[12:05pm] Why we trade day to day and not month to month or year to year anymore was illustrated by my opening remarks in last week’s WIR.
The market is set to crash – first equities; later bonds – because HB&B is going to permit it. They are aware that the Glass-Steagall debate is on fire and about to burn them beyond recognition. They are livid and have decided to sell everything. This week I alone pointed you to the fact that while there was no interest at all for equities in any market of the world there was a huge pumping action that was sending bank stocks soaring. Banks in Japan, China, India, Greece, France, Germany, UK, Ireland, and everywhere I looked were bouncing from +2% to +10% for several days in a row, which was strange because the market indexes in those countries were dropping. I came to the conclusion it was the pump before the dump.
Same thing happened with the banks this week, but so far the market has not crashed, and would not possibly for a while. It didn’t take far into the week before we made that call.
Let’s return to what was obvious a week ago and what’s happened since.
[From WIR#44] What I noted in the blog and on the trading desk this week was that many buy signals from our system were quickly being hit with offers, reversing the cycle, pushing the stocks back into the Accumulation Zone. An AZ with a falling Daily RSI-7 is not particularly attractive. A stock with a falling Weekly RSI-7 as well is downright ugly.
I cannot begin to tell you how many ugly charts I am looking at. There are a couple industry groups or sub-groups that appear to be holding their own, but did you see that on Friday there was not a single Cara 100 company stock that lifted in price. That’s right: zero for 100. That followed Thursday when the broad equity market indexes were up +2%. Talk about night and day.
After hanging in suspended animation for five trading days from about Wednesday Oct 14, five of the past six have had losses. After hitting an intra-day high of 1101.36 on Oct. 21, the S&P 500 index closed Oct. 30 at 1036.19. That’s a drop of -5.92% in just over seven sessions. Friday’s loss was -2.81%.
A week ago, I noted an ominous Friday-Monday double down. Then Tuesday, Wednesday and Friday followed suit. A second in a row Friday-Monday double down would serve as a black flag to many traders; so watch Monday. HB&B either decide this weekend to give it another shot or else they have already made the decision to withdraw except for a well-timed pump and dump of their own stock to benefit their employees who management would not want holding the bag.
Alert! Alert! Plunge Protection Team (PPT) to the rescue!
As soon as we saw a repeat of the banks getting goosed big time in markets like Ireland, among many others, we knew it was still “game on”. Hearing that two dead-in-the-water British banks, in fact the UK taxpayer-owned banks, RBS and Lloyds, would be seeking capital, we were not at all shocked when the Bank of England reported that, ahem, even though rates sooner than later would have to lift, the central bank would first have to pump more liquidity into the system.
Guess where that liquidity goes. Well, by definition, liquidity is aka debt to the taxpayer on the one hand and, as we are discovering, money to Humungous Bank & Broker and from HB&B right into equities, on the other.
Doesn’t seem right, but central banks are the major players in capital markets these days.
Oh, you didn’t hear? The Fed’s trading room, now all 400 traders strong, is wielding the biggest ax these days, which happens to be $2 trillion big. No longer content to manage a few tens of billions with a couple traders intervening in the T-Bill market in order to “stabilize” the US Dollar, the Fed’s trading room now manages 20,000 individual securities.
If you haven’t read the article, which was highlighted in the Community Chat on Nov 3, here is the link:
http://online.wsj.com/article/SB125720947716624249.html
If you cannot read the whole article because it’s shown as a Subscriber Content Preview, then copy and paste the article headline (as follows) into your browser, which should give you the whole piece.
Brian Sack Engineers Big Moves at Fed
The $2T FOMC hedgefund is a sad state of affairs. Their Plunge Protection Team (aka Goldman Sachs and JP Morgan) wins and we lose. This market was ready to fall on Tuesday this week, but taxpayer money was used to hold it up.
As far as I am concerned, the concept of a free market is dead and so should Congress be for allowing this abomination to capital markets to continue. The ex-head of this FOMC hedge fund is Bill Dudley, the ex-chief economist at Goldman Sachs who then went on to replace Teflon Tim Geithner as head of the Fed Bank of New York. Before he departed he had beefed his PPT to over 200 traders, and now Brian Sack has it over 400.
http://www.newyorkfed.org/aboutthefed/orgchart/dud...
Congress ought to be ashamed.
You see, the Fed has scared the hell out of prudent folk so what used to be the safe-haven play into T-Bills is now a negative yield game, and the good folks are forced to either take their chips out of the market (art paintings and precious metal bullion seem to be the alternatives) or they are being forced to go along with the speculative pumping of equity prices, and of course the V-shaped hype that these Interventionists are spewing.
Now that most of the States and Counties of America are bankrupt, and unemployment is greater than at any time in 27 years, and more home-owners and renters as a percentage of all the people have been evicted from their homes than anytime in the past 75 years, we are told that stock prices are rising because conditions are not that bad.
Ha! I guess things are not so bad if you work in some government, education or not-for-profit organization job or, of course, at Goldman Sachs or you manage one of the hundreds of companies the government has bailed out. The rest of the people are left to hope, which is a unique concept in such a powerful country as America.
Alas, America’s gift to the world has turned from wealth creation to wealth distribution. I suppose that as long as the foreigners agree to pay for it, nothing will change.
That doesn’t mean to say you cannot make money in a country intent on wealth distribution. You merely need to position your people to be having government line your pockets.
This week, we discovered that over the 65 trading days of the quarter, banker Goldman Sachs were “blow-out” winners 64 of them. But are these people bankers, which they did to get more TARP money and avoid SEC regulation in favor of the Fed, or traders, which they have always been?
In a world where the huge majority of trades are now time-based contracts, mostly involving speculation, where there is one winner and one loser, Goldman has created a whole new branch of statistics, called the DNA of cheating. With so many daily gap openings followed by subsequent reversals, I think the probability of Goldman winning 64 in 65 is oh maybe one in 100 billion -- without of course knowing in advance the direction the market would take.
Does this concern the 32,000 employees at Goldman? Not unless their boss man hasn’t papered the FBI because he just parachuted a 29 year old, totally inexperienced, non-prosecutor, into the role as head of the SEC Division of Prosecution. When maybe two or three percent of Goldman’s traders – the rest of their employees, for lack of a better word, are back-ups, trainees, investigators, promoters, administrators and clerks – are able to conspire to make $10 billion gross earnings over 65 days scamming the market, that’s quite a record. Unfortunately, it should be called a rap sheet because most of that money came out of your account and mine, and your pension, your government, and your school’s endowment.
The mob rules -- at least as long as Goldman and the Fed are working in tandem, and they can keep the American People from thinking about what’s going to happen in the future to the prices of food, energy and clothing consumables, and homes, vacations, schooling, roads, police and fire protection, and heaven forbid taxes.
But all that is for us to ponder at another time. We are independent traders with no inside access to those in government who are planning our future, so, if we are going to play the game today, we have only to look at the cards dealt to us on the table, ie, the prices on the board. For us, it’s not a matter of hope, but of being practical in trading those prices and managing our portfolios.
On the current charts, there is clearly a step-up ladder picture with the S&P, each low higher than the preceding one, which is a sure sign of a Bull. So, until and unless the October low is violated, shorting remains a risky proposition.
Same parameters hold for next week; S&P over 1080, say, is a caution signal for shorts, while, on the other hand, breaking below the early October intra-day low of 1019 means the Bulls should pull in their horns.
Now let’s take a look at the details.
Global Economics Review
Weekly International Economic Report.
Econoday reported for the week ending Nov. 6: Investors were in a perpetual state of edgy vigilance last week as they waited for four central bank announcements and the U.S. employment report. All but the Reserve Bank of Australia indicated that rates would remain low for the foreseeable future. The RBA continued its new cycle of rate increases while the Bank of England raised its asset purchase ceiling to £200 billion and the European Central Bank hinted that they might end their extraordinary measures at the end of the year. And the Federal Reserve laid out its criteria on which their guidance for keeping rates low for an “extended period” is based. The three are low rates of resource utilization (read high unemployment), subdued inflation trends and stable inflation expectations… U.S. employment dropped more than expected by analysts and the unemployment rate jumped by more than anticipated Friday initially sending the dollar up in value against most major currencies and U.S. and European equities down while gold climbed to a new record high. While the U.S. and several countries in Europe have returned to growth, resources remain underemployed. Inflation is not an issue thanks to weak demand… All indexes followed here with the exception of the All Ordinaries (Australia), Kospi (South Korea), Nikkei and Topix (Japan) were up last week. Gains ranged from a low of 0.3 percent (STI of Singapore) to 5.6 percent (Shanghai Composite).
Here are the key US economic reports on last week’s calendar.
US ISM Manufacturing Index for October. Following release of the data at 10:00am ET, at 11/2, Econoday reported, “Coincident and lagging indicators, not leading indicators, gave a big lift to the ISM's manufacturing index which jumped more than 3 points in October to 55.7. Employment, a lagging indicator, was a standout, at 53.1 for a nearly 7 point gain to indicate, at a plus 50 reading, that manufacturers actually added to payrolls in the month. The rise in the workforce is in response to output needs as the production index, a coincident indicator, rose more than 7-1/2 points to 63.3. Inventories, like employment a lagging indicator, also gave a big lift to the index, rising nearly 4-1/2 points to 46.9 as the de-stocking phase in manufacturing moves to a restocking phase. Price increases were steady in the month, showing little change at 65.0 vs. 63.5 in September. Delivery delays were also stable, at a moderate 56.9… The major leading indicator in the report, new orders, showed month-to-month improvement but at slower rate for a second month in a row, at 58.5 vs. September's 60.8 and August's 64.9. The latest reading points to a lower month-to-month percentage gain in October for durable goods orders which jumped 1.0 percent in September. This is a major offset to other gains in the report, suggesting that forward momentum is not accelerating. But markets are definitely accelerating in reaction to the report, with stocks and commodities shooting higher, especially oil which has jumped more than $1 in immediate reaction to $78.”
Except for September and now October, forward momentum had been building all year following a cycle low in December 2008. Manufacturing apparently needs the continued tax incentives for home buyers, which is not a sustainable program.
US Construction Spending for Sept. Following the release of the data at 10:00am ET, at 11/2, Econoday reported, “Construction spending was sharply higher than expected for September but a large downward revision to August was essentially offsetting. Overall construction spending advanced 0.8 percent in September after slipping a downwardly revised 0.1 percent in August. The increase in September was well above the consensus forecast for a 0.2 percent dip. However, the decrease in August is now significantly lower than the original estimate of a 0.8 percent gain. The boost in spending in September was led by a 3.8 percent surge in private residential outlays. Private nonresidential declined 1.8 percent and public outlays decreased 0.1 percent in the latest month… On a year-ago basis, overall construction outlays slipped to minus 13.0 percent in September from minus 12.5 percent the previous month… Overall, housing continues a moderate recovery. However, now that housing is on an uptrend, the nonresidential and public sectors are still in recession and it may be some time before they turn up… Inclusive of revisions, September outlays were close to expectations. But there were other reports out at the same time that clearly were positive. Pending home sales spiked and ISM manufacturing rose further. Equities advanced on these other reports while Treasury yields firmed.”
Four months ago, this same report stated, “Construction spending declined 0.9 percent in May after gaining 0.6 percent in April. 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. Looking ahead, healthy gains in housing starts of 17.3 percent in May and 3.6 percent in June could push the residential component of outlays back up. But the public component is still being weighed down by declines in state & local government revenues and nonresidential outlays are on an easing trend due to lower corporate profits, less cash on hand, and cutbacks in commercial lending.”
As pointed out elsewhere, clearly the home-owner tax incentive program had a big impact, which is why it is being extended. The govt continues to hit the ‘easy’ button at the expense of taxpayers.
US Factory Orders for Sept. After the data release at 10:00am ET on 11/3, Econoday reported, “Factory orders rebounded strongly in September though the outlook for October, based on yesterday's ISM report, is less upbeat. Factory orders rose 0.9 percent vs. a 0.8 percent decline in August. September's gain was led by durable goods orders which rose 1.4 percent, data revised 4 tenths higher from the advance durable goods report issued last week. The non-durable goods component, boosted by chemical prices, rose 0.6 percent. Given October's gains in energy prices, the non-durables component is likely to show another gain in next month's issue of this report. But the slowing in the ISM's new orders index in yesterday's manufacturing report points to a smaller gain for October's durable goods component… Other readings include a rebound in non-defense capital goods orders though the outlook for further increases is uncertain given weak indications on business investment. Total inventories fell 1.0 percent but this reading may begin to turn given indications in the ISM report that manufacturers are beginning to phase out of the de-stocking cycle. Shipments rose 0.8 percent and will follow the lead of orders data in future months. Unfilled orders dipped 0.4 percent but are likely to begin firming given the turn underway in new orders. Though the turn is underway, early indications for the recovery of the manufacturing sector are moderate not robust.”
US Non-Manufacturing Index for Oct. Following the data release at 10:00am ET on 11/4, Econoday reported, “The ISM's non-manufacturing index shows little change in month-to-month activity, pointing to fractional but still very welcome growth for the bulk of the nation's businesses. The headline composite index came in at 50.6 vs. 50.9 with the business conditions index, akin to a production index, showing a stronger rate of month-to-month growth, at 55.2 for a 1 tenth gain. The new orders index offers even better news, up 1.4 points to a very solid 55.6. This index, in contrast to the ISM's new orders index on the manufacturing side, is accelerating and will hopefully continue to accelerate in the months ahead. Order backlogs were also higher, up 2 points to 53.5… Now the bad news. The employment index fell more than 3 points to 41.1 in what is a negative indication for Friday's employment report, and which for the markets, may prove to offset the broad strength of this report. Firms in the sample are not restocking as the inventories index fell 4.5 points to 43.0. Note however that outside of mining and construction, inventories are not a central area of concern for the non-manufacturing sample. Exports are also not a major factor for the sample which however is reporting a month-to-month increase, at 53.5 for a 5 point gain and a reflection of dollar weakness. Delivery times are little changed, at 50.5, while input prices, at 53.0, firmed slightly in the month. Initial reaction to the report is favorable, at least for stocks which are moving higher.”
US Jobless Claims for the week ending 10/31. After the data release at 8:30am ET on 11/5, Econoday reported, “Initial jobless claims are clearly on the decline, down 20,000 in the Oct. 31 week to 512,000 (prior week revised 2,000 higher to 532,000). The four-week average is down for the ninth straight week, 3,000 lower at 523,750 for a 25,000 decrease from late September. Continuing claims are also declining but here the change is likely a negative, due largely to the expiration of benefits. Continuing claims, in data for the Oct. 24 week, fell 68,000 to 5.886 million for the seventh decline in a row. The unemployment rate for insured workers is unchanged at 4.4 percent, a level that is down 8 tenths from a peak in late June. In contrast, the overall employment rate has continued to climb, at 9.8 percent in September and is expected to increase another 1 tenth in Friday's data for October. Remember, improvement in both initial and continuing claims during September did not correlate to improvement in either payrolls or the household survey.”
US Employment Situation for October. After the data release 11/6 at 8:30am ET, Econoday reported, “The jobs picture in October worsened as the unemployment rate topped double digits and payroll jobs fell more than expected. Nonfarm payroll employment in October declined 190,000, following a revised decrease of 219,000 in September and a revised contraction of 154,000 in August. The October fall in payroll employment was more negative than the market projection for a 175,000 decrease. September and August revisions were up 91,000 net for the two months (the net declines were smaller)… Payroll losses were widespread in both goods-producing and service-providing sectors but declines were sharper in the goods-producing sector. Goods-producing jobs contracted 129,000 in October, following a 114,000 decline the month before. Construction jobs fell 62,000 while manufacturing decreased 61,000 and mining dipped 5,000…
Service-providing job losses, however, slowed to a 61,000 drop from a 105,000 fall in September. The largest decline in services was a 66,000 decrease in trade & transportation, including a 40,000 fall in retail. The one notable positive in the payroll survey portion of the employment situation was a 34,000 gain in temp help. This category is often seen as a leading indicator of hiring intentions by businesses. With incremental gains in August and September, this component has risen three months in a row… On a year-ago basis, payroll jobs improved to down 4.0 percent in October from minus 4.2 the month before… Wage inflation firmed as average hourly earnings in October rose 0.3 percent, following a 0.1 percent uptick the month before. The market had forecast a 0.1 percent advance. The average workweek was steady at 33.0 in October, falling short of the market forecast for 33.1 hours… Turning to the household survey, the ranks of the unemployed continued to rise as the civilian unemployment rate worsened to 10.2percent from 9.8 percent in September. The consensus had expected a 9.9 percent rate. The October rate is the highest since the same rate for April 1983. The really bad news within the unemployment rate spike is that it was not due to a rise in the labor force (more choosing to look for jobs) but by a 558,000 surge in the number of unemployed. The labor force actually dipped 31,000 in October… The bottom line is that the labor market is still in recession even though overall economic growth is positive. The jump in unemployment is going to keep consumers cautious and economic growth sluggish. On the release, bond yields eased and stock futures dipped.”US Consumer Credit for Sept. After the data release, Econoday reported, “Between consumers sticking their money into savings and banks cutting back on loans, consumer credit continues to tighten and dramatically. Consumer credit outstanding fell $14.8 billion in September to extend a long run of declines. Revolving credit, mostly credit cards, fell $9.9 billion with non-revolving, mostly car loans, down $4.9 billion. What little good news there may be is that the rate of contraction is easing as consumer credit contracted at a 6.1 percent pace in the third quarter vs. 6.6 percent in the second quarter.”
Quantitative easing by the Fed is not going into loans to the People. It has gone to trading departments in the banks. This is a serious problem, leading to a collapse in the consumer segment of the equity market. Friends of the banks will now become acquisitors.
Here are the key US economic reports on next week’s calendar.
With the mid-week Veterans Day (Canada=Remembrance Day) holiday, there is virtually no economic data for the US being reported this coming week.
Econoday’s reports, with charts, are informative, concise, and objective. They actually teach people something that can be used in trading decisions. When I think it is important, I add comments, but for the most part, Econoday does an exceptionally fine job. Here is a plug for Cynthia Parker at Econoday:
http://www.econoday.com/clients/mam/index.html
International Equity Markets Review
All equity indexes in the world were up this week except for Japan, Australia and South Korea.
In Japan, the Nikkei 225 was down -2.4% to 9789.4, but is up +10.5% YTD. The TOPIX index on the other hand was down -2.3% this week, but is up only +1.7% YTD.
The KOSPI of S. Korea dropped just -0.5% this week, and is up +39.8% YTD.
The All Ordinaries of Australia was down -0.9% this week, and is up +25.8% YTD.
Other than the Shanghai Composite gain of +5.6% W/W, the biggest gain W/W was in the Sao Paulo Bovespa, which soared +4.75% from 61545.5 to 64466.1.
These markets have been lifted by the falling $USD, but there may be a reversal this month or next.
The Financial Times did a compelling presentation of Brazil this week, calling it, rightly so, the envy of Latin America.
http://www.ft.com/reports/invest-brazil-2009
Investing in Brazil
05 November 2009
Subscription required, but inserting the title into your google browser will pull up the whole article.
Content
Olympic accolade sets seal on progress
Jonathan Wheatley considers the strides that the South American giant has made and the pitfalls ahead
Banking: Quick recovery, enviable outlook
The sector has prospered thanks to wide spreads and tight regulation, explains John Rumsey
Capital markets: Strong growth after slight dip
It has been a good crisis but some are worried about the tax on inflows, reports Jonathan Wheatley
Celebrity status in the field of IPOs
A respected monetary policy and deep interest rate cuts have made the country an attractive option for emerging market equity investors, writes Samantha Pearson
Power generation: Amazon dam comes under close scrutiny
Ed Crooks looks at a hydro-electric project in a fragile region
Agriculture: Superpower is ready to feed the world
Huge strides have been made in productivity, with scope for more, writes Jonathan Wheatley
Metals and mining: Government intent on more control
The sector is facing pressure over policy decisions, writes Jonathan Wheatley
Sugar and ethanol: A perfect storm of troubles
Samantha Pearson on the predicament of an industry striving to transform itself
IT: Culture of hi-tech and hustle fosters world-leading ambitions
Brazil is rapidly becoming a new world centre for IT and BPO, writes Dom Phillips
Telecoms: A sweet spot for mobiles
In Brazil, more people have mobile phones than bank accounts, writes Dom Phillips
The north-east: Still trying to catch up
Santo Antônio: Project Financing
Business life in Rocinha favela
Irrigation helps the drylands bear fruit
Walmart cuts retailing cloth to suit fast-growing local customers
Retail: The battle for consumers heats up
Oil and gas: Sunken treasure is ticket to the world’s VIP energy club
Embraer: The worst may be over
Hotels: An Olympian effort may be required
Housing profile: Tenda sees benefit of home-building programme
Franchising: Golden opportunities, but choose your partners wisely
Shoemaking: A prized industry has travelled north-east
Education: Expanding economy discovers it lacks the skills it requires
Bolsa Família scheme: Income support makes a real difference
Housing programme: Support for affordable housing and construction sector
Environment: Masses of trees and soon to be a big oil producer
Infrastructure: Too little for too long, but PAC may put things on track
Aspiration: World-class destination
Coconut water takes on the world
Tourism profile: Brazilian Beach House exploits gap in villa rental market
Business of fashion: The sexy Brazilian touch goes down well in Russia
Olympics: Rio’s glossy sell belies a litany of troubles
The beautiful game: malfeasance and goalposts
Transport: Highway concessions
Interview with Luciano Coutinho, president of the development bank, the BNDES
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 additions to the country-based ETF tables as I intend to focus more on ETF’s in 2009-2010. Now that the Drupal platform is well in place, we can expand these tables, and 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
International equity market ETFs Review
All 11 country ETFs I track were up W/W, with Japan (EWJ +0.73%) being up the least. On Friday, 7 of the 11 were down, with Russia (RSX -1.43%), India (IFN -0.84%) and Japan (EWJ -0.62%) dropping the most.
A week ago, Japan dropped -1.44% and was the best for that week.
I still maintain that the traders at HB&B are playing the global equity market like a fiddle. They are moving prices higher and the $USD lower until they either (i) get their houses in order, refinanced and all, or (ii) have positioned themselves to exploit reversals in the $USD, $GOLD and equity prices.
With the average daily turnover in global foreign exchange markets estimated at $4.0 trillion according to the Bank for International Settlements, it should not be shocking that international equity prices rise and fall quickly.
Table 13: International equities via an ETF perspective (in $USD)
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
Japanese equity market ETF: EWJ
Here is the Japanese (EWJ) equity market ETF Monthly, Weekly and Daily data charts:
U.K. equity market ETF
Here is the United Kingdom (EWU) equity market ETF Monthly, Weekly and Daily data charts:
EWU Daily data: 
Canada’s equity market
Here is the Canadian (EWC) equity market ETF Monthly, Weekly and Daily data charts:
Taiwan’s equity market
Here is the Republic of China/Taiwan (EWT) equity market ETF Monthly, Weekly and Daily data charts:
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)
US Equity Markets Review
A week ago, the S&P 500 dropped -4.0%, and the prior Friday’s loss was -1.22%. Things were looking bleak. This week, the S&P jumped +3.20%, so over the past eleven sessions, the S&P is down.
The charts still show a series of higher lows and highs, so the next step up the ladder had better be above the October S&P high of 1101.36. I feel like saying, or else, except that such a call can only be made by the FOMC $2 trillion hedge fund known as the Plunge Protection Team.
These are wild days in the market. Volatility has soared. It’s kind of hard to write anything on a weekly basis when there are significant price changes occurring on a daily basis.
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
Add two of AMZN, DELL, JAVA or YHOO to get a Cara Dozen.
Or while you are at BillCara2.com, input up to 30 tickers in the window above “Summaries” – say AAPL MSFT GOOG QCOM RIMM CSCO INTC ORCL GILD EBAY AMZN DELL JAVA YHOO plus up to 16 more – and click on Tech Chart, Basic View, Daily Watch, Performance or Fundamentals and you’ll get a lot of information to compare one against the others.
Here is the Monthly data chart of the Interactive Chart of Nasdaq Composite, S&P 500, Dow30, and Russell 2000 (small cap) indexes.
Here is the Weekly data chart of the Interactive Chart of Nasdaq Composite, S&P 500, Dow30, and Russell 2000 (small cap) indexes.
Here is the Daily data chart of the Interactive Chart of Nasdaq Composite, S&P 500, Dow30, and Russell 2000 (small cap) indexes.
Table 14: Dow 30 List
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
Here are the links to interactive Dow charts from Billcara2.com that I broke into groups of ten, which you can add technical indicators for as well.
(list one)
(list two)
For those of you who are relatively new at trading, or to this blog, why not pull the ten (10) Cara 100 companies out of the DJIA 30 list, and study the links for just these stocks? Keep a hard copy of the Value Line quarterly report plus a record of the Daily-Weekly-Monthly RSI-7 technical indicator. Study up on what the RSI is so you know it and have confidence that it is just like a football game yardstick that shows you how much risk your team is facing when trying to score points. The Cara 100 high-quality company list has the following ten DJIA components:
Wal-Mart (WMT), Disney (DIS), Johnson & Johnson (JNJ), McDonalds (MCD), Exxon (XOM), Boeing (BA), Procter & Gamble (PG), IBM (IBM), Intel (INTC), and United Technologies (UTX)
There is no rocket science to these high-quality companies. In your typical week, you shopped at Wal-Mart and along the aisles, mostly the personal consumer products were from Procter & Gamble, except for maybe the baby powder from Johnson & Johnson. On the way there, you may have filled-up at an Exxon gas station, and on the way home, maybe you stopped for a Big Mac or a salad at McDonalds. Overhead, you watched airplanes from Boeing. If you were in a high-rise building, you probably rode in an Otis elevator from United Technologies. Maybe you no longer have an IBM PC, but you do know the company, and your present PC is likely powered by Intel. Every parent's kids want you to take them to Disney… All in all, this is just life we're talking about here. If you are alive, you know these companies like your children. You probably even see more of them… So, just quickly read those Value Line reports – one per company every 13 weeks – and keep an eye on the RSI (momentum) and MACD (trend)… Those guys on Wall Street may be worth a gazillion dollars, but they didn't do it the way you and I have to do it. So, stop listening to their stories that financial engineering and out-sourcing is what's making America strong. That is such a crock. Instead, 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 one DJIA component: Wal-Mart Stores (WMT), the world’s largest consumer goods retailer, and a company I like.
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 Nov 6: next one is due Feb 5)
[From WIR #32: Aug 9]
Generally speaking, in my writing I probably have too much of a positive bias about the share prospects for WMT. But I trade for the short run. Presently I am long WMT puts for the reasons I provide here (i.e., net bearish), mostly because of my concerns about consumer spending.
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 Aug 8: next one is due Nov 7)
For study purposes, Here is what I wrote in the WIR #6 (Feb 8, 2009):
Here is what I wrote in the WIR #6 (Feb 8, 2009):
We were active in WMT trading this week, and I told you about it in the Trader's Conference Call notes in the Daily Reports. Hopefully you were listening.
After the close on Monday, I wrote: “We have to believe there is some value in Wal-Mart (WMT), down -25% in a few short months to 46.57 from the low sixties. We understand that unions have renewed clout in the Obama administration, but we like our chances making money by beginning to ladder into out-of-the-money puts sales in WMT. We shall see.”
Then after the close Wednesday, I wrote: “Wal-Mart (WMT +2.66%) had a nice pop today and we may add to shares if it trades back down to 47. We don’t think it will be a leader, but may be good for a trade.”
Then after the Thursday close, “We closed many our short put positions opened just a few days ago. Profits were booked in POT, WMT, GG, and AAPL. Risk management is our prime focus so when we are able to book 60-75% profits in a few days-especially before an economic release certain to increase volatility-we take the trade off.”
What we were in effect doing was reducing our cost base on WMT shares, having just bought positions in WMT at low prices, but in a very weak market that could have sunk lower.
WMT closed the week at $49.63, a move off the closing price of 46.57 just four days earlier, which I alerted you to.
If you go to the Weekly data chart, you'll see that my only real indication that WMT was ready there was the RSI-7 move back above 30, consistent with the Daily turn that day. Not being enamoured with Wal-Mart's fundamentals or Retailers at the moment, I needed those put writes to help me manage the risk I wanted to take. No option, no trade. Simple as that.
What we're doing here is fine tuning dinner just like the best Parisian chef. It's a matter of combining your experience, knowledge and mathematics to result in what some people call skill.
I can tell you that no economist gave you profits like this over a couple days in WMT. Yes, I'll make that flat-out statement. Just like none of us could have landed that Airbus safely in the Hudson, we have to put our trust and faith in people who know what they are doing, and then hope for the best.
To me, Wal-Mart was my Hudson. WMT's not some sexy penny stock, but our crew managed to get the passengers home safely.
Why is Wal-Mart my Hudson, as I say? Look at the Value Line report. A small child can run their finger along the lines for Sales per share, cash flow per share, earnings per share, dividends per share, and book value per share – for 17 consecutive years – and see that every consecutive number in the series was higher than the previous year. You don't need a PhD in Time Series Analysis to see that Wal-Mart is growing, getting stronger, a company you can count on.
No, Wal-Mart is not a sexy structured investment vehicle peddled by HB&B to hoodwink us out of our hard-earned wealth. We can walk into any Wal-Mart store, say hello to the elderly greeter, and then see for ourselves that there's nothing remarkable going on other than we get exactly what was advertised, at a fair price. I like to trade stocks of companies like that.
Patience, patience, patience. You wait until the WMT price comes to you, and then you buy. And later when too many people and the talking heads on TV start yapping about it, you sell.
Wal-Mart is not a perfect company, but then nothing in life is perfect, not even rocket science. Taking profits like we did this week in WMT is about as good as it gets.
It more than makes up for the bad days.
Here is what I wrote in the WIR #19 (May 10, 2009):
By following these notes and the accompanying charts you can see how I trade. With WMT in early February, I said that 47 would attract me, but I was also not thinking the stock would be a market leader so I determined that the best trade was to put on some put writes. Traders with a longer term time horizon would have been well served to buy the stock at 47 that month if they had sold out within a month of that with a gain of 12.5-13%. In a volatile (unstable) market, you have to learn to take trades like that when they come to you.
After trading on behalf of clients for almost six months now, I think it would be fair to say that my clients – and maybe many of you -- are surprised at how conservative I am. But, from the outset of our trading the S&P is down -11% and we are up +8%. The benefit to clients is that we have achieved that performance using an average of under 20% of available cash. We have managed to be very effective in writing puts.
Based on Wal-Mart (WMT $49.24) at August 10, here is Pierre Brodeur’s quantitative analysis of WMT:
http://caracommunity.com/blogs/pierre-brodeur/2009/08/wal-mart–-august-10th-2009
Pierre says he “would watch for a break above $51 or below $47 for an indication of the next move”. Presently, there is some downward pressure using the MACD M, W, D, and H price series data. He says that “a clear breakout from strong resistance at $49.50 would negate the inverse head and shoulder formation which if the neckline is broken ($48.75) would provide for a minimum price objective of $47.10.”
Long-term, he is looking to be a buyer.
The charts today show me a long-term and short-term range bound pattern, which will only result in good share price performance if you trade it frequently, with complementary options strategies. Writing puts and calls for premium income, will continuously lower the cost base, but judicious use of stops is typically useful whenever RSI-7 rises above 65-70 for the Weekly data series.
Presently we are short via puts. There is a falling Monthly and Weekly RSI-7 but, due to Friday, a rising Daily RSI-7. Should markets sell off next week, the Daily price will also likely fall. However, with Friday’s unexpected broad market rally caused by the Bank of England “surprise” on Thursday and Friday’s helpful US Employment Report, we are at now at risk, and we may put on more puts after the short-term price RSI-7 peaks again because, if that were to occur next week, we do think there is at least a 75% probability of the $47.10 floor being reached in WMT in the next month, and possibly a further chance for the price to go to $45 a month or two after that.
One of my concerns for the Retailers is that consumers are earning less and saving more. That’s not good for spending. Retailers like Wal-Mart can only do so much to encourage spending. Recently we saw that Procter & Gamble revenues and earnings were down in double digits, and we know that Wal-Mart is that company’s major retailer. If shoppers are walking down the aisles at Wal-Marts and avoiding P&G products, that means they are doing the same elsewhere. Target confirmed it. So, just because Friday was a market rally day, I’ll wait out the puts I have on WMT.
But ultimately I do like these long base patterns. Ian Notley taught me that.
WMT is a quality asset to hold in your portfolio. The company’s financial strength is rated A++. Over many years, the growth in sales, cash flow, earnings and dividends is frankly stunning. There is really not much more you need to study in this particular Value Line report. The only thing you have to do is make well-timed entries and then wait for the best time to apply stops, which is always after the RSI-7 is rising above 65-70 on the Monthly, Weekly, or Daily price series depending on your time horizon. If you over-use stops, you will get shaken out at lower than acceptable prices. If you turn a bit bearish, but still undecided, or if you want to lock in a quick profit, you can over-write calls on your stock position.
These charts also show me a long-term cycle bottom pattern, which will likely result in good share price performance over the next two to three years should the $51 level be crossed on the upside.
As for the company itself, this world leading consumer staples company is both fundamentally sound and well regarded by long-term oriented defensive traders aka value investors. There is a satisfactory dividend yield (about 2.3%) that is safe, so the Total Return (TR), including capital growth and dividend yield, ought to be satisfactory for 2010-2012.
To increase one’s income, if these stocks were of interest, I would buy the stock on extreme down days and write puts during periods where the Daily and Weekly RSI-7 is below 30 or maybe even 35 if the RSI-7 has started to lift.
If you have just six stocks like this in your portfolio like WMT, such as XOM, PG, MSFT, IBM, JNJ, and/or MCD, I think you will do well over the years ahead. If there happens to be a market crash below say S&P 950 or 920 if you are very nervous, I would not hesitate to buy these stocks and on Buy Alerts write two-month puts if you have the funds to acquire more if exercised at what I refer to as ‘stink bid’ prices.
My words are based on sound investment/trading principles. At times like the present, however, the market fools us and doesn’t follow logic. There are reasons for these anomalies, of the kind I have stated, but that blind faith in chasing prices higher is only a recipe for disaster.
Tough to accept sometimes; but true.
As at Nov. 6, here is my own current thinking re WMT, based on the following charts:
http://billcara2.com/tkchart/tkchart.asp?stkname=WMT&ind=rsi&wt=3
http://billcara2.com/tkchart/tkchart.asp?stkname=WMT&ind=rsi&wt=1
http://billcara2.com/tkchart/tkchart.asp?stkname=WMT&ind=rsi&wt=0We got a Sell Alert @$50.63 on Oct 21, but the broad market then reversed, aborting that signal a week later at about 50. There is nothing I see in the chart to stop WMT from moving higher here, but the key may be competitor Target (TGT $49.70), which needs to lift above its 52-week high of $51.77 set on 10/14.
TGT has had a tremendous run from its low of $25.00 on Mar. 6, and WMT really hasn’t kicked into gear.
Thirteen weeks ago, Pierre Brodeur advised to “watch for a break above $51 or below $47 for an indication of the next move. Since then there have been five separate attempts for a break-out as prices each time ran over 52, but then backed off.
I read this as being the stock is ready, but maybe the broad market isn’t. If the S&P cannot soon break out above 1101 or TGT above say 52, then I would hold off on WMT purchases.
The company itself appears to be doing well. Despite a horrendous economy, company revenues, cash flow and earnings continue to rise. There are now some share buy-backs so the metrics going forward will be easier to beat.
This week, Wal-Mart announced they would sell DVD’s normally costing $27-30 at just $10, so management is being aggressive. As the Value Line analyst has pointed out, they are also cutting back on capital expenditures and slowing their domestic supercenter store openings. All that will result in higher ROI and cash flow. Internationally, management is being very aggressive with acquisitions in China and Chile, and so sales growth is now coming from abroad. As for earnings, VL anticipates +6% growth in 2009 and 8-9% growth for 3 to 5 years forward.
Looking at the tables in the VL Report, the comparables for 1999-2001 are really unbelievable. Total shares are now much less, which makes for easier to beat metrics like revenues, cash flow, earnings and dividends per share, but number of stores and total sales have more than doubled, and all the key metrics are growing much faster each year than the share reduction. The annual dividend yield has tripled. With consistent operating margins and financial returns, and constant growth in the key metrics, I can’t see why the average PE multiple has collapsed by half or more this decade, and the price is now under 3 times book value whereas it was over 6x less than ten years ago. But it is what it is, and probably has something to do with concerns that should China increase their product selling prices or revalue the Yuan much higher against the USD, Wal-Mart could suffer.
To put some numbers on WMT, I would be looking for dividends to increase from $1.0565 in 2009, to maybe $1.18 (2010), $1.30 (2011), and $1.45 (2012). As to cash flow per share in 2012, I’d be looking for $7.
At a price-to-cash flow of ~10.5, the 2012 target would be about 75, which hits the low end of the VL projection, and would result in a dividend yield of under 2.0 and the PE at a respectable 15.
I keep testing the water with some WMT puts, with a sense that lower consumer spending should have an impact, but I have been consistently wrong, so I think that this stock is ready to move higher. If, as and when the broad market pulls back in this or the next quarter, I intend to be writing puts and buying calls as well as starting to establish a long-term core investment holding in this stock.
VL rates earnings predictability and stock price stability at 100%. The cash flow is quite stable (in fact growing every year), so I am not concerned about the dividend. In fact, looking at a possible $1.45 for 2012, and an attainable share price in the high 40’s, that would be a yield of over 3.0%, which has not happened for this company in the past, so that price is well protected.
As I say, it’s just a matter of waiting for the pull-backs and writing puts and buying calls. That may result in getting cheap stock put to you at times, which means you would only be buying less of it when the opportunity otherwise comes up.
I might even think about shorting TGT against WMT, but I wouldn’t go so far as to recommend it with doing a lot of homework.
The Dow 30 Company links in chronological order of the upcoming reports.
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 Aug 14: next one is due Nov. 13)
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 Aug 14: next one is due Nov. 13)
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 Aug 22: next one is due Nov. 20)
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 Aug 22: next one is due Nov. 20)
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 Aug 22: next one is due Nov. 20)
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 Aug 22: next one is due Nov. 20)
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 Aug 29: next one is due Nov 27)
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 Sept. 4: next one is due Dec. 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 Sept. 11: next one is due Dec. 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 Sept. 11: next one is due Dec. 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 Sept. 18: next one is due Dec. 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 Sept. 25: next one is due Dec. 24)
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 Sept. 25: next one is due Dec. 24)
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 Oct. 2: next one is due Dec. 31)
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 Oct. 2: next one is due Dec. 31)
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 Oct. 9: next one is due Jan. 8)
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 Oct. 9: next one is due Jan. 8)
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 Oct. 9: next one is due Jan. 8)
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 Oct. 9: next one is due Jan. 8)
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 Oct. 16: next one is due Jan. 15)
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 Oct. 16: next one is due Jan. 15)
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 Oct. 16: next one is due Jan. 15)
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 Oct. 16: next one is due Jan. 15)
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 Oct. 23: next one is due Jan. 22)
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 Oct. 23: next one is due Jan. 22)
Coca Cola [GICS 30, Dow 30, Cara 100]
(KO: Google Finance file)
(KO: Yahoo Finance file)
(KO: StockChart chart)
(KO: Billcara2 chart)
(KO: ADVFN Financial Data)
(KO: Value Line Report Oct 30: next one is due Jan 29)
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 Oct 30: next one is due Jan 29)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 Nov 6: next one is due Feb 5)
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.
You can use this tool to set up watchlist charts by industry group and sub-groups.
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.
In the US equity market review, I gave a list of five components of the DJIA index that I said were important and have been in large scale distribution. I showed you the chart. Take a look at the same chart, but with 9-period Stochastics (%K and %D) added to the RSI-7 chart. The arithmetic is similar, but the STO is more sensitive.
http://billcara2.com/tkchart/tkchart.asp?stkname=IBM,BAC,GE,INTC,JPM&ind...
This week nine of the ten sector ETF’s fell. Tech (XLK +0.99%) was up. On Friday, they were all down.
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
%ChangeThe Crude Oil price ($WTIC) lifted +$0.43/bbl (+0.56%) to close at 77.43.
A week ago Goldman Sachs raised their outlook for Oil to $85, and, as they seem to know everything, the oil stocks (XLE) lifted +3.31% this week to close at 57.08. Meanwhile there are analysts with big name firms who are shocked that $WTIC is above $60.
Doesn’t this illustrate the mockery that capital markets have become? The fact that Goldman Sachs has wormed their way into the White House, the SEC, the Fed, and central banks around the world (Canada and Italy for starters), who is to say they aren’t trading on inside information?
When experts become cynical of the capital market process, as they certainly are today, it’s time the President stops talking and starts listening. If not, the rest of us will stop trading American.
The two main Chinese oil stocks, in fact, were strong this week. China National Offshore (CEO +6.30%) and PetroChina (PTR +6.42%) were the leaders, along with PetroBrazil (PBR +6.04%). These stocks are also the strongest on my monitor over the past six months.
The charts are not bearish, so I would not short this sector of the market. Some like Chevron (CVX) and EOG (EOG) look toppy. But, for direction, I’d look to the $USD and if it pulls back, what that might do to the energy stocks in china and Brazil.
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
%ChangeThe Basic Materials sector (XLB +4.60% W/W to 30.69) was the 3rd best performer, but is still down -2.57% over the past four weeks, and down -2.73% over the last two.
Tenaris (TS), the Argentine steel tube maker for the oil industry, was up +11.6% this week. Brazil’s Votorantim, a pulp & paper maker, was also strong (VCP +10.2%).
After getting hammered for the two previous weeks, a recovery bounce was likely. Despite most of the stocks in this sector being up a lot this week, they are still down a lot over two weeks.
As I pointed out a week ago in this space, I don’t know whether the toilet seat is going up or down. Depends on the hour as money flow has little to do with fundamental economics at this point.
The charts are still bullish, so I wouldn’t short this sector either. There are some big ones like Barrick Gold (ABX), Randgold (GOLD) and Royal Gold (RGLD) that look over-bought, while Vale (VALE) and Freeport McMoran Copper & Gold (FCX) appear toppy, having had an amazing Bull run this year.
http://billcara2.com/tkchart/tkchart.asp?stkname=abx+gold+rgld+vale+fcx+...
http://billcara2.com/tkchart/tkchart.asp?stkname=abx+gold+rgld+vale+fcx+...
US Gold (UXG) was over-bought a couple weeks ago, so we sold, then bought some back at much lower prices to catch the rebound, but it has a long way to go to recover the recent high.
The steels look weaker again.
Agri chemicals maker Syngenta (SYT) looks over-bought.
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 +6.29% to 26.88) was the strongest sector ETF this week, but had been down the prior Friday by -3.40%.
Among the leaders was General Electric (GE +7.5% W/W), based on plans to hive off non-core divisions. The stock was up +6.24% on Friday. As long as Jeff Immelt is running CNBC and sitting on the Board of the NY Fed, I am afraid I don’t know what to believe with GE anymore. I like the person, but I don’t care for the circles he moves in
A couple of stocks I am watching for possible weakness are Union Pacific (UNP) and Raytheon (RTN). Caterpillar (CAT) is over-bought and will likely take a hit after the $USD strengthens.
http://billcara2.com/tkchart/tkchart.asp?stkname=unp,rtn,cat&cht=Tech+Ch...
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 +4.77% to 28.10) was second best sector performer.
The big deal in the sector this week was that Stanley Tool had announced a take-over of Black & Decker, which pushed BDK to a gain of +29.3%, which, surprise, is the same gain over the past four weeks.
A week ago, the big loser of the week was Brunswick Corp (BC), down -15.7%; but this week BC jumped +15.2%. Are you shocked Goldman Sachs can make billions trading this way?
Actually, even with this week’s stunning gain, BC is down -2.9% over two weeks.
It’s all a casino, folks. If you cannot be in during the morning and out before the close, you might miss a gain that would normally take a year to make. If you want to gamble, and you are not being bankrolled by Goldman, Sachs & Fedco, I recommend you take a deep breath.
The Cruise Lines, Carnival (CCL) and Royal Caribbean (RCL) are looking toppy, having run into resistance with a falling MA line.
http://billcara2.com/tkchart/tkchart.asp?stkname=ccl,rcl&cht=Tech+Chart&...
http://billcara2.com/tkchart/tkchart.asp?stkname=ccl,rcl&cht=Tech+Chart&...
I would not short these if Crude Oil prices fall, but I am not looking for bullish charts either.
RCL will be sailing their new Oasis of the Seas, the world’s biggest cruise ship, from Ft. Lauderdale on Dec. 1. Nassau harbour was dredged to a depth of 11.0 meters and partly to 12.5 meters (~2 million cubic yards of rock removed, at a cost of over $50 million this past several months, plus several millions more to extend the dock, and now the town is awaiting the big ship’s arrival at 1pm through 7pm on Thursday Dec 10 (my late Dad’s birthday).
http://www.royalcaribbean.com/findacruise/ships/class/home.do;jsessionid...
http://www.caribbeannetnews.com/news-19562--10-10--.html
I love the quote from RCL CEO Richard Fain: “"We like to deliver the vow and I think it's fair to say that this ship delivers the vow". I think he was referring to the wow factor, and somethink got lost in the translation, as my wife would say.
http://www.royalcaribbean.com/findacruise/search/vacationSearchResult.do...
Anyway, I’ll be there with camera in hand showing you the photos. Hope to be anyway.As for other stocks you need to be watching in the consumer discretionary sector, I think Amazon.com (AMZN) is over-bought, but Yahoo (YHOO) looks ok.
I noted the negative divergence in the gaming stocks. There has been a lot of hype over the Macau financings.
Jones of New York (JNY) is probably getting ready for its next sale.
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 +1.43% W/W to 26.20) had a loss of -1.56% on the previous Friday, so is actually down over six sessions.
But you do have Starbucks (SBUX +11.3%) to calm your nerves. Of course, SBUX reported a good quarter and positive guidance for 2010 (don’t they always?). The stock was down -6.4%, which means Goldman was buying at that point.
Which reminds me; I have run out of coffee.
No longer a staple in tough economic times, Whole Foods (WFMI -11.9%) was crushed. On Thursday, the Company reported a fourth-quarter profit of $28.67 million, or 20 cents per share, on revenue of $1.83 billion, compared to analysts' forecasts of 18 cents per share on revenue of $1.84 billion.
But, here’s the deal: management also forecast fiscal-2010 EPS of $1.05 to $1.10, missing analysts' forecasts of $1.11, and that’s why reporters say the stock got hammered. I have a different take. Goldman was long puts and had paid scriptwriters at Tout TV to trash the stock for possibly missing next quarter’s estimate by a penny. Sorry, I am no longer skeptical; I’m just downright cynical.
If you recall, with RSI-7 at nosebleed heights for Walgreen (WAG) a month ago when the RSI-7 was well down for Diageo (DEO), I suggested that it might be good to buy the DEO and sell the WAG. Even with this week’s gain of +4.60% in WAG and +2.40% in DEO, over four weeks the DEO is up +7.93% while the WAG is up only 0.30%. When you spot anomalies like that, you cannot hold the trade forever. Nothing’s forever.
Well, maybe booze, in moderation, is always better than drugs. People are in such pain today, they are running pharmacists and family doctors off their feet. The patients are all spaced out. I don’t think that’s healthy.
Years ago, my family doctor told me that during tough economic times he was less a medical doctor and more a psychologist. Sad, but true.
DEO does look a little over-bought now though, whereas CVS, like WFMI, is over-sold.
Two DJIA powerhouse stocks, MCD and PG appear to be over-bought here.Nike (NKE) and Deckers (DECK) have probably run a little too far. :-)
It’s been a tough week. Forgive me.
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
%ChangeSpeaking of healthcare, the sector (IYH +3.87% to 59.60) was 4th strongest. It’s now up +0.56% over the past four weeks.
Aha, but you recall the Aetna (AET), which some of you responded to my Buy Alert a couple weeks ago when I said the health insurers were looking pretty good in the face of Washington’s fight to introduce a fair health insurance reform act. And some people actually believe their politicians. Well I trust the market.
This week, the three leaders on my board were AET +12.0%, United Health (UNH) +10.5%, and Wellpoint Health Network (WLP) +9.1%. Over four weeks, these three stocks are up an average of +13%.
On Oct 13 I wrote: “... be focused on healthcare reform legislation. I have Aetna (AET) as a new Buy Alert @ $26.42. I will be watching the Senate Finance Committee vote and ...” AET is now $29.16, up +10.4%.
As I wrote previously, “There is a lot of politics going down in Washington over this sector, which apparently has the biggest lobby group there.”
Now that sufficient numbers of Democrats in the House (plus the one you-know-who Republican) have been bought and paid for and the Health Insurance Reform bill gained a very slim approval last night, you can probably sell the Aetna, United Health and Wellpoint on the news. Just think about the 220 members of Congress they had to piece off to get the deal they could live with. So be it, but there is now a Senate vote, and the People also get to vote! Watch for the fall-out.
http://billcara2.com/tkchart/tkchart.asp?stkname=aet,unh,wlp&cht=Tech+Ch...
I have been a long-time supporter of universal health insurance, something the U.S. ought to have had many years ago. But I don’t like how this Bill was put together, and I think there is a huge resentment by the People in how it was rammed through, probably by pay-offs.
I have also been watching the Biotechs, and some appear to be over-bought. Gilead (GILD) comes to mind, although I like the company, and the industry. Analysts have GILD rated 1.8, and they are ever stronger on many of these companies. One from the Big Pharma they don’t much care for though is Pfizer (PFE) with a 2.8 rating, preferring Abbott Labs (ABT) with a 1.8 rating.
http://billcara2.com/tkchart/tkchart.asp?stkname=gild&cht=Tech+Chart&ind...
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
%ChangeFinancials (XLF +1.85% to 14.31) was up this week, but lost -4.68% the previous Friday and -6.95% a week ago. On a Friday in mid October XLF plunged -12.4%. You need Valium to trade these banks.
Case in point, India’s ICICI Bank (IBN) was the big winner this week (+14.4%), but a week ago plunged -18.7%), and it was down the week before that -4.6%. I’ll bet you Goldman Sachs made money on that trade!
As stated two weeks ago and again last week, any bank that doesn’t have a strong prop trading division is losing big money in the lending end of the business and not doing well overall… The post reporting period could be pretty tough as regulators and the public focus on Wall Street bonuses that many people believe were not fairly earned.
Well at least the public can focus on it. The SEC, with that 29 y.o. Goldman Sachs “whiz-kid” Adam Storch now helming the Prosecutor’s desk, you can forget about anything happening there. Maybe the FBI has not also been bought and paid for by GS? Do you think?
The banks, despite my rant, have charts that are looking ok.
The charge card companies don’t though. American Express (AXP), Master Card (MA) and Visa (V) appear to have finished a strong Bull run, or close to it.
http://billcara2.com/tkchart/tkchart.asp?stkname=axp,ma,v&wt=1&ind=rsi
http://billcara2.com/tkchart/tkchart.asp?stkname=axp,ma,v&wt=0&ind=rsi
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 +3.11% to 21.25) was way up this week. Problem is XLK was 20.61 a week ago and 21.33 two weeks ago.
Cognizant (CTSH), a favorite of mine, was up +11.3% this week, but now that I’ve mentioned it, GS will likely smash it next week.
They have already beaten up First Solar (FSLR), down another -$4.00 W/W to 117.93. It’s looking attractive again. Just biding my time.
Research in Motion (RIMM -0.02% W/W to 58.72) had been crushed -10.7% a week ago. The good news, other than the fact I will soon publish a positive report on the company, is that on Friday – MOT DROID Friday – RIMM was up +1.61%. Hahaha! On Friday, MOT got hammered -4.51%. So much for DROID. Well, at least for now.
Semi-conductors (SMH +1.32% to 24.51) was given some life by Advanced Micro (AMD +9.6%) after the Justice Dept claimed Intel (INTC -0.94%) is a crooked dealer. Gee, if that’s true, why aren’t they looking at Goldman?
No matter, AMD is still a dog. Even with that gain of +9.6% this week, the stock is down -10.00% over two weeks, -14.29% over four weeks. The stock has been under promotion for the past nine months (AMD +111.8% YTD), so careful when the promoters decide to unload.
Do you think somebody had advance notice of the Justice Dept move against Intel? A week ago, the AMD dropped -17.9%, and now boom. Are there counter-espionage agents inside the FBI? Just asking.
I noted a negative divergence on charts of IBM and AAPL, which is not a bullish sign.
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 +2.02%) made a small gain. A week ago I wrote in this space, “Telecom (IYZ -4.09% to 17.34) was fourth best sector performer. How is it that Verizon (VZ +2.6%) and AT&T (T -0.2%) were strong – VZ was best in the DJIA index this week – but the telecom sector was down -4.1%?... I have pointed out that the big guys like AT&T and Verizon are big losers when the bond market gets creamed. This week, bonds were up – TLT up +0.9% W/W and +1.5% on Friday -- which helped the big guys, and the little guys were lagging.”
Well, sometimes I get it right. This week, the Treasury Bonds (TLT -2.56%) got dumped again and T and VZ were two of the bottom 5 in the DJIA index of so-called “blue-chip” stocks.
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 +1.87% to 28.92) was not very interesting to me this week. The only utility I need right now is time off.
http://billcara2.com/markets/mkview.asp?qte=ss&ty=tk&qt=AEP+D+DUK+ED+EXC...
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 0.01 0.01 0.01 0.04 6 Month 0.12 0.12 0.14 0.13 2 Year 0.84 0.88 0.89 0.85 3 Year 1.35 1.40 1.39 1.36 5 Year 2.29 2.33 2.31 2.16 10 Year 3.50 3.52 3.38 3.18 30 Year 4.40 4.40 4.23 4.00
Municipal Bonds Maturity Yield Yesterday Last Week Last Month 2yr AA 1.06 1.11 1.04 1.02 2yr AAA 0.82 0.97 0.98 1.05 2yr A 1.37 1.37 1.42 1.18 5yr AAA 1.87 2.05 1.88 1.64 5yr AA 1.90 1.95 1.95 1.72 5yr A 2.16 2.12 2.18 1.92 10yr AAA 3.35 3.28 3.00 2.76 10yr AA 3.33 3.35 3.29 2.81 10yr A 3.67 3.64 3.73 3.33 20yr AAA 4.58 4.87 3.97 3.39 20yr AA 3.70 3.72 4.43 4.11 20yr A 4.96 4.99 5.05 4.47
Corporate Bonds Maturity Yield Yesterday Last Week Last Month 2yr AA 1.42 1.47 1.39 1.56 2yr A 1.91 1.97 1.97 2.27 5yr AAA 2.93 2.98 2.94 3.55 5yr AA 3.36 3.46 3.26 3.44 5yr A 3.72 3.85 3.70 3.68 10yr AAA 3.60 3.67 3.54 3.41 10yr AA 4.86 4.97 4.92 4.93 10yr A 4.75 4.82 4.68 4.56 20yr AAA 5.03 5.18 4.86 4.88 20yr AA 4.93 5.08 4.76 4.78 20yr A 5.97 6.12 5.80 5.82
A week ago I reported, “This week, the US Treasury market had a gain on the week all because of a monster day on Friday, right before Halloween. The 20-year US bonds (TLT +0.87% W/W to 95.78) was up, but only because of the +1.45% gain on Friday on Friday.”
Different story this week; TLT dropped -2.56% W/W to 93.33. Friday was about flat.
Over two weeks, the yields lifted on the 30-year (from 4.29 to 4.23 up to 4.40); and the 10-year (from 3.49 to 3.38 up to 3.50); but the 5-year yields continued to drop (from 2.44 to 2.31 down to 2.29).
The T-bill yield stayed at 0.01%. With costs, it’s a negative yield. The Treasury Dept wants your money at work despite their pleas for savings.
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. Obviously, the banks are being favored.
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 (FNM $1.04) and Freddie (FRE $1.23) apparently need more funds from the taxpayer. You can guess what Frank, Dodd, Reid and Pelosi are going to do. Just once I’d like to see these people try to reduce the size of govt.
Consumer Finance -USA -- Interactive Weekly Data Charts
Mortgage Finance -USA -- Interactive Daily Data Charts
Commodities Review
A week ago, $CRB lost -3.55% to close at 270.38, and there had been a loss of -0.78% on the prior Friday as the US Dollar strengthened. This week, $CRB dropped -0.35% to 269.44, but Oil and the Precious Metals were up.
The 50d MA for $CRB is up from 254.03 to 255.79 to 256.46 to 257.45 to 258.07 to 259.73 to 261.44 to 263.04 over the past seven weeks.
The 200-day MA has moved from 233.50 to 233.82 to 234.05 to 234.99 to 235.75 to 236.57 to 237.70 to 238.60 to 240.00 to 241.36 to 242.66 over ten weeks. It had been at the 233 level for quite a while, as I had pointed out about eight weeks ago as it broke free.
Rising MA’s for the $CRB is basically the only time that the monetary authorities get concerned.
Although I use the $CRB (Reuters/Jeffries Index), principally because it’s the oldest, there are many commodity indexes: http://www.crbtrader.com/crbindex/ • Astmax Commodity Index(AMCI) • Commin Commodity Index • Dow Jones-AIG Commodity Index • Goldman Sachs Commodity Index • Reuters/Jefferies CRB Index • Rogers International Commodity Index • Standard & Poor's Commodity Index • NCDEX Commodity Index • Deutsche Bank Liquid Commodity Index (DBLCI) • UBS Bloomberg Constant Maturity Commodity Index (CMCI)
Here is a link to an article that discusses the major ones that have been around for a while: http://www.rogersrawmaterials.com/overviewandanalysis.PDF
Here is a current price summary of the heaviest weighted commodities contracts: http://money.cnn.com/data/commodities/
These indexes change their component weightings perhaps annually or even monthly, for example: http://www.seekingalpha.com/article/43586-the-new-generation-of-diversif... http://tinyurl.com/a5myfj
Interactive Chart of Weekly CRB Commodities Index:
Interactive Chart of Daily CRB Commodities Index:
Oil Review
Crude Oil ($WTIC +$0.43/bbl +0.56% to close at 77.43) was quiet.
Goldman Sachs is calling for $85 oil. Maybe they’ll move their oil on BNI now that their buddy Buffett owns the company outright. Yes, it was GS that sold Berkshire $5 billion of GS stock and a further $5 billion in options at rock bottom prices. But, did you hear GS chairman and CEO Lloyd C. Blankfein say that Buffett force the money on them the way his ex-boss Henry Paulson did? What a complete crock of b.s. that guy is.
Yes, Buffett’s Berkshire made billions this quarter because the GS trade was his savior. And yes, Buffett made a bet on the US economy with his take-out of the remaining shares in Burlington Northern. Honestly, I want to puke.
Btw, did you note two weeks ago, right before the BNI deal, I reported that Burlington Northern (BNI -8.4%) had a disappointing quarter? Now, how many of you, honestly, believe that (i) the books were not cooked in order to set up this deal, and (ii) Buffett was clueless?
Why doesn’t Immelt not just sell CNBC to Buffett and we’ll all just walk away in total disgust.
Yes, I still think we’ll see a new trading range for $WTIC of say 60-70.
If I’m short, I can always hope that Obama’s solar farms and Immelt’s windmills make me whole. I may need another lifetime, but that’s a different story.
For $WTIC, the 50-day MA is now at 73.43, up from 72.81, 72.08, 71.11, 70.20, 69.86, 69.14, 68.25, 68.16 and 70.62 the prior nine weeks. In 25 weeks, it has risen from 51.85. If I can remember, I’ll stop posting this after 26 weeks.
The 200-d MA is at 61.52, up from 60.63, 59.75, 58.88, 57.22, 56.68, 56.06, 55.16, 54.86 and 57.96 the prior nine weeks.
As you know, I have been calling this higher oil (aka pump job) a $USD speculative play, and there are a lot of $USD shorts out there, so be careful not to get caught in a trap. Goldman has literally trillions more than you to play this game – yes, trillions now that they are fixed up with the FOMC traders.
Two weeks ago I wrote, “The comparative strength chart $WTIC:$USD shows a Distribution Zone in the RSI-7 at 72.9. It usually peaks at 75-90 but lasts in the DZ about a month or two only. So with this indicator, you can watch the peak oil price soon drop off… It’s just a matter of when the $USD starts to lift.”
I don’t have the time to look at that chart now. Maybe somebody can do it? Thanks.
Here is the e-miNY Dec-07 Crude Oil chart.
Interactive Chart of Weekly Crude Oil:
Interactive Chart of Daily Crude Oil:
Gold & Precious Metals Review
A week ago Friday, $GOLD had lost -$15.00/oz in the last six sessions to close at $1,045.70. Before that, I had given a heads-up. I wrote,
The RSI-7 is now very high at 81.1 on the Weekly RSI-7 and 71.3 on the Monthly. The Daily RSI-7 has fallen from about 80 to 57.0 in the past couple weeks..
http://billcara2.com/tkchart/tkchart.asp?stkname=gld&cht=Tech+Chart&px=3...
http://billcara2.com/tkchart/tkchart.asp?stkname=gld&cht=Tech+Chart&px=1...
http://billcara2.com/tkchart/tkchart.asp?stkname=gld&cht=Tech+Chart&px=0...
For those who still believe that the precious metals momentum is still up, they should take note that the $SILVER:$GOLD and GDX:$GOLD comparative strength indexes are falling and that’s a definite negative.
As I wrote in this space three weeks ago, right after the week closed with at humungous gain of almost +$50/oz, “I think the music is pretty close to the end, and the last dancers ready to depart the floor.” Later I added, “You will also notice that right then the comparative strength indexes started to show a drop in momentum, which is an important sign of price drops to come.”
This week, the central bank of India purchased 200 tonnes of gold from the International Monetary Fund for about $5 billion, some of which will find its way back to feed the poor of India. That was a good decision on the part of India and the IMF, but whether it’s a positive for the gold market or not is debatable. At this point nobody knows. We do know that once the goldbug newsletters got fired up, the price of gold rallied this week by +$45.00 an ounce to close at $1,095.20.
Is that so amazing? At the end of March this year at the Cara Bahamas 2009 Conference I opined that the $USD had peaked at almost 90, was then 86 and falling and Gold at 900 would lift, possibly to well over $1,000, on its way in a couple years to $2,500.
So, I am not surprised with the $USD at 76 that $GOLD is now at $1,100.
$GOLD has been in a Bull phase since July after bottoming at 905.10, then cycling through a series of higher highs and higher lows… 971.60, 930.20, 1024.20, 985.00, 1070.70, 1026.50, ??? There was a high on Friday of 1101.40, so the beat goes on.
http://stockcharts.com/charts/gallery.html?s=$gold
http://tinyurl.com/yd3fu3j
What surprises me if anything is that in the past 17 weeks of this intermediate-term Bull cycle is that there have been five separate relatively short buying spurts that have been followed by distribution. So, there has been maybe 5 or 6 weeks up and 11 or 12 weeks sideways or down. That is not a wall of worry. Nor is it a typical Bull move, which is usually just the opposite.
In any case it is a Bull. For how much longer, nobody knows, and that includes the newsletter writers and the goldminer CEO’s. So, enjoy it while it lasts because in past cycles, I have witnessed Precious Metals prices dropping -10% or more in a blink. That would not happen with bullion in the real world, but in the futures world dominated by JP Morgan, Barclays and Deutsche Bank, it happens.
The $GOLD 50d Moving Average is now at 1025.60, up from 1011.83, 1001.95, 991.04, 981.39, 971.37, 966.19, 958.67, 949.82, 940.53, and 939.29 going back over the prior ten weeks.
The 200d MA is 954.19, up from 948.59, 943.16, 938.18, 933.48, 928.70, 924.41, 918.51, 913.32, 903.20, and 897.84 over the prior ten weeks.
As I pointed out five weeks ago, “These are big rises in a short time for the $GOLD MA’s, which likely have been a concern to the Fed. The Fed could step in soon to support the $USD. So, I will stand aside and wait for the outcome.” The longer this goes following Fed chairman Ben Bernanke’s studied remarks that he would take action to stabilize the USD, which is in free-fall, the more I can point to the man as a flat out liar. If the policy of the US Treasury and the Fed is to have a weak Dollar, then the world should be put on notice, so we can deal with it. Why should Goldman Sachs be the only private sector trader to know what goes on in the Fed boardroom?
Bernanke, Geithner and Obama owe the world an answer because in the big picture, $GOLD is a speck (and a spec) in the background. International trade is at stake here, and the US leaders are showing a total disregard for other nations. Japan, for example, is at its wits end. Canada also could not survive a Loonie at par with the Dollar – at least not its manufacturing and tourism sectors.
I don’t mind the hard ball; but stop the lies. It is unbecoming the offices these people presently hold.
People ask me why the capital market is so unstable, and I say just look at the leaders in the U.S.
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
A week ago, $SILVER dropped -$1.36 or -7.70% W/W to close at 16.31. This week, $SILVER gained +$1.08/oz (+6.59% on a smaller base number). Over two weeks, $SILVER is still down.
$SILVER has been on a Bull run since July with a series of higher highs and higher lows… 12.45, 14.10, 13.17, 15.19, 13.49, 17.66, 15.73, 18.08, 16.11, ?? Unlike $GOLD, the $SILVER contract still has not set a new high. The price is now 17.39, which is -3.8% off its most recent high.
http://stockcharts.com/charts/gallery.html?s=$silver
http://tinyurl.com/y8k8ud4
In the earlier note about $GOLD, I wrote, “enjoy it while it lasts because in past cycles, I have witnessed Precious Metals prices dropping -10% or more in a blink”.
Maybe you think you haven’t ever seen that and that a drop of -10% in a blink could not happen. Well, look again at the $SILVER chart; the average loss has been -11.0% not once but three times in less than three months, and each pull-back (-11.2%, -10.9% and -10.9%) has been stunningly quick. So don’t get lulled to sleep because the next loss could actually be -20%!
For $SILVER, the 50d MA is now 16.81, up from 16.52, 16.27, 15.96, 15.64, 15.27, 15.00, 14.64, 14.24, 14.02, and 13.87 the previous ten weeks.
The 200d MA is 14.40, up from 14.25, 14.11, 13.95, 13.78, 13.61, 13.47, 13.29, 13.12, 12.98, and 12.83 the previous ten weeks.
As I wrote four weeks ago, with $SILVER almost $18: “Yes, I like the trend, and I’m long, but I still turned cautious in the near term until I see what happen next at the Fed. Higher silver will mean wooden nickels, and other countries may justifiably refuse them.” I then sold the silver positions at the top and said, “Be careful here”.
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.
This week, $PLAT gained +$22.20 (+1.67%) to close at 1348.50. Traders are excited. Meanwhile, I know that a week ago, $PLAT plunged -$42.80/0z (-3.13%), so over the past ten sessions, $PLAT is actually down -$20.60/oz.
http://stockcharts.com/charts/gallery.html?s=$plat
http://tinyurl.com/ydwz4pn
The 50d MA is now at 1320.83, up from 1310.13, 1301.52, 1290.59, 1280.92, 1267.58, 1251.02, 1238.81, 1218.89, 1210.77, and 1204.82 over the past ten weeks.
The 200d MA is at 1192.79, up from 1182.34, 1173.49, 1163.36, 1151.74, 1140.09, 1128.78, 1116.00, 1104.08, 1094.46, and 1083.99 the previous ten weeks and from 1074.29 and 1063.85 the two weeks before that.
Two weeks ago I wrote in this space, “A higher $USD will give back of much of these gains”, and since then $PLAT is down -$22.60/oz. Let’s see what next week brings. I suppose we are going to hear the old saw that PM’s can rise when the $USD rises, which happens to be true, but only when the economy is cranked up into 5th gear, factories are at 80+% utilization instead of maybe 65%, and when T-Bill rates are maybe 1.50% to 2.0% or more as the economic engine is sucking money rather than sputtering along, which is what a rate of 0.01% proves.
The point is that when approached by many salespeople, it pays to listen and to think through their pitch. You’ll find much of it absolute b.s., by people who want you to buy the risk they or their clients are holding. When you learn how to trade prices, you will not always be a winner, but over the long haul, you will be a winner. For sure, you’ll realize the world is built on b.s.
I don’t trade plat or pall, but I study them as part of the precious metals study.
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.
This week, $PALL gained +$7.65 (+2.36%) to close at 331.95/oz. A week ago, $PALL dropped -$16.10/oz or -4.73% to 324.30 from 340.40. I wrote at the time that $PALL “is quite possibly no longer on a Bull run, no longer leading the group higher”.
I still believe that. Why? Look at the chart: http://stockcharts.com/charts/gallery.html?s=$pall
http://tinyurl.com/yenr5rj
Since mid July, the price of $PALL has cycled through the following series of higher highs and higher lows until this week! Check it out: 226.45, 282.80, 263.45, 308.70, 283.90, 342.90, 316.65 and oh oh 336.10.
The 50d MA is now at 312.52, up from 308.23, 302.88, 296.70, 291.16, 285.68, 281.86, 276.38, and from 265.26 eight weeks ago.
The 200d MA is at 253.98, up from 250.40, 246.85, 243.24, 239.52, 236.04, 233.16, 230.00, and from 227.13 eight weeks ago.
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.
After $COPPER contracts had dropped a fifth week in a row through Sept, I wrote in this space five weeks ago, “There may be a recovery bounce somewhere in here. Watch the $USD and precious metals.” Then, “This week there was a gain of +15.65 W/W (+5.84%) to close at 283.80.” $COPPER soon zipped up to a new 13-month high of $306.90.
But for how long I asked?
Two weeks ago, with $COPPER at 303.45, I wrote in this space,
$COPPER gained +18.90 a contract or +6.64% to close at 303.45… Analysts are interpreting this move as a sure sign that the global economy has lifted, but I am not in agreement. I think it is little more than traders trading prices with excessive funds in their accounts… BHP, which is the world's second biggest copper producer (state-owned Codelco of Chile is biggest), lifted +1.87% this week… (But) the BHP:$COPPER Comparative Strength index peaked at the beginning of this past week. BHP strength or in this case weakness compared to the metal usually precedes a pull-back in price for both. We’ll have to wait and see. Only Zug knows… Keep watching that $USD. It could reverse trend any time. You know, I am in the habit of saying that. What it means is that I am on guard.
The following week, $COPPER contracts dropped -7.50 (-2.60%) to 295.55. I remarked “Sometimes I get it right”. This week, $COPPER dropped again, this time by just -$0.30 to 295.25. But it hasn’t gone anywhere in 14 sessions. In that time there was two big days only and the rest appeared to be distribution as central banks hyped the economic recovery of the world. But, what else are they going to say? They have to be optimists. On the other hand, traders have to be smart. You don’t have to be smart to work in a central bank; you just have to do what you are told.
http://stockcharts.com/charts/gallery.html?s=$copper
http://tinyurl.com/ybgnb7f
For $COPPER, the 50d MA is at 287.14, up from 286.42, 284.45, 282.60, 281.84, 278.85, 274.24, 271.42, 265.26, 260.53, 254.56 and 195.92 over the prior eleven weeks, which is still a bullish picture. Of course another week or two of lower prices might change that.
The 200d MA is at 229.64, up from 225.91, 222.21, 218.48, 214.69, 210.99, 207.75, 204.45, 201.43, 198.85, and from 195.92 the prior ten weeks.
For those who are keen to study the industrial metals like copper, aluminum and zinc, why not look at the Powershares DBB, which trades on the NYSE.
http://finance.google.com/finance?q=NYSE:DBB
Interactive Chart of Weekly Copper EOD Continuous Contract Index:
Interactive Chart of Daily Copper EOD Continuous Contract Index:
Interactive chart of the Copper metal index.
Table 12: Senior gold equities
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
The Goldminers were absolutely ecstatic this week: $XAU (+10.98%), GDX (+12.39%) and XGD (+11.23%), bolstered with a gold futures price that hit a high of $1101 on Friday.
Some of the miners seem to be going in opposite directions: Barrick (ABX +15.9% W/W) was flying, while the better miner, the one without a hedge book to buy back at $1100 gold, Kinross (KGC) gained just +0.43%. Recently I put on a long KGC-short ABX trade, so that hurt. I figured the gold price might rise or it might fall, which I figured would work out in either case, but I picked the wrong horse. Don’t know why.
I think at this point, less is more, so I’ll keep quiet. You are being flooded with stuff from the gold newsletters and Tout TV, so I’ll let you chew on that.
Btw, these people were nowhere to be seen in July and earlier, when I opined that the goldminers would have another fling on the dance floor. I had that right, but I have been somewhat surprised the world has such a hate on for the USD, driving Gold above my intermediate-term upside target of $1020.
Yes, longer term I do anticipate higher gold prices, and last time I checked, gold in the ground was still money, and the miners are having a difficult time finding it as fast as you are hoarding it. So the economist Roubini can tell the trader Jimmy Rogers that the latter’s forecast of $1200+ gold is “utter nonsense” and I have to break up in laughter. Since when has Roubini run money, not to say co-founding one of the world’s largest and most successful hedge funds with George Soros. But take the professor out of the classroom and into the White House for a couple meetings and he thinks he’s God’s Gift to you all. What the man is has mostly to do with self-promotion. At least Jimmy Rogers, for whatever some people think, earned the right to make commodity and futures forecasts and be obnoxious at times in doing so in order to sell his books and appearances.
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.
I believe you cannot trade commodities that are priced in $USD without studying forex movement. So, forex is important.
The Forex market is a three to four 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 ETF that tracks the G-10 currencies is the Powershares DBV. http://tinyurl.com/ltxpk4
I have said I intend to start trading it and other currency ETFs soon, but that has changed as the broker my clients use, Interactive Brokers, now permits holding multi-currencies simultaneously in the same account. Thank you.
But, I still need to recruit a successful forex trader.
This week, the $USD dropped -0.79% W/W to close at 75.76. I have been bullish on the Dollar. At least, a week ago the Dollar gained +1.17% and was up +0.52% on the Friday. So, over six days, the Dollar hasn’t gone down much and over ten days, it is actually up.
http://stockcharts.com/charts/gallery.html?s=$usd
http://tinyurl.com/y9c3sr4
The 50-day MA of the $USD is now at 76.52, down from 76.74, 77.00, 77.36, 77.58, 77.84, 78.04, 78.37, 78.76, 79.00, 79.20, 79.43, and 79.58 over the past 12 weeks.
The 200-day MA is 81.15, down from 81.38, 81.57, 81.75, 81.88, 81.98, 82.13, 82.38, 82.62, 82.83, 83.04, 83.23 and 83.40 over the past 12 weeks.
Interactive Chart of Daily U.S. U.S. Dollar Index:
This week, the Euro contracts ($XEU) gained +0.92% to close at 148.47.
The Euro has been on a Bull run since June. There was a short-term cycle low of 146.32 on Tuesday. The most recent high of 150.47, set 10 sessions ago, must now be taken out or else I believe the $USD will start its own Bull run.
http://stockcharts.com/charts/gallery.html?s=$xeu
http://tinyurl.com/ydekjtk
The 50d MA for the Euro futures are now 146.95, up from 146.44, 145.83, 145.03, 144.52, 143.95, 143.54, 142.86, 142.13, and 141.75, and from 140.84 twelve weeks ago.
The 200d MA is at 138.53, up from 138.09, 137.70, 137.38, 137.16, 137.01, 136.73, 136.26, 135.78, 134.98, 134.59 and 134.25 over the past eleven weeks.
Interactive Chart of Weekly Euro Dollar Index, priced in USD:
Interactive Chart of Daily Euro Dollar Index, priced in USD:
The Pound gained +0.94% W/W against the USD to close at 166.14, the same gain it made a week ago.
http://stockcharts.com/charts/gallery.html?s=$xbp
http://tinyurl.com/yasdzc2
The 50d MA is at 162.80, which is close to 162.64, 162.71, 162.69, 163.59, 164.09, 164.61, and 164.75 over the previous six weeks.
The 200d MA is now at 156.26, up from 155.64, 155.22, 154.83, 154.45, 154.22, 154.02, 153.66, 153.35, and 153.02, and continuing to lift. But if the 50-d MA reverses course again as it did one week ago, so too will the 200-d MA at some point, and that will be a signal for an intermediate-term $USD rally. We almost hit that trigger point a week ago.
An intermediate-term rally btw is a big one.
Weekly British Pound Index:
Daily British Pound Index:
Weekly Japanese Yen Index:
The Japanese Yen contracts ($XJY) had a huge winning week, up +2.15% to close at 110.96.
http://stockcharts.com/charts/gallery.html?s=$xjy
http://tinyurl.com/yd2fzv4
In late October, the Yen, like the Pound, looked ready to terminate its Bull run with a cycle low of 108.37 almost getting below the prior cycle low at 108.10.
The Yen’s 50-day MA is now 110.07, up from 109.63, 109.25, 108.66, 108.07, 107.35, 106.84, 106.56, 106.17, 105.77, 105.43, and 105.11 over the past eleven weeks.
The 200-day MA is now 105.81, virtually unchanged in the past few weeks from 105.84, 105.89, 105.85, 105.83, 105.82, 105.78, 105.73, 105.63, 105.54, 105.43 and 105.43. And it has been down for two weeks in a row now.
Daily Japanese Yen Index:
Four weeks ago, I wrote, “The Canadian Dollar rocketed +3.66% to close at 95.97 [with a spike cycle high of 97.69]. I have never seen anything like it. One would think the Loonie has gold feathers.” The $GOLD jumped +$46.40/oz that week. Then the Loonie plunged in 12 sessions to a cycle low of 92.16, which was head spinning.
The Loonie gained +0.90% this week to close at 92.99. $GOLD also soared +$49.50 (+4.73%), which was literally an Eagle over the Loon. But Thursday and Friday were losers for the Loon. If the cycle high cannot match the 97.69 of mid Oct, and should it on the other hand drop below the most recent cycle low of 92.16, then I strongly believe $GOLD will no longer be a soaring Eagle.
http://stockcharts.com/charts/gallery.html?s=$cdw
http://tinyurl.com/ycx58us
The Loonie 50-day MA is now at 93.59, up from 93.44, 93.23, 92.83, 92.47, 92.23, 92.05, 91.60, and 90.86 eight weeks ago, and up from 84.57 just 22 weeks ago.
The 200d MA is at 87.37, up from 87.03, 86.74, 86.45, 86.07, 85.77, 85.48, 85.15, and 84.84 over the past eight weeks.
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.
So far, it has been the Dollar down and other currencies and $GOLD up. But for how much longer?
Weekly Canadian Dollar Index:
Daily Canadian Dollar Index:
Here is the China Yuan (CNY) chart.
Wrap-up:
A week ago, I added some comforting words that were well received by many of you. I opined that despite all the doom and gloom around, and my outlook for a market bearish move that could take the S&P to 900…
the point I was making is that this pull-back will be quick like Oct 1987, but nothing as severe. Conditions are different this time around. For one, interest rates are very low and ought to remain low for many quarters. Corporate earnings are improving because govt stimulus programs and corporate belt-tightening are having an impact and the economy is recovering. More of all of this is on the way. Also, the US Dollar is strengthening because the problems with Japan and Europe are every bit as bad and yet foreign equity prices got ahead of the US by a large measure earlier this year, caused by an outflow of funds fed by local doubts and criticisms, and now the Dollar will be returning in order to buy up some relatively low-priced but high quality US equities.
Valuation is a subjective measure, somewhat like quality although just a bit more quantitative. Still, with accounting games being played by large corporations today, I don’t place too much value on the subject of valuation. On a price to earnings basis, the multiples may be high, but not grotesquely so. A bit of a price correction will steady the ship.
Politics too is starting to take on a different look. The questioning of the Treasury Secretary and Fed chief are much sharper these days and the bi-partisan aspects of debate have calmed as I see it. The voter holds the hammer, so these elected representatives are starting to rein themselves in. You cannot dismiss some of the good work some of these people are doing that in previous years was absent. And some of the people in the civil service, people appointed by the president, are starting to speak out, even against the party line, which is good. Those who would continue to rant to the extreme are forgetting that everything political is a matter of negotiation and the result a matter of degree. Activists and forward thinking persons, including myself, ought to take comfort in small gains. After all, who would have thought a year or so ago that Glass-Steagall discussion would be hot, or that a universal health insurance bill would be so close to a fait accompli. Prosecution of important people on Wall Street has taken a serious turn. Leading people on Wall Street are now admitting they made an error in judgment in allowing hedge funds to go unchecked so long. The Madoff story was breaking a year ago and now the man is in prison with a 300 year sentence, meaning he will never come out. Hedge funds Galleon in the US and K1 in Germany are news breaking stories, as well as many other similar cases, most of which will end in very long-term prison sentences. Tax havens are closing shop and fraudsters having to cough up, and their bankers held to account.
There are a lot of positives out there, and they should not be over-looked. As someone said to me this month, we cannot go around with our heads between our knees; we have lives to live. What we feared would happen, has happened, and now that the matter is being addressed, we can afford to look up and take the next step forward.
This week there were many additional arrests made by the FBI of scoundrels on Wall Street. To use the most common word today, we hope the process continues. Prosecution doesn’t restructure the financial system or the capital market, of course, but it does represent change of the kind we need.
There is also evidence of the two US political parties starting to work together to address the biggest issues facing the nation. Kudos to those who are finally making the bipartisan effort, people I formerly criticized, like Tennessee Senator Bob Corker.
http://corker.senate.gov/public/
The Republican Party is in disarray. The John McCain-Tina Fey ticket was a mistake. The Republicans need a leader the world will respect. In that light, I’d like to know what you all think of Corker’s chances of developing into a national leader.
http://corker.senate.gov/public/index.cfm?FuseAction=AboutBobCorker.Biog...
As you know, I have an open mind – except maybe when it comes to Sarah Palin or Rush Limbaugh. Actually, I do happen to think highly of Palin; she just wasn’t ready for the role that the Party wanted at the time. In another eight or 12 years she might be prepared, like Pres. Obama, to tackle the biggest issues facing the nation. She would even try it, I think, with a smaller government. I wouldn’t dismiss her. Still I think I’d prefer a Bob Corker-Ron Paul ticket for 2012. As long as a candidate is in good health, I think having an older person as VP is quite acceptable.
As I see it, there are a lot of good news stories happening today, and, when I take the time, I am one to hope. I am an optimist by nature – and, of course, a critic.
Regarding the market; don’t call me a Bull, but at least my head is now back into prices. Blogging is fun, and a worthy pastime; but, trading is my game. I will do it until the day I die or at least until I am no longer vertical and moving forward.
Ciao.
I had written most of the WIR yesterday before receiving the startling and deeply disappointing news of the passing of a very close friend, and a friend to the Cara Community and to Cara Trading, Peter Simmons. My heart aches.
Thanks Coach!
Submitted by bobbyo (345 comments) on Sun, 11/08/2009 - 00:26 #52105
Bill I hope you don't mind. I found this in the archives when doing a search of your friend. I believe the Community will understand your affection for Peter and his analysis of your/our community really illustrates his analytical abilities. I offer my sincerest condolences.
Bobhttp://www.billcara.com/archives/2007/07/bill_cara_introspection_sat_ju....
P.S. He sounds like my kind of doctor!
Thanks bobbyo; I had forgotten about that article. I am extremely happy you posted it today, and I hope people read it to gain an appreciation of our loss. Peter was the consummate analyst who understood me possibly better than anybody else, certainly one who could articulate his thoughts of this blog as well as anyone. He cared as I know you all do.
When the billcara.com web portal goes live, I shall dedicate it to the memory of Peter Simmons. May his memory last for many years here at this site.
