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December 22, 2006
Cara's Daytrader Bull Board, Fri., Dec. 22, 2006, 7:00 AM
U.S. stocks sagged again yesterday [Dow (-42) and Nasdaq (-11.8)] as economic data is showing us a picture of Stagflation.
Stagflation is simply means slower than expected growth with higher inflation expectations. Stagflation is a killer of Bull phases because earnings growth slows, while at the same time interest rates have to remain higher (than what is needed to sustain the economy) in order to fight inflation.
Richmond Fed President Jeffery Lacker was quoted: "... the risk that core inflation surges again, or does not subside as desired, clearly remains the predominant macroeconomic policy risk."
Commodity prices dipped as traders spun on the softening economy worry. Copper plunged nearly -3 pct to 6-month lows. The Dow Jones Aluminum index was off -2.5 pct on the day. The Semis (SOX -1.3 pct) and DJ Transports (DJTA -0.9 pct) led the cyclical stocks to the downside and the Retailers (RLX -0.7 pct) and Broker-Dealers (XBD -0.4 pct) also reflected growing economic concerns.
Defensive sectors Telecom (+0.2 pct) and Consumer Staples (+0.04 pct) were up a bit.
(From Knobias) "During Thursday's "Mad Money" show, Cramer evaluated Jones Soda (JSDA). Cramer: This could be the next Hansen (HANS); each markets a premium soda. Caution: Buy the stock Monday afternoon [Editor's note: Cramer meant Tuesday afternoon, Dec. 26, as the markets are closed Monday for the Christmas holiday], not on Friday. JSDA is all about growth: is should earn 6c this year, 12c in 2007, that's 100% growth, and a brand/marketing success. Cramer: Buy JSDA on Monday [he meant Tuesday, Dec. 26] after it pulls-back. Next, Cramer evaluated Riverbed (RVBD). Cramer: RVBD is a keeper because it invented wide area network [wan] optimization, and software called "Steelhead" that allows a company to centralize its office computer network without sacrificing speed or efficiency. Cramer sees RVBD's 2007 EPS 25c and 2008 EPS 48c - again outstanding growth. P/E is high: 30, but Cramer doesn't care. And RVBD has no meaningful competition, he said. Cramer: Buy RVBD. In the Lightning Round, Cramer was bullish on: Barclays (BCS), Bank of America (BAC), Coldwater (CWTR), Caterpillar (CAT), BHP Billiton (BHP), CVRD (RIO), XTO Energy (XTO), Honeywell (HON), and Time Warner (TWX). In the Lightning Round, Cramer was bearish on: Aventine (AVR). In the Sell Block Round, Cramer had the following recommendations - Sell: FD - its merger is not working; Sell: HLS. Take Profits: ATVI; GMKT: sell some, keep some; NUAN: do not buy. Next, Cramer evaluated Brinker (EAT) and spoke briefly with CEO Doug Brooks. Cramer: The downside is very limited here, Buy EAT."
I see that Pfizer (PFE) will be paying out $199 million as the final compensation package to retiring Chairman & CEO Hank McKinnell. Shareholders can put a stop to unconscionable stuff like that in the future, and I think they will. I removed PFE from the Cara 100 for this reason. It's not enough to say "Welcome to America". Payments of that sort to an individual, particularly one who was widely considered to have failed in his job, are unacceptable. Shareholder-owned corporations who are meeting and beating shareholder expectations ought to be paying out aggregate compensation of that sort to the top 50 or 100 senior executives who were the ones that deserve it. Annual payouts of $50 to $200 million or more to these "Big Swinging Dicks" shows me there needs to be employment discrimination laws on the books that prevent CEO's from using their power in the boardroom for excessive personal advantage. When an employee can pull off a $200 million annual compensation, you wonder what else he pulls off.
Global equity markets
Asia-Pacific indices (Interactive link)
European indices (Interactive link)
Gold spot chart (Interactive link)
Silver spot chart (Interactive link)
Platinum spot chart (Interactive link)
Palladium spot chart (Interactive link)
$CRB Index (Interactive link)
$USD Index (Interactive link)
U.S. Treasury Bond Dec. contract (Interactive link)
Open Futures Contracts (Interactive link)
NYMEX Oil near futures contract (Interactive link)
Goldminer stock watch (Interactive link)
RSI Highs in Cara 100 (Interactive link)
RSI Lows in Cara 100 (Interactive link)
Wall Street upgrades (Interactive link)
Wall Street downgrades (Interactive link)
In Focus (Interactive link)
Economic calendar
Yesterday's portfolio movers from Cara Watch List:
Here are the top 25 gainers on the day.
Interactive chart of the top 12 Watch List gainers (Interactive link)
Interactive chart of the next 12 Watch List gainers (Interactive link)
Here are the top losers on the day.
Interactive chart of the top 12 Watch List losers (Interactive link)
Interactive chart of the next 12 Watch List losers (Interactive link)
Here are the stocks with higher than daily average volume on the day.
Here is the End of Day RSI-7 values prepared by "David" using a Welles Wilder smoothing that reduces erratic numbers. RSI-7 calculations produced by Investertech are not smoothed.
To my readers in 140 countries, may peace, joy, prosperity and love be yours throughout this holiday season.
Beannachtai na Nollag agus na hAthbhliana (Gaelic)
Boas Festas E Feliz Ano Novo (Or) Feliz Natal E Um Prospero Ano Novo. (Portuguese)
Boldog Karacsonyl es Ujevl Unnepeket (Hungarian)
Buone Feste Natalizie Buon Natale e Felice Anno Nuovo (Italian)
Cestitamo Bozic (Yugoslavian)
Chung Mung Giang Sinh (Vietnamese)
Felices Pasquas Y felices ano Nuevo (Argentine)
Feliz Navidad y prospero Ano Nuevo (Spanish)
Frohliche Weihnachten und ein Glueckliches Neues Jahr (German)
Gajan Kristnaskon (Esperanto)
Gezuar Krishtlindjet! (Albanian)
Glædelig Jul Gledlig jol og Nyar (Icelandic, Danish)
God Jul and (Och) Ett Gott Nytt Ã…r (Swedish)
Gun Tso Sun Tan'Gung Haw Sun (Catonese)
Happy Hanukkah (Hanukkah/Channukah)
Harambee (A Kwanzaa Greeting "Let's all pull together")
Hauskaa Joulua (Finnish)
Hristos se rodi (Serbian)
Hyvaa Joulua (Finnish)
Hyvää Joulua ja Onnellista Uutta Vuotta! (or God Jul och) (Finnish)
I'D MIILAD SAID OUA SANA SAIDA (Arabic)
Idah Saidan Wa Sanah Jadidah (Iraqi)
Il - Milied Ferriehi, u is - Sena it - Tajba. (Malta)
Joyeux Noel et heureuse année (French)
Kala Christouyenna! Kala Khristougena kai Eftikhes to Neon Ethos (Greek)
Kellemes Karacsonyi unnepeket (Hungarian)
Kung His Hsin Nien bing Chu Shen Tan (Mandarin)
La Maunia Le Kilisimasi Ma Le Tausaga Fou (Samoan)
Linksmu sventu Kaledu (and) Laimingu Naauju Metu (Lithuanian)
Maligayang Pasko (Filipino - Tagalog)
Maligayang Pasko At Manigong Bagon Taon (Philippines)
Mata-Ki-Te-Rangi. Te-Pito-O-Te-Henua (Rapa-Nui - Easter Island)
Mele Kalikimake me ka Hauloi Makahiki hou (Hawaiian)
Merry Christmas (English)
Mitho Makosi Kesikansi (Cree)
Mo'adim Lesimkha. Chena tova (Hebrew)
Nadelik looan na looan blethen noweth (Cornish)
Nadolic Llawen. Blwyddn Newdd Dda (Welsh)
Nathaal Vaalthukal (Tamil)
Nolag mhaith Dhuit Agus Bliain Nua Fe Mhaise (Gaelic - Irish)
Nollaig Chridheil agus Bliadhna Mhath Ur (Gaelic - Scot)
Nathaal Vaalthukal (Tamil)
Naya Saal Mubarak (Urdu and Hindi)
Noeliniz Ve Yeni Yiliniz Kutlu Olsun (Turkish)
Nollaig Chridheil agus Bliadhna Mhath Ur! (Scottish Gaelic)
Nollaig chridheil huibh (Scots Gaelic)
Nollaig Shona Dhuit (Irish)
Ojenyunyat Sungwiyadeson honungradon nagwutut.Ojenyunyat osrasay (Iroquois)
Ollick Ghennal Erriu as Blein Feer Die. Seihil as Slaynt Da'n Slane Loght Thie (Manx)
Pozdravlyayu s prazdnikom Rozhdestva i s Novim Godom (Russian)
Prejeme Vam Vesele Vanoce a stastny Novy Rok (Czech)
Roomsaid Joulupuhi Roomsaid Joulu Phui ja Uut Aastat (Estonian)
Sarbatori vesele Sarbatori Fericite. La Multi Ani (Rumanian)
Sawadee Pee Mai (Thai)
Seasons Greetings (English)
Selamat Tahun Baru, dan, Selamat Hari Krismas (Malaysia - Bahasa Malayu)
Shana Tova (Hebrew)
Shenoraavor Nor Dari yev Pari Gaghand (Armenian)
Shinnen omedeto. Kurisumasu Omedeto (Japanese)
Shub Naya Baras (Hindi)
Shubha Naba Barsha (Bangla)
Solstice Blessings (Pagan, Wicca)
Sretan Bozic Vesela Nova Godina (Croatian)
Srozhdestvom Kristovym (Ukrainian)
Sung Tan Chuk Ha (Korean)
ubha nath thalak Vewa. Subha Aluth Awrudhak Vewa (Singhalese - Ceylon/Sri Lanka)
Tchestita Koleda; Tchestito Rojdestvo Hristovo (Bulgarian)
Tezze Iliniz Yahsi Olsun (Azeri - Azerbaijan)
Vitaiu iz svyatom Rizdva ta Novim Rokom (Ukrainian)
Vesele Bozicne. Screcno Novo Leto (Slovene)
Veseleh Sviat i scaslivoho Novoho Roku (Ukrainian)
Vesele Vianoce. A stastlivy Novy Rok (Slovak)
Vrolijk Kerstfeest en een Gelukkig Nieuwjaar! Zalig Kerstfeest en een Gelukkig Nieukjaar (Dutch)
Wesolych Swiat Bozego Narodzenia (Polish)
Yeni Yilnizi Kutar, saadetler dilerim (Turkish)
Zorionak eta Urte Berri On! (Basque)
Posted by Posted by Bill Cara on December 22, 2006 07:00:30 AM | Category: Cara's Bull Board
Discourse
Thank you Bill for all you've done for others via this blog. May you and your family have a safe, warm and merry holiday. And the best of health in 2007!
Only here for a short time this a.m., but noticed Yamana (AUY) is moving to the NYSE in Jan. (For disclosure, I am long)
http://www.marketwire.com/mw/release_html_b1?release_id=197703
Posted by: Seamus ![[TypeKey Profile Page]](http://www.billcara.com/nav-commenters.gif)
at
December 22, 2006 9:28 AM [link]
Merry Xmas, Bill, and thanks for an entertaining and timely perspective.
When I hear about companies like Pfizer and their payouts, they go on my "stay away' list. The unconscionable behavior of so many execs is disturbing and revealing, simultaneously. Revealing in that it shows how little they think of the company in their stewardship, and how likely it is that price share is their only objective.
I am so cashed out of equities, holding international funds in my IRAs and gold, euros and foreign exchange positions in my margin account. Mostly cash. I have been buying ( smile) SPX puts for a couple days now for some nice 20% returns, but mostly to offset portfolio losses.
I have no confidence at all in an expanding market and feel the current downturn is a taste of things to come.
Ernie
Posted by: ErnestM at
December 22, 2006 10:00 AM [link]
Bill:
I read where Jack Schannep this Thursday has agreed with Richard Russel, two of the three editors of DOW Theory fame, and are finally joining you in calling for a Bearish OutLook, leaving Richard Moroney out in the cold.
Posted by: C.Note at
December 22, 2006 10:17 AM [link]
A very merry Christmas and wishes for a happy and healthy new year to you and your family, Bill. And thank you so very much for your excellent blog. You put so much work into it and we readers do greatly appreciate your efforts. With much sincerity, Bob Rosenbaum (RDR)
Posted by: RDR at
December 22, 2006 10:58 AM [link]
Gold Heads for First Weekly Gain in Three on Investor Demand
Dec. 22 (Bloomberg) -- Gold rose in London, heading for the
first weekly gain in three, on speculation demand will increase
as investors seek to diversify their holdings.
Gold has risen 20 percent this year and climbed to a 26-
year high of $730.40 in May as investors and jewelers, the
biggest consumers, bought the precious metal. Lyxor Gold Bullion
Securities Ltd., a fund started in December 2004 that allows
investors to own gold through equity, has gained 3.3 percent
this quarter as the dollar dropped 4 percent against the euro.
``The emphasis for next year will be coming from the Far
East as far as investor demand goes,'' said David Gornall, head
of bullion and foreign exchange in London at Natexis Commodity
Markets, which acts on behalf of gold buyers in India, the
world's biggest consumer of gold. ``India's moving quite a lot
of its investment in gold into coins.''
Gold for immediate delivery rose 90 cents, or 0.2 percent,
to $619.40 an ounce at 4:30 p.m. in London. Prices are up 0.7
percent this week after declines of 1.6 percent last week and
3.2 percent the week before. There is no 3 p.m. afternoon fixing
in gold today because of the year-end holidays, Gornall said.
Gold futures for February delivery snapped two days of declines
on the Comex division of the New York Mercantile Exchange,
rising 30 cents, or 0.3 percent, to $621.90 an ounce.
Gold often moves in the same direction as the euro, which
rose for a second day against the dollar. A government report
yesterday showed the U.S. economy grew in the third quarter at
the slowest pace this year.
Gold may surpass $800 an ounce next year ``given the
possibility of economic woes in the U.S. and the impact on the
dollar,'' said James Moore, a Kettering, U.K.-based analyst with
TheBullionDesk.com. The metal, which is headed for its sixth
annual gain, last reached $800 in 1980.
Gold may average $700 an ounce next year, said Michael
Widmer, director and head of metal research at Calyon in London.
The metal has averaged about $604 this year.
Posted by: tinman at
December 22, 2006 11:47 AM [link]
Mele Kalikimaka
to all the citizens of the universe.
Mele Kalikimaka
Posted by: Telestar3d at
December 22, 2006 4:15 PM [link]
Merry Christmas everyone.
Posted by: NYUgrad at
December 22, 2006 4:18 PM [link]
Merry Christmas and Happy Holidays to all.
May we have health and prosper.
Then meet in the Bahamas at Bill's conference center?
Tony
Posted by: tony at
December 22, 2006 4:47 PM [link]
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Bill,
An article title linked at Kitco.com yesterday said it all -
"Gold ignores ecomomic data"
There has been a lot of "ignoring" in the capital markets lately. Q1 could be very exciting. Heck, January could be quite exciting.
Happy Holidays!
Posted by: g034![[TypeKey Profile Page]](http://www.billcara.com/nav-commenters.gif)
at
December 22, 2006 9:23 AM [link]