By caution, I mean that you have a need to know the extent of your technical support before real damage can be done. That’s something I learned late in the evening of November 8, 1988. I will never forget the experience.

Having been rebuffed from the high winds off Cape Hatteras in North Carolina on my voyage to South Florida, I turned my Dream Merchant II back to the Intracoastal Waterway and headed down to the Cape Fear River, hoping the extra day would allow the ocean storm to pass.

Arriving in the pitch dark sometime about 9pm, I decided to make anchor in the river off Southport SC adjacent to Cape Fear where we would get some sleep before sailing offshore in the morning. It was, as I say, the evening of November 8, 1988, which happened to be presidential election night, so I dropped anchor in the river, turned the TV on, and pulled a 14-pound turkey from the oven, popped the champagne and began to cheer the returns for George Herbert Walker Bush.

The depth sounder read something like 8 or 9 feet and my keel was less than six, which on Lake Ontario was quite acceptable. But, this was the Carolina’s and I didn’t give much thought to the ocean tide.

Periodically, we would hear the churning of the propellers and see the lights of the Fort Fisher Ferry passing by a couple hundred yards away. That wash from the ferry was to be our undoing because sometime in the middle of the night, with the galley a mess with dirty pans and dishes and the three of us sound asleep following the Bush victory, we hadn’t noticed that the tide had gone out, leaving my sailboat stuck high in the mud of the river bottom.

Yes, we had been upright until the wake of the ferry knocked us over on our side, throwing everything in my boat including the occupants upside down. We had to wait until Mother Nature sent in a flood tide before Dream Merchant II would re-float and we could be on our way.

From that life’s experience, I learned another rule: always check your depth. Know where the support/danger levels are below you.

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Global Market Summary

International Equities: All global stock markets were smashed this week, but prices plunged the most in the BRIC markets (ie, Brazil, Russia, India and China).

U.S. Equities : All broad indexes were sharply down. Apparently, traders in the Financials saw this move coming, which I was pointing out the previous week.

Dow 30 : This week it was 2 up (Merck and AIG) and 28 down. But, 16 of the 30 were down over 4.0 pct this week alone.

U.S. Sector ETFs: All ten of my sector ETF’s were down this week. The extent of the losses ensured that all ten are now down over two weeks. Worse news for the Bulls is that with the single exception of the high dividend-paying, private equity acquisitions-involved Utilities (XLU), all these ten sector ETF’s are down over the past four weeks.

First segment: most influenced by global commodities, forex and capex spending
10: Energy (XLE): #5 (-4.4 pct); Losses despite high oil prices
15: Basic Materials (XLB): #8 (-5.1 pct); Pull-back in the metals
20: Industrials (XLI): #6 (-4.8 pct); Even conglomerates on sale
Second segment: most influenced by U.S. consumer spending and economic growth
25: Cons. Discretionary (XLY): #9 (-5.2 pct); The loss started a week ago Fri.
30: Cons. Staples (XLP): #3 (-3.5 pct); Even defensives got trounced
35: Healthcare (IYH): #4 (-3.5 pct); Not so defensive.
Third segment: most influenced by U.S. interest rates and general economic health
40: Financial (XLF): #7 (-4.8); Down almost -6 pct in 6 days
45: Tech (SMH chips): #10 (-5.3 pct); Chips dipped too
50: Telecom Service (IYZ): #2 (-2.9 pct); Higher bonds didn’t help
55: Utilities (XLU): #1 (-1.3 pct); Best of a bad lot

Bonds: There was a massive switch this week from stocks to bonds. The US Bond market rocketed up, but the Fed rate stands still (holding the T-Bill rate fairly high) so there is a huge inversion in the yield curve. And, incredibly, the spread between two-year and 3-month Treasury’s is now -42 basis points. And the negative spread between the Fed rate and the two-year Treasury’s is -74 bp. So, the lending banks are in trouble. In addition to loan defaults, there is a problem making profits on new loans. There will be screams for a rate cut next week. But, the Fed will try to hold off until a market crash, which is what I’ve been saying about the Fed all along.

Commodities: $CRB dropped only -1.4 pct W/W because while the metals and other commodities were hammered the crude oil price actually lifted this week.

Oil & Gas: $WTIC futures were up +0.82 pct W/W to 61.64. We are still freezing in the North East, and endured a major blizzard on Thursday.

Gold: $GOLD, $SILVER, $PLAT and $PALL all plunged this week, down -6.2 pct, -7.0 pct, -2.0 pct and -3.4 pct. $COPPER dropped -5.1 pct, and the other base metals and aluminum also got hit, so this wasn’t just a precious metals rout.

Goldminers: $XAU, GDX and XGD (TSX) plunged -9.2 pct, -9.9 pct, and -7.6 pct respectively W/W. But the world’s biggest base metal miners (BHP, RTP and RIO) each dropped more than -10 pct, and the stocks of Goldman Sachs (GS) (-9.6 pct), Morgan Stanley (MS) (-9.4 pct), Ebay (EBAY) (-9.3 pct), Starbucks (SBUX) (-8.7 pct), Fedex (FDX) (-7.0 pct), and Whole Foods Market (WFMI) (-8.4 pct) show the kind of week it was. This pull-back is not about gold!

Forex: The $USD dropped -0.37 pct W/W, which makes for a two-week loss of -0.75 pct. And the Euro lifted +0.19 pct W/W after last week’s rise of +0.27 pct, and the previous week’s rise of +0.93 pct, and the ones of +0.40 pct and +0.38 pct the two weeks before that. So why is gold dropping? It helps when the Fed dumps gold on the market to cover up what is really happening today, which is that the $USD is in trouble as the Yen carry trade is kaput. The Yen this week rallied +3.73 pct (in a single week!) In that regard, how many Yen-short hedgies had their heads handed to them on a platter this week?

Economic calendar for next week.

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Cara Stock Watch

This week there are zero RSI-7 >70 in the Cara 100. A week ago it was 25, and two weeks ago it was 20. I noted at the time that the market was over-bought and getting “frothy”.

Interactive link to Friday Daily unsmoothed RSI-7 <30 in Cara 100 (12 of 54: a week ago it was 9, and two weeks ago it was just 1.)

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The market momentum took a turn for the worst. As I wrote a week ago, “(the market) is looking soft. There is a real fight between the Bulls and the Bears at the moment. For the most part, the quarterly earnings reports were up to expectations, but guidance for next quarter is not so hot.”

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Here are the Cara 100 gainers on Friday.

Yes, there were a few winners from the Cara 100 list, but not many on Friday (per this list), or on the week.

Interactive chart of the top 12 Watch List gainers

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Here are the top Cara 100 losers for Friday.

There were many losers on Friday though (and on the week).

Interactive chart of the top 12 Watch List losers (Interactive link)

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Sector ETF Review

The tables I show are for ten Sector Index Funds (ETF’s) only.

For the Tech sector, there are many sub-sector ETF’s I could have selected, but I feel the chip industry is a leading group, and a very important one. After I get BillCara2.com the way I want it, I intend to devote more time and space to ETF’s in the blog and the WIR.

Of the ten I have been following here, 10 of 10 were down this week, with Chips (SMH) and Consumer Discretionary (XLY) the biggest losers of a week where they were all big losers.

The following 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
XLU	38.15	-0.50	-1.29%	-1.34%	-0.08%	3.36%	3.61%	3.89%	9.53%	17.53%
IYZ	30.12	-0.34	-1.12%	-2.90%	-2.74%	-1.83%	1.55%	5.80%	11.56%	19.10%
XLP	25.89	-0.41	-1.56%	-3.47%	-3.65%	-3.21%	-1.48%	1.41%	0.90%	10.08%
IYH	66.00	-0.54	-0.81%	-3.54%	-4.61%	-4.28%	-0.69%	-0.03%	1.26%	2.14%
XLE	56.05	-0.67	-1.18%	-4.43%	-3.35%	-3.86%	-0.94%	-7.69%	-0.80%	3.57%
XLI	34.84	-0.45	-1.28%	-4.81%	-5.35%	-3.36%	-1.11%	-0.23%	7.27%	6.67%
XLF	35.50	-0.41	-1.14%	-4.83%	-6.01%	-4.83%	-3.85%	0.34%	5.91%	8.90%
XLB	36.45	-0.61	-1.65%	-5.08%	-3.80%	-0.65%	5.32%	4.98%	13.23%	14.88%
XLY	37.78	-0.28	-0.74%	-5.19%	-5.43%	-4.60%	-1.92%	0.40%	13.83%	12.74%
SMH	33.66	-0.50	-1.46%	-5.34%	-2.43%	-1.29%	0.27%	-1.06%	-0.53%	-12.57%

You can do this table yourself by entering the following string into the Summary window at Billcara2.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 because the list of ETF’s growing incredibly fast.

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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 lost -4.43 pct to 56.05, while $WTIC (Crude futures) gained +0.82 pct to $61.64. Stocks are in retreat.

The oil share prices are relatively weaker than the Crude Oil price for the past four weeks because traders are figuring that exogenous factors (like random political events) are involved in keeping oil prices high.

It has been a year since XLE has performed well and yet the companies have made significant improvement in their corporate fundamentals (revenues, cash flow, earnings, and dividends).

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

XLE Monthly data:

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
ECA	46.99	-1.30	-2.69%	-2.69%	-4.53%	-2.95%	3.64%	-11.26%	-11.89%	8.70%
CEO	79.63	0.09	0.11%	-3.89%	-4.73%	-6.61%	-15.53%	-9.02%	-9.12%	-7.00%
STO	25.24	-0.60	-2.32%	-4.93%	-3.99%	-6.10%	-1.75%	-9.57%	-8.25%	-5.08%
IMO	34.25	-0.45	-1.30%	-5.75%	-6.16%	-5.15%	-3.95%	-9.10%	-10.20%	-64.48%
SU	69.21	-1.11	-1.58%	-5.99%	-6.86%	-7.31%	-6.36%	-12.44%	-11.67%	-12.20%
CVX	66.79	-0.81	-1.20%	-6.02%	-6.40%	-10.31%	-5.89%	-8.64%	3.02%	17.15%
TOT	65.38	-0.94	-1.42%	-6.02%	-6.80%	-5.33%	-7.88%	-7.38%	-3.64%	2.72%
XOM	70.01	-0.98	-1.38%	-6.93%	-7.07%	-6.75%	-5.53%	-9.31%	2.80%	15.05%
PBR	86.47	-2.70	-3.03%	-9.56%	-7.57%	-12.92%	-13.23%	-7.91%	-4.64%	-6.75%

A week ago I wrote: “The oils were largely down, which makes it surprising that XLE was up over +1.1 pct.” This week all the oil stocks were hammered and so was XLE (-4.4 pct).

PBR -9.6 pct, XOM -6.9 pct, TOT/CVX/SU -6.0 pct, IMO -5.8 pct. These are mega cap companies and they are headquartered all over the world.

Integrated Oil & Gas - Canada

Oil & Gas Exploration & Production -Canada

Despite a higher Crude Oil price, the three Cdn oils (ECA, SU and IMO) were hammered. Profit-taking.

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

The Basic Materials ETF (XLB) was the 8th worst ETF performer out of 10. XLB dropped -5.08 pct W/W, and Friday’s loss (-1.65 pct) was the worst of all ten. XLB closed at 36.45.

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

XLB Monthly data:

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
MT	51.29	-0.96	-1.84%	-1.63%	2.38%	5.97%	25.71%	26.89%	48.24%	48.02%
PKX	93.65	2.21	2.42%	-5.27%	-1.94%	2.34%	17.90%	18.16%	48.39%	56.58%
TS	44.76	-0.06	-0.13%	-6.30%	-5.53%	-6.56%	-7.75%	-1.67%	18.41%	24.75%
AA	32.70	-0.55	-1.65%	-6.78%	-5.79%	-0.30%	11.49%	5.93%	12.72%	9.36%
TCK	68.12	-1.91	-2.73%	-8.05%	-9.41%	-9.11%	-1.63%	-9.88%	1.55%	0.00%
NUE	58.74	-2.08	-3.42%	-8.80%	-10.05%	-9.38%	7.78%	0.17%	18.24%	32.09%
BHP	41.59	-0.71	-1.68%	-10.17%	-8.91%	0.41%	7.00%	1.71%	-2.53%	13.45%
RTP	206.37	-5.14	-2.43%	-10.42%	-6.90%	-5.27%	1.11%	-3.86%	0.65%	7.48%
RIO	32.70	-0.80	-2.39%	-10.87%	-9.47%	-4.11%	13.46%	18.56%	46.90%	36.36%
GGB	16.26	-0.60	-3.56%	-12.11%	-13.00%	-4.47%	-0.97%	4.50%	7.61%	-34.62%

Many moves in the metals and steels the prior week were excellent (eg, PKS, TS, AA, BHP, RTP and RIO), but this week was a far different story.

The big base metal miners (BHP, RTP and RIO) plunged -10.2 pct, -10.4 pct and -10.9 pct.

The big steelmakers NUE and GGB dropped -8.8 pct and -12.1 pct.

The goldminers also were hammered this week: MDG -15.9 pct, GG -11.1 pct, AEM -10.8 pct, GFI -8.9 pct, AUY and BVN -8.6 pct and ABX -8.3 pct.

Not very pretty. What makes it all the more spectacular is that the $USD has been in free-fall. Did something happen this week to make capital managers think there is going to be a “Recession”? Did they really believe that maybe Greenspan spoke the truth about a possible US recession (cleverly disguised in typical code) while addressing an audience in Hong Kong, and that the straight-speaking Bernanke is just full of hot air?

Or is it a matter of central banks in Japan, China, India and elsewhere in the world starting to tighten in order to cut back on speculation by the large capital managers, which is a signal to book real profits before they become paper losses?

This is the sector we have to watch to see what the Fed intends to do next. If its a case of more money printing, then this is the sector (especially the metals group) that will claw itself back. If that happens, then the Precious Metals are going higher – to the cycle highs I forecasted at the start of the year.

Since I’m not in the room (with Bernanke), I’m out of the deal. I don’t know. But what concerns me is that the Big Swinging Dicks who run the Goldman’s, Lehman’s, JP Morgan’s, Morgan Stanley’s and Merrill’s are in conference with Bernanke (probably pulling his chain as we speak), and their stocks are in a nose dive as bad as the metals. That worries me.

So let’s be watching these stocks in the Financial sector early next week as well.

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

The Industrials and Transport sector ETF (XLI), aka capital goods producers, was down -4.81 pct W/W to close at 34.84.

Fedex (FDX) is no longer “carrying the freight, flying the Transports to a new high, keeping the Bull market technically stable.” Hahaha. No sirree, FDX skid landed this week, down -7.0 pct.

You recall of course that I wrote this paragraph a week ago:

As I wrote previously, “As long as I see GE not making a Bull move (remember CEO Jeff Immelt sits on the NY Fed Board of Directors), I don’t think it’s wise to chase stocks this late in the cycle. I also think these industrial conglomerates and transports are in rally mode because of lay-offs, restructurings, share buy-backs, excessive dividends, M&A, pressure from private equity (which is really your debt – or soon will be -- and their equity), etc. If the manufacturing sector in the US was the healthy component of the GDP, and not the services sector, I might agree that there is a trading rationale for the rally in this sector.”

This week, in addition to FDX going down, the big losers in my global Industrials list were CAT -6.3 pct and (Cara 100) ABB -7.5 pct. GE was also down.

For the Industrials (XLI), like the Energy stocks (XLE), the market is back to where it was almost a year ago. so being mostly in cash here, and long the metals and precious metals in the Basic Materials sector (XLB), as I have been, has been a winning strategy.

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

XLI Monthly data:

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
GE	34.87	-0.13	-0.37%	-0.66%	-3.51%	-3.75%	-8.16%	-1.16%	2.14%	6.15%
ERJ	44.51	-0.55	-1.22%	-2.82%	-1.92%	8.35%	9.15%	9.41%	12.74%	10.23%
BA	87.03	-0.82	-0.93%	-3.60%	-5.10%	-4.42%	-2.40%	-2.81%	15.38%	19.55%
HON	45.91	-0.28	-0.61%	-3.73%	-3.49%	-0.04%	1.80%	7.24%	18.42%	10.68%
MMM	73.01	-0.65	-0.88%	-4.20%	-5.07%	-1.32%	-6.71%	-8.71%	1.80%	-0.05%
UTX	64.35	-0.77	-1.18%	-4.74%	-6.64%	-6.17%	2.45%	0.77%	1.72%	10.40%
CAT	63.04	-0.86	-1.35%	-6.27%	-6.77%	-3.00%	3.07%	3.02%	-6.29%	-15.20%
FDX	112.50	-1.66	-1.45%	-7.00%	-4.08%	0.55%	2.49%	-2.06%	10.49%	2.83%
ABB	16.52	-0.06	-0.36%	-7.45%	-10.61%	-8.32%	-7.30%	1.29%	23.56%	34.53%

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

The Consumer Discretionary sector ETF (XLY) was down -5.19 pct W/W to close at 37.78, which is 9th worst performer on the week. But, the loss on Friday (-0.74 pct) was the smallest of the ten ETF’s I follow.

As I say, “From 31 to 40 is mighty impressive. But how long can this Consumer Discretionary sector continue to rally?” Actually, I wrote that in last week’s WIR.

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

XLY Monthly data:

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
DIS	33.95	-0.44	-1.28%	-3.39%	-2.08%	-3.03%	-0.73%	2.60%	13.58%	21.12%
NKE	103.86	-1.43	-1.36%	-3.87%	-1.56%	3.16%	6.34%	6.41%	28.00%	20.70%
CCL	45.70	-0.39	-0.85%	-4.01%	-6.08%	-12.37%	-10.30%	-2.95%	8.73%	-11.78%
TM	129.09	-2.19	-1.67%	-4.73%	-5.62%	-3.14%	-4.59%	7.57%	19.00%	20.84%
BC	32.16	-0.61	-1.86%	-5.63%	-3.42%	-7.11%	0.75%	1.61%	10.14%	-19.11%
JCP	78.81	-1.14	-1.43%	-6.23%	-8.21%	-7.03%	0.96%	3.25%	23.04%	30.94%
WHR	86.92	-1.44	-1.63%	-6.89%	-6.13%	-5.78%	2.67%	2.68%	6.57%	-2.87%
SBUX	29.88	-0.51	-1.68%	-8.74%	-10.11%	-13.16%	-15.23%	-14.85%	-5.92%	-15.71%
EBAY	30.83	-1.10	-3.45%	-9.30%	-8.43%	-4.11%	2.19%	-1.69%	9.52%	-23.35%

Nike (NKE) runners finally got exhausted, dropping this week -3.9 pct.

EBAY down -9.3 pct, SBUX down -8.7 pct, WHR down -6.9 pct and JCP -6.2 pct were all big losers, and quite diversified across the sector. Surprising, perhaps, was this week’s econ datapoints that showed personal income and spending had increased a lot.

Next month, I’m guessing that the Average Joe will be looking at the IRA and the salary/wages and the rising Cost of Living, and pondering those next purchases!

So it could just be that the President has to announce a slowdown to the purchases of Strategic Petroleum Reserves (dropping the price of Crude, which soon drops the price of gas at the pump), and the Fed will start suggesting that maybe their overnight ending rate to commercial banks will have to be cut to help out the average Joe.

That ought to help put some shine on the bling of their Friends & Family (aka the Rich & Famous), and stop those harassing phone calls.

And maybe the Chinese authorities will be happier that the American consumer is juiced one more time. That extra tickee for Americans might even convince Dr. Joe to buy some more US Treasuries.

But, like I say, I’m out of the room, out of the deal. Unfortunately, I didn’t spend a couple hundred million dollars to get elected to a job paying a couple hundred thousand. So, just like you, I have to check the prices on the tote board to see what the VIP’s have decided to do that will impact next week’s capital markets.

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

The Consumer Staples sector ETF (XLP) lost -3.47 pct W/W to close at $25.89.

Whole Foods Market Inc (WFMI), where I had a meeting over coffee last Sunday, got hammered this week (-8.4 pct). Maybe the shoppers recognized me and were listening in to my conversation? Do you think?

WFMI is a good case study for the Accumulation Zone (AZ). Yes, for a couple days, the RSI-7 was down in the zone for the Monthly-Weekly-Daily data, which was good for a trade, but the sector (GICS 30) was still too strong, and falling. So the best play for the long-term trader is to just relax and let these prices come to you.

Do you recall last July when I gave a list of 20 info tech companies (GICS 45 sector) that looked ready to move higher (Weekly and Daily and Hourly RSI-7 values down below 30 across the board)?

At the very least, I like to look at stocks in groups before deciding to buy or sell any of them. The case of WFMI is different because the company does not have a lot of direct competition in its space, and two weeks ago bought out its number one competitor to make it a very big fish in a relatively small pond. Large capital managers like those kinds of stocks, particularly when the corporate fundamentals (growth of revenues, cash flw, earnings and dividends) are solid when compared to other stocks in the sector.

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

XLP Monthly data:

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	83.48	-0.86	-1.02%	-2.23%	-3.02%	-4.57%	-3.50%	-0.62%	-0.39%	16.58%
PEP	62.93	-0.50	-0.79%	-2.55%	-1.79%	-3.75%	0.33%	1.57%	-3.79%	6.16%
WAG	44.16	-0.47	-1.05%	-2.56%	-4.21%	-3.45%	-4.15%	9.66%	-11.41%	-1.03%
PG	63.16	-0.52	-0.82%	-2.56%	-2.82%	-3.34%	-2.14%	0.75%	2.02%	6.06%
KO	45.89	-0.63	-1.35%	-2.90%	-4.10%	-4.59%	-5.54%	-1.46%	1.82%	9.50%
WMT	47.81	-0.08	-0.17%	-3.55%	-1.14%	0.06%	0.55%	4.23%	5.19%	6.10%
BUD	48.14	-0.88	-1.80%	-3.82%	-6.98%	-6.34%	-2.19%	1.07%	-2.65%	16.36%
DEO	77.01	-0.99	-1.27%	-6.15%	-6.35%	-3.10%	-3.17%	-0.82%	6.66%	22.94%
ABV	48.64	-0.69	-1.40%	-7.05%	-10.14%	-7.28%	-0.94%	5.74%	5.97%	13.12%
WFMI	46.23	-0.72	-1.53%	-8.40%	0.37%	5.14%	1.65%	-3.85%	-13.65%	-27.54%

Last week I wrote:

A week ago I wrote, “Whole Foods Market Inc (WFMI) lifted by +1.0 pct this week to close at $46.43, which makes it the top performer of this group in the past 4 weeks.” Well, this week, WFMI rocketed +9.6 pct for a 4-week gain of +17.3 pct! When a stock moves so quickly, traders need to read up on the reasons (In this case it was a take-over of the company’s largest competitor), and study the charts to determine the prospects for further gain. The best trading tactic is to wait until the stock runs into the first significant resistance and then sell in order to protect that gain.

In this case, at the 51-52 level on Thursday in the hours following the announcement, the charts showed after 1 pm ET (i) a drop-off of volume (ii) an RSI-7 that fell back through the 70 level on the 10-minute chart (iii) a cycle peak of the RSI at 1 pm that was short of the prior peak, (iv) a negative cross-over of the MACD, and (v) (15 period) Stochastics that dropped below 70. Had I been watching WFMI at that minute (rather than sitting at a table in the courtyard at Matisse in Nassau), I would have been a seller. The RSI-7 on the 10-minute data series closed the week at 27.3 (with WFMI at $50.47), which makes me think there will be a small recovery on Monday morning of maybe $0.40 (a guess). I’d be a seller when the Stochastic next reaches above 80 and then pulls back to 70. As a rule, I don’t trade by price point. Like a pilot who flies by instrument, I’m guided by the indicators.

So let’s look at the detail of what happened because WFMI is, as I say, a good case study.

On Monday morning the WFMI stock sagged (I have too many observant readers), but in the afternoon, the RSI-7 on the 10-minute rallied to go over 70 and the stock rebounded to about $50.40 near the close on Monday (bingo; selling point). Then for the rest of the week the volume dropped off, the technical indicators collapsed, and the price of WFMI closed the week at $46.23.

WFMI had been relatively low in the RSI values across the board, and hence ready for a trade, but the sector was not down in my Accumulation Zone, so I had been suggesting that a sudden pop (as we were seeing) might not hold. It didn't.

Avoiding that loss was enough to pay for groceries. Even steeply priced groceries (for an Italian who is one quarter Scotsman).

That’s what I love about the blogosphere: I get a chance to dance. Heaven help those traders who don’t know how to dance.

Nervous laughter here because I still have to get to the section on the Precious Metals where some readers are expecting me to walk on water, which we all know I can’t do. (smiley goes here)

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

The IYH healthcare ETF lost -3.54 pct W/W to close at 66.00, but Friday’s loss of -0.81 pct was not so bad.

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

IYH Monthly data:

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
UNH	54.18	1.44	2.73%	2.17%	1.06%	2.61%	3.06%	10.96%	4.59%	-5.90%
BMET	42.20	-0.13	-0.31%	-0.45%	-0.35%	-0.14%	1.76%	11.29%	27.26%	15.90%
BMY	26.42	-0.22	-0.83%	-2.33%	-4.86%	-8.26%	0.15%	6.36%	15.12%	16.13%
DNA	82.79	-0.80	-0.96%	-3.16%	-4.69%	-5.06%	1.21%	0.10%	0.12%	-2.66%
PFE	24.79	-0.25	-1.00%	-3.24%	-6.56%	-6.87%	-5.71%	-11.02%	-11.34%	-4.87%
JNJ	61.95	-0.50	-0.80%	-3.43%	-5.84%	-7.55%	-6.70%	-6.09%	-4.28%	7.38%
AET	44.21	-0.64	-1.43%	-4.02%	-1.84%	4.56%	3.10%	6.94%	20.17%	-12.37%
GSK	54.61	-1.26	-2.26%	-4.06%	-5.27%	-0.18%	1.49%	1.64%	-3.79%	5.73%
NVS	54.91	-0.19	-0.34%	-6.38%	-8.02%	-6.12%	-5.56%	-5.05%	-4.24%	1.07%
AMGN	61.75	0.06	0.10%	-6.76%	-9.56%	-11.16%	-9.72%	-10.92%	-9.71%	-19.25%

By the end of the week, the owners of United Health (UNH) were looking forward to many new patients who suffered great financial damage this week. UNH gained +2.73 pct on Friday, leaving the stock down just -2.2 pct W/W.

But big biotech and big pharma were hammered. AMGN dropped -6.8 pct and NVS lost -6.4 pct this week, so even the extra pills being doled out this week didn’t help the share prices in this sector.

Btw, this week the market did red flag the 35 car (IYH).

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

The Financials ETF (XLF) lost -4.83 pct W/W, closing at 35.50. Including the loss from the prior Friday (-0.93 pct), that’s a hit of almost -6 pct in six sessions.

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

XLF Monthly data:

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
CSR	59.15	-0.11	-0.19%	2.76%	6.25%	7.66%	10.87%	15.73%	-1.00%	40.13%
HBC	86.27	-0.63	-0.72%	-2.79%	-3.79%	-6.55%	-7.21%	-6.98%	-5.30%	0.50%
JPM	48.19	-1.01	-2.05%	-5.57%	-5.90%	-5.90%	0.25%	4.74%	5.38%	15.67%
UBS	57.85	-0.90	-1.53%	-6.29%	-7.28%	-8.88%	-5.77%	-2.72%	0.96%	6.97%
C	49.97	-1.11	-2.17%	-7.07%	-7.82%