Traders with limited experience seem to think that a Bear market will plunge prices down sharply. While it is true that Bear market prices fall faster than they rise in a Bull, it is also a fact that Bears are almost always shorter in duration and that over three or four complete bull-bear cycles " say 12 to 14 years in total, equity prices always rise.

That's because the capital markets tend to destroy the management and financial structure (balance sheet and P&L) of companies that are inefficient or unproductive, as well as some of those that are unlucky. So over time, weak companies quit or are taken over. New companies that start out tend to have better managers and products or services plus superior business models and funding.

The point is that the relationship between share prices and the underlying companies and the economic environment in which they operate is an ongoing process. The quality of the company affects the long-term success or lack thereof, and the share prices tend to reflect the appetite (i.e., degree of fear or greed) of buyers and sellers (i.e., the decisions of those who trade those shares).

The market, then, is a continuum of prices that "blend into each other so gradually and seamlessly that it is impossible to say where one becomes the next" [Encarta Dictionary]. In the long run there is a trend (caused by quality) and in the interim there are bullish and bearish phases, called cycles, where the process is known as the reversion to the trend mean.

You might say that a Bear market is a matter of one step forward, two back, while the Bull is two forward and one back. You might say that except time does not work in reverse. That means it is a case of one step up and two down for the Bear, which I characterize as a slinky toy in action.

I'm writing about this because too many readers are questioning my opinion that this is a Bear market. These are people who don't see the market as a dance where prices are in motion. They don't see the market as being us " collectively " where we (i.e, our mindset) represent the Bear or the Bull.

Yes, the market is just a slice of life.

Today, our eyes are focused on the Fed and the White House and, because the times are rapidly changing and uncertain, we are looking for leadership. Life is a journey and we need a roadmap and some guidance.

Something I read today about the job of the Fed struck a chord. I think the Fed's mission statement needs to be changed because I don't see a clear roadmap, and I don't see much guidance from this particular Administration other than maybe self-serving ones.

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Is the Fed really the People's servant, or is this "mission" (of "your government") just another nebulous, misleading or erroneous statement on an arcane website?

According to the Fed's website: "The Federal Reserve Act of 1913 gave the Federal Reserve responsibility for setting monetary policy. The term "monetary policy" refers to the actions undertaken by a central bank, such as the Federal Reserve, to influence the availability and cost of money and credit to help promote national economic goals."

But what are the "national economic goals" other than the President's economic goals?

Here is a link to the June 8 Joint Press Release of the Council of Economic Advisers, The Department of the Treasury, and the Office of Management and Budget.

Please note that, two weeks later, the interest rate market has already exceeded the forecasts of these august organizations through 2007. The Leading Economic Indicators are pointing down, not in the direction reported by these people. So what's the purpose, other than public relations for the Office of the President, of issuing these papers?

Does anybody take the President's national economic goals statement seriously? Or the words of most of his spokespeople?

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Press Briefing on the Administration's Updated Economic Forecast by CEA Chairman, Dr. Edward Lazear (June 8)

Q I just was wondering how concerned you are about the slide that we're seeing today in the stock market, which, as you know, comes on the heels of some declines earlier in the week? The markets seem particularly jittery lately, and I'm just wondering if you're concerned about the volatility?

DR. LAZEAR: Well, as you point out, the market has been volatile in the last couple of weeks. But the volatility is not unusual in the stock market, and if we look at the numbers in the market, we are up considerably since last year. We're up about 4.5 percent from a year ago today, in terms of the S&P 500. So, you know, seeing movement up and down is not unexpected, but, obviously, you know, we like to see things move up. But, again, we don't think of this as being particularly alarming.

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Yes, two weeks ago, the S&P500 index had been up +4.52 pct over 12 months. But it had been down -0.52 pct over 6 months. Today, the S&P500 index is up just +3.65 pct over 12 months, and is down -1.90 pct over 6 months. And the Nasdaq is down -5.69 pct over 6 months.

So the stock market is in decline and the Leading Economic Indicators are in decline, but the Office of the President is denying the truth. How could the man (Lazear) talk like this and look himself in the mirror?

It's all just one big sales job. Right?

I'll say what I really think: these presidential advisors are not employed to tell the truth and too often they end up being flat-out cheerleaders (you know the word I want to use). As I see it, the last person who tried to tell the truth was former Treasury Secretary Paul O'Neill, and he was fired.

If you re-read the White Paper by the Council of Economic Advisers, called Economic Update, Achievements, and Objectives for the Future (August 9, 2005), you will see that the national economic objectives is nothing more than a bag of wind, and all of these people pretty accomplished pipers.

When I went to the whitehouse.gov website seeking an answer to the question ‘Just what are the national economic objectives?', I saw that "Your Government" is about "Faith-based & Community".

I thought in the United States there was to be a wall of separation between church and state. So, what's really going on here?

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From Wikipedia:

The phrase "separation of church and state" does not appear in the Constitution, but rather is derived from a letter written by Thomas Jefferson to a group identifying themselves as the Danbury Baptists. In that letter, Jefferson referred to a "wall of separation between church and state."

James Madison, the father of the U.S. Constitution and the Bill of Rights, wrote in the early 1800s, "Strongly guarded . . . is the separation between religion and government in the Constitution of the United States." Ulysses S. Grant also called for Americans to "Keep the church and state forever separate."

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I think this discussion is relevant. What I see happening under this President is a movement away from clearly defined national economic objectives that the People can understand and would support. There has been obvious movement in support of a personal agenda that people like Bush-appointee Paul O'Neill warned about, that all of us can see by looking at the whitehouse.gov website, and by listening to the leader.

The concern by Americans for the lack of effective leadership is reflected in the public polls.

In order to get the economy and the capital markets back on track, I think American voters had better think seriously about their vote on November 7.

The nation stands at a crossroads, an economic and financial markets precipice. The People have been led into a credit trap, and now have to make tough decisions. There is no longer room for personal agendas on the part of government or the President.

Success at trading is a matter of understanding cause and effect so that you can prepare for the next phase of the market's journey. Some things like a 9/11 or a Katrina you cannot adequately prepare yourself for. But the heart of the problem " the "cause" if you will " is lack of effective leadership where the People's interests are not coming first.

We don't need to be told the President has faith, or that government is faith-based. We need to be told that he and it are taking care of business in terms of finance and economics, which is why they were elected.

The People are unhappy. First, they spoke through the polls and now they are starting to speak via their responsible actions in the market, including their inclination to sell the $USD and buy gold.

Selling the $USD and Treasury bonds, shorting the equity market, and buying gold is not un-American. The people who talk like that ought to look themselves in the mirror.

Now that I have that off my chest, let's see how this week went in the capital markets.

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Global Market Summary

International Equities: Russia, China and India did ok this week (well, in fact) but most equity markets were flat to slightly down (e.g., Japan, UK and Canada). For some unfathomable reason, everybody in the world is anxiously awaiting the FOMC decision.

U.S. Equities : The Dow 30 was down on the week by -0.24 pct; the S&P 500 was down -0.56 pct; the Nasdaq was down -0.40 pct; and the Russell Small Cap index was down -0.42 pct. Trading may be quiet until the Fed meeting on Thursday.

Dow 30 : 12 up -- 18 down. When you look at the aggregate market cap of the leading ten that are up this week, versus the ten that are down the most, you see a striking difference. By far the heaviest weight is to the downside, which is characteristic of Bear markets.

U.S. Sector ETFs: Seven of 10 ETF's I track were down, which is fair representation of traders fleeing the Bear. The supposed leaders -- Tech (chips) and Financials " were the worst over two and four weeks respectively. This week, SMH was worst and helped greatly by Morgan Stanley (MS), up +4.8 pct W/W, the XLF made it to 5th best.

First segment: most influenced by global commodities, forex and capex spending
10: Energy (XLE): #2 (+0.53 pct); Will a softening economy pull own the oil price?
15: Basic Materials (XLB): #1 (+1.14 pct); Some miners did real well
20: Industrials (XLI): #4 (-0.06); CAT was up again, but GE tanked
Second segment: most influenced by U.S. consumer spending and economic growth
25: Cons. Discretionary (XLY): #6 (-0.81 pct); JCP was up +2.9 pct W/W
30: Cons. Staples (XLP): #3 (-0.21 pct); Nothing much happening except PG+
35: Healthcare (IYH): #7 (-1.01 pct); AET+UNH up after being down, up, down
Third segment: most influenced by U.S. interest rates and general economic health
40: Financial (XLF): #5 (-0.63 pct); Over 3 months, most are losers
45: Tech (SMH chips): #10 (-1.73 pct); From #1 to #10: told you so last week
50: Telecom Services (IYZ): #8 (-1.27 pct); Nothing good to say!
55: Utilities (XLU): #9 (-1.40 pct); Bonds were down, sorry (again)

Bonds: A week ago I wrote: "The yield curve a week ago was a Big Swinging Thing. This week it was a Big Lifting Thing." More was lifted this week. Yields were up from +9 to +11 basis points for U.S. treasuries.

Commodities: $CRB was down -1.23 pct W/W and close to support. The precious metals were all up, copper down " something to watch next week as it could mean a slowing economy and a falling $USD.

Oil & Gas: $WTIC futures was up +1.0 pct W/W to 70.87, but has technical resistance at 71.40 (50dMA). Price in short run may fall back to mid-60's before rallying as $USD falls.

Gold: Last week I wrote: "Following a week where $GOLD, $SILVER, $PLAT and $PALL plunged -5.7 pct, -8.4 pct, -4.4 pct and -9.9 pct respectively, these metals gave the longs some comfort, being down just -3.5 pct, -7.7 pct, -2.3 pct and -6.0 pct respectively this week. Ah, but the good news is they are on the way back." This week (drum roll please), the numbers are +0.56 pct, +0.33 pct, +2.00 pct, and +1.34 pct, respectively. I could say respectfully, but some would accuse me of taking that a little too far.

Goldminers: The $XAU (U.S. listed gold and silver miners) popped higher to close Friday at 133.40, which was a gain of +4.2 pct W/W. The XGD (TSX gold miner ETF) was up +2.2 pct. The Canadian miners, however, dropped on Friday for reasons I don't understand.

Forex: The $USD was up +1.05 pct W/W, all of it Thursday and Friday, for goodness knows what reason, which is a good way of saying my technical tea leaves ("the rising $USD is about to hit a ceiling") were early to steep " or did I just brew up a bad pun? If $USD continues north by next Saturday, I'll spit out those tea leaves. :-)

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Sector ETF:

Last week I wrote: "I have opined that there will not be a sustainable Bull rally unless and until both Tech and Financials join in." This week Tech (semiconductors SMH) was worst and the Financials were fifth (almost second) worst of the ten sector ETF's I monitor.

This week seven of ten ETF's were down. With six of 10 being up a week earlier, I advised: "It (c)ould have been six down. So don't go agreeing with Kudlow that this is a Bull Market."

For the U.S. equity market, as you know, I study it top down by sector. Here is the weekly performance of my favorite ten Sector Index Funds (ETF's). The table is sorted by price performance Week over Week (W/W), i.e. 1W%N.

Table 1: Cara ETF List

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
XLB	30.94	0.26	0.85%	1.14%	1.18%	-3.37%	0.06%	-3.52%	1.31%	11.82%
XLE	53.38	1.16	2.22%	0.53%	1.10%	-2.80%	1.29%	-0.13%	4.16%	18.05%
XLP	23.80	-0.11	-0.46%	0.21%	0.08%	-1.20%	1.54%	-0.75%	0.59%	3.61%
XLI	33.24	0.09	0.27%	-0.06%	1.22%	-2.09%	5.09%	-1.39%	4.40%	12.75%
XLF	31.62	-0.21	-0.66%	-0.63%	-3.27%	-3.21%	-1.80%	-3.86%	-1.74%	7.70%
XLY	32.88	-0.03	-0.09%	-0.81%	-0.75%	-2.03%	-0.36%	-2.72%	-0.63%	-0.75%
IYH	59.78	0.15	0.25%	-1.01%	-1.32%	-1.04%	-6.05%	-8.21%	-6.77%	-2.89%
IYZ	24.89	0.05	0.20%	-1.27%	-0.16%	0.20%	8.36%	-3.53%	7.47%	6.82%
XLU	31.66	0.04	0.13%	-1.40%	-2.52%	1.18%	-1.06%	0.35%	-0.60%	1.02%
SMH	32.46	-0.40	-1.22%	-1.73%	-0.34%	-4.53%	-14.40%	-9.48%	-14.06%	-6.24%

You can do this table yourself by entering the following string into the Summary window at Investertech.com and then clicking on the link for Performance. XLE XLB XLI XLY XLP IYH XLF SMH IYZ XLU . You can also add more ETF's " up to 30 in total.

For a list of components to any ETF, simply go to the AMEX.com web site, and click on ETF's. I do that frequently.

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)

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When you look through these charts you will note that Wednesday from the outset, share prices were pumped up. In fact, without Wednesday, this would have been a dismal week.

Whenever I see a situation (i.e., effect) like this, I try to work back to the cause. Unfortunately, in this case, I cannot find one.

Here is what Econoday had to say about the Economic Calendar for pre-open June 21: "With little data and no news-makers scheduled, Wednesday should be a quiet day in the financial markets."

Nevertheless there was a pop that day.

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Sector 10 (energy: XLE, IYE, VDE, OIH, PBW and IXC)

This week, XLE gained +0.53 pct to 53.38. A month ago it was 59.

A unexpected drop in the May durable goods orders (-0.3 pct M/M), after a consensus (+0.4 pct) was priced into the market, led to some talk that maybe the Fed could cease hiking rates. That popped oil prices early Friday (and also led to a small rally in gold).

For all that CNBC pumps the financials and techs, it is the oils, basic materials and industrials that are the big gainers over the past year, up +18.1, +11.1 and +12.8 pct respectively, while the combined financial-tech performance is flat.

The simple reason is that traders are anticipating a relaxation of U.S. monetary policy and a lower $USD.

Here's the XLE Weekly, Daily and Hourly data charts:

XLE Weekly data:

XLE Daily data:

XLE Hourly data:

Table 2: Senior oil & gas equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
PBR	81.94	2.13	2.67%	3.63%	4.10%	-4.72%	9.66%	-3.94%	16.81%	59.54%
ECA	50.30	1.34	2.74%	3.22%	5.32%	4.51%	7.71%	7.52%	10.14%	23.89%
TOT	62.34	0.89	1.45%	2.30%	2.33%	-5.00%	-52.07%	-51.20%	-51.24%	-46.59%
STO	26.42	0.77	3.00%	1.62%	-0.75%	-9.55%	9.49%	-0.45%	16.39%	37.39%
SU	73.47	2.08	2.91%	0.89%	-2.22%	-8.52%	12.12%	-2.75%	16.51%	57.69%
CVX	58.71	0.05	0.09%	0.00%	2.05%	-1.31%	-0.63%	3.67%	2.77%	2.41%
CEO	76.07	0.73	0.97%	-0.18%	6.62%	-1.96%	9.94%	-7.68%	10.65%	37.93%
IMO	33.37	0.15	0.45%	-0.33%	-3.19%	-69.55%	-67.91%	-67.36%	-66.50%	-59.29%
XOM	58.10	0.13	0.22%	-1.19%	-1.19%	-5.56%	-0.63%	-5.14%	1.77%	-1.56%

A week ago, Value Line reported on XOM, which happens to be the world's biggest market capitalized company, but this week was a big loser (-1.2 pct W/W).

GICS 10 Exxon Mobil Corp (XOM) (XOM) Financial Data (Value Line: XOM) Dow 30

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Sector 15 (basic materials: IYM, XLB, IGE and VAW)

The Basic Materials sector ETF (XLB) was this week's leader at #1, up +1.14 pct.

A week ago I opined that precious metals would do well, but not likely base metals this week.

This week, base metal prices came down a bit while all the precious metals prices lifted.

Still, in the main, there was a small rally across the board for all types of miners. Some of the goldminers (GFI, GLG and AEM) performed in spectacular fashion.

Here's the XLB Weekly, Daily and Hourly data charts:

XLB Weekly data:

XLB Daily data:

XLB Hourly data:

Table 3: Senior metals and steel equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
PD	82.95	2.41	2.99%	3.56%	4.99%	-3.75%	11.09%	11.73%	13.04%	82.07%
RTP	206.13	1.25	0.61%	2.69%	6.14%	-6.74%	9.17%	6.23%	12.46%	66.68%
GGB	13.41	0.07	0.52%	2.21%	-0.52%	-0.45%	-22.98%	-42.07%	-19.94%	44.82%
NUE	51.37	1.64	3.30%	1.62%	4.28%	-5.67%	48.13%	1.12%	51.09%	116.29%
BHP	40.51	-0.31	-0.76%	1.50%	2.82%	-5.99%	15.74%	9.55%	22.61%	49.15%
PKX	61.11	0.96	1.60%	1.34%	4.52%	-6.34%	21.61%	-0.75%	20.06%	39.04%
RIO	22.01	-0.34	-1.52%	1.01%	1.34%	-7.33%	2.37%	0.05%	6.95%	55.22%
ACH	70.68	0.76	1.09%	0.97%	4.17%	-12.38%	-10.98%	-30.58%	-9.38%	29.05%
AA	30.18	0.19	0.63%	0.30%	0.00%	-4.67%	0.94%	2.24%	2.48%	11.00%
N	58.26	-1.11	-1.87%	-2.25%	-6.89%	-7.30%	34.64%	19.14%	32.38%	50.97%

Phelps Dodge was up +3.6 pct and Rio Tinto was up +2.7 pct. But how about those goldminers?

Goldfields was up +12.8 pct, Glamis was up +12.1 pct, and Agnico-Eagle was up +10.9 pct W/W. Wednesday morning for whatever reason) and Friday morning led the rally.

These three stocks are up an average of almost +120 pct in the past 1 year.

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Sector 20 (industrial: IYJ, XLI, VIS, and IYT)

The ETF for the Industrials and Transport sector, aka capital goods producers, (XLI) was the fourth best of 10 ETF's this week, but it was down -0.06 pct W/W to 33.24.

On Friday afternoon, there was a pop to the XLI, but it quickly sold down as sellers were hitting the bids of stocks like GE.

Look at the 5-Minute data chart for Thursday into the close, and Friday. Every time the RSI hit 70, there were sellers driving GE back down. In a Bull market, GE is one of the Generals (i.e., leaders).

With a market cap of over $350 billion, GE is almost as big as #1 Exxon Mobil (XOM: $370 billion), and often times is the largest cap on the board. So when core portfolio holding GE is down (well over -4 pct over the past year), portfolio performance suffers.

Here's the XLI Weekly, Daily and Hourly data charts:

XLI Weekly data:

XLI Daily data:

XLI Hourly data:

Table 4: Senior capital goods makers and transportation

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
CAT	72.14	-0.14	-0.19%	2.25%	6.84%	-2.46%	24.81%	-5.40%	23.30%	46.51%
CBE	87.55	1.43	1.66%	1.48%	4.44%	-2.71%	18.50%	3.16%	18.26%	34.82%
UTX	62.28	0.39	0.63%	0.86%	3.71%	-0.18%	10.17%	6.01%	8.73%	18.92%
HON	39.31	0.21	0.54%	0.85%	3.18%	-3.03%	4.94%	-7.55%	3.58%	5.14%
TYC	26.78	0.18	0.68%	-0.33%	0.34%	-1.62%	-9.65%	-1.98%	-8.82%	-12.91%
MMM	79.92	0.33	0.41%	-0.73%	-0.81%	-4.01%	1.02%	4.10%	1.68%	5.34%
ERJ	34.47	-0.42	-1.20%	-1.71%	-0.23%	4.04%	-12.20%	-12.76%	-13.82%	7.55%
GE	33.16	-0.08	-0.24%	-2.27%	-2.67%	-3.66%	-6.25%	-2.81%	-6.38%	-4.33%
BA	83.39	-0.67	-0.80%	-2.51%	3.59%	0.48%	18.55%	7.05%	16.65%	34.80%

This week I replaced MMM with BA in the Cara 100, for reasons explained later in this report.

Mr. Caterpillar continued to rally this week (+2.3 pct), and is up +6.8 pct over 2 weeks and +24.8 pct year to date.

GE on the other hand dropped -2.3 pct this week and in every time frame covered in this table is down, including down -4.3 pct over the past 1 year.

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Sector 25 (consumer discretionary: XLY, IYC and VCR)

The Consumer Discretionary sector ETF (XLY) was down -0.81 pct W/W to 32.88.

A week ago I opined: "XLY can't seem to bust above 35 to set a new high, so I'd say that the May 10-11th high of about $34.80, and the earlier high of $35.02 are the tops of the 2002-2006 Bull Market. Remember the slinky toy."

The Daily data chart shows XLY going through a series of lower highs and lower lows since early May. This is a matter of the People in America not having enough disposable income or savings to draw down to satisfy their spending habit, which explains why politicians are so low-rated in the polls these days.

It is also a matter of concern to the Fed that the People may start to demand higher wages, which would add to inflation. And that might explain the Fed's inclination to continue ratcheting short-term borrowing rates higher, i.e., squeeze employers who in turn will squeeze the workers.

Here's the XLY Weekly, Daily and Hourly data charts:

XLY Weekly data:

XLY Daily data:

XLY Hourly data:

Table 5: Senior consumer discretionary equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
JCP	67.50	-0.18	-0.27%	2.94%	4.94%	10.62%	19.57%	9.93%	21.14%	28.94%
CCL	40.79	-0.16	-0.39%	1.49%	9.44%	1.70%	-25.25%	-14.11%	-24.34%	-24.69%
NKE	84.36	0.49	0.58%	1.46%	3.98%	5.91%	-1.85%	-1.92%	-3.03%	-6.37%
WHR	81.60	1.27	1.58%	0.77%	-3.15%	-7.65%	-1.29%	-6.65%	-2.66%	15.30%
SBUX	36.50	0.41	1.14%	-0.30%	1.70%	2.99%	18.24%	1.02%	19.44%	37.22%
EBAY	30.00	-0.01	-0.03%	-0.92%	-1.90%	-11.45%	-32.52%	-19.70%	-32.75%	-12.89%
TM	99.69	-1.17	-1.16%	-0.97%	-0.86%	-8.52%	-6.70%	-7.01%	-3.85%	38.94%
DIS	29.12	-0.16	-0.55%	-1.12%	-0.72%	-3.42%	19.34%	5.81%	19.98%	10.85%
BC	33.41	-0.31	-0.92%	-2.14%	-4.32%	-8.24%	-18.15%	-13.11%	-17.30%	-24.22%

Disney (NYSE: DIS) was down -1.1 pct this week and Brunswick Corp (NYSE: BC) " had another bad week. For owners of BC, it has been a bad year. People have no tickee. But long-term I like the management.

Last week I wrote some positive things about Carnival Corp (the cruise line) and afterwards, including this week, CCL took quite a pop.

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Sector 30 (consumer staples: XLP, VDC, RTH and IYK)

The Consumer Staples sector ETF (XLP) was up +0.21 pct W/W to close Friday at 23.80.

Nothing much is happening here. PG was up for a second week, but is still down -5.2 pct year to date.

Here's the XLP Weekly, Daily and Hourly data charts:

XLP Weekly data:

XLP Daily data:

XLP Hourly data:

Table 6: Senior consumer staples equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
ABV	38.07	-0.53	-1.37%	2.56%	-2.38%	-9.57%	-1.22%	-9.08%	0.40%	24.33%
PG	55.73	-0.12	-0.21%	1.29%	2.35%	0.85%	-5.19%	-4.98%	-5.35%	3.86%
WAG	43.61	0.01	0.02%	0.95%	2.35%	5.59%	-3.92%	-2.15%	-3.13%	-2.70%
MO	71.25	-0.97	-1.34%	0.52%	0.25%	-1.21%	-4.97%	-2.06%	-6.31%	7.63%
BUD	45.42	-0.08	-0.18%	-0.22%	0.46%	-2.97%	4.01%	4.97%	3.94%	-1.48%
WFMI	61.97	-0.15	-0.24%	-0.34%	-4.07%	-9.00%	-19.62%	-4.29%	-19.09%	7.23%
PEP	59.49	-0.53	-0.88%	-0.35%	-0.73%	-1.77%	-0.45%	0.61%	0.47%	8.42%
DEO	66.70	-0.53	-0.79%	-0.57%	-0.57%	0.57%	11.99%	4.84%	13.44%	11.15%
WMT	47.94	-0.54	-1.11%	-0.77%	1.72%	-3.05%	3.70%	-1.24%	-0.83%	0.13%
KO	42.75	-0.12	-0.28%	-1.06%	-1.84%	-3.65%	4.52%	0.80%	3.89%	-0.74%

Whole Food Markets (WFMI) was down again, but not by much. Do you think that CNBC's Joe Kernan has finished his job of helping drive this stock down to a level where smart buyers will start accumulating? I mean his diatribe this week on fresh lobster sales was absolutely disgusting.

As long as that stuff goes on, traders are going to be suspicious of motives.

I think a day or so in the restaurants and markets in East Asia would bring this guy to his senses if that's possible.

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Sector 35 (healthcare: IYH, XLV, VHT, IXJ, and IBB)

The healthcare ETF (IYH) was down -1.01 pct W/W to close at 59.78.

Here's the IYH Weekly, Daily and Hourly data charts:

IYH Weekly data:

IYH Daily data:

IYH Hourly data:

Table 7: Senior healthcare equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
AET	40.97	0.72	1.79%	4.44%	-1.63%	6.78%	-12.89%	-18.95%	-15.11%	-1.37%
UNH	45.23	0.80	1.80%	2.12%	-1.18%	6.62%	-26.73%	-19.76%	-28.94%	-12.51%
BMY	25.51	-0.12	-0.47%	1.31%	2.24%	3.66%	9.77%	0.04%	11.20%	0.12%
GSK	54.13	-0.27	-0.50%	0.54%	-0.95%	-2.77%	6.22%	2.11%	5.93%	10.13%
NVS	52.63	0.34	0.65%	0.52%	-2.07%	-6.83%	-1.57%	-5.09%	1.68%	10.22%
JNJ	61.32	0.14	0.23%	-0.58%	-0.10%	1.44%	-0.50%	0.84%	0.34%	-6.17%
BMET	34.98	-0.21	-0.60%	-1.27%	0.00%	0.06%	-5.15%	2.07%	-3.98%	0.92%
DNA	77.21	0.31	0.40%	-2.39%	-1.66%	-3.49%	-17.86%	-10.15%	-17.80%	-3.15%
AMGN	64.93	-0.04	-0.06%	-2.83%	-4.01%	-4.74%	-19.20%	-10.81%	-19.71%	6.86%
PFE	22.64	-0.01	-0.04%	-3.37%	-3.78%	-5.07%	-4.79%	-13.42%	-5.51%	-21.66%

A week ago I wrote: "This week, the Cara 100 stocks Aetna (NYSE: AET) and Johnson & Johnson (NYSE: JNJ) were down -5.8 pct and -3.2 pct respectively. Last week they were up +2.7 pct and +1.1 pct."

This week AET (and UNH) jumped back up again (+4.4 pct), although JNJ was off -0.6 pct W/W.

As I say, "Up one week; down the next. Mom & Pop is getting whip-sawed."

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Sector 40 (financial: IYG, IYF, XLF, VFH, IXG, VNQ, RWR, IYR, and ICF)

This week, the popular Financial sector ETF XLF was down -0.63 pct, but CNBC's Maria Bartiromo was cheerleading again.

I don't know what else to say.

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Here's the XLF Weekly, Daily and Hourly data charts:

XLF Weekly data:

XLF Daily data:

XLF Hourly data:

Table 8: Senior financial company equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
MS	59.70	-0.31	-0.52%	4.76%	0.86%	-0.12%	2.14%	-3.04%	0.00%	0.00%
GS	147.92	-0.39	-0.26%	2.72%	-1.31%	0.41%	14.78%	-2.47%	15.46%	44.99%
UBS	105.35	-0.55	-0.52%	2.44%	-0.90%	-6.77%	6.73%	-3.30%	10.11%	36.30%
JPM	40.87	-0.20	-0.49%	1.77%	-2.92%	-4.62%	1.69%	-2.78%	1.39%	13.75%
DB	106.23	-0.55	-0.52%	1.70%	-0.54%	-8.52%	6.81%	-6.19%	8.49%	37.07%
MER	68.00	0.11	0.16%	1.12%	-4.32%	-4.87%	-0.67%	-12.04%	-1.15%	23.68%
CSR	53.46	-0.39	-0.72%	0.98%	-1.29%	-6.83%	0.21%	-2.64%	4.60%	35.14%
LEH	62.71	-0.54	-0.85%	-1.01%	-4.42%	-4.16%	-3.43%	-12.77%	-2.50%	27.72%
HBC	86.18	-0.49	-0.57%	-1.03%	0.43%	-1.51%	5.51%	2.17%	5.90%	6.28%
C	47.74	-0.43	-0.89%	-1.28%	-4.08%	-2.71%	-3.14%	-0.06%	-3.05%	1.83%

The Financial sector Bulls cannot like the heavy lifting being done in the bond market yields. Traders ought to be on the lookout for take-over candidates among the smaller local and regional banks " the ones with huge mortgage loan portfolios.

More lifting by the Fed this week is going to bring a few of them to the edge.

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Sector 45 (technology: IGM, IGV, IGW, XLK, VGT, IYW, IGN, IXN, MTK and SMH)

Alan (a reader) wrote: "Bill, I think you have a horseshoe stuck on one-half of your rear end. The other cheek has a crystal ball."

But a week ago I opined:

"The semi-conductor ETF (SMH) was up +1.41 pct for #1 best price performance on the week. But, is this something to call home about? Well, a week ago, SMH plunged -5.87 pct, so I'm betting this was a Dead Cat Bounce. It's kinda like when the slinky toy hits the next step on the way down. Are the techs leading the charge of the Bull Brigade? Not without a flanking action by the Financials they are not!

Time is precious to industries that are rapidly evolving " like technology. It is amazing what some of these start-up companies can do in 3 or 4 months. All of a sudden they become competitors to the giants of today!

So, because bear markets buy time for start-ups, SMH and the Techs have a way on the downside to go yet. Their PE multiples are getting ratcheted down as traders perceive that the risks of holding them increase."

This week SMH went from 1st to last, and XLF finished up the track.

That's not horseshoes or crystal balls at work.

It's called experience, expertise, insight; call it anything but luck. :-)

Here's the SMH Weekly, Daily and Hourly data charts:

SMH Weekly data:

SMH Daily data:

SMH Hourly data:

Table 9: Senior technology equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
ADBE	30.60	-0.19	-0.62%	5.08%	9.32%	5.01%	-20.56%	-15.77%	-17.54%	1.83%
ORCL	14.90	0.57	3.98%	5.00%	10.62%	5.90%	18.25%	7.97%	20.75%	19.10%
CTSH	66.56	1.75	2.70%	4.62%	7.72%	8.58%	31.31%	16.30%	29.27%	42.50%
INFY	71.77	0.11	0.15%	1.96%	4.26%	-0.83%	-10.79%	-1.70%	-12.35%	-2.62%
SAP	51.34	0.04	0.08%	0.53%	4.63%	-4.41%	11.73%	-1.91%	12.46%	20.12%
INTC	18.00	-0.25	-1.37%	-1.64%	4.90%	-0.28%	-29.61%	-8.63%	-30.69%	-32.76%
CSCO	19.61	-0.08	-0.41%	-1.85%	-1.80%	-4.43%	12.38%	-8.41%	13.03%	-0.86%
SNDK	51.59	-0.60	-1.15%	-4.32%	-1.30%	-12.32%	-23.80%	-7.97%	-18.16%	107.86%
ADSK	34.73	-0.20	-0.57%	-5.68%	0.81%	-4.80%	-18.76%	-5.39%	-22.79%	-0.77%
QCOM	39.50	-1.88	-4.54%	-10.13%	-9.07%	-14.24%	-10.23%	-20.33%	-11.02%	16.18%

About the rally of a week ago, I wrote: "This is bottom fishing. Nothing more." Now I'm not entirely sure.

It seems that Oracle, SAP, Adobe and a couple other large software companies are getting pumped up for take-overs, which could have them trading high for a while.

On the other hand, after an extreme top in May, share prices in the software group (see IGV and PSJ ETF's) plunged (with RSI on the Daily falling to 10), so this rally may be a Dead Cat Bounce. It's what I call a price anomaly that you will have to watch.

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Sector 50 (telecom: IYZ, VOX and IXP)

The Telco sector ETF (IYZ) was down -1.27 pct W/W to close at 24.89. This sector has done zip for the past month.

A week ago I wrote, "All through March, there was a RSI divergence on the Daily data, with a subsequent price peak at the end of March and start of April. I think that the $26.18 at that point will be the 2002-2006 Bull Market cycle high."

Oh yes there was talk about the telcos and cable companies taking over the Internet so they can put companies like Skype out of business, and tell us what movies and computer games we are going to be entertained by, and so forth. But that dog will never hunt.

Here's the IYZ Weekly, Daily and Hourly data charts:

IYZ Weekly data:

IYZ Daily data:

IYZ Hourly data:

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Sector 55 (utilities: IDU, XLU, and VPU)

The Utilities ETF (XLU) ended the week second worst again. And I told you a couple weeks ago it would. You remember, I said that when the bond market falls (and yields rise), so too will these debt-burdened companies.

XLU closed down -1.40 pct W/W at 31.66.

Two weeks earlier, even though they were #1 price performer that week, I wrote:

That makes XLU a stand-out again, and as long as bond yields don't rally it could stay that way. XLU needs bonds to go up to keep that relative price performance going. Watch XLU the morning that the bond market opens weak. It ought to be ugly.

Well, it wasn't pretty. This was the second straight weekly decline in bond market, and the Utilities also took their hit, which clearly shows up in the Daily data chart.

Here's the XLU Weekly, Daily and Hourly data charts:

XLU Weekly data:

XLU Daily data:

XLU Hourly data:

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Bonds:

This was the second straight week the bond market crapped out. The damage was serious, although not as bad as a week ago.

A week ago, the 30-year Treasury bonds moved up in yield +14 basis points (bp) from 5.02 to 5.16 pct. The 10-year Treasury yield jumped +15 bp from 4.97 to 5.12 pct; the 5-year Treasuries jumped +20 bp from 4.89 to 5.09 pct, and the 2-year paper +25 bp from 4.90 to 5.15 pct.

So I wrote: "People, there is a serious problem."

This week, the Treasury yields were up from +9 to +11 basis points. This is "serious".
[Please overlook the data errors in the 3-month T-Bill Yield (Index) here.]

Weekly data charts:

Daily data charts:

Hourly data charts:

US Treasury Bonds

Maturity	Yield	Yesterday	Last Week	Last Month
3 Month	4.94	4.88	4.85	4.66
6 Month	5.24	5.22	5.17	4.78
2 Year	5.26	5.23	5.15	4.93
3 Year	5.23	5.21	5.12	4.90
5 Year	5.20	5.19	5.09	4.90
10 Year	5.22	5.21	5.12	5.07
30 Year	5.25	5.24	5.16	0.00

Municipal Bonds

Maturity	Yield	Yesterday	Last Week	Last Month
2yr AA	3.69	3.65	3.62	3.62
2yr AAA	3.73	3.72	3.65	3.66
2yr A	3.77	3.74	3.70	3.61
5yr AAA	3.86	3.83	3.78	3.71
5yr AA	3.89	3.85	3.80	3.73
5yr A	3.89	3.86	3.81	3.77
10yr AAA	4.11	4.08	4.00	3.99
10yr AA	4.10	4.06	4.00	3.96
10yr A	4.24	4.19	4.07	4.15
20yr AAA	4.47	4.44	4.35	4.32
20yr AA	4.46	4.42	4.35	4.30
20yr A	4.60	4.57	4.50	4.47

Corporate Bonds

Maturity	Yield	Yesterday	Last Week	Last Month
2yr AA	5.66	5.64	5.55	5.31
2yr A	5.73	5.69	5.62	5.42
5yr AAA	5.75	5.67	5.61	5.47
5yr AA	5.82	5.79	5.70	5.53
5yr A	5.88	5.87	5.77	5.57
10yr AAA	6.02	5.85	5.90	4.35
10yr AA	6.08	6.05	5.96	1.67
10yr A	6.19	6.17	6.07	1.15
20yr AAA	6.26	6.22	6.19	5.99
20yr AA	6.42	6.40	6.37	6.42
20yr A	6.54	6.49	6.46	6.37

Interest rates and bond yields.

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Yes, I still "hold to the notion that either the economy slows, and rates come down but so do earnings, or the economy heats up, and rates go up and segments of the economy break down. Choose your poison."

We'll get a whiff of Bernanke's poison on the 29th.

One look at the following charts shows that bond prices have been plummeting for two and a half years. A reader asked why don't I recommend bonds? The charts give the answer.

The appropriate question would be, ‘For persons who are in need of fixed income, what are the best strategies?'

There are high-yield dividend-based ETF's and Canadian income trusts (if you select the highest quality) that will best protect your capital and produce a relatively high fixed distribution.

One of the recent BMO Nesbitt or TD Newcrest or RBC strategy reports I re-published covers that income trust topic, and makes recomendations based on quality. You just need to be highly selective.

As an active trader " there are times I love bonds " I look to the market trends and cycles to tell me how to position the portfolio.

For the couple years I have been blogging, I have never been positive on bonds, as you know. But in time I will because there will be a cycle that benefits the holders of bonds.

I recall a trader's roundtable I did in March or April of 1982 -- almost 25 years ago.

I was asked to go to the Toronto Press Club to meet the head of Finance for one of Canada's leading corporations (and a finance professor at U of T), as well as a man who was a former Energy Minister for Ontario who had gone back to his job running a large broker-dealer. I had been in the securities business just 15 or 16 months but I happened to be in portfolio management at RBC Dominion.

That was the panel of "experts", run by a moderator, Frank Kaplan (who I had met earlier and who became a writing mentor and life-long friend), plus a photographer. The 3,000 words came out as an article on the Bear Market in the Canadian Doctor publication (55,000 physician and surgeon readers).

That day I called an end to the Bear Market in the coming month or so, which did happen in Canada (but not til August in the U.S.), and opined that bonds were the "buy of a generation", i.e., 20 years. I stated that the long Canada bond that was being issued with a 15-pct coupon ought to be bought as much as one's resources permitted and preferably inside a tax savings plan.

Can you imagine how well the traders who followed my advice did? The stockmarket took off, and those bonds did become the Buy of the Generation.

Of course, I was merely echoing the words and strategies of my mentor Ian Notley at that time. Still, I quickly learned the art of bowing to mirrors. LOL

So, for the typical buyer of bonds, there will be a time; but not quite yet in my view.

Now, if the economy does slow dramatically, or if the yield curve were to slope higher with short rates starting to fall, then I'd be a buyer of bonds, and preferred shares, and would switch out of the income trusts and high dividend paying common stocks.

Watch the RSI on the daily and weekly data series of the TLT (Lehman 20+ year bonds). If this RSI on the Daily (presently 22.1) falls close to 10 again, and on the Weekly drops to say 25-27 (presently 34.6), and the Stochastic values are staring to rise off the 0 to 10 level for both Daily and Weekly data, and you like bonds, then you ought to jump in. The long bond would be the only place I'd go.

You see, the RSI on the Monthly data series is down to 28.8, which is now acknowledging that prices are very low. TLT is now at 83.42. If it were to drop to below 82, the Weekly RSI would be down to the 25-27 level, and that would mean the Monthly-Weekly-Daily RSI would all be well under 30. That is my Accumulation Zone.

I think we'll get there if the Fed raises rates once or maybe twice more. Then the economy will be damaged so badly that bonds will be the place to be and you'll be reading a headline article on the Cara Blog that reads: "BUY ALERT on Bonds". :-)

Nobody in a major Wall Street broker-dealer is going to tell you this. They have costly infrastructure in all the departments, and they understand the cyclicality of the capital markets, so they are never going to say "ALERT; SELL ALL BONDS" or "ALERT: BUY ONLY EQUITIES".

Ain't going to happen. Within two full cycles, their assets would have departed by way of the elevator to join firms that tell you stuff like 65:35 equities:bonds (up to 75:25 and down to 55:45).

In my case, I'm just focused on capital market prices, with no axe to grind, people to protect, and so forth. You see; I hold the unfair advantage, which is why I try not to disparage the sell-side, which has a tough job to do. My negative comments re the Street are contained to the broken financial system we all have to use.

Trust me, there are many sell-side broker-dealers who absolutely hate what THE BANKS HAVE DONE TO THEIR INDUSTRY, i.e., turn it into a product distribution system.

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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:

Table 11: Interest-sensitive securities

Sorted by 1-Week Price Performance.

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
CFC	37.08	0.01	0.03%	0.90%	0.38%	-1.96%	6.06%	1.87%	5.19%	-4.92%
SHY	79.46	-0.02	-0.03%	-0.10%	-0.29%	-0.50%	-1.07%	-0.65%	-1.22%	-2.13%
AGG	97.22	0.05	0.05%	-0.55%	-1.17%	-0.80%	-3.40%	-2.19%	-3.63%	-5.76%
TIP	98.61	-0.13	-0.13%	-0.60%	-1.11%	-1.23%	-4.30%	-2.72%	-4.40%	-7.67%
IEF	79.81	-0.07	-0.09%	-0.61%	-1.38%	-1.08%	-4.87%	-2.74%	-4.91%	-8.03%
TLT	83.42	-0.18	-0.22%	-1.06%	-2.68%	-1.01%	-9.11%	-5.68%	-9.13%	-13.02%
FRE	56.80	-0.43	-0.75%	-1.22%	-1.32%	-7.28%	-13.02%	-11.54%	-15.12%	-13.83%
FNM	46.37	-0.70	-1.49%	-1.86%	-5.87%	-8.20%	-4.86%	-14.96%	-4.10%	-21.79%

TLT was down -1.06 pct W/W to 83.42. In the past 12-months, TLT has dropped -13.0 pct.

Even the shorter maturities of the AGG ETF have been hit. AGG is down -5.8 pct over the past 12-months.

Consumer Finance -USA -- Weekly Data Charts

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Consumer Finance -USA -- Daily Data Charts

Consumer Finance -USA -- Hourly Data Charts

Two weeks ago I wrote: "I think the consumer finance (and the small local banks and savings and loans companies) have run into "issues" with the flat yield curve since April, and now Countrywide Financial seems to also have hit a wall."

This week CFC was up +0.90 pct, but over two weeks it is up just +0.38 pct, and over the past month and 12 months, CFC is down -2.0 pct and -4.9 pct respectively.

And that CEO is getting paid how much? $57 million for 2005 (good for #9 on the Forbes list).

Hmmm. You know, his company sponsored my kid's baseball team (when he was a kid), so they do spread it around I suppose.

I wonder what the shareholders are thinking though? Not the baseball sweaters, but the $57 million " the $100 million in the past five years.

In any event, with bond prices sinking and yields rising, there will be greater (negative) impact on the housing market, and mortgage lenders like Countrywide. Mortgage loan applications are expected to fall in the U.S., putting pressure on the Fed to soften their "hawkish on inflation" policy.

Thirty-year fixed rate mortgages are now up to a cycle high of 6.73 pct and rising. Can the market take 7 pct without driving wage inflation, which would be loathsome to the Fed?

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Commodities:

$CRB was down -1.23 pct W/W to 335.04.

$CRB is trading at the bottom end of the recent hi-lo range of 366.00-329.64.

The 40-Week Moving Average for $CRB is 333.53, so there is support for the commodities, even if the metals and oils are in a short-term bear phase.

Some traders are calling it the end of the 4 year commodity Bull. That's because the current price is testing the 40 Week Moving Average for the sixth time in the past 3 years.

I say Bull. :-)

I think that, within a couple weeks, the price of the $CRB index will start to lift. But these are tricky markets going forward, for sure. The central bankers of the world are squeezing out speculation, little by little.

Weekly CRB Commodities Index:

Daily CRB Commodities Index:

$WTIC (near oil futures) was up +0.95 pct W/W to close at 70.87.

As I wrote a week ago, "I wouldn't mind the price sitting in the 67-71 range for a while. But once $WTIC moves higher, the Fed will likely take action that could pull down the metals too."

As to the possible upside for NY crude oil, I see the 50-Day MA at 71.40 as resistance here, so I feel $WTIC will sidetrack or fall.

Weekly Crude Oil:

Daily Crude Oil:

This week, $WTIC at 70.87 is sitting well above the 40-Week MA of 65.02, which is rising. It would not surprise me to see a pull-back, even as low as 66 (probably the low for $WTIC going forward), and then there ought to be a summer rally.

A summer rally may come as the Fed/Treasury work out the problems (for small commercial lending banks) as rates are hiked this summer. The latter is likely as the Fed tries to squeeze inflation one more time. It would also be a quick liquidity pump before the November election that may be needed to avert a serious bear market and economic recession that would be a double whammy against the ruling Republicans.

Integrated Oil & Gas - Canada

Oil & Gas Exploration & Production -Canada

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Gold:

$GOLD closed at $583.75, up +0.56 pct W/W.

The price is now closer to the 595.42 cycle high and 542.27 cycle low, and at 584 appears to have broken out to the upside. As the price moved in a range between 550 and 580, I believed it was like a spring being wound up for a summer rally. I never saw that as a negative.

Weekly Gold EOD Continuous Contract Index:

Daily Gold EOD Continuous Contract Index:

This interactive chart shows the recent trading for the Gold Bullion index.

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$SILVER was up +0.33 pct W/W to close Friday at $10.30. The 40-Week MA of 9.88 will likely remain solid support.

I believe a cycle low was put in a week and a half ago at 9.48.

Weekly Silver EOD Continuous Contract Index:

Daily Silver EOD Continuous Contract Index:

This interactive chart shows the recent trading for the Silver Bullion index.

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$PLAT closed up +2.00 pct to 1174.50.

The 1099.20 recent cycle low will likely hold, and the recent cycle high (on the Daily) of 1206.30 will likely soon be taken out.

Doubters will say that this Friday, the 50 Day MA resistance of 1209.12 pushed back the $PLAT, which may be a sign of weakness. I don't think so.

Weekly Platinum EOD Continuous Contract Index:

Daily Platinum EOD Continuous Contract Index:

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

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$PALL closed the week at 309.56, up +1.34 pct.

The price is moving closer to the recent cycle high of 319.06, and away from the low of 267.74.

Weekly Palladium EOD Continuous Contract Index:

Daily Palladium EOD Continuous Contract Index:

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

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$COPPER dropped a further -2.19 pct this week to close at 315.10.

A week ago, $COPPER was down -2.07 pct after being down -5.76 pct the previous week.

So this week, $COPPER dropped in price as all the precious metals moved higher. I think that is significant.

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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Table 12: Senior gold equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
GFI	20.40	0.05	0.25%	12.77%	11.78%	-3.27%	5.86%	2.00%	19.23%	90.48%
GLG	35.42	1.16	3.39%	12.09%	6.18%	-4.11%	19.06%	26.86%	33.66%	110.46%
AEM	30.88	1.05	3.52%	10.92%	7.82%	-6.96%	40.11%	15.57%	63.91%	150.45%
MDG	29.85	0.66	2.26%	5.07%	3.36%	-3.24%	24.58%	16.10%	39.94%	65.83%
KGC	10.08	0.33	3.38%	3.81%	2.34%	-8.11%	1.92%	3.60%	13.64%	71.72%
GG	28.17	0.92	3.38%	2.89%	6.54%	-8.81%	16.40%	5.31%	34.98%	79.89%
ABX	28.20	0.32	1.15%	1.73%	0.39%	-8.83%	-2.15%	9.43%	3.64%	13.94%
LIHRY	41.36	0.36	0.88%	1.37%	0.17%	-6.78%	19.26%	26.87%	32.90%	115.30%
BVN	26.07	-0.17	-0.65%	-0.19%	-0.15%	-1.44%	-11.81%	11.65%	-7.55%	13.45%
NEM	49.88	0.37	0.75%	-0.36%	1.16%	-4.22%	-12.71%	1.30%	-3.97%	26.25%

This week I put out a full BUY alert on the goldminers, after dipping my toe in the water the week earlier.

The breakout did happen with $XAU jumping +4.17 pct this week to close at 133.40. On Friday it was up +1.60 pct. The Toronto goldminer index (XGD) was up +2.16 pct to 68.66.

Some of the goldminers made a big move this week. Goldfields (GFI) soared +12.8 pct this week, and Glamis (GLG) and Agnico-Eagle (AEM) were close by at +12.1 pct and +10.9 pct.

What a week!

But I told you it would be, right?

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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 GLG KGC BVN
15-minute data
60-minute data
Daily data
Weekly data

MDG LIHRY AEM BGO IAG EGO PAAS GOLD CDE GRS
15-minute data
60-minute data
Daily data
Weekly data

CBJ SSRI RGLD SIL NG KRY HL TSE_HRG TSE_GUY TSE_AGI
15-minute data
60-minute data
Daily data
Weekly data

NXG GSS MNG DROOY MFN RNO RANGY MRB CLG GRZ
15-minute data
60-minute data
Daily data
Weekly data

Here are the key Silver miners and the SLV ETF:

SLV SIL CDE HL PAAS SSRI SLW WTZ MGN

15-minute data
60-minute data
Daily data
Weekly data

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Here are the Weekly and Daily Data charts of the indexes:

Weekly U.S. Goldminers Index:

Daily U.S. Goldminers Index:

There was a little selling in the Toronto goldminers on Friday, which we'll have to watch on Monday.

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

XGD Weekly data:

XGD Daily data:

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Forex:

$USD was up +1.05 pct to 86.87.

A week ago I opined: "But I don't think the rising price will make it back to the prior cycle high of 86.50. The 50-Day MA of 86.09 will put in some resistance." I was ok until Thursday (and Friday " up another +0.51 pct Friday).

All of a sudden, at the end of Wednesday, there was talk of a 50 basis point rate hike by the Fed on Thursday 29th. That sure helped the $USD but I don't know if that wouldn't also be the death knell for the equity market!

I really think +50 bp from the FOMC would crash this equity market. It would hurt the housing market badly, and many small local and regional banks and S&L firms would be in jeopardy.

Weekly U.S. Dollar Index:

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

The $XEU (Euro priced in USD) dropped -0.99 pct to 125.18. Wow!

I still believe the prior cycle high of 129.74 will be crossed in the next couple weeks, but a week ago I believed that the cycle low of 125.33 would hold, and it didn't.

Weekly Euro Dollar Index, priced in USD:

Daily Euro Dollar Index, priced in USD:

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International Equities:

Russia, China and India did ok this week (pretty good actually) but [insert: from the perspective of USD priced country ETFs] most international equity markets were flat to down (e.g., Japan, UK and Canada).

NOTE: AN IMPROVEMENT SOON TO BE MADE TO THIS WEEK IN REVIEW REPORT WILL BE THE INTRODUCTION OF FIVE-DAY PRICE CHARTS OF THE MAJOR INDEXES IN ADDITION TO THE USD-PRICED COUNTRY ETF'S. ON OCCASION THERE ARE SIGNIFICANT DIFFERENCES BETWEEN THE INDEXES OF JAPAN SAY AND THE ETF (EWJ).

For Japan (EWJ), UK (EWU) and Canada (EWC), there was no more Dead Cat Bounce, which was true to my forecast.

Table 13: International equities perspective

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
TRF	62.28	0.36	0.58%	3.73%	4.44%	-15.84%	15.33%	-14.63%	5.20%	55.62%
FXI	72.23	0.68	0.95%	1.65%	3.07%	-4.01%	14.67%	-1.39%	15.60%	28.68%
IFN	44.98	0.45	1.01%	1.42%	7.10%	-8.32%	8.99%	-7.26%	2.69%	48.45%
EWZ	35.63	0.02	0.06%	1.37%	1.37%	-5.49%	2.30%	-10.79%	6.29%	48.40%
IEV	87.10	-0.30	-0.34%	1.07%	0.30%	-3.97%	4.35%	-1.34%	7.57%	16.91%
EWJ	12.94	-0.06	-0.46%	0.08%	0.70%	-8.23%	-7.24%	-7.04%	-5.20%	26.37%
EWC	22.70	0.12	0.53%	0.00%	-2.32%	-5.06%	1.11%	-2.99%	3.84%	24.18%
EWU	20.16	-0.14	-0.69%	-0.10%	0.75%	-3.08%	5.22%	-0.25%	7.69%	11.14%
SPY	124.47	0.01	0.01%	-0.14%	-0.70%	-2.55%	-1.76%	-4.33%	-1.81%	3.85%
QQQQ	38.15	-0.04	-0.10%	-0.50%	0.00%	-3.07%	-7.65%	-7.16%	-7.85%	2.03%

For the Weekly (more important than the Daily) charts below, (i) the MACD is negative, (ii) the current price is below the 40-Week Moving Average, (iii) the RSI is negative. What traders are watching is to see if there will be a summer rally that would see rising values on the Daily data that could extend and turn about the Weekly data.

That would be a condition that underscores a Bull market. Since we are in a Bear (according to Cara), this means the Daily data is likely to roll over, taking with it the Weekly down harder.

When the Monthly-Weekly-Daily-Hourly RSI and MACD are headed south for these broad market indexes, then traders really want to be out of the market or short or in puts.

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Japanese equity market ETF: EWJ

The Japanese equity market ETF (EWJ, priced in USD), closed at 12.94, up 1 cent.

There may be some weakness early in the week, but the Weekly RSI at 27.7 already shows weakness, so it may be ready or a rally going forward. Of course, the Bank of Japan is calling the shots right now in terms of drying up excess liquidity.

So we shall watch closely.

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

EWJ Weekly data:

EWJ Daily data:

EWJ Hourly data:

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U.K. equity market ETF: EWU

This week EWU moved down 2 cents to 20.16. Traders seem to be waiting for the FOMC decision.

Here is the United Kingdom (EWU) equity market ETF Weekly, Daily and Hourly data charts:

EWU Weekly data:

EWU Daily data:

EWU Hourly data:

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Canadian equity market ETF: EWC

The EWC (Canada's equity market ETF that trades in the U.S. in USD) was unchanged W/W at 22.70. Here too everybody is awaiting the Fed decision.

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:

A week ago I wrote: "Not as bad as a week earlier, but nothing more than a Dead Cat Bounce as I see it."

Yes it was just a Dead Cat Bounce and not a Summer Rally.

On average, U.S. equities dropped in market cap by -0.5 pct this week. So the summer rally (if there is one) appears to be a case of rotation of stock groups ahead of the next major down leg.

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.

There were 12 Dow stocks up this week and 18 down. When you look at the aggregate market cap of the leading ten that are up this week, versus the ten that are down the most, you see a striking difference. By far the heaviest weight (XOM, GE, PFE, INTC, etc) is to the downside.

That's what happens when the bond market takes a swan dive. Equities follow.

Now if bonds surprise and start to rally here, that's not to say equities will immediately follow. They will " in time. But first, traders have to figure how bad is the economy going to be that helps bonds but would not also hurt equities.

Sometimes that takes many months to figure out.

And then when equities are ready to go into the next Bull cycle, the typical rotation is first into the utilities and financials and a few leading techs (chips and software usually), followed by the consumer group, followed by the balance of the techs, and lastly by capital goods manufacturers, energy and metals. In a solidly growing economy, neither cash nor gold are favored. But in this next cycle, until I see evidence that the $USD is in global balance (narrow trading range) with Euro's and Yen, then I think precious metals ought to still play a big role in one's portfolio.

The following table shows the weekly price performance of the Dow 30 stocks, which I sorted by 1-week price change.

Table 14: Dow 30 List

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
GM	26.97	-0.30	-1.10%	5.35%	6.39%	-3.33%	42.70%	22.59%	43.23%	-20.28%
DD	41.81	0.05	0.12%	2.38%	2.83%	-1.16%	-2.90%	-2.70%	-2.79%	-7.97%
CAT	72.14	-0.14	-0.19%	2.25%	6.84%	-2.46%	24.81%	-5.40%	23.30%	46.51%
MSFT	22.50	-0.38	-1.66%	1.81%	2.65%	-5.22%	-16.17%	-16.26%	-15.54%	-11.10%
JPM	40.87	-0.20	-0.49%	1.77%	-2.92%	-4.62%	1.69%	-2.78%	1.39%	13.75%
MRK	34.94	-0.31	-0.88%	1.54%	3.34%	1.60%	6.69%	-3.48%	8.51%	11.81%
PG	55.73	-0.12	-0.21%	1.29%	2.35%	0.85%	-5.19%	-4.98%	-5.35%	3.86%
VZ	32.83	0.09	0.27%	0.89%	4.12%	5.39%	8.06%	-5.44%	7.71%	-5.44%
UTX	62.28	0.39	0.63%	0.86%	3.71%	-0.18%	10.17%	6.01%	8.73%	18.92%
HON	39.31	0.21	0.54%	0.85%	3.18%	-3.03%	4.94%	-7.55%	3.58%	5.14%
MO	71.25	-0.97	-1.34%	0.52%	0.25%	-1.21%	-4.97%	-2.06%	-6.31%	7.63%
AA	30.18	0.19	0.63%	0.30%	0.00%	-4.67%	0.94%	2.24%	2.48%	11.00%
JNJ	61.32	0.14	0.23%	-0.58%	-0.10%	1.44%	-0.50%	0.84%	0.34%	-6.17%
AXP	52.59	-0.16	-0.30%	-0.62%	-1.63%	-2.77%	0.02%	-0.96%	0.54%	-2.03%
MMM	79.92	0.33	0.41%	-0.73%	-0.81%	-4.01%	1.02%	4.10%	1.68%	5.34%
WMT	47.94	-0.54	-1.11%	-0.77%	1.72%	-3.05%	3.70%	-1.24%	-0.83%	0.13%
AIG	59.26	-0.11	-0.19%	-1.02%	-1.58%	-2.71%	-14.88%	-11.76%	-12.98%	7.41%
KO	42.75	-0.12	-0.28%	-1.06%	-1.84%	-3.65%	4.52%	0.80%	3.89%	-0.74%
IBM	77.10	-0.09	-0.12%	-1.09%	-0.68%	-3.79%	-6.04%	-7.33%	-7.64%	2.24%
DIS	29.12	-0.16	-0.55%	-1.12%	-0.72%	-3.42%	19.34%	5.81%	19.98%	10.85%
HPQ	32.66	-0.31	-0.94%	-1.15%	9.08%	1.21%	13.52%	-1.03%	13.52%	33.91%
XOM	58.10	0.13	0.22%	-1.19%	-1.19%	-5.56%	-0.63%	-5.14%	1.77%	-1.56%
C	47.74	-0.43	-0.89%	-1.28%	-4.08%	-2.71%	-3.14%	-0.06%	-3.05%	1.83%
HD	36.41	-0.07	-0.19%	-1.35%	-1.46%	-5.18%	-11.71%	-16.89%	-12.45%	-6.97%
T	27.37	0.08	0.29%	-1.51%	2.82%	6.50%	10.76%	1.37%	11.12%	15.68%
MCD	32.60	0.05	0.15%	-1.63%	-2.34%	-1.98%	-2.74%	-5.62%	-5.64%	14.11%
INTC	18.00	-0.25	-1.37%	-1.64%	4.90%	-0.28%	-29.61%	-8.63%	-30.69%	-32.76%
GE	33.16	-0.08	-0.24%	-2.27%	-2.67%	-3.66%	-6.25%	-2.81%	-6.38%	-4.33%
BA	83.39	-0.67	-0.80%	-2.51%	3.59%	0.48%	18.55%	7.05%	16.65%	34.80%
PFE	22.64	-0.01	-0.04%	-3.37%	-3.78%	-5.07%	-4.79%	-13.42%	-5.51%	-21.66%

You can do this table yourself by entering the following string into the Summaries window at www.investertech.com and then clicking on the link for Performance.

AA AIG AXP BA C CAT DD DIS GE GM HD HON HPQ IBM INTC JNJ JPM KO MCD MMM MO MRK MSFT PFE PG T UTX VZ WMT XOM

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)

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The latest Value Line Report on the Dow 30 is for Boeing (BA), which, under the skilful leadership of James McNerney, is now dominating competitor Airbus, and rapidly resolving issues that surfaced under the prior two CEO's.

McNerney was a favorite of mine while he led 3M. I believe he has the potential to become the top CEO in America. And since I like the Value Line forecasts for growth in revenues, earnings, cash flow, and dividends through into 2009-2011, I am now going to replace MMM with BA in the Cara Global Best 100 Companies.

(BA) (BA) Financials (Here is the Jun. 23 Value Line report on BA: next one is due Sep. 22)

That's not to say I like the BA share price today.

The Cara 100 is a measure of the quality of the underlying corporation and its ongoing prospects based on fundamentals, quantitative measures and macro-economic environment. Right now (3Q06), BA is in fact in a Distribution Zone. But someday it will reach an Accumulation Zone, and I'll be purchasing the share price at that time.

Next Friday, the Value Line reports will be AT&T (T) and Verizon (VZ), about which I intend to write some nasty things if these two players continue their quest to control our Internet. In fact, you will never see me mention them again in a positive light if that happens to be their game plan.

(BA) (BA) Financials (Here is the Jun. 23 Value Line report on BA: next one is due Sep. 22)

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As for Boeing, the stock may be weakening on the Daily and perhaps the weekly. The Monthly chart is very strong, but the RSI is clearly over-bought. In a Bear market, I believe BA would likely drop to the low 70's and perhaps lower.

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(AA) (AA) Financials (Here is the Apr. 21 Value Line report on AA: next one is due Jul. 21)

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(AIG) (AIG) Financials (Here is the May 26 Value Line report on AIG: next one is due Aug. 25)

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(AXP) (AXP) Financials (Here is the May 26 Value Line report on AXP: next one is due Aug. 25)

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(BA) (BA) Financials (Here is the Jun. 23 Value Line report on BA: next one is due Sep. 22)

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(C) (C) Financials (Here is the May 26 Value Line report on C: next one is due Aug. 25) Cara 100

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(CAT) (CAT) Financials (Here is the Apr. 28 Value Line report on CAT: next one is due Jul. 28)

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(DD) (DD) Financials ( Here is the Apr. 21 Value Line report on DD: next one is due Jul. 21)

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(DIS) (DIS) Financials (Here is the May 19 Value Line report on DIS: next one is due Aug. 18) Cara 100

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(GE) (GE) Financials ( Here is the Apr. 14 Value Line report on GE: next one is due Jul. 14) Cara 100

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(GM) (GM) Financials Here is the Jun. 2 Value Line report on GM: next one is due Sep. 1)

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(HD) (HD) Financials (Here is the Apr. 8 Value Line report on HD: next one is due Jul. 7) Cara 100

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(HON) (HON) Financials (Here is the Apr. 28 Value Line report on HON: next one is due Jul. 28)

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(HPQ) (HPQ) Financials (Here is the Apr. 14 Value Line report on HPQ: next one is due Jul. 14)

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(IBM) (IBM) Financials ( Here is the Apr. 14 Value Line report on IBM: next one is due Jul. 14)

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(INTC) (INTC) Financials ( Here is the Apr. 14 Value Line report on INTC: next one is due Jul. 14) Cara 100

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(JNJ) (JNJ) Financials Here is the Jun. 2 Value Line report on JNJ: next one is due Sep. 1) Cara 100

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(JPM) (JPM) Financials Here is the May 26 Value Line report on JPM: next one is due Aug. 25)

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(KO) (KO) Financials (Here is the May 5 Value Line report on KO: next one is due Aug.4)

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(MCD) (MCD) Financials (Here is the Mar. 10 Value Line report on MCD: next one is due Jun. 9)

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(MMM) (MMM) Financials (Here is the May 19 Value Line report on MMM: next one is due Aug. 18) Cara 100

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(MO) (MO) Financials (Here is the May 5 Value Line report on MO: next one is due Aug. 4)

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(MRK) (MRK) Financials ( Here is the Apr. 21 Value Line report on MRK: next one is due Jul. 21)

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(MSFT) (MSFT) Financials (Here is the May 26 Value Line report on MSFT: next one is due Aug. 25)

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(PFE) (PFE) Financials (Here is the Apr. 21 Value Line report on PFE: next one is due Jul. 21)

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(PG) (PG) Financials (Here is the Apr. 8 Value Line report on PG: next one is due Jul. 7) Cara 100

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(T) (T) Financials (Here is the Mar. 31 Value Line report on T: next one is due May 30)

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(UTX) (UTX) Financials (Here is the Apr. 28 Value Line report on UTX: next one is due Jul. 28) Cara 100

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

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(WMT) (WMT) Financials (Here is the May 12 Value Line report on WMT: next one is due Aug. 11) Cara 100

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(XOM) (XOM) Financials (Here is the Jun. 16 Value Line report on XOM: next one is due Sep. 15) Cara 100

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Wrap up:

As noted earlier, I wish the best for three people who were hurt in a helicopter crash this week on a minerals (zinc) prospecting trip in Northern Ontario. One of them, Don McKinnon, is a friend.

Don is well-known for his discovery of Canada's largest gold camp at Hemlo Ontario.

I have mentioned Don a couple times in this blog, once in connection with Beth Kirkwood, who btw is out this week as CEO at First Nickel (I told you this is a tough business and Beth is an awfully nice person).

The other item mentioned selling my Rolls Royce to Don. At PDAC I asked him if he was still driving the car and he retorted, as only Don can do: "I never drove that (expletive deleted) thing. People in Timmins would think I was a pimp. My son at university drives it around campus now and the people there can think what they want."

Field accidents happen a lot to people in the mineral explorations business. Don once bought a 10-seater float plane identical to his prospecting partner John Larche. Larche's plane crashed, hurting him very seriously and killing his pilot.

I once flew with Don to look at an industrial minerals property on the Quebec-Vermont border. There was a wind storm that day, but we went anyway. Unfortunately when the pilot tried to land we had to clear the mountain top to descend to a private airstrip in a farmer's field but the wind shear was so intense that the plane flipped right over in mid air. For a few seconds I thought that we were all going to die, but the pilot managed to get control of the plane, and I'm still here, thankfully.

Reminds me of the time myself and the Merrill Lynch mining analyst and two mining managers got dynamited underground (from fifty feet) in a stupid accident in a gold and silver mine north of Great Slave Lake in the Northwest Territories. I thought all of us were going to die then too.

I often write about these stories because minerals exploration in remote places of the world is such an incredible human challenge that often turns up nothing of value, but all too often results in the final day on earth for the people involved.

And then -- on too few occasions -- is the day that all explorationists live for (like Aurelian in late March this year) -- the discovery of what could be a world-class gold orebody.

Many people buy lottery tickets in hopes of having money fall into their hands; others go out and " regardless of the challenges they face " earn it.

I take my hat off to those of you who work hard to have a better life " for yourself, your children and the society you are part of.

As for myself, earlier this year (February to be exact), I started planning a Trader City for the Bahamas, but at the start of June I had reason to put that plan on hold for a couple months and to move more quickly into my own broker-dealer offshore (which will help the Trader City plan later).

These plans take time to make and to execute. I am trying to do that as fast as possible. I think I'll be in a position to make some announcements in July.

The blog will continue, but a top nav bar tab will lead readers (who register for info) to my second website. Meanwhile I intend to improve the Cara 100 section, but the progress is going to be resource dependent (i.e., when time is available).

Above all, I only "work" at things I really enjoy doing. Thankfully, I don't have to do anything. :-)

Re the book idea, I am working forward on that front too, and I thank all of you who have given me ideas and notes. It all helps. And I am encouraging my writing mentor Frank Kaplan to come out of retirement to give me some help. Frank is closing in on 80 and next week goes in for a full hip replacement. I wish him well.

I am just so looking forward to writing with him. He is an encyclopedia of mining, mutual funds, financial services -- you name it.

BCara@BillCara.com