I suppose had I been watching, yesterday would not have been so entertaining anyway -- as far as the media take.

Today's Daily Report will (hopefully) come to you courtesy of Starbucks given that the Nassau Harbour Club where I am staying is in transition to a Ritz-Carlton facility (part of their Rose Island development).

Yesterday I made a attempt (90 minutes wasted) to do a report, but failed. Trust me, sitting outside in the brilliant sun at Starbucks, unable to see the screen cursor, lucky to even get Internet from them because the city water was shut off on their side of the street and they were waiting to open.

The kind staff did give me Internet access though, but hundreds of incoming mails and Skype calls jammed my system. I was trying, despite not being able to see the screen cursor, to get out the Daily Report before the laptop battery shut down.

After 17 charts, it shut me down. I asked myself, “Isn’t this fun?” I could see that the US equity market would open badly, and Europe was affected, because of Home Depot (HD) issues, according to the media.

After I received the shut-down message BATTERIES NEED CHARGING, which I could barely read while squinting at the screen, I decided, then and there, to not do charts (just leave the links) until I get proper Internet access.

Earlier today, my system shut down again because it took over 30 minutes to download mail (with huge pdf attachments), and the Starbucks system was overloaded with users here and slow as well. So you can see that even in paradise there are challenges. This, then, is my second trip to Starbucks. The place is starting to feel like home. The shopping mall security guard is even shouting my name as I arrive at the scene! (Sad, but true).

Readers are asking why no comments/discourse lately. The simple answer is that I have not been able to see my own site since Saturday at 7:45am, so there is no control, which is unacceptable. Sorry.

As hard as I tried to get back-up in the weeks before I departed to come to Nassau, I failed. This is still a one-man show. This week is proof that even an “eccentric” needs a certain level of resources to perform. To those who are mailing me to say, “Beam me up, Scottie”, I am afraid I don’t have the tools.

As to the capital markets, I’ll just reproduce the Knobias report.

Knobias: Where investors were looking for a window into Fed policy, Chairman Bernanke erected a brick schoolhouse. His speech at the National Bureau of Economic Research focused on academic theory of the Philips Curve and inflationary measurement tools rather than current economic conditions. Meanwhile, the market continued its downward plunge on subprime woes and unfavorable earnings forecasts for Home Depot and Sears, as the Dow shed 148.51 points, Nasdaq Composite lost 30.86, and the S&P 500 closed down 21.73 points. Treasury prices pushed higher as the 2-yr note rose 6/32, yielding 4.853%, and the 10-yr note surged 25/32, pushing its yield down to 5.032%. The Home Construction industry group took yet another hit as the S&P may downgrade $12 billion in subprime mortgage-backed securities considering losses have increased, and also announcing it will review Collateralized Debt Obligations that invest in such residential MBSs. Joining Home Construction as the largest industry laggards were Airlines (-2.81%), Investment Services (-2.84%), Durable Household Products (-2.84%), and Tires (-2.82%). Oil rebounded from early market selling, briefly hovering above $73 a barrel before sliding into the closing bell, finishing up $0.51 at $72.70. Currency markets saw the Euro hit all-time highs as the ever-softening dollar continues to depreciate due to subprime-mortgage concerns and lower bond yields. - Knobias

Let me say this about Prof. Bernanke: I hope he is a better classroom teacher than he is a truth teller. Inflation didn’t just hit the US economy (although $12 billion a month in Iraq/Afghanistan doesn’t help). And the currency issue is not China.

The USD will continue to sink unless and until there is a change in the command level strategies and tactics of the Administration and the Fed. The Fed under Bernanke is not the source of the problem. His bed was made by Greenspan, and both of theirs was put into a shambles by this Administration and the previous one of this President and his advisors. And this President cannot take all the blame and allow the previous one (and Congress, past and present) to take all the glory.

The real problems started building rapidly over ten years ago with the quickening pace of globalization and the inability of any US Administration to manage the process effectively. All the riots at all the high-level international meetings were dismissed as mere irritants, not just by the US but by the leaders of all G-7 countries. It was politics as usual, which is to say that the elected leaders were hell bent on advancing the interests of their closest supporters. The People were denied.

Why do wars and revolutions happen? Why is there an inflation cycle? This is not the fault of The People. The People are reacting, all over the world, and the biggest culprit in the eyes of most people, right or wrong, is the US. The global owners and managers of capital, of which Americans represent by far the largest component, have lost their confidence. Even Americans who own corporations are moving offshore and transferring jobs to places that are “friendlier” to their needs.

This is a reaction by The People to failure at the highest political levels, and mostly to the political process where the needs of The People have been abandoned in favor of self-interest or “other” interests linked directly or closely to politicians.

At the end of the day, there is the need for truth, transparency, investigation, analysis, and finally decisions, of the highest order, for change.

Politicians who are not predisposed to diplomacy and action will be the root cause for failure from this point on. There is not much time remaining before recession and inflation could lead to deflation and depression.

Traders will increasingly avoid financial risk (ie, where not protected by strong free cash flow), and buy and store hard consumable commodities and precious metals.

As I have been saying, precious metals will soar. Every point where it starts to happen, the US Fed and Treasury functionairies (the “G-Team” that migrated from Goldman Sachs to powerful positions inside) have sold off gold. That is The People’s gold they are selling. This is a disgrace, and Congress ought to put a stop to it.

Let’s face it; these are interesting times we live in. History is being made.

For those who operate hour to hour, there will be extreme volatility. Good traders will be happy. And for those who are long-term oriented, the risk is to be long equities (and also bonds, but to a lesser extent). Cash is king.

Remember, gold and silver, like cash, is money.

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International Economics Review

US Economic Calendar for next week

Econoday Weekly International Report

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International Equity Markets Review

Here is the latest session data for the exchanges of the Americas.

DJIA (interactive) chart

There is a lot of technical support in the 12750-12800 area (May-June-07 trading). There is even more support down at about the 12050 level of March-07.

NASDAQ Composite (interactive) chart

Here is the latest chart for the Brazilian Bovespa stock exchange in Sao Paulo.

Like equity markets around the globe last week, there was a cycle peak reached at the close on Friday at the Sao Paulo Bovespa.

Here is the latest session data for the Toronto Stock Exchange composite index.

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Asia-Pacific

Here is the latest session data for the Asia-Pacific stock exchanges.

Here is the latest chart for the Japanese Nikkei 225 index.

The Mar-07 16600 support level is the critical one to watch this summer. It seems to be getting far off, which means the higher we go, the more we need to use protective stops.

I set mental stops no worse than -8 pct from the cycle high, often -6 pct, and occasionally -3 pct if I am quite knowledgeable of the trading patterns. If violated, I would be out.

In the case of the Nikkei 225, I wouldn’t be around to see 16600 if that were to happen.

Here is the latest chart for the Shanghai Composite index .

Here is the latest chart for the Hong Kong Heng Seng index .

Here is the latest chart for the India BSE 30 index .

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Europe>

Here is the latest session data for the bourses of Europe.

Here is the latest chart for the UK FTSE 100 index.

Like many markets, the Footsie had been very strong. There is technical support in the 6400-6500 April and June levels. However, the real underpinning of the FTSE appears to be the 6000 level of March-07.”

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The Cara Global 100 Stockwatch

This data is supplied every day by the folks at KNOBIAS, Inc.

Here are the previous session’s Cara 100 gainers.

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Here are the previous session’s Cara 100 losers.

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Here are the Cara 100 stocks that hit 52-week intra-day highs or lows in the previous session.

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Here are the Cara 100 stocks that had extreme volume changes in the previous session. This is a good list to watch anytime markets start trending in the extreme. It pays to watch the price and volume extremes. That btw is called Money Flow.

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In Focus

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Here is the current Relative Strength Index (RSI) analysis of the Cara 100 company stocks

Here, from “Chris”, are the interactive charts of up to a dozen stocks with (unsmoothed) RSI-7 above 70 and below 30:

Using data from “Chris” (in Indianapolis) – which he takes from BillCara2.com, which is not smoothed like David’s data, which he takes from Worden (using Welles Wilder calculations), the Cara 100 Company stocks that are below 30 on the Daily RSI-7 are as follows:

RSI > 70 (12 of 15)

RSI < 30 (10)

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Here, from “David” in upper New York State, are the stocks in the Cara 100 trading with the highest and lowest RSI-7 sorted by (i) daily and (ii) monthly values, for the previous session.

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Bonds & Yields Review

Here is the $USB 30-year Treasury Bond chart.

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US Dollar Review

Here is the chart of the end of the week trading.

I have been asking rhetorically, “When do we see a trade-weighted USD in the 70’s?” Soon, my friends.

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Commodities Review

$CRB Index

I have said here repeatedly that when the $CRB rises above 320, the Fed will try to step in – if they can. This is like sticking a finger in the dike. At some point, the levee will break.

Oil prices are headed higher because (as I have been saying) OPEC won’t accept USD made up from twenty wooden nickels. The lower the USD falls, the higher the oil price will rise, other factors being equal.

Here is the e-miNY Aug-07 Crude Oil chart.

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Gold & Precious Metals Review

Gold, like oil, will move higher as confidence in the USD breaks down.

Here is the Recent Spot Gold chart.

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Community Chat

Yesterday was Independence Day in the Bahamas, number 38. Business meetings, then, will start today.

Unlike Cayman Islands and Bermuda, this country is a sovereign one. That is an important distinction for those looking to the future of the offshore financial services industry, which is a subject I intend to deal with in depth soon.

Boy, if you can combine offshore financial services, boating and holistic health and wellness interests, you have it made here. Actually the opportunities are endless, and I intend to pursue many of them. One of my intentions here is to establish the (Cara) Bahamas Development Fund. More on that later.

As to my morning, except for the usual problems, it is once again full of brilliant sunshine and good fortune. Captain Mike has invited me over to tour his 80 foot Hatteras, a successful charter boat operation named Sheer Luck.

After that, I will be spending time with my business associate Julian who on Thursday was appointed Chairman of the BTC Bahamas, which is the country's telephone and telecommunication system. Then I will be heading into town for other meetings.

I intend to cap the day editing Lessons From the Trader Wizard, around poolside of course, probably with an Absolut Cranberry or two. Decompression therapy.

Another day in paradise.

But there is no perfection anywhere. Sitting at the next table, using Internet at Starbucks, because his shipboard system is down (courtesy of the local ISP), is Capt. Mike. They ought to make a movie. I will write the script.

Subject to batteries being included!

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