This piece from LewRockwell.com dated April 30 from Paul Craig Roberts, who served in a previous Republican Administration, is sure to stir up the pot. In offering it, my objective is to keep the focus on the reasons for a falling $USD, and how traders can assess the change and reversal in trend as Washington changes and the $USD becomes once again the global reserve currency of choice.

You see; I am not a perpetual Gold Bull (or Dollar Bear) like Burton S. Blumert, publisher of LewRockwell.com, who is also a gold coin dealer. I am a trader who tries to retain a balanced perspective. As a natural bias, I do believe in Blumert’s “anti-state, anti-war, pro-market” libertarian stance. In a nutshell, that’s me. But, first and foremost, I am a trader.

And, over the years, when I see the US Administration, for legitimate reasons or not, taking the country to war, then I expect to see the pendulum to swing toward the beneficial interest of those who produce and invest in commodities and armaments, to the detriment of those who are motivated to build real wealth. Ultimately, these are the cycles that end in speculation and steps by central bankers and finance ministers to kill that speculation.

As an aside: To better understand my views on commodities and the ownership and use of land, you might turn to the work of US economist Henry George. I have many of his books in their original print form.

When I see wars about to come to an end, I look ahead to the next cycle, which I expect to be a period of building real wealth, not speculation with its fleeting prosperity as we recently witnessed in the real estate market and, I believe, are soon to see in the capital markets.

There is coming, I believe, in this transition, a final catharsis of emotions in America for the Bush Administration script (“The War on Terror”), which will lead to new conditions for a rebirth under a new Administration in January 2009, Republican or Democrat. Unfortunately, the new Administration, as I say, Republican or Democrat, will have to deal with deplorable economic and social conditions that have been and are being caused by the decisions of the current Administration, as well as, of course, the agitation of foreign warlords and terrorists.

It is this period of transition where capital flow, to and from countries and sectors and from areas of speculation to those where real wealth is being built, will be so intense that I believe the financial melt-up, which I forecasted early this year, will soon be followed by melt-down.

There are people in the boardrooms of HB&B today and in Washington who I suspect know where the highest probability of financial accident is likely to happen. Like you, I’m out of the loop.

But I do believe in the notion of Financial Armageddon as put forth by my friend Michael Panzner, partly on my own account, and partly because I know that Panzner approaches his daily work from the objective base of analysis, rather than synthesis. He has no axe to grind. He’s a long-time Wall Streeter who simply doesn’t like what he sees happening in the world today and, unlike most of his colleagues who fear the loss of their employment, he has no fear in speaking out.

There are some people you just want to sit down and chat with over a few beers and Michael and I have done that. Not being particularly inclined to marketing, there are other “personalities” I have such little regard for that I would hope never to meet them.

On April 2, with Dow=12,382 flashing on the screen, Michael Panzner did speak out on the Kudlow Show, put up against the views of Don Luskin. A long time ago we put the clown suit on both Kudlow and Luskin. But Luskin, besides being a comic, has few peers among the least competent on Wall Street as I see it. But don’t get me started. Spend your time watching this video and making up your own mind.

At the end of the day, it is up to each of us in the trading community to filter out the noise and the story-telling, and to listen to those independent and objective thinkers who put the needs of society (meaning yours and mine) ahead of the attraction of immediate personal gain (meaning theirs).

Panzner is a person I believe you ought to listen to. His message, this year, is a difficult one to stomach because the broad market averages are screaming out weekly records, while, far from view, the risks are not so obvious.

But the risks are there and credible analysts are telling you that.

A couple months ago, I decided to drop CNBC-TV. I found myself too often shaking my head at the clowns they put on stage, and saying, “Bank another CNBC retainer buddy. You put the definition of the word analyst to shame.”

Being retired, and blogging from home, my wife would say to me constantly, “Please stop complaining about these ('personalities’) you watch on TV. Your readers are interested in what you, not them, have to say.”

Ah, maybe that’s why a spouse is called the better half?

In any event, let’s get back to the capital market.

Friday this week saw the Dow 30 Industrials (+23 to 13,264.62 +1.09 pct W/W) set another record, albeit the percentage gain was small on Friday (+0.18 pct). Friday’s market action was a lot like many recent days, seemingly dependent on share buy-backs, increased dividends, rumors and deal talk.

The potential deals on Friday were mostly in the media sector, which is consistent with all that is happening in the exciting and fast-growing electronic part of the business. Reuters (RTRSY) and UK-based EMI confirmed that unnamed parties had approached carrying billions. Canada’s Thomson Corp (TOC) is believed to be one of them with $5 billion in hand and a desire to get out of book publishing. They want the electronic media assets, apparently.

Yahoo (YHOO) and Microsoft (MSFT) were said to be in smilar talks and Clear Channel (CCU) turned down a higher offer. Meanwhile, everybody in NYC is talking about how Rupert Murdoch’s News Corp (NWS), the world’s #3 media conglomerate, made an unsolicited $5 billion bid for Dow Jones & Co (DJ), which owns the Wall St. Journal, Barrons, MarketWatch.com, BigCharts.com, and on and on.

In other sectors, Weyerhauser (WY) lifted after reporting it is considering strategic options for its packaging and containerboard unit. It seems that all anybody has to do to get a short-term boost to their stock is to make an announcement or start a rumor. Why? Because speculators are not giving a second thought that all these deals are going to be done with debt, and the moment that interest rates hike past the tipping point, this equity market is doomed.

Money. Money. Money. Keep in mind the theme song of Trump’s Apprentice TV show because it’s new money that keeps this market rolling along. On Thursday, the Fed reported the M2 Money supply grew at an annualized rate of +8.2 pct, which is more than six times the annualized growth rate of the US economy (1Q07 GDP +1.3 pct).

Friday’s economic data was a mess. The US non-farm Jobs Report reported +88,000 new jobs, which is the smallest increase since Nov 2004, and a sizable pct of those came from government. The household survey even reported a loss of 468,000 jobs for last month, which would be the worst drop since the last Bear market ended.

But, meanwhile, CNBC’s talking noggins continue to proselytize. Goldilocks rules. We’re all children, right?

It’s tough, I admit for Joe, Joesy, Mom & Pop to not go along with the rising tide. But just remember, when HB&B decides to pull the plug, or gets in so deep they can’t avoid striking the iceberg, our ship goes down. Theirs will be protected by SRO rules, put options, short selling and delays in getting your orders to market.

I don’t care if you have a billion dollars in their bank, don’t for a second believe you are going to beat these people at their game. They have the place wired.

All you can do is step out of their casino, for a while, and take a deep breath of fresh air while you await the slaughtering of the speculators that is needed before the market can return to normal.

Just be sure to keep your own hands in your pockets and a stiff upper lip.

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Global Market Summary

International Equities: Australia’s All Ordinaries and Singapore’s STI were up strongly this week, and have been, like the German Dax and Mexican Bolsa, very strong for the YTD.

U.S. Equities : The broad indices in the US all gained. The Russell small cap 2000, however, only gained +0.38 pct W/W because it was up +0.48 pct on Friday. A few positive earning stories, higher dividends, share buy-backs and take-over deals pushed the Dow up +1.1 pct, the S&P 500 up +0.8 pct and the Nasdaq Composite up +0.6 pct, which was moderately softer than the prior week, but strong nonetheless.

Dow 30 : The Dow 30 average lifted +1.10 pct to 13,264 (+143 points). The small caps are not doing as well because nobody is lending them the money to do the buy-backs and issue dividends that in total greatly exceeds free cash flow.

U.S. Sector ETFs: Nine of 10 US sector ETF’s were up this week, which was one that started to bring in the public from the sidelines, I believe.

First segment: most influenced by global commodities, forex and capex spending
10: Energy (XLE): #6 (+0.8 pct); Surprising strength with $WTIC -7 pct
15: Basic Materials (XLB): #9 (+0.2 pct); Miners came back strong on Fri
20: Industrials (XLI): #5 (+0.9 pct); Share buy-backs & dividends
Second segment: most influenced by U.S. consumer spending and economic growth
25: Cons. Discretionary (XLY): #8 (+0.2 pct); Friday made the week
30: Cons. Staples (XLP): #10 (-0.4 pct); Down again; not speculative enough
35: Healthcare (IYH): #4 (+0.9 pct); AET +3.5 pct led my group
Third segment: most influenced by U.S. interest rates and general economic health
40: Financial (XLF): #3 (+1.1 pct); MER +2.9 pct on buy-backs
45: Tech (SMH chips): #2 (+1.2 pct); #2 after two ws @#1, but see Fri.
50: Telecom Service (IYZ): #1 (+2.7 pct); VZ +7.3 pct is a joke, right?
55: Utilities (XLU): #7 (+0.7 pct); No comment

Bonds: The US Bond market recovered a fair bit with yields down -7 bp for the long bond.

Commodities: Crude oil crashed -4.53/bbl (-6.8 pct), but copper (+6.4 pct), platinum (+2.8 pct) and gold (+1.2 pct) were strong. Stronger than the bond market, which makes sense with the Fed pumping money like there’s no tomorrow, and the Energy Minister cutting off Strategic purchases. (I made up the last part.) I’m only guessing, but why else would $WTIC plummet and XLE rise faster than the S&P 500 this week?

Oil & Gas: $WTIC futures sank -6.82 pct W/W to 61.93 from 66.46. Did Iran hand over their nuke plans and scud missiles this week? Oh, maybe Hugo Chavez wants to help America as a way of converting the people to socialism? But I thought we had that with all those cash notes being dumped from helicopters. Oh, I see; that’s for Friends & Family.

Gold: A week earlier, I reported, “the Precious Metals dropped out of bed. $GOLD was down -14.00 (-2.0 pct W/W) to 681.80. $SILVER (-2.7 pct), $PLAT (-3.6 pct) and +PALL (-3.4 pct W/W) were worse…”. This week, $GOLD was up 7.90 (+1.2 pct) to 689.70, $SILVER (-0.3 pct, but up on Friday), $PLAT (+2.8 pct) and +PALL (+0.8 pct W/W). And $COPPER was up more than a penny -- +22.60 on the contracts (+6.4 pct), with stunning moves on Tues and Thurs.

Goldminers: The goldminers recovered with the $XAU gaining +1.53 pct, which was double the gain in the S&P 500 and beat the gain in the Dow 30 handily. But who’s counting anyway? Certainly not CNBC.

Forex: Despite a horrid Friday (-0.25 pct), the $USD lifted this week by +0.3, and the Euro lost -0.3 pct. The $USD fell from 83.30 to 81.49 in five weeks, but moved back this week to 81.75, and had been toying with 82 until the US Jobs Report showed govt holding the bag yet again. I wonder if the Dems can do a better job in reducing the size of govt? I doubt it. Isn’t that like going from D to D-?

Economic calendar for next week.

Econoday weekly report.

I ask you: when will the Fed stop talking about Inflation and address the issue, which is Speculation. Doesn’t it concern them that staid dishwasher maker (Cara 100) Whirlpool could rocket +29 pct in four weeks without even a single rumor or take-over bid? I mean talk about money and IOU’s sloshing around in a washing machine!

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US Marketwatch

A solid close to the week.

DJIA chart

NASDAQ Composite chart

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Cara 100 Stockwatch

Here are the Cara 100 gainers on Friday.

Interactive chart of the top 12 Watch List gainers

The Dow is trading just above the upper band of a 13200-13250 range. There is a very strong support for stocks of companies that are (i) high quality like the Cara 100, and (ii) involved in share buy-backs, increasing dividends, rumor and M&A, eg, YHOO.

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Here are the top Cara 100 losers for Friday.

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

There were 14 stocks of the Cara 100 for Friday that hit 52-week intra-day highs and none found hitting lows.

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Here are the stocks in the Cara 100 trading with the highest Daily RSI-7 sorted by (i) daily and (ii) monthly values.

Here are the stocks in the Cara 100 trading with highest RSI-7 with Monthly-Weekly-Daily all either >70 or <30

Here are the stocks in the Cara 100 trading with RSI-7 Daily all >70

Here are the stocks in the Cara 100 trading with RSI-7 Daily all <30

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Sector ETF Summary

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

Nine of the ten sector ETF’s I follow here were up this week. On Friday there were seven up, but they were all fizzy.

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
IYZ	32.79	0.18	0.55%	2.66%	1.61%	3.73%	10.55%	6.32%	15.21%	28.29%
SMH	37.52	0.45	1.21%	1.21%	3.56%	9.58%	11.77%	9.32%	13.83%	-0.61%
XLF	37.72	0.13	0.35%	1.13%	1.62%	5.48%	2.17%	0.88%	7.59%	12.00%
IYH	72.32	0.38	0.53%	0.91%	1.15%	5.38%	8.82%	4.98%	10.29%	19.01%
XLI	37.98	0.04	0.11%	0.90%	3.15%	6.00%	7.81%	4.95%	11.97%	7.50%
XLE	64.65	-0.05	-0.08%	0.81%	2.46%	4.70%	14.26%	10.27%	14.22%	11.12%
XLU	42.09	-0.08	-0.19%	0.67%	1.25%	3.42%	14.31%	13.45%	18.30%	33.79%
XLY	39.50	0.09	0.23%	0.18%	-0.18%	1.67%	2.54%	-0.53%	7.92%	15.46%
XLB	39.40	0.35	0.90%	0.15%	0.82%	2.44%	13.84%	7.56%	18.39%	14.53%
XLP	27.40	0.00	0.00%	-0.36%	-0.62%	1.14%	4.26%	2.24%	7.58%	15.03%

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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Individual Sector ETF Review

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

This week, XLE gained +0.81 pct. In the prior six sessions XLE was up +3.5 pct as well. And yet, the price of Crude Oil on the NYMEX has crashed -6.82 pct this week.

Doesn’t this spell C-O-N-F-U-S-I-O-N or am I missing something? Or is it just another hedge fund in trouble and having to sell its oil contracts?

What is going on here? Hot money seems to be traveling at faster than the speed of light because nothing is making sense here. Is there a time warp?

Or could this be the Goldman Sach’s plan that Paulson promised the White House? Hmmm.

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

XLE Monthly data:

XLE Weekly data:

XLE Daily 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	56.55	1.61	2.93%	5.70%	5.76%	8.60%	24.72%	17.35%	17.74%	11.41%
STO	29.12	-0.11	-0.38%	3.23%	3.70%	6.78%	13.35%	8.33%	10.64%	-13.90%
CEO	89.26	0.38	0.43%	2.85%	1.93%	1.20%	-5.31%	5.09%	5.21%	7.28%
TOT	75.51	0.06	0.08%	1.57%	2.57%	6.71%	6.40%	9.67%	11.54%	7.20%
CVX	79.30	-0.26	-0.33%	1.56%	1.08%	4.88%	11.74%	7.10%	15.08%	27.90%
IMO	39.28	0.58	1.50%	1.03%	1.71%	4.08%	10.15%	11.34%	10.80%	-61.60%
SU	82.37	0.36	0.44%	0.52%	1.12%	6.28%	11.45%	11.34%	6.78%	-5.31%
XOM	80.55	-0.13	-0.16%	0.24%	0.99%	4.31%	8.69%	6.63%	11.64%	27.23%
PBR	102.04	-0.61	-0.59%	-0.35%	-1.96%	-0.11%	2.39%	2.59%	14.73%	0.70%

EnCana (ECA +5.7 pct), StatOil (STO +3.2 pct) and China Offshore (CEO +2.9 pct) were the winners. From Canada, to Norway to China this week, nooobody seems ticked that West Texas Intermediate tanked -4.53/bbl.

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) gained +0.15 pct W/W to close at 39.40. Those six cents were made by Friday’s gain of thirty cents, which is kinda what happens when copper and platinum and gold see the light.

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

XLB Monthly data:

XLB Weekly data:

XLB Daily 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
RIO	43.88	1.11	2.60%	7.79%	5.08%	10.39%	52.26%	28.98%	65.90%	60.26%
TCK	81.88	1.63	2.03%	7.10%	7.64%	13.52%	18.24%	14.73%	9.98%	0.00%
RTP	262.13	8.48	3.34%	6.39%	5.37%	9.58%	28.43%	23.21%	17.44%	11.17%
BHP	51.63	1.60	3.20%	5.54%	2.36%	4.35%	32.83%	25.38%	21.11%	10.41%
MT	56.47	1.96	3.60%	5.20%	2.90%	3.01%	38.41%	18.73%	34.61%	41.35%
GGB	20.63	-0.12	-0.58%	2.38%	0.05%	9.33%	25.64%	20.86%	36.53%	21.50%
TS	47.52	0.29	0.61%	0.78%	-0.73%	2.99%	-2.06%	0.96%	15.34%	9.75%
NUE	65.38	-0.12	-0.18%	0.68%	-3.41%	-1.70%	19.96%	0.85%	13.70%	9.61%
PKX	106.24	-1.16	-1.08%	-0.30%	4.26%	-0.11%	33.75%	16.11%	46.78%	45.24%
AA	35.66	0.60	1.71%	-0.92%	3.75%	3.09%	21.58%	9.93%	25.17%	3.42%

There were some big moves in the metal miners, steel makers and gold dehedgers this week. RIO, which is CVRD by ticker, popped +7.8 pct. RIO TINTO, which is RTP by ticker, popped 6.4 pct. Teck (TCK) popped 7.1 pct, BHP (also BHP) popped +5.5 pct and Mittal (MT) popped +6.7 pct.

In the middle of that pack was Barrick (+6.7 pct) because they finally decided to get their heads around a Gold Bull and coughed up about $600 million to buy back their prior forward sales. Now maybe the public will see what Barrick finally sees. To wit, a Gold Bull soon to be seen jumping over the moon.

Like Spiderman, it’s coming to your town.

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

Industrials (XLI), meaning the US military-industrial complex, was up +0.90 pct to 37.98 this week.

Just traders happy that the manufacturing sector in the US has moved to China and India and Ireland and … because nobody wants good paying jobs any more. Actually those traders might be happy with the added dividends and share buy-backs, which when you add it all up, might give more than a few people the cash to join me in Bahamas where a Buck Bahamian is always a Buck US, and nobody in the White House seems to be “as mad as hell and not going to take it any more”, like with China. Or maybe it’s the former Treasury Secretary enjoying the life of Riley in Lyford Cay who is telling his American friends, “Don’t Worry, Be Happy.”

Btw, I see the new Bahamian Attorney General (selected this weekend after the change of govt) is the official legal counsel in Bahamas to the US govt. Ah, Friends & Family. Makes me so happy! But, then I’m Canadian, eh!

Seriously, I’d like to see Boeing move their headquarters one more time. They could leave Chicago and be welcomed in Freeport on Grand Bahama Island. It’s only 499 nautical miles further than Chicago to Washington, and there wouldn’t be as many pay-offs or scandals. Besides, there’s a beautiful airport, a seaport bigger than Miami’s, the fishing is better, and the people, I’m sure, would rename Freeport to something like Dreamliner.

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

XLI Monthly data:

XLI Weekly data:

XLI Daily data:

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
MMM	84.21	0.14	0.17%	3.26%	8.31%	9.72%	7.60%	14.00%	7.16%	-2.61%
HON	56.12	0.12	0.21%	2.24%	9.18%	18.75%	24.43%	21.58%	34.55%	27.20%
FDX	109.50	0.16	0.15%	2.13%	0.43%	0.62%	-0.25%	-4.77%	-2.29%	-7.36%
GE	37.15	-0.19	-0.51%	0.84%	5.75%	6.08%	-2.16%	2.43%	6.84%	6.75%
ERJ	47.35	-1.00	-2.07%	0.49%	-0.42%	0.40%	16.11%	15.15%	16.20%	27.25%
UTX	68.00	0.07	0.10%	0.46%	0.77%	4.73%	8.26%	0.00%	6.30%	6.63%
BA	93.61	-0.24	-0.26%	-0.44%	0.34%	3.44%	4.98%	3.95%	17.06%	8.04%
CAT	73.10	-0.26	-0.35%	-0.89%	1.78%	8.09%	19.52%	12.03%	20.97%	-7.25%
ABB	20.01	-0.03	-0.15%	-1.38%	6.78%	11.79%	12.29%	9.88%	35.85%	40.42%

3M (MMM) (or is that M&M) was up +3.3 pct, Honeywell (HON) +2.2 pct, Fedex (FDX) +2.1 pct (to $109.50) were the leaders of the General’s army. Electric (GE) was up just +0.8 pct, which must be a relief to the guys and gals at CNBC, and 316,000 employees. But alas, Electric is no longer a General, unless it’s a tin pot dictator’s army.

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Colin Twiggs (www.incrediblecharts.com) opines that the lift in the Dow Transports, including Fedex and UPS, is confirming the Bull market. But he has also noted that FDX and UPS seem to be grounded lately.

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

The Consumer Discretionary sector ETF (XLY) gained +0.18 pct W/W to close at 39.50. But, that seven cent gain on the week was more than made up by Friday’s gain of +0.23 pct. Unfortunately, there was nothing in the econ news of Fri (see negative US Jobs Report) that warranted the push.

I wrote a week ago in this space, “If the US consumer is key to the direction of the global stock market, and I still believe that is the case, then trader be wary.” The Average Joe is not the least bit interested in the take-over deals or the share buy-backs and on and on, which push this market higher. But the personal income, savings and spending resources and habits are key to the long-term picture.

This is why I rail when I hear the Kudlow’s saying that because the stock market is rising it means everything is good for the Average Joe. No, it’s good for the Gnomes, who then use their currency to take over yet another corporation whereupon the Average Joe loses his job.

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

XLY Monthly data:

XLY Weekly data:

XLY Daily 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
WHR	111.21	-1.61	-1.43%	4.51%	22.92%	28.91%	31.36%	20.42%	31.04%	19.80%
DIS	35.85	0.16	0.45%	2.49%	1.62%	2.69%	4.82%	1.90%	12.42%	26.23%
EBAY	34.15	-0.47	-1.36%	-0.06%	1.88%	1.31%	13.19%	5.24%	5.43%	0.12%
BC	33.04	0.10	0.30%	-0.30%	5.59%	2.90%	3.51%	-4.51%	7.59%	-12.22%
TM	120.93	0.53	0.44%	-0.88%	-3.97%	-4.40%	-10.62%	-7.88%	2.78%	-0.58%
CCL	47.95	-0.20	-0.42%	-1.50%	1.59%	2.57%	-5.89%	-7.38%	1.22%	-0.37%
NKE	53.29	0.01	0.02%	-1.53%	-0.45%	-0.36%	9.13%	6.37%	15.15%	31.65%
JCP	80.06	0.87	1.10%	-2.37%	-3.76%	-4.76%	2.56%	-4.35%	5.22%	21.23%
SBUX	30.70	-0.92	-2.91%	-2.54%	-3.03%	-2.23%	-12.91%	-10.42%	-15.82%	-20.86%

In this sector, there were many losers this week.

If you like this sector, I find that reading the International Report from Econoday’s Anne Picker on the weekend gives insights into what consumers are doing in other geographic regions of the world. The major corporations in the consumer sectors are global players and they deal with the Average Joe and Durchschnittlicher Joe and Joe Medio and Средний Joe and 일반 조 and 般的乔 and Joe Moyen and 般のジョ and Gemiddelde Joe. In fact, they deal with a Joe by every name.

And then there is Whirlpool. Or is that Draaikolk, 渦,or Torbellino?

Whirlpool (WHR) is a Cara 100 company, but can anybody tell me why the stock is up +28.9 pct in four weeks, including +4.5 pct this week? I figure Joe Medio and Средний Joe also want to know.

So what, I figure, that management agreed to re-start a relatively small stock buy-back program. A week ago, Whirlpool reported a -1 pct profit decline for 1Q07 and the housing industry is in the crapper.

No, something’s going on here that I can’t figure out.

One of the regular readers wrote to ask if this was a good time to short WHR, and I answered only because that person has personally volunteered so much to this website. I said, “Never short a stock unless you know (with confidence) why the price has risen.”

In fact, the only time to short a stock, in my view, is when the confidence of the market has noticeably turned bearish, and the stock in mind has been trading sideways at big volume for a time.

There were some winners here. Disney (DIS) was up +2.5 pct W/W. And you know Disney is a Cara 100, although sometimes I have to wonder why?
On Feb 16, Value Line had good things to say about Disney:

Disney stock is top-ranked for Timeliness. We think forays into new businesses will drive solid earnings gains out to 2009-2011. Accordingly, the equity also holds long-term appeal.

Moreover, Dow Jones reported this week:

The entertainment giant has been riding a strong recovery in its core television, theme park and movie businesses for several years now, but is expected to post at best modest growth for the latest quarter as it comes up against tough year-earlier comparisons. Cable networks remains Disney's steadiest performer.

Earnings Outlook: Analysts surveyed by Thomson Financial expect fiscal-second-quarter earnings of 37 cents share, flat with a year earlier.

Revenue Outlook: Analysts expect $8.09 billion, up from $8.03 billion in the year-earlier quarter.

A misrepresentation here should be noted. The difficult comparison quarter is not until the quarter ending June. Also, Value Line is expecting 38 cents. So this is the kind of b.s. writing that ought to be stopped. Somebody, I am guessing, wrote that piece for DJ, so that if, as and when a 38 cents earnings comes in, the Average Joe (as well as a few fund managers) will be thinking, DIS beat the Street and a difficult Y/Y comparison as well. NOT!

But we’ll have to see.

Disney, this week, had a debut for Xtreme Digital, a social networking site for kids under 14. They want to get these consumers when they are young, so they can sell them stuff later.

Not much later. The next day, kids in New Jersey tuned to Disney TV to discover to their parent’s shock that ‘Handy Manny’ was not much of a cartoon, but was really ‘Randy Manny’, porn star.

A fiction writer can’t make up this stuff!

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Disney [GICS 25, Dow 30, Cara 100]
(DIS: Yahoo Finance file)
(DIS: StockChart chart)
(DIS: ADVFN Financial Data)(DIS: Value Line Report Feb. 16: next one is due May 18)

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The worm at Apple (AAPL) seems to be getting off the hook with respect to fraudulent back-dating of stock options. This really ticks me. When anybody back-dates a financial record for the purpose of gaining a personal benefit at the expense of others, you are committing fraud. Full stop. And when you state that your insiders have done the research and discovered it was only an innocent mistake, I say you are guilty of lying and covering up, and you all ought to be sent straight to prison.

Here’s a report from Dow Jones:

Government and corporate investigations of stock-option granting practices have accelerated, with many companies reporting regulatory or internal probes.
The Securities and Exchange Commission is currently investigating about 140 companies in its expanding probe with more charges expected in the coming weeks, The Wall Street Journal reported. On March 5, The Journal reported that the stock options scandal helped boost by 50% the number of companies filing their annual reports late.

The Internal Revenue Service disclosed on Feb. 9 that companies can pay the taxes for rank-and-file workers hit by a 20% bump on backdated stock options, though it won't be available to executives and other insiders.

In response to these and other reports, many companies have begun examining their own stock-option granting practices to ensure backdating didn't occur.

In the past week, some companies cited in investigations or those that have engaged internal investigations have issued statements.

Below are some of their responses, as well as other developments:

Eclipsys Corp. (ECLP) on Wednesday said it plans to record $9 million in backdating charges going back to 2001. The company said $4.7 million of the charges will be applied between 2002 and 2006 with the balance, $4.3 million, applied to retained earnings as of Dec. 31, 2001.

Broadcom Corp. (BRCM), a provider of communications chips, is responding to grand jury subpoenas tied to a federal investigation into its past accounting for stock options. "The company has produced documents pursuant to grand jury subpoenas," Broadcom said in a regulatory filing Tuesday. "The U.S. Attorney's Office has begun to interview present and former company employees as part of its investigation." On April 27, Dow Jones Newswires reported Broadcom's troubles with stock-options backdating could be an issue for shareholders at the company's annual shareholder meeting. The chip maker said it toyed with the dates of options granted to executives between 1998 and 2003, resulting in restated financial results reflecting an extra $2.25 billion in extra stock-based compensation expenses. Two firms that advise shareholders on voting in corporate elections - Institutional Shareholder Services and Proxy Governance - are recommending investors withhold votes for several Broadcom directors for their roles in the backdating.

Atmel Corp. (ATML) said Monday its former chief executive George Perlegos and general counsel Mike Ross are primarily responsible for the semiconductor maker's problems related to backdated stock options.

Fuel Systems Solutions Inc. (FSYS) on Monday said its previously disclosed review of stock-option grants is proceeding, and the company was assigned an early May hearing date before a Nasdaq Listing Qualifications Panel to address the potential delisting of its common stock related to a delay in filing its 10-K.

The Management Network Group Inc. (TMNG) said April 27 that a special committee of its board completed a review into the company's historical stock option and restricted stock granting practices. According to a filing with the Securities and Exchange Commission, the committee found that 68% of options and restricted stock awards between Nov. 1, 1999, and Oct. 2, 2006, were misdated.

The following is a list of all the other companies that have commented on the stock option investigations, as prepared by Dow Jones:

Adobe Systems Inc. (ADBE)
Actel Corp. (ACTL)
Active Power Inc. (ACPW)
Activision Inc. (ATVI)
Affiliated Computer Services Inc. (ACS)
Affymetrix Inc. (AFFX)
Agile Software Corp. (AGIL)
Alkermes Inc. (ALKS)
Altera Corp. (ALTR)
American Technology Corp. (ATCO)
American Tower Corp. (AMT)
Amkor Technology Inc. (AMKR)
Analog Devices Inc. (ADI)
Apollo Group Inc. (APOL)
Apple Inc.'s (AAPL)
Applied Micro Circuits Corp. (AMCC)
Applied Signal Technology Inc. (APSG)
Aspen Technology Inc. (AZPN)
Asyst Technologies Inc. (ASYT)
ArthroCare Corp. (ARTC)
Autodesk Inc. (ADSK)
Back Yard Burgers Inc. (BYBI)
BEA Systems Inc. (BEAS)
Bed Bath & Beyond Inc. (BBBY)
Biomet Inc. (BMET)
Black Box Corp. (BBOX)
Blue Coat Systems Inc. (BCSI)
Boston Communications Group Inc. (BCGI)
Brocade Communications Systems Inc. (BRCD)
Brooks Automation Inc. (BRKS)
CA Inc. (CA)
Cablevision Systems Corp. (CVC)
Caremark Rx Inc. (CMX)
CEC Entertainment Inc. (CEC)
Ceradyne Inc. (CRDN)
Cheesecake Factory Inc. (CAKE)
Children's Place Retail Stores Inc. (PLCE)
Chordiant Software Inc. (CHRD)
Cirrus Logic Inc. (CRUS)
Citrix Systems Inc. (CTXS)
Clorox Co. (CLX)
CNet Networks Inc. (CNET)
Coherent Inc. (COHR)
Comverse Technology Inc. (CMVT)
Computer Sciences Corp. (CSC)
Copart Inc. (CPRT)
Corinthian Colleges Inc. (COCO)
Costco Wholesale Corp. (COST)
Crown Castle International Corp. (CCI)
CVS/Caremark Corp. (CVS)
Cyberonics Inc. (CYBX)
Dean Foods Co. (DF)
Delta Petroleum Corp. (DPTR)
Digital River Inc. (DRIV)
Ditech Networks Inc. (DITC)
Dot Hill Systems Corp. (HILL)
DRS Technologies Inc. (DRS)
Dycom Industries Inc. (DY)
Electronic Arts Inc. (ERTS)
Electronic Clearing House Inc. (ECHO)
Electronics For Imaging Inc. (EFII)
Embarcadero Technologies Inc. (EMBT)
Emcore Corp. (EMKR)
Endocare Inc. (ENDO)
Equinix Inc. (EQIX)
Epix Pharmaceuticals Inc. (EPIX)
EPlus Inc. (PLUS)
Extreme Networks Inc. (EXTR)
F5 Networks Inc. (FFIV)
Family Dollar Stores Inc. (FDO)
First American Corp. (FAF)
Forrester Research Inc. (FORR)
Fossil Inc. (FOSL)
Foundry Networks Inc. (FDRY)
Fresenius Medical Care AG KGAA (FMS)
Gap Inc. (GPS)
Gensym Corp. (GNSM)
Getty Images Inc.'s (GYI)
Glenayre Technologies Inc. (GEMS)
Greater Bay Bancorp (GBBK)
Green Mountain Capital Inc. (GMOC)
Hansen Natural Corp. (HANS)
HCC Insurance Holdings Inc. (HCC)
Home Depot Inc. (HD)
Hudson Highland Group Inc. (HHGP)
IBasis Inc. (IBAS)
Insight Enterprises Inc. (NSIT)
Integrated Silicon Solution Inc. (ISSI)
Internap Network Services Corp. (INAP)
Interpublic Group of Cos. (IPG)
Interwoven Inc. (IWOV)
Intuit Inc. (INTU)
Jabil Circuit Inc. (JBL)
Juniper Systems Inc. (JNPR)
Jupitermedia Corp. (JUPM)
J2 Global Communications Inc. (JCOM)
KB Home Inc. (KBH)
Keane Inc. (KEA)
Keithley Instruments Inc. (KEI)
King Pharmaceuticals Inc. (KG)
KLA-Tencor Corp. (KLAC)
Knobias Inc. (KNBS)
Kopin Corp. (KOPN)
KOS Pharmaceuticals Inc. (KOSP)
Krispy Kreme Doughnuts Inc. (KKD)
K-V Pharmaceutical Co. (KVA)
Landry's Restaurants Inc. (LNY)
Linear Technology Corp. (LLTC)
L-3 Communications Holdings Inc. (LLL)
Macrovision Corp. (MVSN)
Management Network Group Inc. (TMNG)
Marvell Technology Group Ltd. (MRVL)
Mattel Inc. (MAT)
Maxim Integrated Products Inc. (MXIM)
McAfee Inc. (MFE)
MDC Partners Inc. (MDCA)
Meade Instruments Corp. (MEAD)
Medarex Inc. (MEDX)
Mercury Interactive Corp. (MERQ)
Michaels Stores Inc. (MIK)
Microislet Inc. (MII)
Mills Corp. (MLS)
Mips Technologies Inc. (MIPS)
Microtune Inc. (TUNE)
Molex Inc. (MOLX)
Monster Worldwide Inc. (MNST)
M-Systems Flash Disk Pioneers Ltd. (FLSH)
Nabi Biopharmaceuticals Inc. (NABI)
Nabors Industries Ltd. (NBR)
Network Appliance Inc. (NTAP)
Newpak Resources Inc. (NR)
Novell Inc. (NOVL)
Novellus Systems Inc. (NVLS)
Nvidia Corp. (NVDA)
Nyfix Inc. (NYFX)
O.I. Corp. (OICO)
Openwave Systems Inc. (OPWV)
Oracle Corp. (ORCL)
Orbital Sciences Corp. (ORB)
PacificNet Inc. (PACT)
Palm Inc. (PALM)
Par Pharmaceutical Cos. (PRX)
Pediatrix Medical Group Inc. (PDX)
Peet's Coffee and Tea Inc. (PEET)
Petroleum Development Corp. (PETD)
PMC-Sierra Inc. (PMCS)
Pool Corp. (POOL)
Power Integrations Inc. (POWI)
Progress Software Corp. (PRGS)
Quest Software Inc. (QSFT)
Qwest Communications International Inc. (Q)
QuickLogic Corp. (QUIK)
Rackable Systems Inc. (RACK)
Radio One Inc. (ROIA)
Rambus Inc. (RMBS)
Redback Networks Inc. (RBAK)
ReGen Biologics Inc. (RGBI)
Research In Motion Ltd. (RIMM)
Royal Gold Inc. (RGLD)
RSA Security Inc. (RSAS)
SafeNet Inc. (SFNT)
Sanmina-SCI Corp. (SANM)
Sapient Corp. (SAPE)
ScanSource Inc. (SCSC)
Selectica Inc. (SLTC)
Semtech Corp. (SMTC)
Sepracor Inc. (SEPR)
Sharper Image Corp. (SHRP)
Shaw Group Inc. (SGR)
Sigma Designs Inc. (SIGM)
Silicon Image Inc. (SIMG)
Silicon Storage Technology Inc. (SSTI)
SPX Corp. (SPW)
Sonic Solutions (SNIC)
Sonus Networks Inc. (SONS)
SPSS Inc. (SPSS)
Stolt-Nielsen S.A. (SNSA)
Sun-Times Media Group Inc. (SVN)
Superior Industries International Inc. (SUP)
Sycamore Networks Inc. (SCMR)
Take-Two Interactive Software Inc. (TTWO)
Tetra Tech Inc. (TTEK)
Thoratec Corp. (THOR)
THQ Inc. (THQI)
Thomas Group Inc. (TGIS)
Transaction Systems Architects Inc. (TSAI)
Trident Microsystems Inc. (TRID)
Triquint Semiconductor Inc. (TQNT)
TurboChef Technologies Inc. (OVEN)
Tyco International Ltd. (TYC)
Ulticom Inc. (ULCM)
UnitedHealth Group Inc. (UNH)
UTStarcom Inc. (UTSI)
Valeant Pharmaceuticals International (VRX)
Verint Systems Inc. (VRNT)
VeriSign Inc. (VRSN)
Vitesse Semiconductor Corp. (VTSS)
Voxware Inc. (VOXW)
Walt Disney Co. (DIS)
Waste Connections Inc. (WCN)
Western Digital Corp. (WDC)
Westwood One Inc. (WON)
Wet Seal Inc. (WTSLA)
Wind River Systems Inc. (WIND)
Wireless Facilities Inc. (WFII)
Witness Systems Inc. (WITS)
Xilinx Inc. (XLNX)
Zarlink Semiconductor Inc. (ZL)
Zoran Corp. (ZRAN)

Ah, the new mores of America.

Somehow, I think I live a different kind of life.

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

The Consumer Staples sector ETF (XLP) was down 10 cents (-0.36 pct W/W) to close at $27.40. Friday was flat.

But, don’t let the flat market fool you. There was lots of volatility here again this week, with Companhia de Bebidas Das Americas (AMBEV) (ABV) up +4.0 pct and Whole Foods Market (WFMI) down -4.8 pct.

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

XLP Monthly data:

XLP Weekly data:

XLP Daily 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	61.25	-0.98	-1.57%	4.01%	2.12%	8.97%	24.75%	17.25%	38.79%	30.43%
KO	53.21	0.30	0.57%	2.21%	2.15%	7.45%	9.53%	10.30%	14.43%	26.45%
PEP	67.42	0.11	0.16%	1.70%	1.16%	5.87%	7.49%	3.66%	6.61%	14.78%
DEO	85.04	-0.09	-0.11%	1.00%	2.22%	3.39%	6.93%	7.43%	14.72%	26.76%
BUD	50.50	0.20	0.40%	0.94%	-4.01%	-1.17%	2.60%	-1.69%	7.56%	10.65%
WMT	48.27	-0.09	-0.19%	-0.14%	-2.99%	0.00%	1.51%	0.40%	1.56%	4.03%
MO	69.36	-0.41	-0.59%	-0.34%	-0.27%	-1.96%	6.84%	6.77%	13.85%	25.49%
WAG	44.82	0.27	0.61%	-0.44%	-2.14%	-3.07%	-2.71%	-1.10%	4.67%	9.45%
PG	62.41	0.41	0.66%	-0.91%	-2.18%	-0.94%	-3.30%	-4.48%	-1.56%	11.73%
WFMI	45.25	-0.06	-0.13%	-4.76%	-1.44%	-0.29%	-0.51%	1.30%	-2.18%	-35.74%

Two weeks ago Coca-Cola was a leader (+4.4 pct) as the sell-side blasted out the storyline that ‘$USD makes foreign profits, which are repatriated, which looks good at home’, Then a week ago, traders digested things and KO dropped -0.1 pct. This week, Coca-Cola was flowing again (+2.2 pct). And you guessed it, the $USD gained +0.31 pct, which put unhappy faces to all these story tellers.

Yes, every con artist needs some truth to a story, and, yes, a weak $USD helps companies that produce products in foreign countries that have a strong currency, yada yada. But if and when you see these stories pumping a stock that day or week, then run to the hills before the other shoe drops. It’s called pump and dump and, yes, it happens all the time to blue chip companies like Coca Cola too.

The big loser was Whole Foods Market (WFMI -4.8 pct W/W). A week ago, WFMI was the big winner (+3.5 pct W/W). At the end of the day, for two weeks nothing much has happened.

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

The IYH healthcare ETF was up +0.91 pct W/W to close at 72.32. Friday was a good day.

The M-W-D RSI-7 is too rich for me.

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

IYH Monthly data:

IYH Weekly data:

IYH Daily 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	48.72	0.60	1.25%	3.53%	8.60%	8.27%	13.62%	14.58%	20.18%	31.93%
BMY	30.02	0.68	2.32%	2.91%	4.71%