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May 20, 2007
Week #20 (2007-05-19) in Review
The global equity markets have risen to a level of concern. G-8 central bankers and finance ministers are meeting this week-end, but the question they ought to be asking, “Is anybody in control?” – not what can be done about hedge funds!
The bond market is speaking out. As prices continue to drop, based more on an ‘animal spirit’ concern than on the spirit of inflation, bond yields will soon rise past the economy’s breaking point, I feel.
Something has to give. This week I am going to point again to the fact that very few US stocks are pulling the equity market higher. The NASDAQ and Russell Small Cap indexes had losing weeks, and the broader S&P 500 only gained +1.1 pct vs +1.7 pct for the Dow.
On January 3, I made this statement, “Gold will be the asset class of the year.” I still believe that will be the case. That cannot happen without extreme broad market action, typically following a market ‘melt-up’ based on inflation/speculation or, as in the case of the Great Depression of the 1930’s in the US, which followed the melt-up and crash of 1928.
That the global equity market is in a ‘melt-up’ is undeniable. When I used that expression on February 1, some people thought it must be April 1 and that I was joking. But that blog was almost three months’ ago and now my words are not being laughed at.
Just like I believe that Precious Metal bullion and share ETF’s have been used by market interventionists to try to create an image that inflation and speculation are in control, when we know they are not, I think the inverse broad market ETF’s, used today to protect portfolios, could soon be used to drive this equity market to great depths.
I have also opined that there will be a massive Bear market that will be followed by a G-20 Agreement on currencies – before the next Bull market begins. I still believe that will be the case, as well.
I truly believe that the natural market cycle reversed from Bull to Bear on or about May 10, 2006. I believe the Gnomes panicked, and had Pres. Bush pull Treasury Sec. John Snow out of his position and, as a ‘thank you for favors rendered’ put him into the head position at the Humungous Private Equity Corp (HPEC) unit Cerberus.
You see, HPEC (KKR, Carlyle Group, Blackstone, Bain, Cerberus et al) represents the Gnomes, and these are the very private string-pullers who pull the chains of the President and key Senators of the US, and central bankers and finance ministers, and people like them who have been boosted to power by so-called “democratic” forces in other countries.
HPEC, in May 2006, had an agenda in place, which has been playing out since then. It involves the take-over of listed corporations in many countries, and the total funds being provided by Humungous Bank & Broker (HB&B) is over $1 trillion. A Bear market starting in May 2006 would have stopped those plans.
It might have even kept the Chinese from joining HPEC. Yes, China has agreed to take a $3 billion stake in Blackstone Group. Hmmm.
In any case, after John Snow was shuffled off to Cerberus, possibly the only person in the world who could sustain a Bull market beyond its natural cycle, Henry Paulson, was parachuted into the Treasury Secretary position in June of 2006. A month later, after visiting the trading floors in NY and Chicago, Paulson and Bernanke managed to juice the equity market for another year, and gold took off as a result. Few people then talked Bear market.
The checkerboard is almost complete by HPEC: Texas Utilities, ABN AMRO Bank, Equity Office Properties Trust, Trizec Properties, Chrysler, maybe Ford next, GMAC, pieces coming out of General Electric, First Data Corp, Biomet, HCA, Clear Channel Communications, the re-org of Cendant, probably Canada’s Alcan, following Stelco, and a list of others… and now China.
And all the time you thought Paulson was mad at the Chinese, and talking over their Yuan issue.
Credit swaps have facilitated this amazing situation where debt has been permitted to grow to a point that even the world’s biggest commercial bankers (HB&B) don’t know where they stand, and for them to tell us they have risk management systems that will contain any problem, we only have to look at the quite recent developments at BMO. Sad isn’t it, that BMO doesn’t seem to have a clue whether: (i) the Optionable situation was fraud or simply bad management (ii) the loss on trading Natural Gas Futures was $350-$450 million or $680 million? Could it be billions, like Amaranth?
Today, HB&B research departments no longer seem interested in talking revenue, earnings, cash flow and dividend growth in absolute dollars. They are hung up by distorted calculations caused by mega-billion dollar share buy-backs and extreme dividend payouts. So, now the ratings seem to be “due to valuation concerns”, which really has little to do with valuation and a lot to do with price speculation. But HB&B won’t call a spade a spade because they don’t want to be accused of shouting fire in a crowded theater.
Hence, just like I wrote in 2H99 (in my Internet-based weekly letter at the time) that HB&B research opinions could not be trusted because 98.5 pct of ratings for the Dow 30 stocks were “Strong Buy, Buy or Hold”. We all know how that took Mom & Pop, Joe & Joesy, right to the cleaners. Today is a new cycle peak, but a similar game. HB&B research calls are getting more bizarre by the week.
The pressure to hold this market from imploding must be fierce.
Few people want to read and discuss Michael Panzner’s “Financial Armageddon”, but they ought to. Mean reversion is going to occur. It’s just a matter of when. The bigger the amount of juice injected into this market to keep it growing, the bigger will be the fall to reality.
What will do it? The unwinding of the Japanese Carry Trade for one. At some point, the Japanese lenders will raise rates and want to collect on their loans. I suspect some of those loans will never be paid. A bankruptcy here, a bankruptcy there (hedge funds we’re talking about) will soon hit those Japanese banks and then watch how fast rates rise, and how fast the Carry Trade unwinds.
Another driver could be those Credit Swaps that underlie Private Equity’s recent penchant for debt. A failure here, a failure there will send HB&B scrambling. If a two-bit trading floor in nat gas futures has roiled a bank the size of BMO, what would happen if the loss was the size of Amaranth. Yes, Amaranth cost Mom & Pop’s pension funds mega-billions, but what happens when the loser is a mid to large-sized commercial bank? The Hong Kong Chinese can tell you what a run on a bank looks like. The lines around the block stop traffic, and depositors don’t take kindly to police barricades when family wealth is crashing. That’s a crowd that doesn’t need external agitation to erupt.
Who knows when or where the problems start? I know I don’t.
I just believe that debt-free gold will not drop far. Do you know why? According to research data I use, the break-even cost to produce an ounce of gold today of all goldminers in the world – large, mid-size and small producers is US$482. For the senior miners who produce the bulk of it, the production cost is US$495, and for the North American majors in that group, it is US$512. That does not include costs for management or exploration. So, at a price well above US$512, gold miners will shut down. They will start with their least efficient operations, and office overhead, and grind slowly into a full stop.
So, it is inconceivable to me that gold will drop below say $550.
Funny how Steve Forbes is always saying that he believes the Oil price could drop from $70 to $30. I suppose that’s possible if OPEC producers want to keep pumping oil. The $100 billion Western Canadian Oil Sands, however, would be toast, for what its worth.
But I assure you, the world, which is now looking at $660 gold, will no longer see $500 gold unless there really is a gold horde in Fort Knox and the US Government plans to give it away. Who knows, maybe in a depression, Prof. Bernanke will be force to dole it out to the tens of millions of people at the Food Banks that are rapidly building across America.
At the end of the day, gold will always be good to buy the essentials of life, and to buy asset repo’s from HB&B, like houses and land. You see, you may not, at some point, have enough zero’s on the end of your Dollars, but bankers will always take Gold. They print money (through extension of debt), which is why they put their trust in gold.
As soon as you see a big bank fail in North America, you can expect to see two long line-ups at your bank: one to withdraw paper money and another (if your bank offers it) to buy Gold bullion bars and coins.
You won’t even be interested in a PM ETF at that point because that’s just paper too.
Global Market Summary
International Equities: Canada (+3.0 pct) and India (+2.8 pct) led the way this week, and sometime in June, the Senators of Ottawa will win the Stanley Cup. I had bet on Buffalo, unfortunately. You see, nobody in Toronto, the centre of the hockey universe, likes the Senators. Well, they don’t like Ottawa either, but that’s a whole different matter. The Japanese market had a set-back (I continue to warn).
U.S. Equities : The Dow jumped (+1.7 pct) and the S&P 500 (+1.1 pct) followed, but the other broad markets were down. The Russell small cap 2000 (-0.7 pct) and the NASDAQ Composite (0.15 pct) were laggards, but next week will likely be a different story as certain vested interests need this market to lift.
Dow 30 : The DJIA lifted +230 points (+1.73 pct) to 13,556. Lots of debt being run up for buying back shares and issuing higher than normal dividend increases. Same old, same old, but I expect it to continue through the Summer.
U.S. Sector ETFs: Nine of 10 US sector ETF’s were up this week. There was little natural sector rotation this week, like last, but there was the usual flip for SMH. A week ago, I wrote, “Forget the SMH because that’s either first or last or nearby – so call it an average of 5.5.” Well, after running 1-2-1-1 for the past four weeks, this week SMH was shot. While all other sectors moved higher, SMH dropped -2.2 pct W/W. From 1 to 10, I’m just trying to keep the average at 5.5.
First segment: most influenced by global commodities, forex and capex spending
10: Energy (XLE): #1 (+4.0 pct); $WTIC +2.9 pct after +3.5 pct week ago
15: Basic Materials (XLB): #5 (+1.2 pct); All steel and aluminum this week
20: Industrials (XLI): #9 (+0.2 pct); BA (+3.5 pct)pulled hard; FDX did not
Second segment: most influenced by U.S. consumer spending and economic growth
25: Cons. Discretionary (XLY): #6 (+1.1 pct); Tickee from where? HB&B?
30: Cons. Staples (XLP): #2 (+1.8 pct); ABV, PEP, WAG, PG were all good
35: Healthcare (IYH): #7 (+0.7 pct); Biotechs were a drag on health
Third segment: most influenced by U.S. interest rates and general economic health
40: Financial (XLF): #8 (+0.2 pct); Nervous bankers with G-8 around
45: Tech (SMH chips): #10 (-2.2 pct); Lots of recovery on Friday
50: Telecom Service (IYZ): #4 (+1.3 pct); All T (+3.8 pct), VZ (+3.0 pct)
55: Utilities (XLU): #3 (+1.5 pct); Two or three stocks only are pulling
Bonds: The US Bond market had a monster move, down as I anticipated. Yields up +11 to 15 bp, which was more than I expected.
Commodities: Crude oil was set on fire. The price jumped +2.9 pct as $WTIC lifted to 65.98.
Oil & Gas: A lot of heat in that West Texas Intermediate. I was watching the Rangers-Jays in Arlington one Summer night along with my staff and a ton of kids I sponsored via a local radio station. The scoreboard read 99 degrees. A/C and summer driving, and maybe a couple hurricanes in the Gulf, more civil strife in Nigeria, and on and on. We don’t even need Peak Oil. The OPECers don’t want 20 wooden nickel dollars in lieu of real money.
Gold: Metals and precious metals got hammered again this week, but not to worry; help is on the way. On Friday, the cavalry started to climb the hill. This is no Light Brigade.
Goldminers: The goldminers $XAU sank -2.2 pct this week, after dropping -1.5 pct a week ago, and GDX dropped -2.3 pct. But on Friday, $XAU and GDX lifted +1.3 pct and +2.0 pct respectively. I was tempted to write, respectfully BECAUSE GOLD KNOWS.
Forex: The $USD lifted this week by +0.06 pct, which is like nothing (reversal coming?), and the Euro lost -0.13 pct. A three-week Dollar Rally has just about run out the clock.
Economic calendar for next week.
US Marketwatch
Another solid close to the week with the DJIA up +0.6 pct. It’s called window dressing.
DJIA chart
Colin Twiggs believes the Dow is accelerating in a Phase 2 up-trend, but he again urges caution because now that the upper trend channel has been broken, accompanied by rising money flow, bad things can follow. In his words, “Accelerating up-trends make big gains but normally end with a sharp reversal, so it is important to protect profits. Reversal below the upper channel line would signal that the trend is weakening…”
This week, the Dow 30 were led by IBM on Friday (+2.54 pct), and GM (+6.8 pct), AA (+4.5 pct), DD (+3.9 pct), T (+3.8 pct), C (+3.6 pct), BA (+3.5 pct), MCD (+3.3 pct), VZ and PG (+3.0 pct). If you are going to continue holding these stocks, you might protect those gains by buying puts. Writing calls is not going to help at this point in a melt-up.
A dozen NYSE DJIA stocks to watch.
NASDAQ Composite chart
A dozen NASDAQ stocks to watch.
Cara 100 Stockwatch
Here are the Cara 100 gainers on Friday.
Interactive chart of the top 12 Watch List gainers
Natural Resources stocks (GICS 10 and 15) carried the market higher on Friday.
Here are the top Cara 100 losers for Friday.
Interactive chart of the top 12 Watch List losers (Interactive link)
There were twenty (20) stocks of the Cara 100 for Friday that hit 52-week intra-day highs and none found hitting lows.
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.
The following table is sorted by price performance Week over Week (W/W), i.e. 1W%N.
Table 1: Cara ETF List
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
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.
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)
Individual Sector ETF Review
Sector 10 (energy: XLE, IYE, VDE, OIH, PBW and IXC)
XLE gained +4.02 pct to close at 67.83, which is not surprising as the price of Crude Oil on the NYMEX lifted +2.9 pct after being up 3.5 pct a week ago as well.
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
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
Oil & Gas Exploration & Production -Canada
The IMO and SU charts from the Canadian Oil Sands have to be seen to be appreciated. Gains of this magnitude will not continue unless the price of Crude Oil moves to a new trading range from 65 to 75. which is possible. When the Monthly-Weekly-Daily on the RSI are soaring, I wait until the Daily RSI-7 falls below 70 before I consider selling, though.
Another factor is that the Cdn Dollar this week has also soared (+2.2 pct W/W) as foreign investors climbed on board these Canadian oils. That Cdn Dollar is going to hurt tourism this summer, and more Canadians will be vacationing down south.
Sector 15 (basic materials: IYM, XLB, IGE and VAW)
The Basic Materials ETF (XLB) gained +1.18 pct W/W to close at 40.28, which was the #5 performer this week.
I still await a final melt-up in the metals and PM’s. A week ago I wrote, “… but I am concerned that the M-W-D RSI-7 for XLB is 87.5 (highest ever)/78.5/59.0. The saving grace here is that the Weekly and especially the Daily RSI pulled back to a margin of comfort. I think another “high-risk Buy” was signaled Friday morning, which I’ll discuss in the Gold section of this report.” Gold did not help this week until Friday.
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:
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
With central bankers around this weekend, traders are nervous. But not to worry. There is nobody around that table who can stop printing money so fast.
The steels and aluminums did real well, but the base metal miners and the PM miners were hit again.
Sector 20 (industrial: IYJ, XLI, VIS, and IYT)
Industrials (XLI) was up just +0.16 pct to 38.25 this week. That’s six cents to the good. And if those are real pennies, it’s about a dime to the good if you catch my drift.
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:
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
BA led the flight +3.5 pct. But FDX was grounded -1.6 pct to $106.55.
Colin Twiggs (www.incrediblecharts.com) likes the broad market here, but notes weakness in the Dow Transports, including Fedex and UPS. He opines that the DJTA could break either way here.
In the Week #9-07 report (Mar-3), I wrote, “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.”
Well, Fedex (FDX) has fallen right out of the blue sky, which another leading indicator you ought to be watching.
Sector 25 (consumer discretionary: XLY, IYC and VCR)
The Consumer Discretionary sector ETF (XLY) gained +1.07 pct W/W to close at 39.72.
Who’s got ‘tickee’?
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
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
JCP (+4.2 pct), BC +2.4 pct, TM (+1.6 pct) and WHR (+1.3 pct) led the way. I am surprised at the ongoing strength of BC and WHR. Maybe Private Equity has been checking their books? Do you think?
When the People find money (ie, disposable income) gets tight, one of the first cut-backs is a visit to the casino. I noticed that from July through the end of the year (2006) that casino stocks were in favor. Not so much at this point. This group can be a leading indicator of where equity markets are headed.
Eight leading casino stocks to watch.
I do think MPEL will be a stock to watch, but I’ll keep my eye on it.
Sector 30 (consumer staples: XLP, VDC, RTH and IYK)
The Consumer Staples sector ETF (XLP) was up +1.80 pct W/W to close at $27.69.
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
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
Companhia de Bebidas Das Americas (AMBEV) (ABV) rocketed up +10.7 pct to $67.42.
Yes, Brazil’s AmBev (ABV) has really been on a rip. Since it’s a beer company, maybe we can refer to it as a rip roaring drunk. No moderation here.
Tell me, why is beer a Staple anyway? I can’t answer that, but I do believe many of you had never heard of this company until you saw it as a Cara Global 100 company. Hooray.
Tao, Brother!
Sector 35 (healthcare: IYH, XLV, VHT, IXJ, and IBB)
The IYH healthcare ETF was up +0.70 pct W/W to close at 72.14. Friday (+0.73 pct) was a good day, like a week earlier.
Here’s the IYH Monthly, Weekly and Daily data charts:
IYH Monthly data:
IYH Weekly data:
IYH Daily data:
Table 7: Senior healthcare equities
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
Aetna (AET +4.6 pct) continues to be a story. Is Private Equity checking that one too?
When equity markets peak, one of the first to soften is the Biotech group because the industry P/E ratio is usually very high. Presently, according to industry data at Yahoo Finance, the Healthcare industry PE is 39.7, which is super high, but the Biotech industry is at a nose-bleeding height of 59.3.
A dozen Biotech stocks to watch.
Sector 40 (financial: IYG, IYF, XLF, VFH, IXG, VNQ, RWR, IYR, and ICF)
The Financials ETF (XLF) was barely up this week. XLF gained +0.19 pct to close at 37.82.
There was another “hot” Friday (+0.34 pct), which stopped XLF from being a loser.
Here’s the XLF Monthly, Weekly and Daily data charts:
XLF Monthly data:
XLF Weekly data:
XLF Daily data:
Table 8: Senior financial company equities
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
A week ago, I wrote, “Lehman Bros (LEH) dropped -2.5 pct W/W but it’s still been a strong 2 week and 4 week performance.” Well, LEH this week dropped -3.9 pct. I’m guessing they want to drop the stock low enough that when the $10 billion stock buy-back starts, it will be (i) a timely move for Friends & Family, including the other members of the Fed board of directors, and (ii) just in time to pop the S&P 500 again.
Actually, I haven’t a clue why LEH dropped so much while C (+3.6 pct), UBS (+2.22 pct W/W although Friday was +2.13 pct), GS (+1.25 pct W/W although Friday was +1.30 pct) and MER (+0.71 pct W/W although Friday was +2.14 pct).
Sector 45 (technology: IGM, IGV, IGW, XLK, VGT, IYW, IGN, IXN, MTK and SMH)
A week ago, the semi-conductors (SMH) gained +1.23 pct, but this week was a different story as SMH dropped -2.19 pct.
Here’s the SMH Monthly, Weekly and Daily data charts:
SMH Monthly data:
SMH Weekly data:
SMH Daily data:
Table 9: Senior technology equities
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
Adobe (+4.5 pct), Autodesk (ADSK +2.4 pct) and Intel (INTC +1.9 pct) were winners, but check the gains on Friday.
Sector 50 (telecom: IYZ, VOX and IXP)
The U.S. telco sector ETF (IYZ) gained +1.30 pct W/W to close at 33.40. T and VZ led the way.
Here’s the IYZ Monthly, Weekly and Daily data charts:
IYZ Monthly data:
IYZ Weekly data:
IYZ Daily data:
The broad equity markets have been pulled up by a very few stocks. T and VZ are a couple. The PE’s on these two are now 21.0 and 20.5 respectively. These are not technology companies, and there is no fundamental reason for traders to be following these PE’s to ridiculous heights. If you do, then you are a lamb about to be fleeced.
This telco market is acting so stupidly these days, that Humungous Private Equity Corp (HPEC) had to go to Canada to bid up the share price of BCE (PE now at 16.5), just to make the third largest cap in this industry not look so out of place with the big two, T and VZ, which HPEC has juiced.
But BCE is a pig, losing customers as fast as the cable companies (Rogers and Shaw) can put them online.
This happened to me about a year ago. I received a call from a BCE Customer Call Center in India (I am almost certain) telling me I owed money. I said the bill is paid every month on receipt and always has been, and please check the record. I hung up. They called back. I repeated the story, and hung up. This went on for a couple months, except that before I hung up, I asked them to put a BCE operator on the phone to clear it up. They never did. I then called the BCE billing office and gave them details of this harassment. The calls continued. I then called back and asked for a supervisor in the BCE billing office, and gave the person an ultimatum: “Two more harassing calls and BCE is toast in my house.” A couple harassing calls from India later – same person every single time – going through the same routine from them to me and back, and hanging up – I called BCE billing back, and said that I would give them one more kick at the can. The supervisor said to me: “I don’t care” and then hung up on me. Imagine that! BCE’s latest CRM technique. I immediately called Rogers and had the phone and LD plan switched to them to be included with my Cable TV and ISP bill, which came with a bundled 25 pct discount off each. Next month my wife says, “I can’t believe how low our phone bill is,” and I replied, “Oh, wait til I switch to VOIP.”
These companies are losing it. Internet Protocol says all you need to know. In every aspect of our lives.
What the People need in every country is an IPU (Internet Public Utility). The government ought to make it available free of charge. Then every value-add service company should pay to plug their services in, and the People ought to pay for the services they need and value most highly.
What we have today with Ma Bell is a government lobbyist’s dream. It is a job made in heaven, delivering crappy service based on monopoly or oligopoly control given to them by politicians of former years who were bought and paid for.
.
A dozen Telco stocks to watch.
Sector 55 (utilities: IDU, XLU, and VPU)
The Utilities ETF (XLU) had a gain of +1.49 pct this week, but there were few pulling the rest. XLU closed at 42.82.
Here’s the XLU Monthly, Weekly and Daily data charts:
XLU Monthly data:
XLU Weekly data:
XLU Daily data:
The Dow Utility stocks to watch.
As soon as I can get around to it (unfortunately a week does not have eight days), I’m going to have BillCara2.com tie into Seeking Alpha and also create various trading system screens from the changing technical indicator data (see table below) that will give Cara Accumulation Zone/Distribution Zone and Buy/Sell Alerts.
Why? Because everybody in life needs a fair shot.
Industry “Impulse” Review
Starting this week, courtesy of “Jock” and Dr Alexander Elder, we are going to offer a new WIR component: a 10-week table that depicts stock price inertia/momentum of 31 industries. The table, created by Jock, is based on the “Impulse System” that is described in Dr Alexander Elder's book Come into My Trading Room.
That book, and Dr Elder’s Entries & Exits, sits on my bookshelf.
With the “Impulse System”, Industries are colored green when both weekly MACD-H and 26-week EMA have ticked up; they are red when both MACD-H and 26-week EMA have ticked down. This weekly "impulse" looks at inertia through the EMA, and at momentum through MACD (the rate of change in EMA's).
“Impulse”-related questions will be answered by Jock in the running Commentary. Because Jock might be unavailable some weeks, I presume I will not be able to publish it those weeks, so I will leave the prior WIR table in place and Jock or somebody else might comment.
Bond & Interest Rate Review
The US Bond market dropped more than chump change this week.
US Treasury bond yields gained +11, +13, +15, and +11 bp to 4.94 pct, 4.78 pct, 4.71 pct and 4.80 pct respectively on the 30-year, 10-year, 5-year and 2-year instruments.
A week ago I reported, “The spread between the 2-year and 3-month Treasuries narrowed from -19 bp to flat in three weeks as the T-Bill yield dropped -4 bp this week to 4.69 this week, and the yield on the two-year bumped +4 bp.” This week, the spread went positive by +28 bp as T-Bill yields dropped -3 bp as traders went to cash, and increased +11 bp on the T-Bonds as traders fled that market, fearing inflation numbers on the way. Actually, I think they smell speculation (‘animal spirits’) in the air, and a Fed that might not cool its jets, but actually have to raise rates to put out fires.
The TLT lost -4.62 pct W/W to close at 86.93 from last week’s 88.19. That is a massacre for bond investors – and a reason I have continued to warn you not to be holding but to be folding, if you didn’t a long time ago.
TLT was at almost 92 at year-end 2006, so long bond investors (ie, those who hold to maturity) have taken a serious beating this past few months. Some hedgies must be in tough!
Interest rates and bond yields.
Interactive Daily data charts:
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 3 Month | 4.66 | 4.64 | 4.69 | 4.75 |
| 6 Month | 4.74 | 4.68 | 4.67 | 4.80 |
| 2 Year | 4.80 | 4.76 | 4.69 | 4.61 |
| 3 Year | 4.72 | 4.68 | 4.60 | 4.54 |
| 5 Year | 4.71 | 4.66 | 4.56 | 4.54 |
| 10 Year | 4.78 | 4.73 | 4.65 | 4.63 |
| 30 Year | 4.94 | 4.89 | 4.83 | 4.80 |
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 2yr AA | 3.62 | 3.63 | 3.64 | 3.58 |
| 2yr AAA | 3.56 | 3.55 | 3.55 | 3.61 |
| 2yr A | 3.64 | 3.61 | 3.63 | 3.72 |
| 5yr AAA | 3.62 | 3.61 | 3.58 | 3.59 |
| 5yr AA | 3.63 | 3.60 | 3.55 | 3.65 |
| 5yr A | 3.71 | 3.72 | 3.69 | 3.72 |
| 10yr AAA | 3.75 | 3.73 | 3.70 | 3.80 |
| 10yr AA | 3.72 | 3.71 | 3.67 | 3.79 |
| 10yr A | 4.03 | 4.00 | 3.97 | 4.08 |
| 20yr AAA | 4.32 | 4.30 | 4.31 | 4.17 |
| 20yr AA | 4.22 | 4.19 | 4.49 | 4.43 |
| 20yr A | 4.53 | 4.52 | 4.27 | 4.18 |
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 2yr AA | 5.15 | 5.12 | 5.05 | 4.99 |
| 2yr A | 5.25 | 5.20 | 5.13 | 5.05 |
| 5yr AAA | 5.20 | 5.15 | 5.07 | 5.05 |
| 5yr AA | 5.27 | 5.22 | 5.14 | 5.12 |
| 5yr A | 5.33 | 5.28 | 5.17 | 5.14 |
| 10yr AAA | 5.55 | 5.55 | 5.44 | 5.38 |
| 10yr AA | 5.54 | 5.49 | 5.41 | 5.37 |
| 10yr A | 5.62 | 5.58 | 5.53 | 5.51 |
| 20yr AAA | 5.93 | 5.88 | 5.85 | 5.77 |
| 20yr AA | 5.87 | 5.82 | 5.76 | 5.75 |
| 20yr A | 6.07 | 6.02 | 5.99 | 5.91 |
Interactive Chart of Interest rates and bond yields.
This week, Countrywide Financial (CFC +0.4 pct W/W), Freddie Mac (FRE +1.30 pct) and Fannie Mae (FNM +0.94 pct) were up. Don’t ask me why.
US Bond Funds -- Interactive Monthly Data Charts
SHY Monthly data series chart:
IEF Monthly data series chart:
TLT Monthly data series chart:
AGG Monthly data series chart:
LQD Monthly data series chart:
TIP Monthly data series chart:
US Bond Funds -- Interactive Weekly Data Charts
SHY Weekly data series chart:
IEF Weekly data series chart:
TLT Weekly data series chart:
AGG Weekly data series chart:
LQD Weekly data series chart:
TIP Weekly data series chart:
US Bond Funds -- Interactive Daily Data Charts
SHY Daily data series chart:
IEF Daily data series chart:
TLT Daily data series chart:
AGG Daily data series chart:
LQD Daily data series chart:
TIP Daily data series chart:
Table 11: Interest-sensitive securities
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
I put a link on the side bar to www.thehousingbubbleblog.com, “which offers insights as to what is happening across America with respect to housing and mortgages. I say this cancer will spread for several years, not resolve itself in a few weeks. The big losers here are the bondholders who bought this securitized bundle of Liar Loans.”
Consumer Finance -USA -- Interactive Weekly Data Charts
Consumer Finance -USA -- Interactive Daily Data Charts
Commodities Review
The Commodities Index ($CRB) looks Good to Go.
$CRB gained +2.04 (+0.66 pct) to close at 313.17. $CRB is now above the 50-day MA (311.52) and 200-day MA (310.85) lines, so that’s where the technical support lies.
These down-sloping trend lines are technical resistance, and it appears on the chart that $CRB respects the support (during the Bull phase) and the resistance (for the Bear phase) points.
The $CRB trend lines appear to be reversing course, with the 50-Day MA crossing up through the 200-Day MA. That’s good for the Commodity Bulls who have been hoping for higher commodity prices and some renewed $USD weakness.
A higher $USD this week pushed down against the $CRB, but the rally in Crude Oil pushed up. So there was a stand-off. I believe that the metals and PM’s are now ready to move higher as well and that the $CRB will turn very bullish for the Summer. Unfortunately, at this juncture, the $USD is not co-operating, which I think is a function of foreign wealth being invested in US stocks, hoping to participate in the ‘melt-up’.
You know the flip-side of that tune. But in this case, I think the US market will begin to side-track and capital will flow back to Asia-Pacific, Canada, Brazil, and Russian markets, in particular, and to the miners and oils of Europe. For the balance of this ‘melt-up’ phase, I foresee a weaker $USD.
I’m also thinking, like I wrote here a week ago, “ that $WTIC will continue to lift because of Summer driving season, hurricane season, and a metals and precious metals rally to come because of buying from increasingly wealthy people in BRIC markets. But mostly, I think it will be a melt-up and blow-off rally before the US and European economies starts to slide, which would knock commodities down again.”
Yes, trading prices does get very interesting at times.
Interactive Chart of Weekly CRB Commodities Index:
Interactive Chart of Daily CRB Commodities Index:
Oil:
This week $WTIC rallied some more +1.86/bbl (+2.90 pct W/W) to close at 65.98.
That’s over +4.00/bbl and the People are getting restless. But, I note one story after another on Financial Entertainment TV that says it’s no big deal for Americans to go from $3 to $4 gas. Pardon me, but what world are these people living in?
The $WTIC 50-Day Moving Average (from StockCharts) is now 63.32 and the 200-Day MA is 62.31. Hence the current price (65.98) is a snorting bull. Two weeks ago it had been bearish. It is now above the 55-65 range. Are we ready to go 65-75? I don’t know.
Interactive Chart of Weekly Crude Oil:
Interactive Chart of Daily Crude Oil:
The e-miNY June-07 Crude Oil contracts were very weak all week.
Gold:
$GOLD was hammered down again -10.30 (-1.53 pct) to 662.00. It seems to have found a friend in the 200-day MA though.
For $GOLD, the 50-day MA is now at 673.37 and the more important 200-day MA is at 638.01. So while a plunging $GOLD dropped through the 50-day MA, which is a bearish sign, there is hope yet.
June Gold on NYMEX had a recovery at the end of the week.
Interactive Chart of Weekly Gold EOD Continuous Contract Index:
Interactive Chart of Daily Gold EOD Continuous Contract Index:
Interactive chart of recent trading for the Gold Bullion index.
On Wednesday morning, Colin Twiggs last gave us his analysis of the Spot Gold market”. A few trades subsequently dropped below the bottom channel, but then the price held at about $660.
Interestingly, as Gold has been pushed down (as I say by interventionist forces – like the Central Bank of Spain as an example), the Crude Oil price moved up to 65.
I think Colin is still right, however. Gold did not collapse, and is now likely to move back toward the middle or upper end of the channel. At some point, I believe, these central bankers will no longer be able to hold the gold price at these levels.
$SILVER dropped -0.30 (-2.27 pct) to close down at 13.00. That’s a loss of 0.55 in two weeks. Ouch,
The 50-day MA is 13.48 and the 200-day MA at 12.88, so the current price at 13.00 is only technically Bullish for the long-term.
Two weeks ago, I stated here, “I am waiting for a break-out to the upside. As I opined in the past two weeks, I think the short-term cycle for silver has pulled back to a buying range. If you look at the Weekly chart from www.StockCharts.com, the cycle lows and highs have been climbing the herd, which is what Bulls do. $9.48 low > $13.28 high > $10.46 low > $14.37 high > $12.10 low > $14.89 high > $12.49 low > moving toward the high (above $14.89 to keep those ‘animal spirits’ vigorous. Luskin, in his most vivid dreams, would like to see a drop below $12.49 here. Luskin, btw, is the media personality I called a clown after he made a flat-out call on Oct 3, 2005 that gold was dead, and the $USD would become king, which means silver would get smashed. So check the Weekly charts for Oct 3 2005. Amaranth’s Brian Hunter could have used this guy to trade against. Check the $PALLADIUM. Check any of them.”
Yes, I believe the mid-week turn represented the termination of the bear phase for PM’s.
Spot silver chart for the week
Interactive Chart of Weekly Silver EOD Continuous Contract Index:
Interactive Chart of Daily Silver EOD Continuous Contract Index:
Interactive chart of the Silver Bullion index.
This week, $PLAT lost the prior week’s gain, dropping -15.00 (-1.12 pct) to close at 1327.70. The 50-day MA is 1282.53 and the 200-day MA is 1200.77.
Spot platinum chart for the week
Interactive Chart of Weekly Platinum EOD Continuous Contract Index:
Interactive Chart of Daily Platinum EOD Continuous Contract Index:
Interactive chart of the Platinum metal index.
$PALL has been bullish since early October (290.88).
This week, $PALL dropped -2.92 (-0.79 pct) to close at 368.16. The 50-day MA is 366.93 and the 200-day MA is 341.67.
Spot palladium chart for the week
Interactive Chart of Weekly Palladium EOD Continuous Contract Index:
Interactive Chart of Daily Palladium EOD Continuous Contract Index:
Interactive chart of the Palladium metal index.
This week $COPPER plunged -28.05 (-7.78 pct W/W), following a drop of -4.11 pct a week ago, to close at 332.35.
The 50-day MA is 337.03 and the 200-day MA is 317.34, so there is some technical support at this level. But that quite a Sell button somebody owns.
Yes, “I hear China doesn’t need more copper. (NOT!)”
Interactive Chart of Weekly Copper EOD Continuous Contract Index:
Interactive Chart of Daily Copper EOD Continuous Contract Index:
Interactive chart of the Copper metal index.
Table 12: Senior gold equities
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
This week $XAU lost -3.01 (-2.15 pct) to close at 136.75. The 50-day MA (139.29) and 200-day MA (138.05) are now above the current price, which is bearish any way you look at it.
But I am not you.
Ahh yes, I still await the Summer Rally. I mistakenly thought I saw it starting a week ago Friday when $XAU gained +1.56 pct. But then came Tuesday, and another smash on Wednesday.
But miners are hard rock people, you now. No weak-willed c.banker is going to convince them their $USD are more valuable.
The problem here is that ETF’s make a wonderful opportunity to smash a market down, just as when the tide turns, the same ETF’s can be used to juice the market. But, c.bankers, or is the term “monetary authorities”, have deep pockets.
To watch the moves in precious metal miners, you will have to monitor the individual stock charts, preferably in real-time, as follows:
NEM ABX AU GFI GG HMY AUY KGC BVN
Interactive Daily data
Interactive Weekly data
MDG LIHRY AEM BGO IAG EGO RGLD GOLD CDE GRS
Interactive Daily data
Interactive Weekly data
CBJ SSRI SIL NG KRY UXG GRZ TSE_HRG TSE_GUY TSE_AGI
Interactive Daily data
Interactive Weekly data
NXG GSS MNG DROOY MFN RNO RANGY MRB CLG
Interactive Daily data
Interactive Weekly data
Here are the key Silver miners and the SLV ETF:
SLV SIL CDE HL PAAS SSRI SLW MGN
Interactive Daily data
Interactive Weekly data
Here are the Weekly and Daily Data charts of the indexes:
Interactive Chart of Weekly U.S. Goldminers Index:
Interactive Chart of Daily U.S. Goldminers Index:
The U.S. goldminer share trust ETF trades under the ticker symbol GDX.
Here are the U.S. Goldminer ETF (GDX) index Weekly and Daily data charts:
GDX Weekly data:
GDX Daily data:
The Toronto Exchange-listed goldminer iUnits S&P/TSX Capped Gold Index ETF trades under the ticker symbol TSE:XGD.
Here are the Weekly and Daily data charts for the TSX Goldshares (XGD) index:
Interactive Chart of XGD Weekly data:
Interactive Chart of XGD Daily data:
Forex Review
The $USD closed at 82.17, a gain of +0.06 pct W/W, aka a wooden nickel, despite a huge move up in Crude Oil this week.
The $USD 50-Day MA is now 82.47, and the 200-Day MA is 84.29, so the current price (82.17) is technically still quite bearish, but less so after three weeks of gains with all these c.banker threats and announcements.
Here is the chart of the end of the week trading:
The following data requires your attention: M3 update as of the past week.
M3 continues to grow at an excessive rate.
The M2 Money supply is growing at an astounding 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).
Interactive Chart of Weekly U.S. Dollar Index:
Interactive Chart of Daily U.S. U.S. Dollar Index:
The Euro (priced in USD) had a losing week, going down -0.13 pct W/W, closing Friday at 135.09. On Friday there was a gain of +0.09 pct.
The $XEU 50-Day MA is 134.53, and the 200-Day MA is 130.43, so the current price (135.09) is technically bullish.
Interactive Chart of Weekly Euro Dollar Index, priced in USD:
Interactive Chart of Daily Euro Dollar Index, priced in USD:
The British Pound lost -0.31 pct W/W to close at 197.50.
The $XBP 50-Day MA is 197.61, and the 200-Day MA is 193.43, so the current price (197.50) is barely bullish.
Weekly British Pound Index:
Daily British Pound Index:
The Japanese Yen $XJY lost -0.85 pct, closing at 82.55. That is a lot, and underlines my concern for the Japanese equity market.
The 50-Day MA is 84.13, and the 200-Day MA is 84.56, so the current price (82.55) is extremely bearish, and in need of help. Is the exporting industry there that bad off?
I continue to say, “this is a function, I think, of the Japanese Administration and central bank trying to help domestic exporters (but) I also think that it could be that the carry trade will be coming to a close soon as the BoJ may start to raise rates. Something to consider as the end of the carry trade will mean a big negative for global stock prices, I think.”
Maybe the Carry Trade unwinding process doesn’t start until 3Q.
Weekly Japanese Yen Index:
Daily Japanese Yen Index:
Weekly Canadian Dollar Index:
Daily Canadian Dollar Index:
The Canadian Dollar $CDW had a monster week, gaining +1.94 (+2.16 pct) close at 91.84.
The $CDW 50-Day MA is 88.08, and the 200-Day MA is 87.63, so the current price (91.84) is technically so bullish you could call it a “hot” Dollar.
That Cdn Heat should be left or the Senators of Ottawa, however, because Cdn tourism this summer is going to be hurt.
International Equities Review
Here’s how the week closed for the Asia-Pacific markets.
Here’s how the week closed for the bourses of Europe.
Two weeks ago, Colin Twiggs offered wise advice: “Don’t get caught up in the euphoria.” But as the market continues to lift, he seems to be shifting gears. If so, I’m with him.
There seems to be too much liquidity and not enough reality awash these days.
I still think that Japan’s Nikkei Dow will be the first to go south. The obvious trendline support is near 17300.
Asia-Pacific indices (Interactive link)
European indices (Interactive link)
Table 13: International equities perspective
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
Japanese equity market ETF: EWJ
Japan’s EWJ (which is a USD-denominated NYSE-traded ETF) lost -1.99 pct W/W to close at 14.25.
The Nikkei 225 closed at 17,399.6, down over the week from 17,553.7. As Colin Twiggs says, the lower channel line is being tested, and close to breaking. If that happens, he opines the first level of support would be ~16600.
If you look at a three year chart of the EWJ (not the Nikkei 225), you will understand, maybe, why I said the great Bear market started on May 10, 2006. It did in Japan – the locals just don’t know it yet because they have been trashing the Yen to help their exporters. That trashing cannot continue for long. As soon as the China Yuan is allowed to move higher, which is what the PBOC is saying this week, then the $USD sinks lower and there is no way the Yen can continue to drop that fast.
It was mid-May 2006 when I think the call was made to Hank Paulson to help stave a Bear market. So, it was in NYC that Paulson left his chair at Goldman Sachs to run a band-aid package into the Treasury Secretary’s office, which after he took on the mantle he used to kick off an extremely high-risk market phase extension in NY.
I continue to believe that Japan will lead global equities south
Here is the Japanese (EWJ) equity market ETF Monthly, Weekly and Daily data charts:
U.K. equity market ETF: EWU
The EWU (UK market ETF trading in the US in USD) gained +1.15 pct due to a Friday move of +1.03 pct. The previous week, EWU dropped -1.06 pct W/W.
EWU now stands at 25.49. Like other markets, I noticed that the FTSE has lost volume this year. Oh, oh.
On the week, the FTSE 100 moved from 6565.7 to close at 6640.9.
There are certain politico’s there who must be happy that PM Blair is possibly heading off to take Wolfie’s old job. Somehow, I don’t think he’ll put his wife on the payroll at the World Bank if he does take that job.
Here is the United Kingdom (EWU) equity market ETF Monthly, Weekly and Daily data charts:
EWU Daily data:
Canadian equity market ETF: EWC
EWC (priced in USD) had yet another sharp gain (+2.98 pct on the week) to close at 29.69. That’s a gain of over +13.0 pct in just 34 trading sessions. As I say, the Beaver never had it so good.
The TSX Composite closed Friday at 14,105.3.
Btw, the Saturday Report On Business of the Globe & Mail is doing a splendid job of reportage.
They did miss Stelco, but overall, this is one fine financial newspaper.
Here is the Canadian (EWC) equity market ETF Monthly, Weekly and Daily data charts:
U.S. Equities Review
The M&A game being played between Bankers and Gnomes is really quite stunning. Apparently there is no size corporation that couldn’t be taken out. The price is never right, but nobody seems to question it.
On the week, the Nasdaq Composite and Russell 2000 small cap indexes again dropped, while the S&P 500 and DJIA were strong. That is the large cap M&A game at work, mostly.
The NASDAQ and Russell Small Cap indexes dropped -0.15 pct and -0.71 pct respectively, while the S&P 500 (+1.12 pct) and the high-optic Dow 30 (+1.73) were soaring.
When you look at Table 14 (below) you’ll see what’s really going on.
I’m still nervous for the Average Joe. Once the US stock market starts to roll over, there will be some serious losses taken, which means you have to watch the individual sectors and your own basket of stocks very carefully.
Here is the Monthly data chart of the Interactive Chart of Nasdaq Composite, S&P 500, Dow30, and Russell 2000 (small cap) indexes.
Here is the Weekly data chart of the Interactive Chart of Nasdaq Composite, S&P 500, Dow30, and Russell 2000 (small cap) indexes.
Here is the Daily data chart of the Interactive Chart of Nasdaq Composite, S&P 500, Dow30, and Russell 2000 (small cap) indexes.
Table 14: Dow 30 List
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
You can do this table yourself by entering the following string into the Summaries window at www.billcara2.com and then clicking on the link for Performance.
AA AIG AXP BA C CAT DD DIS GE GM HD HON HPQ IBM INTC JNJ JPM KO MCD MMM MO MRK MSFT PFE PG T UTX VZ WMT XOM
Here are the links to interactive Dow charts from Billcara2.com that I broke into groups of ten, which you can add technical indicators for as well. (list one) (list two) (list three)
Dow 30 comments:
The free research reports from Value Line this week are on (Cara Global 100) Disney (DIS) and Cara US 100 3M (MMM).
Disney
(DIS: Value Line Report May 18: next one is due Aug. 17)
3M
(MMM: Value Line Report May 18: next one is due Aug. 17)
Alcoa [GICS 15, Dow 30]
(AA: Yahoo Finance file)
(AA: StockChart chart)
(AA: ADVFN Financial Data)
(AA: Value Line Report Apr. 20: next one is due Jul. 20)
Altria Group Inc [GICS 30, Dow 30]
(MO: Yahoo Finance file)
(MO: StockChart chart)
(MO: ADVFN Financial Data)
(MO: Value Line Report May. 4: next one is due Aug. 3)
American International Group [GICS 40, Dow 30]
(AIG: Yahoo Finance file)
(AIG: StockChart chart)
(AIG: ADVFN Financial Data)
(AIG: Value Line Report Feb. 23: next one is due May 25)
American Express [GICS 40, Dow 30]
(AXP: Yahoo Finance file)
(AXP: StockChart chart)
(AXP: ADVFN Financial Data)(AXP: Value Line Report Feb. 23: next one is due May 25)
AT&T [GICS 50, Dow 30]
(T: Yahoo Finance file)
(T: StockChart chart)
(T: ADVFN Financial Data)
(T: Value Line Report Mar. 30: next one is due Jun. 29)
Boeing Co [GICS 20, Dow 30. Cara Global 100]
(BA: Yahoo Finance file)
(BA: StockChart chart)
(BA: ADVFN Financial Data)(BA: Value Line Report Mar. 23: next one is due Jun. 22)
Caterpillar [GICS 20, Dow 30]
(CAT: Yahoo Finance file)
(CAT: StockChart chart)
(CAT: ADVFN Financial Data)(CAT: Value Line Report Jan. 26: next one is due Apr. 27)
Citigroup [GICS 40, Dow 30, Cara Global 100]
(C: Yahoo Finance file)
(C: StockChart chart)
(C: ADVFN Financial Data)(C: Value Line Report Feb. 23: next one is due May 25)
Coca Cola [GICS 30, Dow 30]
(KO: Yahoo Finance file)
(KO: StockChart chart)
(KO: ADVFN Financial Data)
(KO: Value Line Report May. 4: next one is due Aug. 3)
Disney [GICS 25, Dow 30, Cara Global 100]
(DIS: Yahoo Finance file)
(DIS: StockChart chart)
(DIS: ADVFN Financial Data)(DIS: Value Line Report May 18: next one is due Aug. 17)
Dupont [GICS 15, Dow 30]
(DD: Yahoo Finance file)
(DD: StockChart chart)
(DD: ADVFN Financial Data)(DD: Value Line Report Apr. 20: next one is due Jul. 20)
ExxonMobil [GICS 10, Dow 30, Cara Global 100]
(XOM: Yahoo Finance file)
(XOM: StockChart chart)
(XOM: ADVFN Financial Data)
(XOM: Value Line Report Mar. 16: next one is due Jun. 15)
General Electric [GICS 20, Dow 30, Cara Global 100]
(GE: Yahoo Finance file)
(GE: StockChart chart)
(GE: ADVFN Financial Data)(GE: Value Line Report Apr. 13: next one is due Jul. 13)
General Motors [GICS 25, Dow 30]
(GM: Yahoo Finance file)
(GM: StockChart chart)
(GM: ADVFN Financial Data)(GM: Value Line Report Mar. 2: next one is due Jun. 1)
Hewlett-Packard [GICS 45, Dow 30]
(HPQ: Yahoo Finance file)
(HPQ: StockChart chart)
(HPQ: ADVFN Financial Data)(HPQ: Value Line Report Apr. 13: next one is due Jul. 13)
Home Depot [GICS 25, Dow 30]
(HD: Yahoo Finance file)
(HD: StockChart chart)
(HD: ADVFN Financial Data)(HD: Value Line Report Apr. 6: next one is due Jul. 6)
Honeywell [GICS 20, Dow 30]
(HON: Yahoo Finance file)
(HON: StockChart chart)
(HON: ADVFN Financial Data)(HON: Value Line Report Jan. 26: next one is due Apr. 27)
IBM [GICS 45, Dow 30]
(IBM: Yahoo Finance file)
(IBM: StockChart chart)
(IBM: ADVFN Financial Data)(IBM: Value Line Report Apr. 13: next one is due Jul. 13)
Intel [GICS 45, Dow 30, Cara Global 100]
(INTC: Yahoo Finance file)
(INTC: StockChart chart)
(INTC: ADVFN Financial Data)
(INTC: Value Line Report Apr. 13: next one is due Jul. 13)
Johnson & Johnson [GICS 35, Dow 30, Cara Global 100]
(JNJ: Yahoo Finance file)
(JNJ: StockChart chart)
(JNJ: ADVFN Financial Data)
(JNJ: Value Line Report Mar. 2: next one is due Jun. 1)
JP Morgan [GICS 40, Dow 30]
(JPM: Yahoo Finance file)
(JPM: StockChart chart)
(JPM: ADVFN Financial Data)
(JPM: Value Line Report Feb. 23: next one is due May 25)
McDonalds [GICS 30, Dow 30]
(MCD: Yahoo Finance file)
(MCD: StockChart chart)
(MCD: ADVFN Financial Data)
(MCD: Value Line Report Mar. 9: next one is due Jun. 8)
3M Company [GICS 20, Dow 30, Cara US 100 June 25-06]
(MMM: Yahoo Finance file)
(MMM: StockChart chart)
(MMM: ADVFN Financial Data)
(MMM: Value Line Report May 18: next one is due Aug. 17)
Merck [GICS 35, Dow 30]
(MRK: Yahoo Finance file)
(MRK: StockChart chart)
(MRK: ADVFN Financial Data)
(MRK: Value Line Report Apr. 20: next one is due Jul. 20)
Microsoft [GICS 45, Dow 30]
(MSFT: Yahoo Finance file)
(MSFT: StockChart chart)
(MSFT: ADVFN Financial Data)
(MSFT: Value Line Report Feb. 23: next one is due May 25)
Pfizer [GICS 35, Dow 30]
(PFE: Yahoo Finance file)
(PFE: StockChart chart)
(PFE: ADVFN Financial Data)
(PFE: Value Line Report Apr. 20: next one is due Jul. 20)
Procter & Gamble Co. [GICS 30, Dow 30, Cara Global 100]
(PG: Yahoo Finance file)
(PG: StockChart chart)
(PG: Billcara2 chart)
(PG: ADVFN Financial Data)
(PG: Value Line Report Apr. 6: next one is due Jul. 6)
United Technologies [GICS 20, Dow 30, Cara Global 100]
(UTX: Yahoo Finance file)
(UTX: StockChart chart)
(UTX: ADVFN Financial Data)
(UTX: Value Line Report Jan. 26: next one is due Apr. 27)
Verizon [GICS 50, Dow 30]
(VZ: Yahoo Finance file)
(VZ: StockChart chart)
(VZ: ADVFN Financial Data)
(VZ: Value Line Report Mar. 30: next one is due Jun. 29)
Wal-Mart [GICS 30, Dow 30, Cara Global 100]
(WMT: Yahoo Finance file)
(WMT: StockChart chart)
(WMT: ADVFN Financial Data)
(WMT: Value Line Report May 11: next one is due Aug 10)
Wrap up:
I had hoped, starting this week, to publish the WIR at 12:00pm ET (noon) on Sunday’s. I didn’t tell you that’s 12 Canadian (sometime after 1pm). Hopefully next week, for their long week-end, I can get in tune with the US.
Also starting this week is Dr Elder’s Impulse System. I think it will become popular. Thanks Jock.
Btw, if there are other features you wish me to publish in the WIR, send me a note (about $1,000 would suffice – just kidding!) and I’ll give it consideration.
Have a great week. I know that wherever you are in the world, we are connected somehow. It’s a small Web.
That just made me think of “Six Degrees of Separation” between me and every person on Earth. Do you think that maybe if you told everybody you knew about my blog and they told everybody they knew, and down the line, that maybe our Community could extend to the Gnomes, and HB&C, and the G-20 VIPs?
I’d like to think, we’d have a better world.
The blog "hits" are expanding, by the way. Three of the past 11 days have exceeded 300,000. On May 14th, you "hit" me 360,153 times. On the 16th, it was 341,775 times.
I'm getting knocked silly. But it's kinda fun.
And very busy too with so many projects on the run. Survey Saturday will have to wait for a week to get kicked off.
Posted by Posted by Bill Cara on May 20, 2007 01:03:55 PM | Category: Cara Week in Review
Discourse
Bill asks what might spark a market meltdown? -
FT columnist Gillian Tett in the last 2 days wrote:
1. CDO's (collateralized debt obligations) offer returns above fixed income instruments. The math only works with credit spreads from 250-275 basis points. Demand for debt assets has gotten so strong, that typical spreads are now 225 BP. Activity could suddenly collapse, "producing a shock for debt prices, which could be the tipping point for credit markets that are already overstretched."
2. Anthony Bolton, a top UK fund manager, noted "cov-lite" loans to private equity (with covenants getting more lax by the day) as bankers compete to get into LBO's. In the deal, they reap huge bonuses. Walking away from a bad deal doesn't pay!
3. 10 yrs. ago, banks assumed the risk on their loans. Now, they slice, dice, and sell off their risk. Nobel-prize winner Robert Merton recently told Tett that an advanced braking system for a car can reduce road accidents - but not if drivers react by speeding up.
Bill,
Excellent review this week....this is my first posted comment on your site. Thanks for sharing all the information with your readers. Your site is outstanding
You spoke of development of IPU's (Internet Public Utilities) Here's part of a recent report from John Maudlin. He is involved with a company called MeshLinx that is installing a private system which will blanket Richardson TX and provide all with a high speed connection. Here's part of the report:
by John Maudlin
In late 2005, my publisher for this letter, Mike Casson, called me to introduce me to a reader he had met and who had asked to meet with me. Mike said he thought Jack Harrod and I would hit it off. We met for a one hour lunch and three hours later finished. As it turns, out, we had a lot of interests in common. Our Dallas Mavericks tickets were only ten feet apart. Jack is a former executive vice-president for Texas Instruments and ran a major part of their defense business before it was sold. He then led the development and took to production their Digital Light Processor business from scratch before retiring. He has since spent his time on various technology companies, often as an angel investor. As readers know, I am fascinated by new technologies, and enjoyed hearing from a real insider what was transpiring in his world.
At one of our lunches, he asked me where I lived and I said Colleyville, which is a small suburb in the Dallas area. He then said he was investing in a company that had developed a new wireless "mesh" network technology that was being deployed in operational form for Colleyville's First Responders (police, firemen, ambulance, etc). Long and short, I spent a great deal of time looking at the company, and decided to invest alongside. It was (and is) quite risky, as the radically new technology was just being deployed for the first time in a real operational environmental. It had yet to be brought on line and turned over to the city to operate.
Now, over a year later, the firm has developed and deployed yet a third generation mesh network leaping far over the technology in the market today or what they had even one year ago. It has been retrofitted into the Colleyville site and is operating as expected with vastly superior performance over potential competing systems. And this week, we received a contract to install an expanded version of this high speed, wireless broadband system in Richardson, Texas. This system will be the first of its kind anywhere. This, gentle reader, is not your father's Oldsmobile.
Caveat: I am now on the board of directors for the private firm which is called MeshLinx and a minority shareholder. So my view point does have a bias. That being said, while we think we have a several year lead on the technology I will describe in a minute, it is highly likely that competitors will have similar systems within a few years. We can see a pathway to significant improvements to stay in the lead for a period of time and have no doubt our competitors will over time move in our direction as well.
So, while I hope that the growing little company I have invested in is able to keep a lead and get some healthy percentage of what will be a monster market, from a consumer standpoint it makes little difference which of several companies (and there will clearly be more than one) will succeed. Within a few years, the world is going to be much flatter than we can imagine.
So, let's cut to the chase. What is MeshLinx going to do in Richardson? (A little background. Richardson is a city of 100,000 people covering 27 square miles, with a mix of high rise offices and commercial businesses as well as homes and apartments. It was recently named as the third most technologically advanced city of its size in the US. The University of Texas at Dallas is in the city, where one of the most important nanotechnology research centers in the country resides. It is home to some of the country's leading technology firms. It is known for its "telecom corridor" because many of the manufacturers of telecommunications equipment have their US headquarters in Richardson. In short, this is a forward looking city with a number of engineers and tech savvy people on its city council, and a mayor who "gets it.")
Within 10 months, Richardson will have the most advanced wireless broadband system in the world, what we think of as a third generation mesh system. Over this time, the company will be installing approximately 700 basketball-sized access points (APs) throughout the city on light poles, buildings and other infrastructure. This will lay a very dense high speed wireless broadband blanket over the entire city. Each access point has six radios in it. For the technically minded, this is a single silicon tunable chip, radio mesh network digitally interfacing with every network layer and able to automatically adjust in real time.
This is the first of its kind in the world. I smile when I think that one of our major competitors produced a white paper about a year ago detailing why such a multi-radio system could not work, even as we deployed our initial three radio system, which has been successfully working (through Texas summers, winters and tornadoes) for over a year. We will look at more about the technology of the system in a minute but let's look at what it can do.
First and foremost, it delivers bandwidth on the public wi-fi spectrum to the end user, the so-called last mile, at a speed unrivalled by its wire bound brethren. And at the end of the day, that is what consumers really want: high speed bandwidth. They really are agnostic as to how they get it. Just serve it up, as fast as you can and easy to use. Oh, and can you please make it cheap?
Every citizen in the City of Richardson will be able to access 756 Kbps of internet connectivity for free, from anywhere in the city. They will be able to access the internet from their homes, schools, restaurants and parks using standard wi-fi connections which are now installed on almost every notebook computer. That is almost as fast as many so-called high speed broadband connections that one pays dearly for today, and several times faster than the various hotspots at your local coffee shops. And I should note that the tax-payers of the City of Richardson are not paying one penny for this, and in fact are going to see additional revenues as a benefit.
But once the infrastructure is built, it can do so much more. For those who want higher speeds, they will be able to buy up to 20 megabits of bandwidth (upload and download) for quite modest expense when compared to what they are paying today. That is up to 10 times or more faster than what we currently think of as "high speed broadband." Faster than your T-1, DSL, cable or cellular 3G. You will pay less and get more.
Full article at: http://ce.frontlinethoughts.com/CT00066501MTk5NDcw.html
Posted by: astral25 ![[TypeKey Profile Page]](http://www.billcara.com/nav-commenters.gif)
at
May 20, 2007 4:26 PM [link]
ALOHA !!
Well, let me think here ... Whats the fastest way a Wall Street bank can gets its hands on gold and silver without having to mine it and without having to pay for it? HEY ... I got it ... start an ETF !!! YEAH-H-H-H !!! Use "OPM"(other peoples money)and trade OPG(other peoples gold)! What a deal ... You send them your hard earned cash and they give you an electronic "receipt" that says you own gold, but you can never see it, touch it, count it, smell it or "own"it! THEY OWN IT!
Take a look at what they did with "YOUR GOLD" over the last couple months. I'll give you a hint ... THEY SOLD OFF YOUR GOLD!
Based on stats issued by GLD over the last month the ETF has been either selling gold or not buying on POG up days and selling gold heavily on POG down days.
For instance on April 19 the POG was at $681USD and then the next day the POG went up to $691USD but GLD sold nearly 6 tons of gold during that same 24hr time period. How is that tracking the price of gold(POG)?
Another time on April 26 the POG was at $673USD then the next day gold went up to $677USD, yet GLD total tons did not change at all it stayed at 493tons. What a wonderful "tracking" mechanism ...
Another time on May 1 the POG went from $673USD down to $669USD, down $4, while GLD sold off 8 tons of gold. GLD seems to mostly "track" on POG down days! Is that a coincidence?
Then from May 3 to May 7 the POG went up from $674USD to $688USD yet GLD tonnage went from 485.93 down to 485.78 ... selling .15 tons! WOW ... I really feel safe with my hard earned cash in GLD!
On May 15 the POG went down less than $1USD($0.50USD, to be exact)yet GLD sold off 8tons of gold. Seems a bit extravagant and out of line with a $0.50USD POG down day. Are they helping investors or the FED and the PPT?
From May 9 to May 18 GLD sold off a total of 16.63 tons of gold, contributing to a $26USD drop in the price of gold. Which is perfectly timed along with the final sales of gold by Banco Espana. Also GLD was "selling" gold on days when the US Dollar was tanking, From April 1 to May 1 the USDX went from 83 down to 81.29 and GLD only added (bought)9 tons of gold, Yet when the USDX recovered from May 2 to todays close of 82.11 GLD sold 24 tons. From April 18 to May 18 GLD sold 31.57 tons of gold. Do you think that helped out Goldman and the US Dollar?
In other words those who invested in GLD as a hedge against a devaluing US Dollar are being used to control the price of gold to benefit Goldman Suchs and the FED and the US Treasury. As I have said many, many times if you buy into these ETFs like GLD and SLV the powers that be will use your funds to trade against you. You get no security as you actually possess no "real" gold or silver, but only "paper". Streettracks Gold the sponsor of GLD says that their ETF "tracks" the price of gold ... well based on their own info they do no such thing, at least sincee April 1st ... what a coincidence that was also April Fools Day! GLD sold off near 7% of gold assets yet the share price only fell 0.25% from April 2 to May 18th. If you want to buy back the gold you sold off its better to keep the "ask" as high as possible to get more bang for your "fiat buck"!
To put an end to this scam I suggest all GLD and SLV investors sell and take the proceeds to buy "real" physical gold bullion coins or bars. Once coins and bars are in your control they are out of the control of the FED which leaves them that much less ammo to perpetuate their program of "wealth confiscation"! Dump your paper IOUs before they dump you ... Investing in GLD and SLV means the banks owns the gold and you own paper. You'll find out how worthless your investment is in the event Streettracks is ever found insolvent and your gold ends up as part of the banks "general assets" that goes to its creditors to settle their bankruptcy. Only paper can file bankruptcy ... actual GOLD has never filed bankruptcy in over 6,000 years of human history!
Link to GLD info: http://streettracksgoldshares.com/us/value/gb_value_usa.php#2
Posted by: kaimu at
May 20, 2007 6:56 PM [link]
Kuwait on Sunday removed its currency peg to the US dollar
more to follow ?
Posted by: moon at
May 20, 2007 7:43 PM [link]
Re etf shorts...looking for a global short vehicle
I see cap shorts and industry shorts, but are there any global shorts? If not, and I think not, does anyone know of any alternatives to etfs for gaining access to a global short position? Rydex has none. Personally, limited by my ira account for directly shorting.
Posted by: jasper at
May 20, 2007 7:51 PM [link]
Greetings Professor Cara,
I have a couple of questions. I would like to preface my first question with an observation I made at the local grocery store. A very large woman was in line at the store. Her old style pager went off- "beep,beep,beep". The little boy who was in line behind her was holding his Dad's hand and looked frantically up at his Dad and said, "look out dad she is backing up, she is backing up!!!" Being the wet behind the ears freshman at the Cara School of Wealth Presevation, are you saying the fat lady will be backing up to crush us little guys sooner then later? Second question. Probably another stupid question, but what do you make of Paulsen skipping the G8 meeting in Germany? This seems odd to me.
http://www.reuters.com/article/economicNews/idUSN1117157720070511
Have a marvelous evening.
Keep a smile on your face and a song in your heart.
Posted by: jammon at
May 20, 2007 10:32 PM [link]
Dear Kaimu,
Your opinion is right on! This gold ETF scam is one that history will remember and have a big belly laugh about, unfortunately, at the expense of the trusing people who bought into this charade. The idea is nonsensical on it's face. My attitude could be summed up as "trust easily, but never believe."
Chris
Posted by: shark_attack at
May 20, 2007 10:35 PM [link]
Bill
I am surprised you think the USD will go down and that Gold will start a new "melt up" leg now...
I am in the camp that the crucial 79 line for the USD will be defended. And the only real way to do that is to raise rates... yields did have quite a week this week. And if the dollar is defended and gets some strength that would create a weakening overall market I suspect.
Can you expand on your thoughts as to why you think the dollar will drop and gold will go up as much as you are expected. Because if that is so, then I have to conclude you think the overall markets have much higher to go as well. Correct?
Much appreciated.
SoccerMatt
Posted by: SoccerMatt at
May 21, 2007 12:10 AM [link]
A few comments on precious metals and the stock market. My alternative take.......
While many commodities (e.g. corn, uranium) continue to make new highs in 2007, gold and silver have failed to lift off to the next level and have underperformed both the domestic and international equity markets as well this spring. Can this be expected to continue through the duration of the year? I am not sure....... but let me offer a few ideas:
1) I consider the continued strength of the gold and silver bull markets as dependent on a significant and furthered decline of the dollar relative to other currencies and commodities over the coming six months. If the dollar was to fall an additional 10-20%, I think that gold and silver will begin to trade more as an alternate CURRENCY as opposed to a speculative inflation hedge and could make another sizeable move upward.
2) How do we get a significant dollar decline that has been talked about for years now? I think it is tied to the Fed policy on interest rates and two fallacies linked to the eagerly expected interest rate drop by Bernanke later this year:
Fallacy #1: We want the housing market to continue to weaken because it will stabilize inflation and slow growth and give the Fed room to cut rates.
I do anticipate a Fed rate cut but I think that this argument ignores the significance of the housing market to our current economy and puts unreasonableness emphasis on other industries and businesses that supposedly will bail us out as the rate cut occurs. I think it also fails to consider the extent to which our current consumption levels in the USA have become precariously tied to asset values - mainly real estate, which up until recently could be freely borrowed against.
Fallacy #2: Once the Fed cuts rates it will be off to the races again and the stock market can hit new highs - re: 15,000, 20,000 Dow, etc.
If we look back to as recently as the years 2000 and 2001, the interest rate cuts by the Federal Reserve took two years to firmly take hold in the economy and filter through to improved stock market performance. To argue that the Fed rate cuts would instantly bolster the underlying fundamentals and encourage further speculation in the stock markets ignores the lag that fed policy takes for its effectiveness.
Many of the poor fundamentals are evident in the current economy such as the Q107 GDP number coming in around 1.3% and expected to be revised down to below 1% in the next reading. It is also quite evident that any sectors levered to the consumer or real estate are hurting. Investors and money managers have decided to ignore these fundamental developments and instead focus on large-cap earnings which are being juiced from overseas growth (much of it the result of currency gains), as well as relatively low interest rates that make it easy to borrow and continue the speculation in asset markets around the world.
Current challenges to this analysis: Money flow into worldwide stock markets including the United States must be currently favored over investment in gold and silver as the metals stagnate in value while stock market indexes ramp higher at extremely high rates of return re: 25%+ around much of the world.
Conclusion: When the interest rate cuts materialize later this year I expect the result to be a declining dollar relative to the rest of the world's currencies. If the precious metals make another significant bull move I expect it to be less the result of speculation and more an attempt to place assets in an alternate currency that has more credibility as a store of value than the Dollar or even the Euro or Yen.
I do not see the threat of further inflation or world crisis/terrorism as major drivers for the precious metals bull market going forward, although in some ways the expected Fed Rate Cuts and resulting abundance of dollars does argue for a dollar inflation / depreciation relative to commodities and other currencies around the world.
Best regards,
Soulek1
Posted by: Soulek1 at
May 21, 2007 1:41 AM [link]
This is a question for the community, most of whom are far smarter than I am...
I have been reading Bill's blog for some time and feel like I have learnt a lot. His theme, repeated in the latest WIR, that the Dow/S&P levels are unsustainable seem very sensible to me. In fact I had subscribed to this philosophy long ago and had been significantly short. Since I did not like to consider myself to be a weak hand and cover my losses early (this was not machismo, but simply my continued belief that the bear argument was more convincing), I let the losses grow - until now when I have lost over 50% of my trading capital.
Today I read a note by another market commentator (Bernie Schaeffer) who rubbed salt into my wounds by reminding me that he had sent out a note a thousand Dow points earlier saying he expected the market to go higher (and yes, I had read that note at that time).
Having been foolish enough to lose a substantial chunk of my (retirement) money, what should I do now? Cover my shorts and walk away with a 50% haircut or hold on in the expectation that the 'end' is near?
BTW, as much as I would love to get advice, this note is also to warn others how fatal it can be not to stick by elementary rules of money management.
Posted by: schrott at
May 21, 2007 1:46 AM [link]
KRY will have an interesting day. El Progreso reports with some indignation in its Monday op-ed about corruption that reliable sources say the permit will be granted after Tuesday morning.
(http://www.diarioelprogreso.com/edi-210507/html/pag06-a.htm)
Please note, Babelfish translation is entirely inadequate, and the author's grammar isn't very clear once he gets past that point. I think the paper complains that KRY isn't big enough to develop Las Cristinas and makes a demand to exclude foreigners from VZ's natural resource development, but someone with better Spanish than me will want to clarify that point.
Posted by: Skrymir at
May 21, 2007 4:01 AM [link]
For starters - a word (or should that be world) of thanks to Bill and the regular commentators on this blog for your insights. This blog has been an eye-opener to this amateur trader. Bill - looking forward to your book.
One question on how to safely hold claim to some physical gold in one's name: Is this actually what holding CEF (Central Fund of Canada) stock offers? I would think yes, but I'm not versed enough in the fine print to tell for sure.
Thanks for any and all pointers.
Posted by: Case at
May 21, 2007 5:27 AM [link]
260 Tons of gold sold in China last year,ingots and other investment products have seen the sharpest rise in sales, up 27% to 15 tons.Many Chinese distrust the banking system and prefer to keep their earnings in cash or commodities.But personal investments will be dwarfed by the sums the government is set to spend on gold. Last month,it unveiled plans to invest up to a third of its £1.1 trillion foreign exchange reserves in technology and raw materials.
Posted by: john uk at
May 21, 2007 7:49 AM [link]
I may have missed a discussion of the impact of the trend to use State Government bonds to bail out foreclosures. This seems to have ominous implications for those states that do this in a big way. If there has been some discussion of this topic, perhaps someone could direct me to it.
Thanks, BRC
See
http://www.bloomberg.com/apps/news?pid=20601109&sid=agJcJoWYtKEM&refer=exclusive
Posted by: BRC at
May 21, 2007 9:05 AM [link]
Goldcorp Inc. today announced that it has entered into a $1.5 billion credit facility with a syndicate of twelve lenders.
I wonder what they will buy with all that new credit :)
Posted by: NYUgrad at
May 21, 2007 9:30 AM [link]
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The oils sure do look overbought. Like many "good" Canadians I hold some SU, TLM, ECA and CNQ. This past week the oils saved my bacon as my golds got beat up. I actually thought that oil and gold would move up together as part of an inflation scenario. So, now it's about personal fear and greed with the oils. I think that there is more upside for the oils due to it being summer plus the possibility that any major Canadian natural resource company could get bought out. However, the oils (particularly oilsands) sure are overpriced! I think that I will bail on them mid-August if they can hold up until then.
Fred
Posted by: Fred![[TypeKey Profile Page]](http://www.billcara.com/nav-commenters.gif)
at
May 20, 2007 2:54 PM [link]