But today is Week #52 out of 52 for 2005, so I'll tend to confine my remarks to a Year in Review.

This was the "Year of the Oils", when crude prices went to $70, speeding up the earnings growth and filling the coffers of the world's major oil companies.

On May 16, I thought the early in the year selling had been far over-done so I announced in a headline article, "The Oils will recover tomorrow". And right on cue, the next day was the start of a bull run in the oil company stocks.

But by May 27, I clearly recognized an industry-based stock promotion on a massive scale the likes of which I have seen few times. Simultaneously I noted that the biggest of Big Oil, Exxon Mobil (XOM) had peaked out and was being distributed to the Little People. So, as recorded in this blog that day, I shouted to CNBC, the prime protagonist of Big Money, "Sold to You! " XOM at 56.80". Today, exactly seven months later " after all the $70 oil hoopla " XOM closed the year at $56.17.

Who's sorry now?

Same day I sold XOM, I sold another 800-pound Dow gorilla " INTC @ $27.39. I gave you my reasons, mostly being that I know a good stock promotion when I see one. INTC closed the year at $24.96, after getting down to about $22.50 two months ago.

So this year you learned how to sell into strength and buy into weakness. It's the only way to beat the market, and you can do that despite what every academic prof will tell you, which only goes to prove that professors are better teachers than traders.

Also back on May 16, I noted that gold stocks had been far over-sold and were ready to rally, so I wrote another headline article, "The golds will recover tomorrow". And right on cue, the next day was the start of a bull run in the goldminer stocks.

Later in the year I observed a growing disconnect between gold bullion prices and the USD, so I thought to myself I had better start really talking up Gold because I know a stock promotion in the making when I see it. And boy wasn't I right.

Today, of course, most every pundit, talking head, Elliott Wave chartist, and blogger, will tell you they are experts in gold. But as my barber says, "When prices go up, they tell you to buy; when they go down, they say sell. They don't know what they are talking about."

Actually they do. They represent the sell-side, and they need to stir up emotions or else their hands will not find a way into your pocket.

Yes, I have said that 2006 will be the "Year of the Metals", and that includes the precious metals (gold, silver, platinum and palladium) and the base metals (particularly copper). Although metals prices are at near record high levels, and certainly at cycle high levels, I believe the metals game has just begun.

The present year was a strange one for bonds and currency. I admit that as right as I was for oil and gold, I have been wrong on bonds and the USD. But then anybody who looked at the economic data was making incorrect assumptions.

When inflation data was clearly popping up higher numbers, the talking heads were saying, "There is no inflation". And instead of interest rates rising, which would have killed the housing boom, rates fell, which pushed bonds higher and extended the housing boom.

So who knew other than Alan Greenspan and the White House and their friends at Humungous Bank & Broker? Of course, now that the world can see what the Fed-Treasury combo have done, which has been to print massive amounts of money, we can also see that the talking heads were fed leaks from the Administration.

Pretty nasty stuff. In a world that is supposed to be transparent, and democratic, and based on fairness and integrity in capital markets, we the Little People got to see that our chains have been yanked.

Ergo: 2006 will be the year that I go back to tape watching, where I can spot a smarmy promoter in a heartbeat. And so can you: just watch for the volume increase in the bought-and-paid-for talking heads to be transferred to the volume increase in the related stocks WITHOUT AN INCREASE IN PRICE.

That means, in a word, DISTRIBUTION.

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Portfolio/Trades: I had a great week the total pct increase rising from +14.7 pct to +23.1 pct. It was only Week #48 when I was up +2.2 pct. I still have three shorts (XLF, IYZ and EWH), and only one long (TSX: XGD). I was going to close down the blog portfolio this week before going on vacation, but (premium access) live portfolio linked to my brokerage account might not start until late January (Rule of 5 = changes take 5 times as long and 5 x the cost as planned). So I'll leave this blog portfolio intact until after i return from vacation. Trust me, I won't worry about being short everything but gold.

U.S. Sector ETFs: Zero up; Ten down.

10: Energy (XLE): Over-weighted: crude was up, stocks down W/W
15: Basic Materials (XLB): Over-weighted: strong metals, #1 performer again
20: Industrials (XLI): Market-weighted: to follow GE down
25: Cons. Discretionary (XLY): Under-weighted: WMT "3.7 pct W/W; weak spending
30: Cons. Staples (XLP): Market-weighted: weakness encountered
35: Healthcare (IYZ): Under-weighted: PFE "3.1 pct; trouble starting
40: Financial (XLF): Under-weighted: 7 week ceiling, inverting yield curve
45: Technology (SMH chips): Market-weighted: weakness here
50: Telecom Services (IYZ): Market-weighted: dividend yields protecting sector
55: Utilities (XLU): Market-weighted: topped out @ 32.75 2 weeks ago

Bonds: Market is very nervous; could be rebalancing books at year-end, but data is very inconsistent. This is a market for pro traders.

Commodities: The index was up +1.7 pct W/W on basis of oil and gold strength through the week

Oil & Gas: Gain of +3.3 pct W/W, so every time technical weakness shows, buying comes in; looks like 55 oil might hold for next month at least

Gold: Gold jumped from $502.80 to $517.03 after I called a rally to $530 before a pullback to re-test 500 base; on its way to 550-600 soon

Goldminers: Shares continue to be strong, with $XAU up +2.4 pct and TSX: XGD up +3.0 pct W/W; heavy promotion is yet to start

Forex: The trade-weighted USD this week was up +0.3 pct, while the Euro was down "0.3 pct W/W; Cdn Dollar to follow gold price from here

International Equities: U.K. and Japan markets dropped almost 1 pct W/W, and will likely follow U.S. markets (down) from here

U.S. Equities : The Dow and S&P500 were down about "1.6 pct, and the Naz and Russell small caps were down about "1.9 pct W/W. Twenty-seven Dow stocks were down, and just 3 up on the week, including GM on dead-cat bounce.

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ETF Portfolio:

Weekly
Daily
30-Minute

Short:
XLF (29.13) 31.67 -8.7 pct
IYZ (23.50) 22.86 +2.7 pct
EWH (13.03) 12.62 +3.1 pct

Long:
TSX: XGD (53.03) 62.86 +18.5 pct
XLP (23.66) N/A +4.44pct SOLD
IYH (60.54) N/A +3.12 pct SOLD

My sample portfolio continued to gain: to being up +23.1 pct vs +14.7 pct, +9.1 pct, +7.9 pct and +2.2 pct in the prior four weeks. I'll be closing it for admin reasons in mid-January.

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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
XLB	30.28	-0.26	-0.85%	-0.49%	0.43%	0.10%	2.89%	10.11%	11.57%	1.71%
XLY	32.65	-0.20	-0.61%	-1.03%	-2.97%	-2.48%	-6.87%	0.49%	-0.40%	-7.72%
XLI	31.42	-0.22	-0.70%	-1.13%	-1.23%	-1.23%	2.08%	4.18%	6.94%	0.77%
XLU	31.39	-0.17	-0.54%	-1.23%	-3.71%	-0.41%	14.02%	-6.58%	-0.54%	12.15%
IYZ	22.86	-0.14	-0.61%	-1.30%	-4.19%	-5.30%	-5.34%	-3.38%	-2.31%	-6.31%
XLF	31.67	-0.17	-0.53%	-1.49%	-1.37%	-1.15%	4.11%	7.28%	7.47%	3.73%
IYH	63.02	-0.33	-0.52%	-1.68%	0.05%	1.74%	8.17%	1.35%	3.14%	6.54%
XLP	23.29	-0.19	-0.81%	-1.77%	-2.72%	-1.06%	0.91%	0.04%	2.37%	0.60%
XLE	50.31	0.21	0.42%	-2.10%	-4.13%	-1.58%	43.83%	-6.26%	13.13%	38.86%
SMH	36.64	-0.28	-0.76%	-2.81%	-4.38%	-5.52%	12.19%	-0.81%	8.82%	10.26%

This week, it was 10 down and zero up. Two weeks ago, I wrote: "I'm taking a guess that by the close next week, there will be oh seven down and three up." It was just 5 and 5.

So I said, "let's see what next week brings?" Ten for ten; there you have it.

Get used to it.

I had to laugh when CNBC's Pisani said that the selling started after all the buyers had taken off on vacation. In the immortal words of Bill Cosby and Art Linkletter (born in Moose Jaw Saskatchewan): "Kids say the darndest things."

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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 down "2.10 pct W/W to close at 50.31. Momentum peaked at the end of Sept. The Crude oil price was up nicely this week, but the stocks were down.

Last week, I said, "I am modestly over-weighted in Energy within a portfolio that is grossly over-weighted in cash. But I don't have big hopes, and may soon sell into strength." So, except for gold, I am now fully in cash.

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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 the best performer on the week, like a week earlier. But unlike a week earlier when XLB was up +2.58 pct, this week XLB dropped "0.49 pct W/W to 30.28.

It's not a Bull market when the best ETF is down a half percent on the week. Not even the always bullish Joe Battapaglia can be a happy camper. Btw, I ran across a Voice of America interview with Battapaglia in March 2000 " at the height of the last great Bull. He was telling the world to "Buy, buy, buy America". Check it out.

Back to reality: the metals have powered this sector fund, which has helped my long position, but the chemicals are going to be a heavy weight to bear. I still think: "XLB looks toppy, mostly because of the non-metal groups."

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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 was down "1.13 pct W/W to 31.42. Most heavily weighted GE was down "1.02 pct W/W, so I was wrong in saying GE would lead XLI lower. This week it was the aerospace & defense stocks, UTX, HON and BA that led the foray south.

Next week it will be GE taking charge.

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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 "1.03 pct W/W to 32.65.

A few good holiday sales by retailers plus some promise on the week at GM, and goodness XLY was 2nd best performer on the week. But if that housing ATM machine shuts down in the 1Q06, it could become the year's worst performer.

Heavyweight WMT, down "3.70 pct W/W, led XLY lower.

You know it was April-09-05 (Week #14) that I first suspected that America's consumers had no tickee for laundree. First it was high gas prices, and then it was jobs, credit squeeze, interest rate worries, and so forth.

Let's face it, except for the upper class in America " the ones who were watching the New Orleans Super Dome on their 54 inch Home Entertainment Centers " the rest of America is starting to feel a little like the poor souls who were trapped in that debacle.

This Administration can publish all the statistical lies about inflation and jobs they want, and Wall Street can try their best to monetize those lies, but Wal-Mart cash registers and 90 pct of American consumers know the truth.

And the rest of us get to see it all play out in the price of WMT.

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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 down "1.77 pct W/W to 23.29. "Spending issues abound." Same old, same old, and it ain't going to change for a while.

But I'll be doing my best to help Diageo sales next week. :-)

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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 was down "1.68 pct W/W to 63.02. Leading the pack south was the sector 800-pound gorilla Pfizer. PFE was down "3.08 pct W/W.

Not even the Business Roundtable can help when traders decide to take these stocks down.

A week ago I wrote, "... But do they have enough fuel for a controlled landing, or are they going to crash and burn after a free-fall to earth? After Congress returns from vacation, and the regulatory and legal discussions heat up, these are stocks that will likely suffer again." The rocket ran out of fuel early Tuesday morning.

This could be the second worst sector for 2006.

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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:

The Financials (XLF) closed down "1.49 pct W/W to 31.67, greatly helping out my short position.

I'm only down "8.7 pct on that trade " my worst on the year, and that's after it's been going my way for a couple weeks. Pretty soon though " say by the end of January - I'll be in the money.

With the treasury yield curve inverting, I didn't think these Financials could break through the glass ceiling of the past month and a half.

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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:

A week ago I wrote, "The chip technology ETF (SMH) dropped "0.71 pct W/W to 37.77. A week earlier I noted: "On Friday I noticed a few weak spots. So SMH might be ready soon to drop down to a new lower trading range". This week was a good start."

And this one was even better. SMH - or better yet SM(AS)H " was the worst ETF performer out of ten. SMH dropped "2.81 pct W/W to 36.64, which must hurt the Bulls who have been counting on Tech to lead the rally to Dow=12,000. Not!

The Bulls should have been watching INTC, which just happened to be down on the week "3.89 pct (to $24.96), which was 30 out of 30 in the Dow. And on a week like this one, that's really saying a mouthful.

"Intel, May 27, Sold to You CNBC at $27.39", which is a gain of +8.9 pct in seven months in case you're wondering.

But, no, most traders are wondering why I'm now 88 pct in cash! Now you see how simple the answer is: it's because I can't afford the losses!

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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:

Last week I said, "Somebody doesn't like the sector. IYZ was down "2.65 to 23.16."

There was no change this week as IYZ dropped a further "1.68 pct W/W to 22.86. I'm short at 23.50, thank you, but I'm playing with fire. With the high dividend yields of T and VZ, this is an ETF I won't be short for long.

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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 down "1.23 pct to 31.39.

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Bonds:

The yada yada on Financial Entertainment TV was all about the inverted yield curve this or that, depending on whom you were listening to. As I forewarned; don't get caught up in the Washington Week in Review stuff " it's all just noise. Stick to following the prices.

Unfortunately, the bond market this week was all over the map. There was a little more flattening of the yield curve as well as a small decline in the long yields.

But for so little happening, the talking heads made you think that all hell was breaking loose, particularly with (supposedly) rising bond prices. That makes a good story, but if anything I think the yields on the 10-year, now down to about 4.36, may work back to 4.45, possibly 4.50, next week.

But more than anything, I think the bond traders are watching the equity traders decide what to do if the air comes out of the stock market balloon. Usually that money goes into short life T-Bills (sending yields down), but I noted that on Thursday and Friday as the broad market indexes were sagging, the yields on the T-Bills seemed to be jumping, which is not what I expected.

With the Fed/Treasury hard at work, does anything happen in a straight-forward fashion these days? I'm now at a point where I need two things: (i) a vacation, and (ii) help from a new a money market advisor, for when I return.

I do know this: if the 3-month Treasurys start yielding more than the long Notes and Bonds, that's a serious danger signal for the economy, leading to two events: (i) a pass on a further rate hike at the next FOMC meeting, and (ii) even more money to be printed by the Administration to keep the economy from winding down.

Bonds can hang in during such a scenario (in the absence of signs of wage inflation), but stocks may not " except the golds/metals. Reflation means (i) the Administration is worried about deflation, and (ii) it's the opposite of short selling in that the money going into the equity market today is going to have to go back to the Fed in the future, which the Fed accomplishes by further tightening.

Now you can see why I am just going to become a tape watcher in January.

Weekly data charts:

Daily data charts:

Hourly data charts:

US Treasury Bonds

Maturity	Yield	Yesterday	Last Week	Last Month
3 Month	3.81	3.76	3.81	3.79
6 Month	4.13	4.12	4.11	4.10
2 Year	4.35	4.35	4.37	4.38
3 Year	4.33	4.32	4.36	4.38
5 Year	4.31	4.31	4.36	4.39
10 Year	4.36	4.37	4.42	4.47
30 Year	4.51	4.52	4.60	4.68

Municipal Bonds

Maturity	Yield	Yesterday	Last Week	Last Month
2yr AA	3.00	2.98	2.99	2.94
2yr AAA	3.01	3.01	2.97	2.93
2yr A	3.14	3.08	3.11	3.06
5yr AAA	3.22	3.22	3.25	3.20
5yr AA	3.24	3.23	3.27	3.23
5yr A	3.34	3.33	3.40	3.29
10yr AAA	3.58	3.58	3.68	3.63
10yr AA	3.56	3.56	3.69	3.61
10yr A	3.76	3.77	3.90	3.81
20yr AAA	4.00	4.01	4.09	4.09
20yr AA	3.97	3.97	4.06	4.12
20yr A	4.23	4.21	4.33	4.20

Corporate Bonds

Maturity	Yield	Yesterday	Last Week	Last Month
2yr AA	4.49	4.49	4.51	4.47
2yr A	4.52	4.52	4.54	4.53
5yr AAA	4.62	4.62	4.63	4.59
5yr AA	4.64	4.63	4.68	4.68
5yr A	4.70	4.70	4.76	4.77
10yr AAA	5.09	5.15	5.16	5.08
10yr AA	4.95	4.99	4.98	5.03
10yr A	5.03	5.05	5.10	5.17
20yr AAA	5.44	5.37	5.54	5.47
20yr AA	5.58	5.59	5.68	5.72
20yr A	5.55	5.54	5.63	5.79

As I said, the Treasury yield curve has now gone flat. The 5-year yield dropped below the 2-year a week ago and stayed that way. And the spread between the 2-year and the 10-year is just (another drum roll!) just 1 basis point.

Last week, I wrote, "Alert. Alert." But then most of the Wall Street talking heads spent the week telling you to ignore this situation.

Tell me, are those guys working on a contract for Washington? Could the Administration be considered paid lobbyists for the Republican Party? And if so, what does that make these Wall Streeters who flood CNBC touting the Party line?

And, there are now 37,000 registered lobbyists in Washington, almost double the number since Bush first came to office. Is there a connection here?

The spread between the 3-month T-Bill and the 10-year is now at an extremely low level of 54 basis points. And I just pointed out that equity money fleeing the NYSE and Naz just might end up in T-Bills, pushing the 3-month rates down.

Last week I wrote: "Nobody wants to borrow. Actually, they have no more credit on which to borrow. Did you think of that?"

Could even be true.

Interest rates and bond yields.

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:

For the interest-sensitive equities, FNM and FRE, the road ahead will be a difficult one.

Consumer Finance -USA -- Weekly Data Charts

Consumer Finance -USA -- Daily Data Charts

Consumer Finance -USA -- Hourly Data Charts

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Commodities:

The Commodities Research Bureau (CRB) Index was up strongly by +1.69 pct W/W at 331.83. A week ago, with the index at 326.31, I wrote: "$CRB seems to be basing for another run at the cycle top of 341.53, which could be the high for many months to come, especially if Crude Oil settles down here."

I still feel that.

Weekly CRB Commodities Index:

Daily CRB Commodities Index:

Weekly Crude Oil:

Daily Crude Oil:

I believe a credible story is building for additional investment into Canada's Oil Sands in Northern Alberta. Increasingly, it appears that $40 oil is going to be a very long-term floor, and that's what the high-cost Oil Sands needs.

So on market weakness, you take one look at the $34 billion total cash in the bank at Exxon Mobil, and you see that XOM has a 70 pct ownership stake in Canada's Imperial Oil (IMO), and you put two and two together. IMO is a no-brainer except the stock is up almost +10 pct in the past month to $99.60, and you'd like to buy it in the mid-80's.

But that's life, isn't it? I'd like to fly to Bahamas for $200 too.

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Gold:

Gold jumped up from $502 to $517 this week. I had a good week.

Yes, the continuous contracts ($GOLD) are now $517.03, up +2.83 pct W/W.

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 +2.92 pct W/W to 8.82.

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 up +0.80 pct W/W at $973.00.

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 +1.55 pct W/W to 261.63 after being down "2.6 pct a week ago.

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 down "0.55 pct W/W to 204.11, still just off the record high closing week price of 205.86.

Weekly Copper EOD Continuous Contract Index:

Daily Copper EOD Continuous Contract Index:

This interactive chart shows the recent trading for the Copper metal index.

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The Philly goldminer index ($XAU) had an excellent week, going up +2.41 pct W/W to 128.03, after being up +2.2 pct a week ago.

A week ago I wrote, "It's closing in on its high of 127.00 of just two weeks ago. So all you goldminer bears ought to have another look at the charts." Yippee.

Weekly U.S. Goldminers Index:

Daily U.S. Goldminers Index:

The XGD Toronto Exchange-listed goldminer iUnits S&P/TSX Capped Gold Index ETF TSE:XGD was also very strong.

XGD was up +3.00 pct W/W to 62.86, after being up +3.8 pct a week ago. I continue to say: "I'm long; and I'm glad I recommended hanging in."

Friday was a weak day for the miners though, down "1.2 pct for both XGD and $XAU. It seems that traders don't want be long over the weekend, fearing action by central banks before the market opens next week.

Here are the Weekly, Daily and Hourly data charts for the TSX Goldshares (XGD) index:

XGD Weekly data:

XGD Daily data:

XGD Hourly data:

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.

List #1

List #2

List #3

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Forex:

The trade-weighted USD index gained modestly +0.30 pct W/W to 91.16. The forex market seemed to be quiet this final week in the year.

Weekly U.S. Dollar Index:

Daily U.S. U.S. Dollar Index:

The Euro (priced in USD) was down "0.30 pct W/W this week. A week ago, it had been down "1.2 pct. There is a pretty good debate going on whether the USD will rally again in 2006. I'm in the camp that says it will gradually fall. Mostly, I feel that the China Yuan will gradually rise, linked closely to the Japanese Yen, which will depress the USD. But I am no forex trader, as my track record here clearly shows.

Weekly Euro Dollar Index, priced in USD:

Daily Euro Dollar Index, priced in USD:

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International Equities:

Sometime in January, I am going to start reporting on international equity markets "from the horse's mouth" rather than via the USD-priced ETF's. I can do that in 2006 because I'll be getting daily data from about 25 international stock exchanges in January.

I'm so excited, I feel like tonight's Christmas. But that was last week. Tonight is New Year's Eve, and we were going to celebrate it Irish time (7pm ET) so we could get to bed early, and rise early for an airport limo. But then i had meetings today re the 2006 website and time went out the window. Now I'm rushing. I've got champagne on ice, and shrimps on the barbi.

So, I'll just say that Japan down, UK down, Hong Kong down (good because I'm short) and Canada up a bit.

Japanese equity market ETF: EWJ

Japan had a weak week, down "0.95 pct W/W to 13.52 on the EWJ.

Remember, I promised in 2006 to learn something about the Nikkei Dow vs the TOPIX. And I will.

Here is the Japanese (EWJ) equity market ETF Weekly, Daily and Hourly data charts:

EWJ Weekly data:

EWJ Daily data:

EWJ Hourly data:

U.K. equity market ETF: EWU

The U.K. ETF (EWU) was down again, this week by "0.75 pct to 18.58. I was joshing a week ago about Sir Elton and Sir Black " but I think you caught the drift.

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 was up +0.18 pct W/W to 21.90, which is all of four measly pennies.

The current Prime Minister doesn't think much of the fat that the RCMP has started an investigation into leaks from he, his staff, or his Minister of Finance, or the Minister's staff earlier this month just prior to making a statement to the voters that Canadian trusts would get some continued favoured treatment " if his government happens to win the next election.

Along with Stelco, I don't have to tell you that I'm not voting for those gangsta's in the January election " like I did the last time. Because if I did that, some readers might think this is becoming a politically inspired blog. Not!

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).

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U.S. Equities:

All the major U.S. equity indexes were down. The Dow and S&P 500 were down about "1.6 pct W/W each, and Naz and the Russell small cap index were down "1.9 pct W/W.

It's just the start of something big.

Same old, same old.

2006 will be a story about the "Credit Bubble". Of course, what comes first: the chicken (bubble) or the egg (equity market)?

I think the egg comes first. Then everybody starts talking down the market.

We'll just have to see.

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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
GM	19.42	0.41	2.16%	4.18%	-12.25%	-14.11%	-51.81%	-36.56%	-42.88%	-51.66%
AA	29.57	-0.08	-0.27%	0.82%	4.75%	4.56%	-4.58%	21.09%	13.16%	-5.98%
AIG	68.23	-0.87	-1.26%	0.49%	4.49%	0.62%	3.33%	10.12%	17.44%	4.12%
T	24.49	-0.13	-0.53%	-0.37%	-1.45%	-3.20%	30.20%	23.69%	28.62%	27.29%
MRK	31.81	-0.54	-1.67%	-0.62%	6.85%	7.18%	1.76%	16.91%	3.28%	-1.27%
JPM	39.69	-0.17	-0.43%	-0.90%	0.28%	2.90%	1.38%	16.98%	12.37%	1.56%
DD	42.50	-0.52	-1.21%	-0.91%	-0.96%	-1.89%	-13.48%	8.50%	-1.19%	-13.18%
DIS	23.97	-0.20	-0.83%	-0.91%	-3.11%	-3.97%	-13.93%	-0.66%	-4.81%	-14.02%
HPQ	28.63	-0.11	-0.38%	-0.93%	-1.95%	-3.15%	36.01%	-1.95%	21.78%	35.49%
GE	35.05	-0.14	-0.40%	-1.04%	-2.64%	-1.96%	-4.21%	4.10%	1.15%	-4.23%
CAT	57.77	-0.37	-0.64%	-1.16%	-1.60%	-2.08%	21.54%	-1.67%	21.24%	18.45%
IBM	82.20	-0.20	-0.24%	-1.23%	-1.59%	-7.86%	-15.91%	2.47%	10.78%	-16.38%
C	48.53	-0.05	-0.10%	-1.34%	-1.16%	-0.66%	0.54%	6.61%	4.98%	1.04%
MMM	77.50	-0.79	-1.01%	-1.45%	0.01%	-2.23%	-5.95%	5.64%	7.19%	-6.34%
BA	70.24	-0.94	-1.32%	-1.51%	-0.78%	0.82%	37.81%	3.37%	6.42%	35.34%
PG	57.88	-0.54	-0.92%	-1.53%	-1.88%	0.42%	4.87%	-2.66%	9.73%	4.38%
AXP	51.46	0.35	0.68%	-1.61%	0.06%	-1.02%	-7.96%	-10.41%	-3.33%	-8.35%
XOM	56.17	-0.07	-0.12%	-1.63%	-5.58%	-5.36%	12.14%	-11.60%	-2.26%	10.07%
MSFT	26.15	-0.12	-0.46%	-1.65%	-2.86%	-6.24%	-2.21%	1.63%	5.27%	-2.28%
VZ	30.12	-0.15	-0.50%	-1.86%	-1.60%	-6.29%	-25.61%	-7.86%	-12.92%	-26.14%
JNJ	60.10	-0.15	-0.25%	-1.99%	-0.10%	-2.56%	-4.45%	-5.03%	-7.54%	-5.43%
HD	40.48	-0.26	-0.64%	-2.29%	-4.93%	-2.55%	-6.08%	6.14%	4.06%	-5.68%
KO	40.31	-0.29	-0.71%	-2.35%	-2.07%	-5.91%	-2.96%	-6.67%	-3.45%	-3.22%
MCD	33.72	-0.42	-1.23%	-2.49%	-3.60%	-4.56%	5.97%	0.69%	21.51%	4.14%
MO	74.72	-0.38	-0.51%	-2.76%	-2.48%	2.36%	23.24%	1.37%	15.56%	22.23%
HON	37.25	-0.34	-0.90%	-2.77%	-1.87%	-0.03%	5.52%	-0.67%	1.69%	5.23%
PFE	23.32	-0.13	-0.55%	-3.08%	2.33%	9.07%	-11.83%	-6.61%	-15.45%	-13.66%
UTX	55.91	-0.42	-0.75%	-3.35%	-2.93%	3.12%	8.56%	7.85%	8.88%	7.77%
WMT	46.80	-0.68	-1.43%	-3.70%	-4.99%	-2.56%	-12.28%	6.80%	-2.90%	-11.80%
INTC	24.96	-0.11	-0.44%	-3.89%	-6.09%	-8.17%	8.19%	1.26%	-4.07%	7.35%

This performance chart of the Dow 30 shows 27 stocks up and 3 down this week. It could have been worse, and treasure this thought; it probably will.

Lets take a look at what happened:

The only three winners out of 30 Dow stocks this week:

GM, up +4.18 pct: strictly a dead-cat bounce from being down "14 pct a week ago
AA, up +0.82 pct: Wow; AA was up +4.32 pct a week ago too " so, down next week
AIG, up +0.49 pct: Wow; AIG was up +4.53 pct a week ago too - so, down next week

The five big losers out of 16 this week:

INTC, down "3.89 pct
WMT, down "3.70 pct, and was down a week ago by -1.89 pct:
UTX, down "3.35 pct:
PFE, down "3.08 pct after being way up +6.11 pct a week ago
HON, down "2.77 pct:

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 Dec. 23 Value Line report on BA: next one is due Mar. 24)

(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/T) (SBC/T) (Here is the Dec. 30 Value Line report on T: next one is due Mar. 31)

(UTX) (UTX) (Here is the Oct. 28 Value Line report on UTX: next one is due Jan. 27)

(VZ) (VZ) (Here is the Dec. 30 Value Line report on VZ: next one is due Mar. 31)

(WMT) (WMT) (Here is the Nov. 11 Value Line report on WMT: next one is due Feb. 11)

(XOM) (XOM) (Here is the Dec. 16 Value Line report on XOM: next one is due Mar. 17)

The new Value Line reports on VZ and T show that these are the favored dividend players for 2006. I don't like T as much as VZ in terms of upside potential. Look at the RSI.

With MCI, VZ is going to be stronger in the Internet business. (I will discuss VZ here only because it was a VL report this week, and it is a good quality company that pays a high dividend. It's not on the Cara 100 list because Verizon doesn't have a high enough Growth Rate for Revenues/earnings/dividends or high enough Gross operating and Net profit margins. But for many traders, VZ would be an excellent choice.)

On market weakness, (if you're interested) you want to buy a little VZ stock (it won't drop as far in a bear phase as low-yielding stocks) and write some puts in order to take in option premium. That will lower your adjusted cost base (ACB), and ensure that your dividend yield-to-cost is over +5.5 pct, i.e., $2.60/$29.50 (after taking in premium income or having the stock @ 30 strike put to you).

Then in a new bull market (say over 2.5 years, which is 54 months), your growth in capital is likely to exceed +54 pct based on VL's estimate of $2.60 earnings (2006) x 17.5 PE = $45.50 - $29.50 ACB.

Your total return will be up in the Warren Buffett level, i.e., per year capital growth of +24.0 pct plus annual dividends to cost that yield +5.5 pct = a total of about +29.5 pct per year. I assure you that Warren himself will have a tough time doing that. But you can do it. Trust me.

Once you commit, your focus should be strictly on lowering your ACB. You do that by writing covered puts in the bottom of the primary cycle (Accumulation Zone, i.e., when you see both the Monthly and Weekly data RSI below 30) and selling covered calls at (hopefully unreachable) high strike prices at intermediate cycle tops (Distribution Zone, where the Weekly data RSI jumps over 70).

Look at how low the RSI is today on the VZ Monthly. The next time the Weekly RSI gets down into the low 20's or lower " on a sharp general market pullback " you ought to know that you are deep in the Accumulation Zone. You will seldom see the price so attractive.

The 30-70 is a rule of thumb. It could be 20-80. You just have to apply these tools like an artist's brush on a canvas, and totally ignore the Elliott Wave garbage, or what you hear from talking heads. Your job isn't to pick tops and bottoms; it's just to reduce ACB of core portfolio stocks.

The lower you get your ACB, two wonderful things happen: (i) your effective cash on cash dividend yield grows (well above your cost of capital), and (ii) your risk of capital loss is transferred from you back to Humungous Bank & Broker. Believe me, HB&B will be buying VZ for their Funds, and the Private Wealth Clients, at prices at least in the mid-30's, probably the 40's, and possibly 50's, in the next couple years. You'll smile while looking at an ACB in the 20's.

And VZ management will be working their tails off for you. They will cut something like 13,000 jobs in the next year or two, which will save the company some $3 billion cost per year, which will drive up the price of your stock. Happy days.

But if dividend income is important to you, just be sure to keep track of the ex-dividend dates when buying and selling.

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Wrap up

I hope I ended 2005 on a positive note. I have been seeing a lot of DISTRIBUTION go down in 4Q05. The last time I saw selling like this was 2000, led by CNBC's Kernan, Bartiromo and Kudlow, guests like Joe Battapaglia, and Wall Street analysts in the Internet sector, all telling you that infinite PE's were not risky. What a joke!

Today, CNBC's Pisani, LeBeau and Cramer, and some of the traders on the commodities and futures floors lead the sales charge. This time, however, following major fines levied by Eliot Spitzer, Wall Street analysts are reluctant to join the party.

Different faces and voices, but in every cycle the game is same old, same old. In doing so, Wall Street gives a bad name to the casino industry.

Wall Street bonuses this year were in the order of $24 billion. How much did you contribute?

The 2002-2006 bull market has come to an end. The money to be made from here on will be made by (i) broker-dealers (ii) day traders (iii) short sellers, and of course, (iv) the Metal Men.

Time to go on vacation. Enjoy a good party tonight.

BCara@BillCara.com