This week the stagflation story was put back on the front burner and traders started to worry again. Worry, contrary to the general perception started by the sell-side, does not translate into higher prices.

With little upcoming news on the economic calendar this week, and very little happening in the bond market last week despite the North Korean missile "crisis" and a lot of debate over the U.S. jobs data, it appears to me that the upcoming week might be soft on volume, which will permit prices to drift.

Very seldom do you see prices drift up. In fact if you ever hear a Talking Head mention that prices are "drifting" you can, on your own, finish the remaining sentences. Prices are sliding.

The Bank of Canada announces their monetary policy decision on Tuesday, and I don't think there will be a hike, which would lift the CAD and serve to put more hospitality and manufacturing workers out of work.

In spite of a robust economy to this point, Canada actually lost jobs this past month. Of course, nobody seems to qualify the types of jobs lost.

While listening to my favorite country music station from Hamilton ("Steeltown"), I was surprised to hear a jobs recruiting promo for Tim Horton's. It wasn't slick " not much is in Hamilton " but very effective: the DJ was saying "Git your rear-end down to Timmy's " they're hiring today; they need you."

Kinda reminded me of the good old days.

Traders now are focused on the upcoming Earnings Season; in effect hoping for the "good old days".

Sadly, these are not the "good old days".

Now, let's see how this week went in the capital markets.

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Global Market Summary

International Equities: The rockets that a week ago lifted off the equity markets of emerging economies and advanced economies (on a U.S. bank rate hike?) all tumbled this week like those of North Korea.

U.S. Equities : More downside action this week after some good days the previous week. Friday was a tough one on the Bulls unless of course they think Healthcare and Utilities are going to lead them to the "Promised Land". Actually that's the Aussie shiraz we had for dinner to toast tomorrow's trip to Bahamas.

Dow 30 : 7 up, 22 down and 1 flat on Friday. It was almost 4 up, 26 down on Friday. As I said last week, "Stocks will mostly be distributed" during this phase. Dow component 3M was down -9.0 pct on Friday. Which one will be the next major company to admit earnings problems?

U.S. Sector ETFs: Six of 10 ETF's I track were down in this short week; and for the past five sessions, it was 5 and 5. A week ago I wrote: "I call it a Sucker Rally". Nothing's changed. Time to look at Bear funds and proShare inverse ETF's.

First segment: most influenced by global commodities, forex and capex spending
10: Energy (XLE): #5 (-0.11 pct over 4 days); Soft on Fri. afternoon before the weekend
15: Basic Materials (XLB): #6 (-0.93 pct); Weakness on Fri. afternoon
20: Industrials (XLI): #9 (-1.60); Profit-taking in HON and MMM Friday
Second segment: most influenced by U.S. consumer spending and economic growth
25: Cons. Discretionary (XLY): #8 (-1.47 pct); SBUX down -4.9 pct Friday
30: Cons. Staples (XLP): #1 (+0.70 pct); Defensives holding tight
35: Healthcare (IYH): #3 (+0.48 pct); Defensives holding tight
Third segment: most influenced by U.S. interest rates and general economic health
40: Financial (XLF): #4 (+0.03 pct); Signs of weakness
45: Tech (SMH chips): #10 (-3.37 pct); Back to #10
50: Telecom Services (IYZ): #7 (-1.21 pct); Was overdone a week ago
55: Utilities (XLU): #2 (+0.68 pct); Defensives holding tight

Bonds: A week ago was short-covering. This week nothing much happened except for some money coming out of T-Bills and 2-year Treasuries, with the rest of the maturities flat on the week.

Commodities: $CRB was up +0.5 pct W/W after being up +3.4 pct a week ago. So the technical support levels held up, and the USD dropped Thursday and Friday.

Oil & Gas: The $WTIC futures enjoyed a modest gain this week; but a gain nonetheless.

Gold: Three weeks ago I wrote: "Ah, but the good news is they are on the way back." Two weeks ago, $GOLD jumped $32.25 (+5.5 pct), taking it to a higher trading range. This week $GOLD gained a further $13.75 (+2.2 pct), closing at 629.75. Lot of Bulls ready to buy the dips.

Goldminers: Despite a rotten day Friday, the $XAU (U.S. listed gold and silver miners) gained +1.2 pct W/W (after a prior week's impressive gain of +7.6 pct). The XGD (TSX gold miner ETF) was up +0.9 pct W/W.

Forex: The $USD continued dropping, but Friday was the cause in that economic weakness scared traders away from the USD.

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Sector ETF:

The various sector ETF's one would expect to be strongest in a Bull and weakest in a Bear were in fact weakest this week. I'm speaking of Tech, Industrials and Consumer Cyclicals.

Actually the broad market in the U.S. was weaker than I expected. I thought the "Reflation" story might last longer on Page 1. But there were no legs to that one. "Stagflation" seems to be the bogeyman now.

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 following table is sorted by price performance Week over Week (W/W), i.e. 1W%N. The data is for the past five trading sessions, while this week there were four.

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
IYH	60.72	0.04	0.07%	1.20%	1.83%	-0.30%	-4.57%	-2.30%	-6.01%	-0.65%
XLU	32.51	0.25	0.77%	0.96%	2.81%	0.96%	1.59%	6.00%	1.03%	2.81%
XLP	24.36	-0.03	-0.12%	0.25%	1.88%	2.40%	3.92%	4.06%	3.66%	7.31%
XLE	56.69	-0.78	-1.36%	0.23%	8.56%	6.12%	7.57%	2.42%	6.04%	21.78%
IYZ	25.34	-0.20	-0.78%	0.12%	2.01%	1.32%	10.32%	-1.82%	7.92%	8.29%
XLF	32.35	-0.16	-0.49%	-0.25%	1.63%	-1.37%	0.47%	-0.71%	-0.37%	9.33%
XLB	31.80	-0.26	-0.81%	-0.47%	3.65%	3.08%	2.85%	-3.08%	1.18%	17.08%
XLY	32.90	-0.24	-0.72%	-1.41%	-0.03%	-0.96%	-0.30%	-2.86%	-1.29%	-0.21%
XLI	33.27	-0.50	-1.48%	-1.68%	0.36%	0.45%	5.18%	-2.00%	4.69%	13.51%
SMH	31.80	-0.52	-1.61%	-3.84%	-3.23%	-3.05%	-16.14%	-13.80%	-19.80%	-9.01%

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

This week, XLE was flat, closing at 56.69, off just 6 cents.

I don't like the fishhook pattern on the Daily data chart though. Ominous really. That was quite a sell-off on Friday afternoon.

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
TOT	65.89	0.42	0.64%	2.71%	7.23%	7.35%	-49.34%	-50.64%	-49.90%	-45.12%
IMO	36.76	0.45	1.24%	2.65%	10.66%	6.43%	-64.65%	-66.62%	-64.37%	-57.38%
STO	29.52	0.63	2.18%	2.07%	15.09%	9.33%	22.34%	1.83%	18.60%	37.56%
CVX	63.68	-0.30	-0.47%	1.97%	8.56%	10.06%	7.79%	8.58%	7.48%	10.17%
XOM	62.82	-0.65	-1.02%	0.72%	8.37%	5.46%	7.44%	2.43%	5.70%	5.54%
SU	80.75	-2.37	-2.85%	0.59%	13.11%	8.83%	23.23%	-1.15%	21.21%	59.71%
CEO	80.25	-1.75	-2.13%	-0.67%	6.52%	10.70%	15.98%	1.67%	13.17%	26.58%
PBR	87.21	-1.31	-1.48%	-0.77%	9.27%	8.13%	16.72%	-2.83%	11.38%	67.71%
ECA	52.02	-0.13	-0.25%	-1.77%	6.25%	8.40%	11.39%	11.06%	13.43%	20.36%

A major Canadian oil sands player Suncor (SU) got hit on Friday afternoon " down -2.9 pct on the day. The prior week, however, was unreal on the upside for these stocks.

Integrated Oil & Gas - Canada

Oil & Gas Exploration & Production -Canada

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

The Basic Materials ETF (XLB) was #6 best sector performer this week " down -0.93 pct W/W to close at 31.80.

The prior week was largely a metals rally " partly to do with mergers and acquisitions and partly metals prices related.

This week, precious metals continued gaining, but the miners did little in the market. And traders are waiting for the boardroom moves to be played out before chasing some of these stocks like Inco any higher.

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
AA	33.55	0.13	0.39%	5.17%	11.87%	11.57%	12.21%	3.23%	11.06%	28.59%
N	67.09	-0.34	-0.50%	2.71%	13.00%	8.65%	55.05%	28.06%	47.52%	72.91%
BHP	42.96	0.19	0.44%	1.46%	5.24%	8.95%	22.74%	1.20%	20.17%	57.07%
GGB	14.83	-0.15	-1.00%	-0.34%	11.17%	8.64%	-14.82%	-37.90%	-18.52%	63.15%
RIO	23.37	-0.33	-1.39%	-0.97%	4.56%	9.62%	8.70%	-4.02%	3.87%	54.87%
NUE	54.19	0.77	1.44%	-1.22%	8.97%	10.82%	56.26%	0.04%	50.65%	124.20%
ACH	74.77	-0.71	-0.94%	-1.29%	6.94%	6.25%	-5.83%	-30.76%	-4.97%	39.39%
RTP	207.27	-0.81	-0.39%	-1.39%	1.17%	5.80%	9.78%	-3.30%	9.01%	64.96%
PD	80.24	-1.45	-1.78%	-2.15%	-0.37%	0.31%	7.46%	-4.43%	5.22%	66.65%
PKX	64.00	-1.12	-1.72%	-5.26%	6.40%	8.20%	27.36%	1.36%	23.03%	43.47%

Some of the goldminers took pretty big losses on Friday. Kinross -3.9 pct, Lihir -3.1 pct, Glamis -3.5 pct and Meridian -4.9 pct were Friday's big losers. Barrick and Goldfields held in.

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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 down -1.60 pct W/W to 33.27, which was about how much was gained the prior week.

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
ERJ	35.88	-0.45	-1.24%	0.50%	2.84%	5.47%	-8.61%	-2.02%	-12.70%	11.71%
TYC	27.37	-0.29	-1.05%	0.33%	2.89%	1.56%	-7.66%	4.95%	-8.71%	-7.38%
GE	33.30	-0.20	-0.60%	0.09%	0.18%	-3.67%	-5.85%	-2.15%	-6.14%	-2.57%
UTX	63.10	-0.75	-1.17%	-0.30%	1.96%	4.63%	11.62%	9.51%	12.36%	24.36%
CBE	91.50	-2.30	-2.45%	-1.04%	6.25%	8.22%	23.85%	6.64%	19.91%	41.86%
CAT	72.58	-1.07	-1.45%	-2.45%	0.42%	8.51%	25.57%	-3.12%	20.07%	49.13%
HON	38.96	-0.86	-2.16%	-2.50%	-0.36%	0.15%	4.00%	-8.11%	2.88%	10.03%
BA	79.99	-0.82	-1.01%	-3.63%	-4.84%	-1.48%	13.72%	0.53%	15.34%	22.72%
MMM	74.10	-7.29	-8.96%	-8.69%	-6.90%	-9.36%	-6.33%	-8.55%	-5.76%	0.39%

GE, one of the Generals (i.e., leaders) in a Bull Market dropped -0.60 pct on Friday and did nothing on the week. So from where do the Bulls expect the leadership to come? It's also not coming from the Techs and Financials, as you'll see.

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

The Consumer Discretionary sector ETF (XLY) was down 1.47 pct W/W to 32.90.

Part of the consumer group (staples and health) held their ground this week, but the consumer cyclicals stayed at #8 again.

There is nothing going on there.

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
TM	104.38	1.11	1.07%	2.10%	3.49%	2.85%	-2.31%	-8.52%	-2.70%	42.62%
CCL	41.71	-0.22	-0.52%	1.56%	1.86%	11.52%	-23.57%	-12.78%	-22.73%	-23.69%
JCP	68.51	0.86	1.27%	1.21%	1.23%	5.25%	21.36%	14.16%	22.36%	24.72%
WHR	82.55	-0.10	-0.12%	0.17%	2.76%	-2.31%	-0.15%	-9.20%	-1.35%	18.61%
DIS	29.83	-0.21	-0.70%	-0.17%	1.88%	-0.13%	22.25%	8.35%	20.57%	22.00%
BC	32.24	0.06	0.19%	-0.34%	-4.39%	-7.57%	-21.02%	-18.48%	-21.31%	-21.73%
NKE	79.08	-0.71	-0.89%	-2.35%	-5.71%	-1.95%	-7.99%	-5.44%	-7.83%	-7.29%
SBUX	36.04	-1.84	-4.86%	-5.08%	-0.14%	-0.55%	16.75%	-4.81%	13.98%	43.64%
EBAY	26.62	-0.23	-0.86%	-9.02%	-11.30%	-14.73%	-40.13%	-30.42%	-42.94%	-21.91%

Toyota Motor (NYSE: TM) continued to rally, but I still feel it's going to be a long hot summer business wise for the auto makers. It was only two weeks ago that the General Motors CEO said that the sales environment today is "brutal". Now GM and Japan's Nissan and France's Renault are talking global alliance or whatever.

Now you're going to have three losers trying to tell the others about the momentum they are supposedly building.

Actually, I think it would be a good thing to work together. I think it would be even better to amalgamate. Sounds like Japan really needs the leadership of General Motors (lol).

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

The Consumer Staples sector ETF (XLP) was up +0.70 pct W/W to close at 24.36. Amazingly that was "Best in Class" this week.

Just like the others in the consumer segment, nothing much is happening here.

I still feel it's a time to scale out of unnecessary positions. I mean how many of the stocks in the defensive portfolio have a superior picture of growing revenues and earnings and dividends than any other sector.

Remember, the money managers have to stay long and suffer the consequences. Their job is to relatively out-perform. If in the balance of the year they lose just 10 percent of the total equity values they are managing, and that puts them in the top half of their peer group, they get to keep their job.

So expect to see these poor souls trying out their best clown suit attire to get ready to sit with their favorite "personalities" at CNBC.

You know the drill: buy PG, WMT, KO, MO, anything in the consumer staples sector with a heartbeat. They own them all and don't want to commit more money to in a falling market, so they go on Financial Entertainment TV to encourage you to do a job they can't seem to do for themselves.

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
MO	77.80	0.04	0.05%	5.29%	7.73%	9.13%	3.76%	11.54%	2.44%	21.18%
PEP	60.46	0.10	0.17%	1.61%	0.73%	0.55%	1.17%	4.60%	1.44%	14.55%
ABV	41.17	-0.54	-1.29%	1.48%	6.66%	3.76%	6.82%	-9.22%	0.59%	31.11%
WAG	45.85	0.30	0.66%	1.28%	5.16%	9.64%	1.01%	5.82%	5.72%	-1.36%
BUD	45.96	0.36	0.79%	0.50%	1.01%	1.93%	5.24%	9.38%	4.50%	1.19%
KO	43.18	-0.15	-0.35%	0.28%	0.72%	-0.48%	5.57%	4.43%	4.27%	3.40%
DEO	66.99	-0.55	-0.81%	-0.22%	-0.36%	-0.39%	12.47%	6.54%	11.91%	16.87%
PG	56.50	0.05	0.09%	-0.86%	1.16%	3.22%	-3.88%	-1.36%	-3.65%	8.32%
WFMI	62.47	-1.49	-2.33%	-2.88%	0.56%	-4.39%	-18.98%	-5.43%	-19.33%	0.71%
WMT	46.00	-0.72	-1.54%	-5.56%	-5.12%	-2.75%	-0.50%	-0.04%	0.26%	-7.09%

On a tough day Friday, Wal-Mart was down -1.54 pct, which takes WMT down -2.8 pct over 4 weeks and -7.1 pct over the past 52 weeks.

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

The healthcare ETF (IYH) was up +0.48 pct W/W to close at 60.72, which was good for 3rd place of the ten ETF's I follow.

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
DNA	84.61	-0.72	-0.84%	5.59%	10.03%	7.52%	-9.99%	6.84%	-7.36%	1.95%
GSK	56.85	0.46	0.82%	3.44%	4.50%	2.62%	11.56%	10.43%	8.45%	17.90%
AMGN	66.39	0.46	0.70%	1.98%	2.19%	-2.95%	-17.38%	-6.53%	-14.99%	-0.81%
PFE	23.68	0.00	0.00%	1.89%	4.55%	-0.75%	-0.42%	-4.09%	-4.71%	-11.48%
NVS	54.37	-0.21	-0.38%	1.80%	3.98%	0.48%	1.68%	-4.26%	-0.77%	15.73%
JNJ	60.62	0.10	0.17%	1.22%	-0.92%	-1.53%	-1.64%	4.82%	-3.16%	-5.16%
UNH	45.39	0.56	1.25%	0.84%	2.16%	-1.86%	-26.47%	-15.46%	-27.84%	-15.14%
AET	38.86	0.16	0.41%	-0.97%	-3.45%	-4.71%	-17.37%	-17.48%	-17.14%	-7.45%
BMY	25.33	-0.06	-0.24%	-1.44%	-1.17%	0.32%	8.99%	3.35%	11.19%	2.97%
BMET	31.42	-0.32	-1.01%	-1.44%	-10.71%	-11.09%	-14.80%	-19.17%	-13.92%	-7.34%

United Health (UNH) had a terrific day Friday when the house was caving in. Another Cara 100, Aetna (AET) also did ok.

This group is a defensive sector because the cash flow is relatively stable in an economic recession. However the U.S. Congress is on a belt-tightening exercise, which could push share prices down here too.

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

This week, the Financial sector ETF XLF was up a penny to close Friday at 32.35.

Not much happening. But what's Earnings Season likely to bring? Could it be that th lack of IPO's and the flat yield curve and summer trading doldrums are going to finally catch up to the Financials?

I don't know; I'm just asking.

---

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	63.95	0.08	0.13%	2.25%	6.57%	8.43%	9.41%	0.28%	0.00%	0.00%
MER	71.23	-0.20	-0.28%	1.64%	4.92%	1.29%	4.05%	-9.19%	3.68%	28.11%
HBC	88.65	0.06	0.07%	1.26%	2.28%	3.21%	8.53%	4.84%	5.50%	12.22%
DB	111.73	-1.19	-1.05%	0.93%	4.64%	4.34%	12.34%	-4.33%	8.73%	44.20%
C	49.08	-0.19	-0.39%	0.45%	1.89%	-1.74%	-0.43%	2.98%	0.95%	6.07%
CSR	55.24	-0.43	-0.77%	0.27%	2.58%	0.25%	3.54%	-4.35%	-1.02%	42.30%
LEH	64.42	-1.35	-2.05%	-0.25%	1.85%	-1.95%	-0.80%	-13.32%	-1.07%	29.05%
UBS	108.06	-1.87	-1.70%	-0.30%	2.04%	0.52%	9.47%	-3.98%	4.87%	38.34%
JPM	42.41	-0.04	-0.09%	-0.63%	3.26%	0.14%	5.52%	1.70%	5.97%	23.07%
GS	148.51	-2.07	-1.37%	-2.42%	0.13%	-0.83%	15.24%	-7.77%	15.27%	42.66%

The Financial sector Bulls Goldman and Lehman took good-sized hits on Friday. GS dropped -1.4 pct on the day, and LEH was down -2.1 pct. And UBS and Deutsche Bank dropped -1.7 pct and -1.1 pct respectively on Friday.

I think it would be wise to watch the electronic brokers, which rise and fall on trading volume. Bear markets mean slow volume days.

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

This was yet another bad week for the semi-conductor industry. SMH was down -3.37 pct W/W, which put it worst performer out of 10. That's really a pathetic four-day performance.

SMH closed at 31.80. It was almost 39 as recently as April and May when the Wall Street promoters were pumping and dumping.

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
INFY	76.44	-1.62	-2.08%	1.95%	6.67%	12.93%	-4.98%	0.78%	-6.12%	-0.84%
SAP	52.56	-0.86	-1.61%	0.44%	2.46%	5.80%	14.39%	-5.87%	7.62%	25.68%
ORCL	14.78	0.28	1.93%	0.27%	3.14%	9.24%	17.30%	7.49%	12.65%