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December 11, 2005
Week #49 (2005-12-10) in Review
Summary:
Last week I spoke of the increasing cloudiness in equity markets. This week the Dow 30 was down "0.9 pct, the S&P 500 down "0.5 pct and the Naz down "0.7 pct. It was not a good week, despite talk to the contrary by Big Media and your friendly advisor at Humungous Bank & Broker.
As I see it, the U.S. equity and debt markets and currency are transitioning from secular bull to a bear phase. I surmise that debt-laden markets are on the tipping point should rates continue much north from here, and with mild inflation at hand, the market bulls are telling you that there is no inflation. But what they really fear is not inflation, but rising interest rates, and even a stronger economy is going to raise rates. So there will be a bear.
I cannot tell at this point whether that bear will be long-term (which is the meaning of secular) or intermediate or short term.
In other words, will the declining prices grind out over a two or three-year down cycle like 1973-74 or 2000-02, which were devastating secular bears, or the 1981-82, 1990, or 1998 bears that lasted a year or less, or the even shorter-lived bear of 1987, which was a two-month shocker.
My thinking is that the longer this bull runs, the more baggage it will carry on its back, and the faster and further it will tumble " like 1987.
Recalling the 1987 experience is a sobering experience to a trader today who has become drunk with excesses of blind confidence. The sheer exhilaration of watching your pet stock jump 10 pct in a week or maybe two " like INTC did in weeks #47 and #48-05 " can turn around and smack you in the face, however.
Like INTC did this week #49, when it declined -5 pct.
Intel is the 800-pound gorilla of what many believe is the world's most important industry " semiconductors " and I'll bet most of you were unaware that INTC had dropped "5 pct this week. Do you know how much capital that loss represents?
Better still " because I want to make an important point " I want to say that when INTC dropped from the closing price a week ago Friday ($27.43) to its low at the open this Friday (four trading sessions), there was a loss of capital to its share owners of almost $14.25 billion.
Have you thought about the size of the General Motors market cap these days? Well, it's just under $13 billion. So for all the market talk about GM this week, the trades in Intel wiped out more cap than one GM, and you didn't even notice.
Wall Street had you mesmerized over a mid-quarter update that went into the Intel story about operating margins and so forth. And I ask you " seriously, because this is your capital " why do you get sucked in with that nonsense?
Are you interested in putting up multiple tens of billions plus a hundred billion-dollar bank line of credit to buy the company? Or are you planning to buy 100, 1000 or 10000 shares to hold for less than a year, which is the average holding term for most fund managers and traders today?
The point of all this is that you are a trader and you have to watch prices, which means market cap. Prices move up and down in percentages that are meaningful to your portfolio, which is your wealth. Your job is to trade that portfolio to increase your wealth. Your job is not to invest in companies.
Warren Buffett invests in companies. You trade share prices.
In summary, the equity market is starting to break down. The bull, which started either in 4Q02 or 1Q03 depending on how you define it, is getting tired.
Increasingly, there are dizzy spells: a week ago it was Wal-Mart " also down "5 pct.
Do you know how much market cap WMT lost that week? Well, Friday close to Friday close, WMT was down -$10.2 billion. And the week before that Altria (NYSE: MO) dropped close to -$7.5 billion.
So over the next few months, I think you ought to be looking at the aggregate losses in the blue-chip big cap stocks, and thinking to yourself, "That must really be hurting somebody".
The thing is " I can't judge people's sensitivity to pain. Given that Wall Street has hypnotized you (which I can see by the low VIX readings), it's hard to tell until you scream.
I suspect you are on the threshold of pain, but I won't know whether you are going to react like a knife is stuck in or it feels like a dull toothache.
You haven't told me yet, but you will.
Portfolio/Trades: This week's performance recovered, as I expected, but I decided to hold off before making the promised big changes. Have 78-pct in cash or near-cash, with 12-pct in gold and silver stocks (a major over-weighting) plus a minor-over-weighting in energy. A 2-pct holding in gold and silver miner call options was closed and moved into the equities. Ten pct is spread across all other (non basic material) sectors except Financials.
U.S. Sector ETFs: Seven down; 3 up.
10: Market-weighted: winter storms; #2 performer this week
15: Market-weighted: all about metal; week's #3 performer
20: Market-weighted: weakness showing; down "0.7 pct W/W
25: Market-weighted: consumers don't like shoppers' numbers
30: Market-weighted: consumers don't like shoppers' numbers
35: Market-weighted: flat on the week; Big Pharma troubles
40: Under-weighted: decline continues; XLF down "0.7 pct
45: Market-weighted: rally did end; worst performer by far
50: Under-weighted: 2nd worst performer (short); VZ "2.5pct
55: Market-weighted: #1 performer on the week
Bonds: Flat, with confused trading
Commodities: The index up sharply again " until Friday
Oil & Gas: modest gain, but Friday down big as M3 growth starts up fears of Fed tightening
Gold: Gold was up +4.6 pct W/W. The $526 level is solidly above psychological support at $500. But Tuesday FOMC not likely to ease
Goldminers: Shares of North American miners are flying, but late Friday trading shows nervousness going into FOMC meeting
Forex: USD was down second week now, this time "0.7 pct. The Euro was up +1.0 pct W/W; after three legs down this year, the euro-bear might hibernate
International Equities: While the U.S. equity markets flounder and drop, foreign markets stayed strong. EWJ (Japan), EWU (UK), and EWC (Canada) were up +1.5, +1.1, and +1.4 pct W/W respectively
U.S. Equities : All four broad market indexes were down. That was to be expected when the Weekly momentum indicator (STO) had been a perfect 99.9 for the Naz. A week ago, I said "I can hear a bear growling"
ETF Portfolio:
Short:
XLF (29.13) 31.90 -9.5 pct
IYZ (23.50) 23.87 -1.6 pct
EWH (13.03) 12.92 +0.8 pct
Long:
TSX: XGD (53.03) 59.59 +12.4 pct
XLP (22.75) 23.36 +2.7 pct
IYH (60.54) N/A +3.12 pct SOLD
My sample portfolio gained: to being up +7.9 pct from +2.2 pct two weeks ago. This week's gold shares picture helped a lot.
Sector ETF:
Here are the ETF charts I follow for the ten sectors of the U.S. equity market:
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)
Here is the weekly performance of my favorite ten Sector Index Funds. The table is sorted by price performance Week over Week (W/W), i.e. 1W%N, but is otherwise unsorted.
| Symbol | Close | Net | %Net | 1W %Net | 2W %Net | 4W %Net | YTD %Net | 3M %Net | 6M %Net | Yr %Net |
|---|
After four weeks running with nine ETF's up, and one down, followed by one where all ten were up, a week ago the picture changed. That week there were 5 up and 5 down. This week it was 7 down and 3 up. The biggest gainer a week ago, Semiconductor Techs SMH (+3.9 pct), was by far the biggest loser this week (-2.5 pct). Financials (XLF) took another hit, down "0.7 pct. :-)
Sector 10 (energy: XLE, IYE, VDE, OIH, PBW and IXC)
Here's the XLE Weekly, Daily and Hourly data charts:
XLE Weekly data:
XLE Daily data:
XLE Hourly data:
XLE was up +1.27 pct to 51.82 W/W. A week ago I said, "I prefer this ETF to about seven others." This week, XLE out-performed eight others in my list of ten.
YTD (after 49 weeks this year), I note that only 3 of 10 are up > +8 pct, and the Dow itself is actually down 5 points. That makes it awfully tough if you are stuck in the wrong sectors.
XLE has been the star performer, up +44.8 pct. XLU and SMH are next, up +18.5 pct and +16.5 pct, respectfully.
I am modestly over-weighted in Energy within a portfolio that is grossly over-weighted in cash.
Sector 15 (basic materials: IYM, XLB, IGE and VAW)
Here's the XLB Weekly, Daily and Hourly data charts:
XLB Weekly data:
XLB Daily data:
XLB Hourly data:
XLB was up +0.30 pct W/W, to 30.21, which was 3rd best of ten sector ETFs, but not much to shout about.
The metals were ok, but the problem is elsewhere. By now you know my mantra: "I still don't like the paper and forest products and chemicals during times when the bond yield curve is flattening. That is warning an economic slowdown or recession."
Sector 20 (industrial: IYJ, XLI, VIS, and IYT)
Here's the XLI Weekly, Daily and Hourly data charts:
XLI Weekly data:
XLI Daily data:
XLI Hourly data:
XLI dropped "0.69 pct W/W to 31.47. UTX (+0.78 pct W/W) was a leader, but there was not much enthusiasm here. And there hasn't been all year, with XLI being up just +2.2 pct YTD. But that's what happens with a strong USD. These companies are exporters are have set up plants offshore. Their earnings would be strengthened by a weaker USD.
As you recall from earlier: "XLI is topping, and I expect the bear will visit soon. The key is when GE rolls over." GE by the way is down "2.9 pct YTD, which must be surprising to many of you for all the airplay given GE and Jeff Immelt by subsidiary CNBC.
And all those CNBC staffers (talking head personalities, producers, writers et al) have one heck of a GE-rich pension plan. They must really wince when the GE stock is DOWN ON THE YEAR.
Alternatively there is an explanation for the cheerleading when GE goes in the opposite direction. You'd think the SEC might dwell on that point.
After all, there are "experts" who visit CNBC every day, every week, who practically vomit when they hear the names of most of the Dow 30. But have you ever heard an "expert" go on CNBC and scream that GE is pulling his or her performance down, and is a dog's breakfast, etc?
You'll never see it.
Did you see that Jim Cramer's former partner at theStreet.com, Herb Greenberg, got the hook by Cramer this week after Herb had called Eddie Lampert's SHLD a dog of dogs. Tell me, as it relates to financial entertainment TV, what is the capital market equivalent of the term ‘politically correct'?
Sector 25 (consumer discretionary: XLY, IYC and VCR)
Here's the XLY Weekly, Daily and Hourly data charts:
XLY Weekly data:
XLY Daily data:
XLY Hourly data:
XLY was down "0.68 pct W/W to 33.36. Retail shoppers are storming into stores, but as soon as they see that retailers are not like Oprah (who gives away cars), they flock out. The retail drop this year must be like +2 pct over last December.
And when you takeaway Wall Street's $24 billion bonuses this year, which went into neat cars and home entertainment centers, the retail drop for the rest of us might actually have come in at a negative.
No tickee in the U.S., unless the managing directors of Humungous Bank & Broker are spending our money on themselves... one managing director at a time.
Sector 30 (consumer staples: XLP, VDC, RTH and IYK)
Here's the XLP Weekly, Daily and Hourly data charts:
XLP Weekly data:
XLP Daily data:
XLP Hourly data:
XLP (Consumer Staples) was also down again "0.72 pct W/W, just like a week earlier, to 23.36, "proving once again that consumers need tickee, even for staples."
But here is where a steel company distracted me, and the reason why I must become more observant. A week ago I wrote: "I don't know why I'm long; it's an embarrassment to my portfolio even though I'm up +3.4 pct in a couple months. Ill be saying goodbye this week." I forgot. Obviously you didn't. XLP in my portfolio is now up just +2.7 pct, when it should be +3.4 pct plus cash.
The idiot blogger.
Sector 35 (healthcare: IYH, XLV, VHT, IXJ, and IBB)
Here's the IYH Weekly, Daily and Hourly data charts:
IYH Weekly data:
IYH Daily data:
IYH Hourly data:
IYH closed at 62.12; down "0.08 pct W/W. I'm glad I got out. I don't need the drugs; I'm already overly medicated.
Sector 40 (financial: IYG, IYF, XLF, VFH, IXG, VNQ, RWR, IYR, and ICF)
Here's the XLF Weekly, Daily and Hourly data charts:
XLF Weekly data:
XLF Daily data:
XLF Hourly data:
CIBC obviously didn't like my negative comment last week; they closed my account.
Just kidding.
Jeez, if CIBC would shut me down after calling 950 ex-officers a few names, Paul Martin would have me run out of the country. That is, if he could spring me from jail, where Ontario Superior Court Judge James Farley would put me (if he could).
Anything's possible, even with XLF. But again I was just kidding.
XLF was down "0.65 pct this week, as I said it would be. :-) More to come I think.
Sector 45 (technology: IGM, IGV, IGW, XLK, VGT, IYW, IGN, IXN, MTK and SMH)
Here's the SMH Weekly, Daily and Hourly data charts:
SMH Weekly data:
SMH Daily data:
SMH Hourly data:
Last week I wrote that it would take an Extraterrestrial (ET) to save SMH. I just didn't tell you there are no ET's.
SMH was down this week "2.54 pct to 37.94.
Actually I rather like the Chips, and the Internets and the Softwares, and other groups in the Tech sector. I just don't want to buy them until people hand them to me. I'm like the customers at Wal-Mart's and Ford/GM lots these days.
Btw, I saw an advertisement for a computer that when you factor in all the rebates, you don't pay $650, you end up with $300 in your pocket. You see, things are starting to come my way.
Now if the store would just fill out those rebate cards for me, I'd come by in a month to pick up the free computer plus the $300 for my time.
You see the value of time? That's why this blog is so valuable.
Btw again, a reader sent me a note that a recent article in Business 2.0 values popular blog sites at $38 per monthly visitor.
Makes me :-), but doesn't change a thing. I'm not going to sell advertising, and I'm not going to sell period.
Sector 50 (telecom: IYZ, VOX and IXP)
Here's the IYZ Weekly, Daily and Hourly data charts:
IYZ Weekly data:
IYZ Daily data:
IYZ Hourly data:
IYZ was down "0.75 to 23.87. If the word "legacy" did not exist, the term "fixed line telecommunications" would surely take its place in Webster and Wikipedia.
In 2H99, Michael Armstrong, who was CEO for a company named T, made all the rounds of the financial entertainment TV shows. His song and dance (well let's just say Michael didn't learn to dance) was that all the fixed line telephone, and the mobile telephone, and the Long Distance, and the broadband ISP, times xx million subscribers paying xx per month, would make Humpty Dumpty a rich man.
Flash forward five years to the reincarnation of T. But wait, oh wait, where is Michael Armstrong?
He never made it to San Antonio. Alas, he met his Alamo at CNBC.
Sector 55 (utilities: IDU, XLU, and VPU)
Here's the XLU Weekly, Daily and Hourly data charts:
XLU Weekly data:
XLU Daily data:
XLU Hourly data:
XLU (Utilities) was best performer this week, up +1.36 pct to 32.00, which is what happens when there is a major snowstorm in the NorthEast, taking Natural Gas prices north of $15.00 on Friday. And what ever happened to the $7.50 prices we had at exactly this time last year, heading into a terrible winter?
Bonds:
TLT was almost flat this week, up 4 cents W/W to 89.54.
I don't have much to say except: BONDS AWAY.
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 3 Month | 3.79 | 3.76 | 3.75 | 3.76 |
| 6 Month | 4.11 | 4.11 | 4.08 | 4.06 |
| 2 Year | 4.41 | 4.39 | 4.33 | 4.39 |
| 3 Year | 4.41 | 4.39 | 4.34 | 4.41 |
| 5 Year | 4.43 | 4.40 | 4.36 | 4.45 |
| 10 Year | 4.51 | 4.48 | 4.46 | 4.56 |
| 30 Year | 4.71 | 4.69 | 4.69 | 4.75 |
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 2yr AA | 2.98 | 2.98 | 2.95 | 2.84 |
| 2yr AAA | 2.93 | 2.94 | 2.95 | 2.82 |
| 2yr A | 2.97 | 3.01 | 3.01 | 2.95 |
| 5yr AAA | 3.22 | 3.22 | 3.22 | 3.19 |
| 5yr AA | 3.26 | 3.27 | 3.29 | 3.22 |
| 5yr A | 3.37 | 3.34 | 3.32 | 3.29 |
| 10yr AAA | 3.68 | 3.66 | 3.64 | 3.72 |
| 10yr AA | 3.67 | 3.66 | 3.64 | 3.71 |
| 10yr A | 3.76 | 3.84 | 3.88 | 3.83 |
| 20yr AAA | 4.11 | 4.11 | 4.09 | 4.17 |
| 20yr AA | 4.14 | 4.14 | 4.08 | 4.13 |
| 20yr A | 4.21 | 4.25 | 4.21 | 4.29 |
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 2yr AA | 4.53 | 4.52 | 4.46 | 4.50 |
| 2yr A | 4.58 | 4.55 | 4.52 | 4.56 |
| 5yr AAA | 4.62 | 4.67 | 4.65 | 4.63 |
| 5yr AA | 4.73 | 4.69 | 4.66 | 4.75 |
| 5yr A | 4.81 | 4.76 | 4.75 | 4.80 |
| 10yr AAA | 5.12 | 5.17 | 5.21 | 5.13 |
| 10yr AA | 5.06 | 5.05 | 5.05 | 5.09 |
| 10yr A | 5.18 | 5.15 | 5.13 | 5.17 |
| 20yr AAA | 5.51 | 5.53 | 5.53 | 5.44 |
| 20yr AA | 5.68 | 5.63 | 5.69 | 5.76 |
| 20yr A | 5.71 | 5.64 | 5.78 | 5.82 |
The Treasury data at Yahoo Finance is all screwed up. This week's data is the same as last week's actual data, top to bottom. And the figures that are showing as last week's data are not even close to what the same table showed a week ago.
Yahoo made a big change to the formatting of this table a week ago. What they proved to techies everywhere is that once a system is proven to work it ought to be called a legacy system and left permanently untouched. Then when an entirely new system comes along, run both in parallel for a couple weeks until EVERYBODY (not just management) is happy. Then drop the legacy system.
Normally I could care less; but we're talking financial data here, and CNBC and Elliott Wave people have exclusively reserved the right to change history whenever they feel like it. So hands off, Yahoo; you are screwing up a good thing.
Here is a news story that gives a more accurate reading.
Interest rates and bond yields.
On Tuesday and Thursday mornings this week, there was a bit of pop in the bond market. That could have been the Fed buying bonds and the Treasury shipping out more money to the Money Center Banks to act as Santa's Helpers for the George Bush PR parties last week.
Otherwise bonds didn't do a whole lot.
CFC, FNM and FRE had a bad week the week earlier as traders started looking at foreclosures, and the strength of their MBS paper. But this is Happy Holidays right? So the Treasury and the Fed must have greased the right players to put some oomph in the CFC, FNM and FRE consumer mortgage market.
Don't want to scare those consumers while they are out spending USD on presents, do we?
US Bond Funds -- 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 -- 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 -- 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:
US Bond Funds -- Hourly Data Charts
SHY Hourly data series chart:
IEF Hourly data series chart:
TLT Hourly data series chart:
AGG Hourly data series chart:
LQD Hourly data series chart:
TIP Hourly data series chart:
Consumer Finance -USA -- Weekly Data Charts
Consumer Finance -USA -- Daily Data Charts
Consumer Finance -USA -- Hourly Data Charts
Commodities:
A week ago I wrote: "Inflation is over. I heard it on CNBC. LOL every time I hear that... Then again, $CRB was up +2.77 pct this week, so maybe CNBC tuned out the world."
This week, CNBC treated its audience to a Kudlow show that had K's bud Dr. John Rutledge sneering, "Inflation? Don't even start with me on that one pal," as John and Larry put the boots to the one legit "personality" CNBC had on display that hour.
Mmmm. This could get nasty. Just like Washington Week in Review.
CNBC; Where Politics Rises Above Capital Markets.
I can see it coming. Left, right, left, right, left... Now march to the Supply Side Drummer. Or else.
$CRB closed at 327.81. A week earlier it was 323.38, which means the gain was +1.37 pct W/W. That's inflation putting its money where its mouth is.
And Rutledge and Kudlow just put both where they don't belong.
$CRB btw is the capital market version of the term ‘inflation'. CPI/PPI is Washington's version.
Now whom are you going to trust? People who are all mouth, or those who are all money? Don't bother... I know the answer.
Crude Oil contracts (NY Crude EOD chart at StockCharts) were up just +0.12 pct this week because on Friday the price of oil slipped "2.1 pct. $WTIC is now 59.39, an increase of 7 cents. Now if it's copper cents, then it went up over +2 pct on the week.
There was a heck of a snowstorm on Friday, but the Texas Ranger Fan club dressed in Salvation Army outfits was down on Wall Street giving away free Texas Crude coupons for a Bush Family Christmas Party. I mean, why else was Crude down so much on Friday? LOL
Gold:
Gold closed up +4.56 pct W/W to 526.38 (Continuous contracts). That just happens to be $23.00 in USD (on top of $7.32 a week earlier) in case anybody is counting in USD.
"Yellow Bird." "Yellow Bird." I've drawn a picture of a cruise ship waiter on my wall, and I'm practising. What's that bartender's name on Love Boat? ...Isaac Washington.
Oh, now there's a Washington I could appreciate. ... "Yellow Bird."
Tuesday is going to a test of the faithful. It's FOMC Day. Rate Hike Day. What's this? Thirteen first downs and counting?
Well, the International Trade data and the CPI data come up later in the week, and then PPI, so it will be interesting to see how much redrawing of charts the Administration can get done this week.
Weekly Gold EOD Continuous Contract Index:
Daily Gold EOD Continuous Contract Index:
This interactive chart shows the recent trading for the Gold Bullion index.
Silver was up this week +5.26 pct to 9.00, another 45 cents. I'm glad I got aboard Nov-17 at ~8.00. I did take Lee Ann to the dance.
The thing about silver and gold is that even Texans don't mess with silver & gold bugs when the action heats up. The reason being of course is that, while you can put a few good stocks down for a day or two, you learn to preserve capital when the Mexican army is storming the Alamo, or more appropriately when the new Middle Class of Asia starts storming Ft. Knox.
And boy won't they be upset to find the U.S. vaults have run out of precious metals, long ago replaced by colored paper. Those people have a mantra, and it's not "In paper we trust."
And I told you before they are all crazy " especially the ones who like the white gold.
Weekly Silver EOD Continuous Contract Index:
Daily Silver EOD Continuous Contract Index:
This interactive chart shows the recent trading for the Silver Bullion index.
Platinum closed flat at $1006.90. Actually it was off a single USD, but what's one in a thousand, anyway?
And if, as and when Ford and GM decide they want to put their 500,000 employees back to work building good automobiles for people who need them, instead of lending money to people who don't, then the platinum in the engines will drive the price of PLAT back up at least a single USD, probably more.
PLAT is quite scarce, but usually when the precious metals take a break, it's usually PLAT that's first to head south.
Weekly Platinum EOD Continuous Contract Index:
Daily Platinum EOD Continuous Contract Index:
This interactive chart shows the recent trading for the Platinum metal index.
Palladium was up +5.27 pct W/W to 285.87. A week earlier it was up +2.78 pct.
Still moving onward and upward, PALL has a friend in Zug, I think.
Weekly Palladium EOD Continuous Contract Index:
Daily Palladium EOD Continuous Contract Index:
This interactive chart shows the recent trading for the Palladium metal index.
Copper was up another 2.01 pct W/W ($4.05 on the contracts), after being up $11.51 a week earlier.
And a week earlier, the ABN AMRO base metals head trader told the Bloomberg TV audience the fun has just begun. (My word not his; I think he called it ‘explosion').
Weekly Copper EOD Continuous Contract Index:
Daily Copper EOD Continuous Contract Index:
This interactive chart shows the recent trading for the Copper metal index.
The Philly goldminer index ($XAU) was up a screaming +5.77 pct W/W to 122.94.
Aren't you happier to be there rather than GOOG?
Well $XAU was actually down "1.00 pct on Friday as afternoon trading turned skittish as traders started to think ahead to the possible damage that a 13th rate hike on Tuesday the 13th could do. At least it's not Friday the 13th.
The XGD Toronto Exchange-listed goldminer iUnits S&P/TSX Capped Gold Index ETF TSE:XGD was also weak.
XGD was up +3.92 pct W/W to 59.59. A week earlier XGD had been down "2.60 pct but what did I tell you? I said: "Hurt me actually. But just like $XAU was down "2.05 pct and Friday was "1.62 pct of that, XGD was down "1.82 pct on Friday, which was a golden lion's share of "2.60 pct loss on the week....(But) I'm not going anywhere until I personally get a call from John Snow to tell me that he put a stop to M3 growth."
You see; I knew that was a call I was never going to get.
And Snow's M3 just happened to leap into 14-digit territory for the first time in the history of the world at the close (4:30 pm actually) on Thursday. And just like I told you that my heart was pounding from anticipation of higher gold prices; sure enough, gold had jumped +2 pct by mid-day Friday until CNBC started in re the FOMC on Tuesday, which scared a few weak hands.
The Weekly data RSI for XGD is 70, but could go to 90. The Daily data RSI is at just 61.4. There is a lot of room to the glass ceiling.
Here are the Weekly, Daily and Hourly data charts for the TSX Goldshares (XGD) index:
For an interactive look, here are links to the Hourly data charts of three groups of proven goldminer stocks. You can click on the tabs for the Monthly, Weekly and Daily data charts.
Forex:
The trade-weighted USD index closed at 91.26, which is a fairly big drop of "0.72 pct W/W.
Now I don't want to tell you how much "0.72 pct of the total value of money in the United States is " for fear you may have a heart attack " but let me say it's more money than Wall Street made in bonuses this year... lost in a week.
Next week could be worse. And I'm afraid to tell you what the Cara Crystal Ball is saying for January 2006. The old joke "If I tell you, I'll have to kill you" doesn't even apply.
If I tell you, you'll die of a heart attack anyway.
The Euro (priced in USD) was up +1.00 pct W/W to 118.24. Three legs down this year, and maybe the selling is over now.
Btw, now you know where all those USD billions went. They flew across the pond.
They prefer a central bank that has raised rates just once in 5 years to one that is about to raise it the 13th time in 18 months, I suppose. Inflation must be lower there. :-)
Weekly Euro Dollar Index, priced in USD:
Daily Euro Dollar Index, priced in USD:
International Equities:
Japan , U.K. and Canada all had a great week.
Last week I made a comment about China not looking so solid. This week I received enough material from shanghai Fly to write an article every day for a week. So, next week my focus might be on international equities.
Japanese equity market ETF: EWJ
This week, EWJ (Japan) was up +1.49 pct W/W to 12.93.
But the Weekly RSI is now up to 80.4, and the index fund (in USD) is up +12.2 pct since mid-November lows. And the STO is red lining it, too, so be careful.
Here is the Japanese (EWJ) equity market ETF Weekly, Daily and Hourly data charts:
U.K. equity market ETF: EWU
The U.K. ETF (EWU) was up +1.49 pct W/W to 19.17.
The U.K. Market is very pricey. It is up +7.9 pct from the lows of the third week in October. The Japanese market (+12.2 pct) and the Canadian market (+15.8 pct) in a similar period were up even more, but in both those cases, I understand the reasons. I think the U.K. market strength is based more in the confidence of local traders buoyed by what they perceive is happening abroad.
Here is the United Kingdom (EWU) equity market ETF Weekly, Daily and Hourly data charts:
EWU Weekly data:
EWU Daily data:
EWU Hourly data:
Canadian equity market ETF: EWC
The Canadian (EWC) equity-market ETF jumped +1.44 pct W/W to 21.88. It is up +15.8 pct from the lows of this quarter. If the oil market comes down, the Cdn market will likely follow. Otherwise it will likely track more closely to the U.S. equity market than it has been.
The federal election campaign is in high gear, and promises by all parties are ringing up the cash register in unbelievable amounts --- literally and figuratively.
Here is the Canadian (EWC) equity market ETF Weekly, Daily and Hourly data charts:
EWC Weekly data:
EWC Daily data:
EWC Hourly data:
(Japan, Taiwan, Hong Kong, Singapore)
(U.K., Germany, France, Italy)
(Canada, Mexico, Brazil, Australia).
U.S. Equities:
This week the Dow 30 was down "0.9 pct, the S&P 500 down "0.5 pct, the Naz down "0.7 pct, and the Russell Small Cap Index down 0.3 pct.
While the market has shown weakness, it appears to still be in a trading range, which is likely to persist for another week or more. After the market makes its next move, I expect the break-out to be on the downside, based on my view of the momentum indicators like RSI, STO and MACD.
Here is the Monthly data chart of the Nasdaq Composite, S&P 500, Dow30, and Russell 2000 (small cap) indexes.
Here is the Weekly data chart of the Nasdaq Composite, S&P 500, Dow30, and Russell 2000 (small cap) indexes.
Here is the Daily data chart of the Nasdaq Composite, S&P 500, Dow30, and Russell 2000 (small cap) indexes.
Here is the Hourly data chart of the Nasdaq Composite, S&P 500, Dow30, and Russell 2000 (small cap) indexes.
The following table shows the weekly price performance of the Dow 30 stocks, which I sorted by 1-week price change.
| Symbol | Close | Net | %Net | 1W %Net | 2W %Net | 4W %Net | YTD %Net | 3M %Net | 6M %Net | Yr %Net |
|---|
This performance chart of the Dow 30 shows 11 stocks up and 19 down this week. Last week it was 13 and 17. Prior to that, however, it was five weeks of solid gains by the majority of stocks.
So the topping process accelerates.
Lets take a look at what happened:
The five big winners out of 11 on the week:
GM, up +3.85 pct: still off "43.1 pct YTD
HPQ, up +2.36 pct: who woulda thought #1 performer YTD +42.1 pct
DIS, up +2.31 pct: still off "9.6 pct YTD
UTX, up +1.48 pct: elevators for China maybe?
SBC, up +1.38 pct: morphing into a new ticker symbol "T"
The five big losers out of 19 this week:
INTC, down "4.92 pct: theStreet.com says: "soggy 4th Q guidance"
PFE, down "3.19 pct: losing the cache traders say
KO, down "3.06 pct: bottled coffee failed once before
MRK, down "2.80 pct: maybe caught in a Vioxx lie, probably not
VZ, down "2.48 pct: changing landscape for telecom
Here are the links to interactive Dow charts from Investertech.com that I broke into groups of ten, which you can add technical indicators for as well. (list one) (list two) (list three)
(AA) (AA) (Here is the Oct. 21 Value Line report on AA: next one is due Jan. 20)
(AIG) (AIG) (Here is the Nov. 25 Value Line report on AIG: next one is due Feb. 25)
(AXP) (AXP) (Here is the Nov. 25 Value Line report on AXP: next one is due Feb. 25)
(BA) (BA) (Here is the Sep. 23 Value Line report on BA: next one is due Dec. 23)
(C) (C) (Here is the Nov. 26 Value Line report on C: next one is due Feb. 25)
(CAT) (CAT) (Here is the Oct. 28 Value Line report on CAT: next one is due Jan. 27)
(DD) (DD) (Here is the Oct. 21 Value Line report on DD: next one is due Jan. 20)
(DIS) (DIS) (Here is the Nov. 18 Value Line report on DIS: next one is due Feb. 18)
(GE) (GE) (Here is the Oct. 14 Value Line report on GE: next one is due Jan. 13)
(GM) (GM) Here is the Sep. 2 Value Line report on GM: next one is due Dec. 2)
(HD) (HD) (Here is the Oct. 7 Value Line report on HD: next one is due Jan. 6)
(HON) (HON) (Here is the Oct. 28 Value Line report on HON: next one is due Jan. 27)
(HPQ) (HPQ) (Here is the Oct. 14 Value Line report on HPQ: next one is due Jan. 13)
(IBM) (IBM) (Here is the Oct. 14 Value Line report on IBM: next one is due Jan. 13)
(INTC) (INTC) (Here is the Oct. 14 Value Line report on INTC: next one is due Jan. 13)
(JNJ) (JNJ) Here is the Sep. 3 Value Line report on JNJ: next one is due Dec. 2)
(JPM) (JPM) Here is the Nov. 25 Value Line report on JPM: next one is due Feb. 25)
(KO) (KO) (Here is the Nov. 4 Value Line report on KO: next one is due Feb. 3)
(MCD) (MCD) (Here is the Dec. 9 Value Line report on MCD: next one is due Mar. 10)
(MMM) (MMM) (Here is the Nov 18 Value Line report on MMM: next one is due Feb 18)
(MO) (MO) (Here is the Nov.4 Value Line report on MO: next one is due Feb. 3)
(MRK) (MRK) (Here is the Oct. 21 Value Line report on MRK: next one is due Jan. 20)
(MSFT) (MSFT) (Here is the Nov. 25 Value Line report on MSFT: next one is due Feb. 25)
(PFE) (PFE) (Here is the Oct. 21 Value Line report on PFE: next one is due Jan. 20)
(PG) (PG) (Here is the Oct. 7 Value Line report on PG: next one is due Jan. 6)
(SBC) (SBC) (Here is the Sep. 30 Value Line report on SBC: next one is due Dec. 30)
(UTX) (UTX) (Here is the Oct. 28 Value Line report on UTX: next one is due Jan. 27)
(VZ) (VZ) (Here is the Sep. 30 Value Line report on VZ: next one is due Dec. 30)
(WMT) (WMT) (Here is the Nov. 11 Value Line report on WMT: next one is due Feb. 11)
(XOM) (XOM) (Here is the Sep. 16 Value Line report on XOM: next one is due Dec. 16)
The Value Line Report for this week is MCD. VL calls it a dog, despite nice words in the summary. Technical rating was dropped this week to a "4". On the other hand, Bush will tell you this company is hiring. :-)
Wrap up
Next week my associate and I start to restructure the data of this website. We are doing it on a development machine, where we are installing MT plug-ins for various new features, as well as new program code to allow some neat stuff " like video and podcasting.
Yes, you'll get to see me everyday " at home and on the road if I can get to an ISP connection
I made a promise to continue pushing the envelope, and part of that will be developing a global e-community where monitors will be helping me from Shanghai to Zug to the floors of the Chicago CBOT and CBOE.
And for a price, I am going to put up my real stock portfolios (from precious metals to Dow 30, Cara 100 and ETFs) and send e-mail alerts on all my trades.
This blog will soon be like a 12-cylinder beast running flat out. Web Autobahn, here I come.
As I see it, anyway.
Posted by Posted by Bill Cara on December 11, 2005 01:33:41 PM | Category: Cara Week in Review