66.26, which is no weakness, and for a while on Monday and Tuesday, the price looked like it would pop. The intra-week high was in fact 73.38 set just two days before the end of the week.
The question now is, was the economic data so bad on Wednesday and Thursday or was this price movement more pressure from the Interventionists. Given that they have a massive quantity of oil and gold at their disposal, and they deal in zero-sum futures contracts with nobody but the taxpayer to cover the losses, I’d say the Interventionists can pretty much do whatever they want. It isn’t fair, but then life isn’t fair.
As I watched the Independence Day fireworks tonight from the barge at Sandals next door, I thought to myself that our freedom is a nice concept in theory, but the bottom line is that most people are locked into debts of one kind or the other. I live here, but how many Sandals guests arrived this week having paid cash – no debt – for their vacation?
So, for much of the time, we traders roll with the punches, trying to make a nickel hear, a dime there, while HB&B, the bankers tied into the Treasury and Fed, all-knowing as to the orders from above, can play we the people like a toy. If HB&B employees want to huddle and agree to pull their bids before the open on Thursday, no problem! They can buy call options on Wednesday and sell before the close on Thursday, recouping any loss on the day’s price levels. We can’t because we’re out of the room, out of the deal.
The theme today, as you have already noted, is that bankers don’t lose, which is why they keep the public and governments that are beholden to them (for continuing loans) under their firm control. If their clients truly believe that financial freedom does exist, it’s not for a banker to upset the applecart. Let the fireworks play on.
So, with a third straight week of lower crude oil prices, it follows that XLE, the Energy sector ETF, was the worst performer of the market’s ten sectors – for the third week in a row.
Three weeks ago, I gave a heads-up when I remarked, “XLE was 3rd best performer [of 10 sectors], 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.”
I felt in my gut we were being deceived. Now you now see the fall-out: the following week, Exxon (XOM) dropped -3.70% W/W and Chevron plunged -6.34%. A week ago, XOM and CVX dropped -2.81% and -3.10% respectively. This week the damage was -2.0% and -3.7% for XOM and CVX respectively. These are big hits to market cap for a couple of the world’s largest corporations. In fact a lot of capital was lost in every sector of the US market this week.
I did give you a heads-up a week ago when I wrote, “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.”
It took four days for the S&P 500 to drop from 919 to 896.
XLE closed down -4.25% W/W to 46.16. My entire monitor shows red.
How you trade the Oils now depends on whether or not you think the G-8 leaders will decide to continue to prop the market with another reflation play. No pump job, no oil and lube, and no lift for the metals, and probably more weakness for the Financials. What’s left to hold the S&P at 880?
But will Russia agree? Are these North Korean missiles part of a bigger plan?
Pump job and we ought to have a lower $USD, and you know the rest.
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:
Sorted by 1-Week Price Performance Symbol Close 1Day
Change1Day
%Change1W
%Change2W
%Change4W
%ChangeYTD
%Change3M
%Change6M
%Change12M
%ChangeBasic Materials (XLB) this week dropped -2.75% to close at 25.15. For the two weeks before that, the loss was -8.0%, so for three weeks, the Materials seem to be like ice cubes on a hot Caribbean beach, melting away to nothing unless the Interventionists decide to step in by lowering the $USD.
I guess we’ll be watching Teflon Timmy on TV on Friday. Your serve, Maestro.
We can’t tell what you are likely to do Tim because this week was a downer for the $USD until Thursday, the point you made a grab for dollars, squeezing out the market (+0.76% on Thursday to leave $USD up +0.54% W/W).
That’s nailing the oil drum shut, or the chemicals and foodstuff drums as is the case with Materials.
Massive South Korean steelmaker Posco (PKX +1.1%) was up W/W, and thanks to a deal between China Investment Corp for 17% of the equity of Canada’s coal and base metals giant Teck Corp, TCK lifted a bit (+0.6%).
But for the most part, Alcoa (AA -8.0%) showed that more than just the Stanley Cup party was over and done with in Pittsburgh. AA had plenty of company.
Of course the tide will turn when the People decide to replace their ten-year old autos, and we’ll start to see that when employment rises and people start spending (not saving for the next rainy day). Or maybe it’ll happen when Americans get to feeling like they live in the 3rd world and decide to trade in their clunkers for dollars -- $3500-4500, I hear.
Courtesy of the taxpayer.
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:
Sorted by 1-Week Price Performance Symbol Close 1Day
Change1Day
%Change1W
%Change2W
%Change4W
%ChangeYTD
%Change3M
%Change6M
%Change12M
%ChangeIndustrials (XLI -3.17% W/W to 21.36) was a downer. Was this just a durable goods order issue or just a day like Thursday when people decided to hold their bids for the first 30 minutes of trading?
As I wrote here a week ago, “Those durable goods orders may be improving, which is economist-speak, but the equity market is speaking too.”
And so on Thursday, out pops a pretty good manufacturing orders number (did you see that above), but that accompanying Employment Report was the one that had traders talking.
Boom; S&P down -2%, right off the top! Yes, Thursday was a tough day.
The best company stock performer of the lot this week was 3M (MMM +2.3%). I guess the news of the previous week’s durable goods data took a little longer to go from Washington to Minneapolis-St. Paul.
I’d really like to know when Goldman Sachs has the Boeing Dreamliner’s test flight scheduled. If I knew the date in advance, I’d have no problem affording the trip to the big event. Why I could even afford to cover the costs of Senator Pelosi’s fuel for her flying machine.
The rest of us were down in the trenches this week with Caterpillar (CAT -8.0%). We’re down (to 896 on the S&P); the question is will the Interventionists help us crawl back?
Did they help Lehman Brothers or Bear Stearns? If it’s in the best interests of Goldman Sachs and JP Morgan Chase et al, we’ll get that helping hand.
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
Sorted by 1-Week Price Performance Symbol Close 1Day
Change1Day
%Change1W
%Change2W
%Change4W
%ChangeYTD
%Change3M
%Change6M
%Change12M
%ChangeConsumer Discretionary (XLY -3.59% W/W to 22.29) was pulled down by something we all know, which is that too few people in America have jobs, secure mortgages, financial freedom and the freedom to ring those cash registers. We knew all that before Thursday’s loss of -4.05%. So, yes, the last day made the week again in this sector, like it did a week ago.
Whirlpool (WHR +2.9%) was up – the only one in my Cons. Discretionary monitor – because… why? Well, maybe Obama has the people hoping for a new washer-dryer and somehow they have translated their dreams to actions – even if they have no money to do the real deal.
Kinda like Oprah, and not Dr. Phil.
Tata (TTM -11.4%) was a shocker on the downside because India, where Tata pretty much owns the country, was the only major country ETF that had a gain this week. So, here we go again; what’s up with these Indian stocks?
I had better learn soon because I am a step closer to moving my company into India – well I may travel there now and then, if I can get off my beach.
I love that Indian market – if only HB&B wouldn’t screw with it. It kind of reminds me of Hong Kong and Singapore 30 years ago – only the cities are named Hyderabad and Bangalore.
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
Sorted by 1-Week Price Performance Symbol Close 1Day
Change1Day
%Change1W
%Change2W
%Change4W
%ChangeYTD
%Change3M
%Change6M
%Change12M
%ChangeConsumer Staples (XLP +0.95% W/W) closed the week at 22.89, almost a win except for a loss of -2.10% on Thursday.
Of course, it’s now summer and people are drinking – alcohol or non-alcohol, doesn’t matter. The three winners on my Staples monitor were Pepsi, Coke and Guinness (I mean Diageo) (PEP +4.4%, KO +2.2% and DEO +1.8%).
And the winner is Pepsi. I wonder, is the Pepsi CEO still on the Board of the NY Fed – representing the masses of course. Jamie Dimon’s corporate side Mini-Me from hotsy-totsy White Plains.
The losers this week were led by Starbucks (SBUX -9.8%) and Whole Foods (WFMI -4.9%), which kind of tells you the people are holding back any money to pay their mortgage rather than some triple-flavored latte and deli cheeses the names of which I can’t pronounce nevertheless afford.
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
Sorted by 1-Week Price Performance Symbol Close 1Day
Change1Day
%Change1W
%Change2W
%Change4W
%ChangeYTD
%Change3M
%Change6M
%Change12M
%ChangeThe Healthcare sector (IYH -2.44% W/W) closed at 52.74, which was bed-ridden by the -2.30% loss on Friday.
Myriad Genetics (MYGN -30.7%) was down but not out. The company managed to pull off a tax-advantaged spin-off, so nothing lost there.
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
Sorted by 1-Week Price Performance Symbol Close 1Day
Change1Day
%Change1W
%Change2W
%Change4W
%ChangeYTD
%Change3M
%Change6M
%Change12M
%ChangeThis week, Financials (XLF -3.29% to 11.47) was a drag on the S&P this week. Of course, the -3.45% loss on Thursday said it all.
This week, UBS dropped a further -7.86%. A week ago, the loss was -7.2%.
As I wrote a week ago, “Can you tell which banks need to get more financing in place?”
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 -1.98% to 17.83) and Semi-conductors (SMH +1.17% to 21.57) showed a bit of life until Thursday.
Among tech stocks this week, Juniper (JNPR +2.21%) and Cognizant (CTSH +1.29%) were winners. Big names like IBM (IBM -4.08%), Qualcomm (QCOM -3.58%) and First Solar (FSLR -3.31%) took relatively big hits. Cisco (CSCO), Oracle (ORCL) and Google (GOOG) were not far behind.
For the semi-conductor stocks, equipment supplier Novellus (NVLS +7.17%) was up a lot, but there was notable strength in ATML, KLAC, AMD, LLTC, LSI, and INTC as well.
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
Sorted by 1-Week Price Performance Symbol Close 1Day
Change1Day
%Change1W
%Change2W
%Change4W
%ChangeYTD
%Change3M
%Change6M
%Change12M
%Change
Sorted by 1-Week Price Performance Symbol Close 1Day
Change1Day
%Change1W
%Change2W
%Change4W
%ChangeYTD
%Change3M
%Change6M
%Change12M
%Change
Sector 50 (telecom: IYZ, VOX and IXP)
Telecom (IYZ -3.29% to 17.32) was a poor performer.
When Telecom was #1 sector performer a week ago I wrote, “Amazing what 20 cents will buy you in America these days.”
Treasury yields dipped further this week, but nothing was helping the market as all ten sectors nose-dived.
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 27.44, down -1.44% W/W. The loss on Thursday was -2.87%.
Not much happening here, though First Energy (FE) and Exelon Corp (EXC) did take losses of over -4% each on Thursday.
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
Sorted by 1-Week Price Performance. Symbol Close 1Day
Change1Day
%Change1W
%Change2W
%Change4W
%ChangeYTD
%Change3M
%Change6M
%Change12M
%Change
Bonds & Yields Review
Table 10: US Treasury Yields
US Treasury Bonds Maturity Yield Yesterday Last Week Last Month 3 Month 0.13 0.14 0.15 0.11 6 Month 0.28 0.30 0.27 0.25 2 Year 0.98 1.04 1.12 0.94 3 Year 1.47 1.54 1.64 1.48 5 Year 2.42 2.50 2.58 2.50 10 Year 3.49 3.53 3.53 3.61 30 Year 4.32 4.33 4.33 4.48
Municipal Bonds Maturity Yield Yesterday Last Week Last Month 2yr AA 1.11 1.10 1.32 1.38 2yr AAA 0.81 0.89 1.14 1.23 2yr A 2.19 2.05 2.64 1.95 5yr AAA 2.05 2.01 2.29 2.11 5yr AA 2.18 2.20 2.31 2.27 5yr A 2.77 2.54 2.71 2.47 10yr AAA 3.51 3.43 3.42 3.19 10yr AA 3.45 3.49 3.57 3.41 10yr A 4.15 4.21 4.19 3.87 20yr AAA 4.78 4.80 4.71 4.81 20yr AA 5.40 5.33 5.22 4.84 20yr A 4.88 4.79 5.15 5.00
Corporate Bonds Maturity Yield Yesterday Last Week Last Month 2yr AA 2.23 2.28 2.28 2.42 2yr A 3.24 3.37 3.22 2.99 5yr AAA 2.87 2.95 3.16 3.05 5yr AA 3.95 4.03 4.21 3.95 5yr A 4.87 4.84 5.09 4.47 10yr AAA 4.34 4.39 4.37 4.69 10yr AA 5.09 5.04 5.02 4.78 10yr A 6.24 6.07 6.16 5.50 20yr AAA 6.00 5.99 5.92 6.35 20yr AA 5.49 5.48 5.41 5.84 20yr A 6.18 6.17 6.10 6.53
The US bond market was subdued this week. The 20-year Treasury Bonds (TLT -0.14% W/W to close at 94.30) settled back a tad after lifting firmly for a third straight week.
The 30-, 10- and 5- year yields closed the week at 4.32, 3.49 and 2.42 down a bit from 4.34, 3.54 and 2.55. Most of the bond prices did rise a bit on the week and on Thursday. Even the TLT was up +0.23% on Thursday.
The T-Bill yield closed the week down at 0.130, down from 0.140 a week ago. The yields on bills have traded in an extremely tight range for several weeks now.
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
Sorted by 1-Week Price Performance. Symbol Close 1Day
Change1Day
%Change1W
%Change2W
%Change4W
%ChangeYTD
%Change3M
%Change6M
%Change12M
%Change
Fannie and Freddie are down to 59 and 65 cents respectively, even with the W/W gain of 8 and 12 cents. As friend of Barack Obama and Barney Frank, I suppose they will continue to trade on the NYSE in violation of the NYSE $1 minimum price rule.
Consumer Finance -USA -- Interactive Weekly Data Charts
Mortgage Finance -USA -- Interactive Daily Data Charts
Commodities Review
The $CRB index stumbled again, falling -2.17% to 245.86, after being down -5.7% in the previous eleven trading sessions. The selling continues.
The 50d MA for $CRB is now up to 246.48, and the 200-day MA has dropped to 240.52. But the falling price now is right on the rising 50-day MA, which ought to be a measure of technical support.
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 -$2.43/bbl (-3.51%) this week to close at 66.73. The loss on Thursday was -3.72%, which more than made the week.
For $WTIC, the 50-day MA is at 63.37, up in seven weeks from 51.85. This week’s move in the 50-d MA was considerable.
The 200d MA is now down to 57.48 from 64.84 seven weeks ago, down from 80.84 just fifteen weeks ago.
Until two weeks 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. A decision may have to be made soon.
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 gave back -$10.40/oz (-1.11%) to 929.50.
A week ago, Remarked, “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.”
To me, the gold market looks nervous as more countries are lining up to work a deal to remove the $USD as the world’s reserve currency.
The gold 50d Moving Average is now at 933.14 and the 200d MA is 876.67, both rising.
$XAU, GDX and XGD this week were down over -2% each (-2.64%, -2.27% and -2.09%, respectively W/W). This week the $USD was up +0.54%, which fits.
This is a tough market to trade. Let’s see what happens when the $USD falls.
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 plunged -$0.69/oz or -4.90% W/W to close at 13.39, close to its low of 13.29. That’s five straight weeks of losses for silver. Thursday was a loss of -2.72%.
Will Monday be kinder to the precious metals Bulls? Stay tuned; the answers will be forthcoming from the G-7 or 8 meeting coming up. Of course the decisions are made in advance and then the gang gathers for a photo shoot. They are politicians and lackey central bankers, after all.
For $SILVER, the 50d MA is now 14.14, rising, and the 200d MA is 12.23, now falling. The fact that the price is now less than the 50-d MA is a negative. Many technical analysts are looking to the silver market for leadership in the precious metals, and are now calling for a Bear phase.
I’m still in the Bull camp, awaiting one more Bull cycle run, although it might be a brief one.
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 -$17.40/oz (-1.44%) to close that week at 1193.30.
The 50d MA is now at 1180.50 (rising), and the 200d MA is at 1036.41, both barely rising (ie, still bullish though).
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 +$5.95/oz (+2.41%) to close at 253.15. That’s a gain of +$7.00 in two weeks (9 trading sessions).
The 50d and 200d MA is now at 239.23 and 212.07, respectively, so the present price is still higher than both the 50d MA and the 200d MA (ie, a Bull), which are each rising.
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 0.35 W/W (-0.15%) to close at 230.55.
The 50d and 200d MA’s are 218.32 and 191.17, respectively, so technically the copper price is in Bull territory, although within a flat trend.
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:DBBInteractive 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
Sorted by 1-Week Price Performance Symbol Close 1Day
Change1Day
%Change1W
%Change2W
%Change4W
%ChangeYTD
%Change3M
%Change6M
%Change12M
%ChangeThe Goldminer indexes and ETFs this week were as follows: $XAU -2.64% to 140.00; GDX -2.27% to 38.31; and XGD -2.09% to 19.71. I had started getting near-term bullish, but along came Thursday when $XAU (-3.00%) and GDX (-2.79%) screeched to a pre-holiday weekend loss as the $USD soared +0.76%.
Thanks Timmy. You made my weekend. NOT!
A week ago I had noted, “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.”
I had been looking for a good time, but for a short time, as I remarked in the daily blog, but alas I was caught out on the Thursday. The consolation is that one day doesn’t make a trend reversal, down or up. I still like the look of the goldminer charts for a short-term move higher.
I am also still concerned about the holding power of the 880 support in the S&P 500.
It’s a tough call. Aren’t most of them?
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.
That was 30-40 years ago. You see; JP Morgan controlled the Fed back then too. Nothing’s changed. Jamie Dimon is just the latest front man. Looks good though doesn’t he.
I believe you cannot trade commodities that are priced in $USD without studying forex movement. So, forex is important.
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 up this week +0.54% W/W to 80.26, but there was a gain of +0.76% on Thursday, so we’ll have to return Monday morning for indications of any further lift in that direction.
Since $USD lost -0.72% on the prior Friday, though, the $USD is still down over the past five sessions. So, take Thursday with a grain of salt or rice if you have it. I do. Every couple months I go to the wholesalers to buy two 20-lb bags of fragrant Jasmine rice from Thailand, from Sun Lee.
I’d rather pay in Thai baht, but here the price is in B$.
http://en.wikipedia.org/wiki/Thai_baht
The 50-day MA of the $USD is now at 81.50 (still falling). The 200-day MA is 83.68 (basically flat with the prior week). The spread continues widening (bearish).
A break below 79 or above 83 would be major.
Interactive Chart of Weekly U.S. Dollar Index:
Interactive Chart of Daily U.S. U.S. Dollar Index:
The Euro ($XEU) pulled back -0.40% this week after a loss of -1.04% on Thursday.
That extreme Euro sell-off explains the sell-off of gold prices on Thursday. The Euro closed at US$1.4001.
The 50d MA and 200d MA for the Euro futures are now 137.72 (still rising) and 133.63 (falling, but barely), respectively, so the present price is still well above both, meaning the Euro is still in a Bull phase, but needs a rising 200d MA to be called a real Bull.
As the spread narrows, the risks of a short-term reversal move decrease.
Interactive Chart of Weekly Euro Dollar Index, priced in USD:
Interactive Chart of Daily Euro Dollar Index, priced in USD:
The Pound dropped -0.82% W/W to close at 163.87. Not much was happening with the Pound in the past two weeks until this loss.
The 50d and 200d MA is 158.03 (still rising rapidly) and 153.83 (slowly falling), respectively, so it is in a short-term Bull phase, about to take on a full Bull definition if, as and when the 200-d MA begins to move higher.
Weekly British Pound Index:
Daily British Pound Index:
Weekly Japanese Yen Index:
The Japanese Yen ($XJY) dropped -0.82% W/W to 104.24, although there was a gain of +0.71% on Thursday.
That weekly loss offer a respite to Japan’s manufacturing exporters like the auto companies.
The Yen’s 50-day MA is now 103.40 (rising) and the 200-day MA is 104.07 (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 for the Yen is 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).
It continues to happen day in and day out, though.
So, 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 sank on Thursday (-1.06%), taking the Loonie for a loss on the week (-0.72% to 86.08).
That is a loss of almost -5.0% in ten sessions, which is hard on the gold bulls. 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 respectively at 87.16 (rapidly rising from 84.57 four weeks ago) and 83.69 (falling).
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, with an anomaly, 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 again this week, some lifting and some falling.
Over the past seven weeks, the UK FTSE moved from 4348.1 to 4365.3 to 4417.9 to 4438.6 to 4442.0, to 4345.9, to 4201.0, and now up to 4236.3, but still 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, to 4776.5, and now down further to 4708.2, which is lower over seven 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, then to 3899.5, and now down to 3826.6, which is just a tad stronger than it was seven weeks ago. Clearly not a strong Bull.
HK’s Hang Seng moved from 16790.7 to 17062.5 to 18171.0 to 18679.5 to 18889.7, down to 17920.9, then up to 18600.3, before falling this week to 18203.4, which is still much stronger than seven weeks ago, but also much weaker than four 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 continue to watch it closely.
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, to 2880.5, to 2928.2 and now to 3088.4 this week, for a very healthy seven week run. Obviously Bullish. Wonder why then that North Korean scud missiles poses no problem to Beijing, but has Washington worried about kaimu’s home town, so many more thousands of miles away?
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, to 51485.6, before dropping to 50934.7, which is not much of a move over seven weeks.
India moved in four weeks from 12173.4 to 13887.2 to 14625.3 to 15103.6 to 15237.9, which was outstanding. But, then the Bombay BSE 30 Sensex index dropped to 14521.9, rallied to 14764.9 a week ago and then further to 14913.1. So this index is in rally mode, but still down from four and five weeks ago.
I will repeat my remarks of a week ago: “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.” Well, as the $USD strengthened to 80.26 this week, gold has fallen to 929.50.
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)
Sorted by 1-Week Price Performance Symbol Close 1Day
Change1Day
%Change1W
%Change2W
%Change4W
%ChangeYTD
%Change3M
%Change6M
%Change12M
%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, but now threatening the lower technical support levels at S&P 880.
Two weeks 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 a week ago for the NASDAQ, DJIA, S&P 500 Russell 2000 small cap index. I remarked that it was like watching paint dry. And this week was much the same until Thursday morning when the market opened with a stumble after the negative US employment data was published.
There was something notable, however, earlier in the week as for on consecutive days there was a strong opening move in the first few minutes of trading, and then basically a flat line for the rest of the day. Each day was a mirror image of the previous one. But at the end of the week, the final result was determined by Thursday’s opening gap lower. Had Friday been a trading day, maybe there would have been yet another mirror image and the week could then have closed flat.
Who knows? I have the feeling that outside the boardroom of the Fed and Treasury, nobody other than their brokers at GS and JPM know much. It’s a tough market to trade. People who say that results are being accomplished in such a market environment are talking nonsense.
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
You can do this table yourself by entering the following string into the Summaries window at www.billcara2.com and then clicking on the link for Performance.
Sorted by 1-Week Price Performance Symbol Close 1Day
Change1Day
%Change1W
%Change2W
%Change4W
%ChangeYTD
%Change3M
%Change6M
%Change12M
%ChangeHere 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: Procter & Gamble (PG), which is a Cara 100, and Home Depot (HD), which a few years ago was one.
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 Jul. 3: next one is due Oct. 2)
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 Jul. 3: next one is due Oct. 2)
Always before I study a company, I take a quick look at the Monthly-Weekly- and Daily charts. I also look back at my previous notes in the WIR.
Here are the charts for PG:
http://billcara2.com/tkchart/tkchart.asp?stkname=PG&ind=rsi&wt=3
http://billcara2.com/tkchart/tkchart.asp?stkname=PG&ind=rsi&wt=1
http://billcara2.com/tkchart/tkchart.asp?stkname=PG&ind=rsi&wt=0The RSI-7 for the Monthly/Weekly/Daily is 34.3 (sidetracking) / 47.6 (falling) / 45.8 (falling), so it appears to me that in a falling market, PG will likely take another leg down. Over a couple months, the low RSI-7 values across the M-W-D time horizons would then set up a timely Buy.
For a quick look at the Monthly-Weekly- and Daily charts of HD:
http://billcara2.com/tkchart/tkchart.asp?stkname=HD&ind=rsi&wt=3
http://billcara2.com/tkchart/tkchart.asp?stkname=HD&ind=rsi&wt=1
http://billcara2.com/tkchart/tkchart.asp?stkname=HD&ind=rsi&wt=0The RSI-7 for the Monthly/Weekly/Daily is 42.1 (falling) / 39.5 (falling) / 34.9 (falling) 63.1, which puts HD into a comparatively weaker position than PG. This you might expect because PG is a Consumer Staple and HD is a Consumer Discretionary.
So, as for my assessment of PG and HD, I believe they will have another leg down, but I would not go short because the Monthly and Weekly RSI-7’s are in the low to mid-range levels.
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 would buy PG as a core element of a conservative portfolio. As for HD, I’ll pass. I didn’t like the fact that ex-NYSE CEO Richard Grasso was a Home Depot director from 2002 to 2004, and got too close to Home Depot founder and control guy Ken Langone who also became a director of the NYSE, where he was the leading supporter of Grasso in the Grasso-Spitzer war.
What I truly didn’t like was the Old Boys Club. Comparing Martha Stewart (and her piddling shenanigans) to these industry heavyweights would truly be a joke. No, I have no time for the OBC, and never have because I knew that one day it would be the reason why the NYSE would collapse. Now it’s just controlled by the Goldman Sachs OBC.
These guys wouldn’t recognize Main Street if it was sitting on the end of their nose. There was a time that Langone did, and I admit I loved the quality of the company. But in later years, under then CEO Robert Nardelli, the former Jack Welch Mini-Me who failed to reach the peak of the mountain at GE, Home Depot started making a series of bad decisions. Particularly galling to me was this extreme attempt to buy back shares at the very top of the stock cycle. I saw that as a take-out of the OBC, and I cringed. I wrote in the blog that companies don’t buy their stock at a long-term cycle top unless there is funny stuff going on. Many companies did, and after I wrote about it, you all saw the outcome. Actually was pretty sad.
I also opined that Nardelli ought to have gone on a training course at IKEA on his travels from GE in CT to HD in GA. The IKEA stores put to shame the warehouses they call stores at Home Depot. I enjoyed the times I was in IKEA, while I have walked away from the cash register in disgust at Home Depot. Now I recall the early years in Atlanta when the company was just getting started and I had a business there that I frequently visited. The experience showed me at the time why HD was a quality company. But in later years, the insiders wanted their money out I suppose and the place was never the same. Having said that, I still believe Home Depot is a gem in the hands of the right CEO and Board.
Now Procter & Gamble is a different story altogether. My respect for that company continues through the years. It’s a package of great brands. Solid management, financial strength, excellent operating metrics even while being constrained by the law of big numbers. Nothing sexy; but just like Goldilocks – not too hot; not too cold; just right!
Every now and then, the company makes a major acquisition, like they did in October 2005 with Gillette, and the deal works out on an accretive basis.
The company makes 15% of its sales from Wal-Mart stores, which is another top quality Cara 100 company. At the end of the day, it’s the company you keep that separates you from the rest and P&G has always been a leader.
Yes, revenues will fall in 2009 – it’s a tough economy – but earnings per share will likely rise from $3.50 to $3.70 according to Value Line, and dividends increase from $1.55 to $1.72. Given that the stock topped out at 75.20 and 73.80 twice in the past 18 months, and the operating metrics and financial strength have improved since then, the current price of $51.11, yielding close to +3.5% is not a bad deal for the long-term.
So, PG is a stock to accumulate and also over-write short calls after abnormal strength and short puts on extreme weakness, particularly with down-spikes at that point. If as Value Line projects as a hi-lo range of 105-85 by 2012-2014, and you are able to buy the stock in the mid to high 40’s, and continue to take in premium from put writes and the occasional call writes (when the stock gets frothy), then I clearly believe an annual Total Return (TR) of at least +26% is likely.
Just look down the brand list as shown in the Value Line report; are any of these products going to fail before 2014? Why even long-lasting Duracell is one of them (although I can’t understand how they lost the Bunny).
So, it’s now up to you to wait until PG hits the Cara Accumulation Zone and then focus in on the next Buy Alert. Then Buy.
A week ago, I was negative on the near-term outlook for AT&T (T) and Verizon (VZ) and this week T dropped -1.05% after a plunge on Thursday of -1.91% while VZ plunged -2.93% this week after a fall of -2.08% on Thursday.
At some point these prices will come to you and with the protection of a solid dividend you might think about writing puts. But for now, I am not focused on these telecom stocks because neither is in an accumulation or distribution zone at this point.
The Dow 30 Company links in chronological order of the upcoming reports.
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)
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 Jul. 3: next one is due Oct. 2)
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 Jul. 3: next one is due Oct. 2)
Wrap-up:
Bill Carrigan, writing his byline column in the Toronto Star this weekend, talks about secular trends and how they break myths and start dominant themes, which persist for many years. Although, due to space constraints, a bit disjointed, the article is an interesting and thought provoking read.
http://www.thestar.com/business/article/660766
Carrigan, an acquaintance of mine, says he thinks he knows just what the next dominant theme will be – which means he’ll likely write about it next weekend – but he invites your opinion. Feel free to write Bill at info@gettingtechnical.com and also please comment in the Cara Community blog.
A very good technical analyst, Bill offers his views of the Canadian market at this link: http://gettingtechnical.com/04_analysis/pdf_files/cfilter.pdf
Written for the trader who has a longer-term time horizon, his observations for the various Toronto Stock Exchange sectors are:
TSX Financials: some upside room left - a new bull but reduce & retain a core position
TSX Energy: some upside room left - a new bull but reduce & retain a core position – (see charts) note the long secular advance only has 2 bull cycles left -
TSX Diversified Metals & Mining: little upside room left - a new bull but reduce & retain a small position - like energy the long secular advance only has 1 bull cycle left - this is not a buy-and-hold group
TSX Materials: little upside room left as the up side target has been achieved… A new bull but reduce and retain a light position
TSX Industrials: much upside room left - a new bull - retain a core position… Favoured components are the rails and the infrastructure plays
TSX Information Technology: much upside room left - a new bull and retain a core position
TSX Consumer Discretionary: much upside room left - a new bull and retain a core position… Favoured components are Canadian Tire, Forzani, Magna, Tim Hortons and Thompson
TSX Consumer Staples: some upside room left - a new bull & retain a core position… Favoured positions are Jean Coutu, Shoppers and Viterra
TSX Telecommunications: much upside room left - a new bull - retain a core position… Favoured positions are BCE & Rogers
Another student of the great market technician Ian Notley, Bill’s technical work is based largely on Moving Average Departure Analysis (Notley’s term for MACD) and the Coppock Curve, with a bit of Gann thrown in, which I do believe are excellent tools for the longer-term oriented trader.
From his writing, it is apparent Carrigan believes the market is in a generally extended cyclical Bull phase within a secular Bear market, where that Bear will not terminate until sometime in 2010. That means, he believes there will be a cyclical Bear between now and sometime in 2010.
Apparently, as I read it, he believes the first up-leg in the next secular Bull will not be confirmed in the market until sometime in 2012. I read this stuff quickly, and I could be wrong on this. So do your own DD.
For the intermediate term, though, Carrigan believes traders should be under-weighted in Diversified Metals & Mining, Materials, and Financials (in that order, starting with the worst first) and over-weighted in Telecommunications, Consumer Discretionary, Consumer Staples, Information Technology, Industrials and Energy (in that order, with the best first).
Food for thought.
For those who are interested, the Canadian equity market, however, does not always move in lock-step with the US market. In 1982, I recall, the secular Bull started in Toronto in May, but the US market missed that move and started its Bull in August. One of the reasons of course was that Canada, being more commodity-price sensitive, endured a bigger crash as the 1970s commodity price boom came to an end. That pull-back in Canada in 1981-82 took all sector prices down sharply, so when the time was right for the disinflation-based Bull to move in, as interest rates were crashing – the Canada Savings Bond had been priced with an incredible 15% yield earlier that year -- the Financial sector took the lead.
And you only have to visit Toronto once to see who occupies the office towers at every major crossroads in the heart of the city – Royal Bank, CIBC, TD, Scotia Bank, and Bank of Montreal. In Canada, these banks are all-powerful, which makes it even more interesting that to head up the Bank of Canada, the government turned to Goldman Sachs executive Mark Carney.
You really have to wonder about this conspiracy stuff.
In any case, I didn’t set out to write so much about Canada on the US Independence Day 4th of July, but it was Canada Day on the 1st and I suppose you can take the boy out of the country, but not the country out of the boy, as they say.
Hopefully I’ll be able to negotiate an acceptable deal to get started managing Canadian portfolios this month. That would be nice.
Have a great weekend. Celebrate your freedom, America. Enjoy your fireworks tonight, as I did right in front of my door. I was told the cost was $20,000 for tonight, which is well shy of the $30,000-40,000 outlay by Sandals for their New Year’s Eve Party, which was fabulous.
As for me, I’m headed to Paradise Island in the morning where I’ll celebrate Kalik and Sands. Just a relaxing day.
Addendum: (i) This week I will have an extended and improved version of the Cara Bahamas 2009 Conference video linked to the blog, and hope to have the preliminary 2010 program linked as well later in the week, and (ii) We are making good strides forward in our plans to link directly to the blog the work of Vadym Graifer (coach), Pascal Willain (volume studies guru) and Stephen Wellman (kaimu, the inimitable freedom economist and junior stocks trader). As you know, the outstanding point-and-figure work of Pierre Brodeur is already linked. The ball is now in my court to improve the visibility of my associates.
Now, finally, I can get some sleep and then look forward to a couple Kalik and/or Sands. Not many, mind you, because I am losing weight and finally getting into the physical shape I should have been for the past oh 30 years…
