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August 26, 2007
Week in Review #34 (2007-08-26)
Following a pullback from the record-setting highs of US equity market prices in June, the story since then has been all about the crisis in the global financial system and the delaying action by international central bankers.
On Friday in US trading, the DJIA (+143 +2.29 pct), S&P (+16.9 +2.31 pct), and Nasdaq (+35 +2.86 pct) finished higher, with lower volatility and much lower volume. The Russell 2000 was up +1.49 pct W/W, but the big day was Friday (+1.35 pct)
Perhaps the positive bias at the end of the week came from a small increase (+2.8 pct) in new home sales last month (to a seasonally adjusted annual rate of 870,000) plus the durable goods report that estimated total orders for July were sharply higher than expectations (+5.9 pct).
Energy stocks, led by Exxon (XOM +1.91 pct), took the leadership position, while Financials like Countrywide Financial (CFC -4.63 pct) and Mastercard (MA -1.73 pct) pulled back.
On the deal front, Home Depot (HD +1.94 pct) reported it may accept a price for the sale of its wholesale distribution business to private equity groups that is about $1.2 billion lower than earlier projected. On a relative basis, I think the stock is attractive, as I pointed out in the Friday report.
On the earnings front, Gap (GPS +6.4 pct) Q2 net income increased +19 pct to $152 million. HJ Heinz (HNZ +0.5 pct) Q1 net income was up +5.8 pct to $205.3 million. Burger King (BKC -3.5 pct) income was $36 million, or 26 cents per share, versus a loss of $10 million, or 8 cents/share, in the comparable year-ago period. Analysts had forecast earnings of 27 cents per share on sales of $580 million. Burger King sales lifted (+11 pct) to $590 million.
US Treasury prices lifted at the long end, sending yields lower by -6 basis points W/W on the 10-year and -10 bp on the 30-year.
Crude Oil moved up more than a dollar on Friday (-0.73 pct W/W) to close at $71.09.
In what helped the market rally on Friday, the $USD rebounded vs the Yen to finish higher, but gave up ground to the Euro and Pound, which pushed the metals commodities (gold, silver, and copper) much higher. On the week, the trade-weighted $USD was down a lot (-0.89 pct) to 80.68, and looking like it will soon drop into the 70's.
Excluding Germany (the DAX dropped minimally), European markets closed a bit higher led by the FTSE +0.37 pct and the CAC 40 +0.83 pct.
The Cara Global 100 Stockwatch
Here are the Friday session Cara 100 gainers.
Here are Cara 100 losers on Friday.
Here are the Cara 100 stocks that hit 52-week intra-day highs or lows in the Friday session.
Here are the Cara 100 stocks that had extreme volume changes. Only one stock on Friday had an increase of more than +25 pct of the average daily volume, which I believe is a 50-day (10-week) average.
Key Stocks plus Cara 100 In Focus
The folks at KNOBIAS, Inc provided the Cara 100 watchlists.
Relative Strength Index (RSI) analysis of the Cara 100 company stocks .
Here are the charts of up to a dozen stocks with RSI-7 above 70 and below 30, from Friday. The market has gone quiet as to volatility, on low volume.
Here are the Cara 100 stocks trading with the highest and lowest RSI-7, sorted by (i) daily and (ii) monthly values, for Friday:
Please note that Moody’s (MCO) has a Monthly-Weekly-Daily RSI-7 under 30, which puts the stock clearly in the long-term ACCUMULATION ZONE. Then, in a rally, the Daily RSI-7 could move up across 30, which then would represent a long-term BUY ALERT.
“Chris,” used BillCara2.com data that is unsmoothed, unlike the data from Worden used by “David”. You can be whip-sawed easier with unsmoothed data, but in any period where volatility is low, the unsmoothed RSI technical indicator system is a more useful one, I find. If I believe in a Buy decision say, then I want to have a reference point continuum that is going to give me a decision support signal just a bit ahead of other traders, which I can do with unsmoothed data.
Like I always say, trading is as much or more art than science, like learning to fish.
I heard a good line from a woman DJ on the radio on Friday. Feed your man fish, he’ll come over for dinner, but teach him to fish, he’s gone for the week-end, which, in her case, I gather was what she wanted.
Industry and Cara 100 “Impulse” Review
Applied weekly to major industry groups, the “impulse system”, based on the excellent work of Dr. Alex Elder, gives a sense of market internals.
“Jock” reports:Weekly Impulse Report
Alex Elder’s “impulse system” considers both the “inertia” in prices (where prices now stand vs. their 26 wk. moving average) and their “momentum” (at what rate their 13wk. and 26wk. moving averages are converging or diverging).
When both indicators (EMA and MACD-H) tick up, the reading is “green”; when both decline, it’s “red”. Applied weekly to major industry groups, indices, and their components, a sense of market internals emerges.
This week saw 13 GREEN industries, and 1 RED (compared to 0 GREEN industries, and 27 RED last week). During the Feb-March pullback, the tally never exceeded 6 industries RED. This week was the most dramatic shift of year.
Of the Cara 100 components, 30 are green (last week: 6) , 26 red (last week: 70). TEK is GREEN but does not appear below for lack of historical trading data:
GREENs
REDs
Components of the major indices, on a weekly basis, were (green/red):DJIA – 11/6 (last week: 3/16)
Dow65 (indu&transport&utility)– 22/11 (last week: 6/38)
SP500 – 151/91 (last week: 63/274)
NDX – 26/18 (last week: 12/52)
RUT – 570/572 (last week: 530/813).The following indices themselves moved FROM RED on their weekly charts last week to GREEN this week: DJIA, NDX, and Nasdaq Comp. The S&P500, Russell 2000, and Wiltshire 4500 moved FROM RED last week to NEUTRAL THIS WEEK.
GOLD stocks rose FROM RED last week to NEUTRAL, while SILVER stocks remained RED. The CRB index remained RED. The US DOLLAR index remained NEUTRAL.
VOLUME this week in the industry groups and indices was SIGNIFICANTLY LOWER not only than last week, but the week before last as well. I think this is a reason to regard this week’s impressive rebound as still tentative.
/Jock
International Economics Review
Econoday Weekly International Report
US Economic Calendar for next week
US Equity Markets Review
This week, with less volatility and less volume, the DJIA closed at 13379, up +2.3 pct W/W. The Bulls are happy that the Fed opened the Discount Window and made short-term money available at a cheaper price. That inspired confidence.
NASDAQ Composite (interactive) chart
The Nasdaq lifted +2.9 pct this week to close at 2576. With the gain of the prior Friday (+2.2 pct), that is a six-session gain in the Nasdaq Composite of +5.1 pct, which cannot be ignored by the Bears.
Another positive sign for the Bulls was that for the past two weeks, the retail trader has gone into the weekend extremely confident. Two weeks ago, the small cap Russell 2000 was down only -0.20 pct W/W, but was up +2.39 pct on Friday. This week, it was up +1.49 pct W/W, but +1.35 pct on Friday.
Last weekend I wrote: “Through this report, I am going to be positive in that I believe the final three hours of trading on Thursday and Friday’s session was so extremely positive that prices are likely now to rally for a couple months until the next Earnings Reporting period in mid-October. And, if those corporate earnings and guidance communications are positive, then the rally could persist a bit longer, say until calendar year-end. But all is not well in the financial system. The liquidity injections were temporary, and will have to be withdrawn. So, debt and equity prices are somewhat limited on the upside.”
The first test will be the resistance to be encountered at the 50-day Moving Averages, which are shown as lines on these charts. When the price is below the MA, there will be resistance crossing it, and when the current price is above the MA, there is technical support there.
In any case, the longer-term 200-d MA is much more significant than the 50-d MA.
Table 13: International equities via an ETF perspective (ie, $USD)
Sorted by 1-Week Price Performance Symbol Close 1Day
Change1Day
%Change1W
%Change2W
%Change4W
%ChangeYTD
%Change3M
%Change6M
%Change12M
%Change
Japanese equity market ETF: EWJ
Here is the Japanese (EWJ) equity market ETF Monthly, Weekly and Daily data charts:
The EWJ gained +2.72 pct W/W to close at 13.97. Simultaneously, the Yen lost -1.85 pct W/W. The Carry Trade was being re-wound as traders gained confidence that a crisis in the global financial system can be averted for the time being. Could be a false and fleeting hope, but for now we have to ride that wave.
U.K. equity market ETF
Here is the United Kingdom (EWU) equity market ETF Monthly, Weekly and Daily data charts:
EWU Daily data:
The EWU gained big (+4.30 pct) to close at 24.51. On July 14, EWU was 26.40, so there is still some way to go to regain former levels. I’ll say that those highs may not be achieved for EWU.
There was a huge rally on Friday, however (+1.49 pct) just like the prior Friday (+2.40 pct), after G-20 monetary authorities stepped up to avert a crisis.
Canada’s equity market
Here is the Canadian (EWC) equity market ETF Monthly, Weekly and Daily data charts:
The commodity price sensitive EWC gained +4.75 pct W/W to close at 29.77 as the metals and precious metals rocketed higher for the past couple days.
The sector/country rally took a while because, as I said a week ago, in a broad market rally, there is usually an orderly move among sectors. First the interest-rate sensitive sectors rally first (Banks, Insurance, and debt-heavy Telcos/Utilities), then the economically-sensitive sectors and finally the commodity-price sensitives, particularly the metals, precious metals and gold.
I would ignore the oil price for a couple days as the pre- and post-hurricane DEAN trading was rather emotional. Fears of another Katrina, I suppose.
The US equity market Sector ETF Summary
The tables I show are for ten (GICS) Sector Index Funds (ETF’s) only, but they cover the full spectrum of the equity market.
This week it was a case of all sector ETFs up.
A week ago, I said in response to there being 1 sector ETF up (XLF) and 9 down, that, “But, it’s how you finish the week that counts most in trading. On Friday, all ten sector ETF’s were in extreme rally mode. The defensive Consumer Staples (XLP) got left behind (+0.49 pct) as Financials (XLF +4.07 pct), Energy (XLE +3.69 pct) and Telecom Services (IYZ +2.52 pct) led the way.” You get the picture now why I was continuing to be bullish, despite some criticism.
Table 1: Cara ETF List is sorted by price performance Week over Week (W/W), i.e. 1W%N.
Sorted by 1-Week Price Performance Symbol Close 1Day
Change1Day
%Change1W
%Change2W
%Change4W
%ChangeYTD
%Change3M
%Change6M
%Change12M
%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, go to the AMEX.com web site, and click on ETF’s.
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)
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
Change1Day
%Change1W
%Change2W
%Change4W
%ChangeYTD
%Change3M
%Change6M
%Change12M
%Change
Oil & Gas Exploration & Production -Canada
XLE gained +2.43 pct W/W, but gained +2.13 pct just on Friday to close at 69.14. Over the past eleven sessions, XLE is now quite positive. Previously there had been a 4-week loss of -7.58 pct.
A week ago I wrote here,
“If you look at the biggest losers this week in the Cara 100, they are all the Brazil stocks: PBR, TS (Brazil/Argentina), RIO, GGB, ERJ and ABV. The ERJ and ABV are not commodity-related, so this pull-back (the country ETF, which is EWZ, plunged -10.6 pct W/W) was on account of the Carry Trade being unwound, particularly in the highest beta stocks/sectors/countries, and not because of any fundamental change in commodity prices or price direction.So, I say that this Carry Trade issue will melt away in a broad market rally (for now at least), and there will be a recovery in Brazil stocks, and commodity prices – as laggards maybe but still in the action.”
Brazil was rocking this week. The EWZ ETF was up +13.04 pct W/W and +3.90 pct on Friday. You got the news here first (LOL).
China National Offshore (CEO) was up +14.7 pct W/W, PetroBrazil (PBR) was up +9.62 pct and Canada’s Imperial Oil (IMO) was up +8.21 pct, all in a week.
Sector 15 (basic materials: IYM, XLB, IGE and VAW)
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
Change1Day
%Change1W
%Change2W
%Change4W
%ChangeYTD
%Change3M
%Change6M
%Change12M
%ChangeXLB (Basic Materials) gained +6.78 pct W/W to close at 39.40, which was by far the bed sector performer this week, as it was the worst the previous week.
Last week I told you, “XLB is now over-sold and soon to catch the rally that started on Thursday afternoon. XLB on Friday gained +1.37 pct.”
Applause heard in paradise (LOL).
Last week, I wrote: “Rio Tinto Mines (RTP) dropped -2.41 pct W/W and that was the best of my watchlist. Brazil-based Gerdau Steel (GGB) plunged -14.00 pct W/W, but the problem is not a crisis in steel as I see it, but with the unwinding of the Carry Trade.”
This week the Carry Trade got re-wound, and the winners were: CVRD (RIO +18.5 pct), Mittal Steel (MT +16.3 pct), Gerdau Steel (GGB +14.2 pct), BHP Billiton (BHP +13.7 pct), Rio Tinto (RTP +12.0 pct), Teck Cominco (TCK +11.9 pct), NuCor (NUE +11.1 pct), Alcoa (AA +10.2 pct), and in the PM’s, Agnico-Eagle (AEM +12.3 pct) and Barrick (ABX +8.5 pct).
Sector 20 (industrial: IYJ, XLI, VIS, and IYT)
Here’s the XLI Monthly, Weekly and Daily data charts:
XLI Monthly data:
XLI Weekly data:
XLI Daily data:
Table 4: Senior capital goods makers and transportation:
Sorted by 1-Week Price Performance Symbol Close 1Day
Change1Day
%Change1W
%Change2W
%Change4W
%ChangeYTD
%Change3M
%Change6M
%Change12M
%ChangeXLI gained 3.45 pct to close at 39.31.
Sector 25 (consumer discretionary: XLY, IYC and VCR)
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
Change1Day
%Change1W
%Change2W
%Change4W
%ChangeYTD
%Change3M
%Change6M
%Change12M
%ChangeXLY (consumer discretionary spending stocks) was up +3.80 pct W/W, to 36.90.
Sector 30 (consumer staples: XLP, VDC, RTH and IYK)
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
Change1Day
%Change1W
%Change2W
%Change4W
%ChangeYTD
%Change3M
%Change6M
%Change12M
%ChangeXLP (consumer staples stocks) gained +1.73 pct W/W to close at 27.11.
Last week I said, “With ABV, do you recall me chastising myself: “It’s not the beer stupid; it’s all about Brazil”? Yes, why else would a global beer operator, perhaps the world’s biggest, drop -10.8 pct in a few days? Spell the answer C-A-R-R-Y T-R-A-D-E. And when you day traders see that trade reversing (for now at least), jump on the short call options for a ride north. For ABV, the Monthly RSI and MACD charts tell me that, like 2Q06, there is a lot of downside to come for this stock before it bottoms out, but in the short-term, the Daily chart shows the extreme corrections from over-sold positions. Look at the action on Friday.”
I can’t dance any better. This week, ABV was up +12.54 pct W/W. With those call options, your gains would have been HUMUNGOUS. You Might even be strutting around like JP Morgan -- Pierpont that is, if he were still around to strut.
Actually I have to rush. I’m going out to dinner, and will be picked up in a couple minutes. BBQ at the former Prime Minister’s house. A piece of history. You might want to buy the place. I’ll even give you photo’s when I get them.
The price is, I believe, $1.8 million. It’s on a ridge overlooking Cable Beach where the Baha Mar $4 billion project is now getting started. Could be a steal at that price.
Sector 35 (healthcare: IYH, XLV, VHT, IXJ, and IBB)
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
Change1Day
%Change1W
%Change2W
%Change4W
%ChangeYTD
%Change3M
%Change6M
%Change12M
%ChangeIYH (healthcare) was up +2.14 pct W/W to 68.74.
The winner this week was BristolMyersSquibb (+6.8 pct). A week ago it the week’s big loser (-4.02 pct). The winner a week ago was UnitedHealth (UNH +4.89 pct), but this week UNH didn’t do much as I recall.
Sector 40 (financial: IYG, IYF, XLF, VFH, IXG, VNQ, RWR, IYR, and ICF)
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
Sorted by 1-Week Price Performance Symbol Close 1Day
Change1Day
%Change1W
%Change2W
%Change4W
%ChangeYTD
%Change3M
%Change6M
%Change12M
%Change
The Financial ETF (XLF) was up +0.12 pct W/W to close at 34.54 but only because of Friday’s rally. These stocks have had a run. Now it’s time to look at Tech.Some winners this week were Lehman (LEH +3.89 pct) because of Friday’s gain of +3.76 pct, and Morgan Stanley (+3.71 pct W/W). JPM was down -2.25 pct.
Sector 45 (technology: IGM, IGV, IGW, XLK, VGT, IYW, IGN, IXN, MTK and SMH)
Here’s the SMH Monthly, Weekly and Daily data charts:
SMH Monthly data:
SMH Weekly data:
SMH Daily data:
Table 9: Senior technology equities
Sorted by 1-Week Price Performance Symbol Close 1Day
Change1Day
%Change1W
%Change2W
%Change4W
%ChangeYTD
%Change3M
%Change6M
%Change12M
%ChangeSMH (semi-conductors) gained +3.09 pct W/W to close at 37.68.
Intel (INTC) was up +4.60 pct to 24.79. Chip pricing is improving.
Sector 50 (telecom: IYZ, VOX and IXP)
Here’s the IYZ Monthly, Weekly and Daily data charts:
IYZ Monthly data:
IYZ Weekly data:
IYZ Daily data:
IYZ (telecommunications) gained +3.40 pct W/W to close at 33.17.
Verizon (VZ +4.51 pct) and AT&T (T +3.35 pct) were the leaders.
A week ago, T had a huge day that Friday, which caused the earlier W/W gain, so that was a tip off the money was flowing back into the big US Telco’s.
Sector 55 (utilities: IDU, XLU, and VPU)
Here’s the XLU Monthly, Weekly and Daily data charts:
XLU Monthly data:
XLU Weekly data:
XLU Daily data:
This week, XLU (Utilities) gained +2.5 pct to close Friday at 39.61.
As I wrote a week ago, “If central bankers keep pushing liquidity here; XLU, like the Financials (XLF), will be a beneficiary.” But the play is now going to move into the Techs and also the metals.
Bonds & Yields Review
Table 10: US Treasury Yields
This table has been lost (for now) because Yahoo Finance changed the spec. But you can find the table through the links.
US Treasury Bonds The long bond (30-year US Treasury) moved down in yield from 5.12 pct five weeks ago to 4.88 pct on Friday. So bond prices have lifted a bit at the long end. However, most of the action is at the short-end (2-years and T-Bills).
The 3-month T-Bill yield had collapsed from 4.80 pct of five weeks ago to just 3.28 pct a week ago Friday. That was the result of panic, both in the form of traders fleeing to cash and to central bankers and the Fed making cash available by doing such things as opening the Discount Window with a major drop in rates. I hadn’t seen such an extreme move in T-Bill rates in many years, if ever.
This week, the T-Bill yield moved back up to 4.04, which is a huge move too.
The 2-year Notes gained +13 basis points in yield to 4.28 pct, while the 10-year lost -6 bp to 4.62 pct.
Here is the $USB 30-year Treasury Bond chart.
Interest rates and bond yields.
Interactive Daily data charts:
Interactive Chart of Interest rates and bond yields.
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
Fannie and Freddie were kept out of the sub-prime lending business and they have held up. A week ago, FRE was up +2.82 pct W/W and FNM was up +1.19 pct. This week it was a small loss of -0.16 pct and -0.09 pct respectively.
Countrywide Financial (CFC), the biggest player in the sub-prime market, had to seek a short-term cash bail-out of $11 billion a week ago and a $2 billion equity injection this week by Bank of America (BAC) in order to stay afloat.
CFC plunged -23.1 pct a week ago. This week, the loss was just -2.01 pct, but the loss on Friday was -4.63 pct. The cEO Angelo Mozilo ought to just take his $50 million a year in compensation and keep off the airwaves at CNBC. He needs to keep a low profile for now, but I guess his arrogance gets the better of him. He started talking and the price started dropping.
Sorted by 1-Week Price Performance. Symbol Close 1Day
Change1Day
%Change1W
%Change2W
%Change4W
%ChangeYTD
%Change3M
%Change6M
%Change12M
%Change
Ah yes, “Bad debts, foreclosures, the end of the “liar loan” practices, Fed tightening, whatever; this consumer lending game died. “
Just remember, “If the Average Joe cannot pay up at the end of the month, it is HB&B that forecloses.”
The foreclosures situation is getting worse. More bail-outs will be needed regardless of the posturing by HB&B and the Fed.
Consumer Finance -USA -- Interactive Weekly Data Charts
Consumer Finance -USA -- Interactive Daily Data Charts
Commodities Review
$CRB index lost -0.17 pct this week to close at 305.64. On July 14 (Week #28), $CRB was over 325. I warned that the Fed didn’t like that. I think they like what they see re $CRB today.
The 50-day Moving Average is now at 315.58 and the 200-day MA is 310.04.
Interactive Chart of Weekly CRB Commodities Index:
Interactive Chart of Daily CRB Commodities Index:
Oil Review
The Crude Oil futures market ($WTIC in the US for Light Sweet Crude called West Texas Intermediate) lost -$0.73/bbl (-1.02 pct W/W).
The 50d MA for $WTIC is 72.37 and the 200d MA is 64.16, so Oil is now sitting between the 50d MA and 200d MA lines, which is a measure of technical support or resistance depending on where the current price moves.
Now that I’m doing this blog from a yacht, I won’t even mention the “H” word again.
Hopefully.
Here is the e-miNY Sept-07 Crude Oil chart.
Interactive Chart of Weekly Crude Oil:
Interactive Chart of Daily Crude Oil:
Gold & Precious Metals Review
This week, $Gold (the near futures) dropped -2.17 pct W/W to 666.80. On Friday, there was a rally of +1.34 pct.
A week ago I wrote, “Now with a Discount Rate so low, I have to believe it is time for the gold market to start a rally, with bullion back to 690 and beyond (perhaps 750 before the cycle runs out). The goldminer shares are late to rally among all sectors and industries, but if the broad market rallies, and the liquidity injections and Discount Window status remains unchanged, then I believe the miners have to start moving higher. If so, look for confirmation in a falling $USD – hopefully a mildly deflating USD so that the Fed and other central bankers don’t come rushing in to prop it up.”
How did we do this week? $GOLD lifted +10.70 (+1.60 pct) to 677.50.
The 50day MA is 667.39 and the 200d MA is 658.40. That means that the current price is right above the MA support. The charts look as ready to zoom as I have seen for a while.
Two weeks ago Thursday evening, I published a large report on gold and the miners. The next day, there was a spark to the gold market, which then went out as HB&B and traders rushed to cash. Then there was a pull-back. But now looks like the real deal. Let’s visit this part of the WIR next weekend.
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.
Spot silver chart for the week
$SILVER gained +0.30/oz (+2.53 pct W/W) to close at 12.10. A week ago the price dropped -8.31 pct W/W. Three weeks ago, spot silver was 13.16.
As I wrote here a week ago, “(Silver) is now over-sold and will likely lead the PM rally (if that actually happens).”
The 50d MA is 12.80 and the 200d MA is 13.24.
Yes, “ I still believe that spot silver needs to move above the 200d MA (13.26) for any (significant) upside break-out. Do I think that’s going to happen soon? Yes.”
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.
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.
$PLAT plunged -47.00/0z (-3.67 pct) a week ago. This week it gained +16.10 (+1.31 pct) to 1249.30.
The 50d MA is 1296.47 and the 200d MA is 1241.89.
A week ago I wrote: “The positive here though is that $SILVER (+2.65 pct), like $GOLD (+1.34 pct), gained strongly on Friday. Maybe that was the kick-start.” Well, the rally has started.
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.
$PALL dropped -28.30/0z (-7.80 pct) a week ago. This week it gained +1.75 (+0.52 pct) to 336.50. After “a horrid two weeks”, that’s a start.
The 50d MA is 365.31 and the 200d MA is 355.44.
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.
Copper ran very weak again this week for a huge loss over 11 sessions.
$COPPER (near futures contracts) dropped -21.20 (-6.31 pct) a week ago. This week they gained +20.25 (+6.43 pct) to close at 335.00.
Two weeks ago the loss was -11.95 (-3.43 pct), and the Friday before that -2.63 pct. It was a rough patch for the Copper Bulls. But the re-wind of the Carry Trade resolved that issue for now.
A week ago I wrote: “So, the past 11 sessions have been very bearish for $COPPER, but I think that has to do with liquidity problems of hedge funds that were hedged in T-Bills.”
The 50d MA of $COPPER is 346.40 and the 200d MA is 317.02, so the current price is below the 50d and above the 200d MA, and rising.
Table 12: Senior gold equities
Sorted by 1-Week Price Performance Symbol Close 1Day
Change1Day
%Change1W
%Change2W
%Change4W
%ChangeYTD
%Change3M
%Change6M
%Change12M
%ChangeA week ago, the goldminers were crushed. The $XAU had plunged -10.37 pct W/W to 129.36.
This week, $XAU jumped +10.07 (+6.43 pct W/W) to close Friday at 139.43.
The 50d MA is 142.92 and the 200d MA is 140.07.
I feel the charts are so positive today that these MA’s will be taken out soon. The stop after that is 148.
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. Yes, just like GDX on the AMEX, you can trade XGD on Toronto.
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
Here is the chart of the week’s trading.
The $USD, which is a trade-weighted index we used to call the Morgan Dollar, plunged -0.73 (-0.89 pct W/W) to close at 80.68, with a 70’s handle in the offing.
A week ago here I wrote: “I still think the sad sack USD will soon fall into the high 70’s (as in just under 80 cents on the index).”
The following data requires your attention if you have not seen it: M3 update as of the past week.
US M3 (estimated) continues to grow at an excessive rate, as it does in Europe. Central bankers are constantly diluting all fiat money at extreme rates.
Interactive Chart of Weekly U.S. Dollar Index:
Interactive Chart of Daily U.S. U.S. Dollar Index:
Interactive Chart of Weekly Euro Dollar Index, priced in USD:
Interactive Chart of Daily Euro Dollar Index, priced in USD:
The Euro ($XEU) had a terrific week if you were bullish. $XEU gained +1.85 (+1.37 pct W/W) to close at 136.72. I think we’ll see a 140 handle inside 60 days.
The 50d MA is 136.24 and the 200d MA is 133.31.
Weekly British Pound Index:
Daily British Pound Index:
The Pound sterling dropped -4.09 (-2.02 pct) a week ago. That was a test. This week, the Pound gained +3.05 (+1.54 pct) to close at 201.32.
The 50d MA is 201.75 and the 200d MA is 197.55.
Weekly Japanese Yen Index:
The Japanese Yen ($XJY) plunged -1.62 (-1.85 pct W/W) to close at 86.15.
The 50d MA is 83.22 and the 200d MA is 83.76.
The Carry Trade is in the process of being re-wound.
Daily Japanese Yen Index:
Weekly Canadian Dollar Index:
Daily Canadian Dollar Index:
The Canadian Dollar gained +0.96 (+1.02 pct W/W) to close at 95.02.The 50d MA is 94.59 and the 200d MA is 89.39, and looking like lift-off is set to occur.
International Equity Markets Review
Here is the latest session data for the exchanges of the Americas.
Here is the latest chart for the Brazilian Bovespa stock exchange in Sao Paulo.
A week ago, I wrote here: “This one you really need to check.” Bingo.
Here is the latest session data for the Toronto Stock Exchange composite index.
International Equity Markets Review
Asia-PacificThe indexes across Asia-Pacific equity markets closed Friday mixed.
Here is the latest session data for the Asia-Pacific stock exchanges.
Here is the latest chart for the Japanese Nikkei 225 index.
The Nikkei Dow was down -0.41 pct at 16249 on Friday. Thursday’s strong gap open needs to be consolidated.
For Monday, traders should continue to watch (i) the Dollar: Yen trade; (ii) the EWJ (Japan ETF that trades in USD in NY); and (iii) the key Japanese stocks and ADRs that trade on the NYSE to determine how the Nikkei 225 is likely to open Monday.
Yen strength has hurt Japanese exporters, including the auto manufacturers. As I wrote a week ago, I would be bottom-fishing the top quality auto makers, but only if, as, and when the Yen weakens, which it has now with the Bank Of Japan liquidity injections, and a return (for now at least) of the Carry Trade.
Here is the latest chart for the Singapore index .
Friday, Singapore was flat at 3369.5, which needed to consolidate yesterday’s strong gap open.
Indonesia lifted again +1.20 pct to 2143.
Here is the latest chart for the Shanghai Composite index .
The Shanghai Composite gained +1.49 pct Friday to 5107.7, which is another fresh all-time closing record high. The People’s Bank of China raised rates again earlier in this past week. Inflation is a problem there, but the equity market is being driven by investor confidence in the economy.
The Shanghai Composite has rocketed from 1000 to 5000 in just over 24 months. Pegging the Yuan to the declining USD has really helped.
Ultimately, the end of the Carry Trade and the strengthening of the Yen will hurt China because imports from Japan (and from other neighboring countries) will be more costly. At some point, either raised interest rates or a too weak Yuan will force the Chinese authorities to release the peg to the USD – at least much faster than they have been.
Here is the latest chart for the Hong Kong Heng Seng index .
The Hong Kong market dropped a bit (-0.20 pct) to close at 22922. I still believe that a new high will be set in the near future. I feel that the market buoyancy of China and India will likely carry over to the exporting nations in the region if the USD stays strong. That’s a clear incentive for capital pools that back those exporters to be continuing to buy USD (ie, T-Bills and short-term T-Notes)
Here is the latest chart for the India BSE 30 index .Friday, the Bombay Stock Exchange BSE 30 Sensex index gained +1.84 pct to 14425. I believe the recovery from the sharp pull-back this summer is going to proceed to new high levels for the index. With a strong economy, traders are confident there.
At some point, concerns that economic weakness in North America and Europe will affect those robust BRIC economies, however.
Here is the latest chart for the Australian All Ordinaries index .
The All Ordinaries index of Australia dropped -1.02 pct Friday to close at 6087. I continue to believe that a new rally will take the Aussie bourse to a return to July highs. For that to happen, however, the Basic Materials sector will have to take the lead, and the Yen to remain weak against the USD. The Aussies, like the Canadians, have to be careful though that their Dollars don’t over-heat because that will pull down their exporters and their in-bound tourism and push up out-bound tourism, all which is not healthy in the long-run for their respective economies.
Europe>
Here is the Friday session data for the bourses of Europe.
There was mixed trading across Europe, with the FTSE down a bit and the DAX of Germany and the CAC of France up a bit. Actually the CAC was up fairly strongly.
Here is the latest chart for the UK FTSE 100 index.
The FTSE is flat at 6197.6 today in mid session. I do not think that the FTSE will return quite to the former high of 6754 before the start of the next downwave in global equity markets.
US Equity Markets Review
A dozen NASDAQ stocks to watch.
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
Sorted by 1-Week Price Performance Symbol Close 1Day
Change1Day
%Change1W
%Change2W
%Change4W
%ChangeYTD
%Change3M
%Change6M
%Change12M
%ChangeYou 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)
Value Line Reports this past Friday
The five reports from Value Line this week are on (Cara 100) Citigroup (C) plus American International (AIG), American Express (AXP), JP Morgan (JPM), and Microsoft (MSFT).
(AIG: Value Line Report Aug. 24: next one is due Nov. 23)
(AXP: Value Line Report Aug. 24: next one is due Nov. 23)
(C: Value Line Report Aug. 24: next one is due Nov. 23)
(JPM: Value Line Report Aug. 24: next one is due Nov. 23)
(MSFT: Value Line Report Aug. 24: next one is due Nov. 23)
The Dow 30 Company links
Alcoa [GICS 15, Dow 30]
(AA: Yahoo Finance file)
(AA: StockChart chart)
(AA: Billcara2 chart)
(AA: ADVFN Financial Data)
(AA: Value Line Report Jul. 20: next one is due Oct. 19)
Altria Group Inc [GICS 30, Dow 30]
(MO: Yahoo Finance file)
(MO: StockChart chart)
(MO: Billcara2 chart)
(MO: ADVFN Financial Data)
(MO: Value Line Report Aug. 3: next one is due Nov. 2)
American International Group [GICS 40, Dow 30]
(AIG: Yahoo Finance file)
(AIG: StockChart chart)
(AIG: Billcara2 chart)
(AIG: ADVFN Financial Data)
(AIG: Value Line Report Aug. 24: next one is due Nov. 23)
American Express [GICS 40, Dow 30]
(AXP: Yahoo Finance file)
(AXP: StockChart chart)
(AXP: Billcara2 chart)
(AXP: ADVFN Financial Data)
(AXP: Value Line Report Aug. 24: next one is due Nov. 23)
AT&T [GICS 50, Dow 30]
(T: Yahoo Finance file)
(T: StockChart chart)
(T: Billcara2 chart)
(T: ADVFN Financial Data)
(T: Value Line Report Jun. 29: next one is due Sep. 28)
Boeing Co [GICS 20, Dow 30. Cara 100]
(BA: Yahoo Finance file)
(BA: StockChart chart)
(BA: Billcara2 chart)
(BA: ADVFN Financial Data)
(BA: Value Line Report Jun. 22: next one is due Sep. 21)
Caterpillar [GICS 20, Dow 30]
(CAT: Yahoo Finance file)
(CAT: StockChart chart)
(CAT: Billcara2 chart)
(CAT: ADVFN Financial Data)
(CAT: Value Line Report Jul. 27: next one is due Oct. 26)
Citigroup [GICS 40, Dow 30, Cara 100]
(C: Yahoo Finance file)
(C: StockChart chart)
(C: Billcara2 chart)
(C: ADVFN Financial Data)
(C: Value Line Report Aug. 24: next one is due Nov. 23)
Coca Cola [GICS 30, Dow 30]
(KO: Yahoo Finance file)
(KO: StockChart chart)
(KO: Billcara2 chart)
(KO: ADVFN Financial Data)
(KO: Value Line Report Aug. 3: next one is due Nov. 2)
Disney [GICS 25, Dow 30, Cara 100]
(DIS: Yahoo Finance file)
(DIS: StockChart chart)
(DIS: Billcara2 chart)
(DIS: ADVFN Financial Data)
(DIS: Value Line Report Aug. 17: next one is due Nov. 16)
Dupont [GICS 15, Dow 30]
(DD: Yahoo Finance file)
(DD: StockChart chart)
(DD: Billcara2 chart)
(DD: ADVFN Financial Data)
(DD: Value Line Report Jul. 20: next one is due Oct. 19)
ExxonMobil [GICS 10, Dow 30, Cara 100]
(XOM: Yahoo Finance file)
(XOM: StockChart chart)
(XOM: Billcara2 chart)
(XOM: ADVFN Financial Data)
(XOM: Value Line Report Jun. 15: next one is due Sep. 14)
General Electric [GICS 20, Dow 30, Cara 100]
(GE: Yahoo Finance file)
(GE: StockChart chart)
(GE: Billcara2 chart)
(GE: ADVFN Financial Data)
(GE: Value Line Report Jul. 13: next one is due Oct. 13)
General Motors [GICS 25, Dow 30]
(GM: Yahoo Finance file)
(GM: StockChart chart)
(GM: Billcara2 chart)
(GM: ADVFN Financial Data)
(GM: Value Line Report Jun. 1: next one is due Aug. 31)
Hewlett-Packard [GICS 45, Dow 30]
(HPQ: Yahoo Finance file)
(HPQ: StockChart chart)
(HPQ: Billcara2 chart)
(HPQ: ADVFN Financial Data)
(HPQ: Value Line Report Jul. 13: next one is due Oct. 13)
Home Depot [GICS 25, Dow 30]
(HD: Yahoo Finance file)
(HD: StockChart chart)
(HD: Billcara2 chart)
(HD: ADVFN Financial Data)
(HD: Value Line Report Jul. 6: next one is due Oct. 6)
Honeywell [GICS 20, Dow 30]
(HON: Yahoo Finance file)
(HON: StockChart chart)
(HON: Billcara2 chart)
(HON: ADVFN Financial Data)
(HON: Value Line Report Jul. 27: next one is due Oct. 26)
IBM [GICS 45, Dow 30]
(IBM: Yahoo Finance file)
(IBM: StockChart chart)
(IBM: Billcara2 chart)
(IBM: ADVFN Financial Data)
(IBM: Value Line Report Jul. 13: next one is due Oct. 13)
Intel [GICS 45, Dow 30, Cara 100]
(INTC: Yahoo Finance file)
(INTC: StockChart chart)
(INTC: Billcara2 chart)
(INTC: ADVFN Financial Data)
(INTC: Value Line Report Jul. 13: next one is due Oct. 13)
Johnson & Johnson [GICS 35, Dow 30, Cara 100]
(JNJ: Yahoo Finance file)
(JNJ: StockChart chart)
(JNJ: Billcara2 chart)
(JNJ: ADVFN Financial Data)
(JNJ: Value Line Report Jun. 1: next one is due Aug. 31)
JP Morgan [GICS 40, Dow 30]
(JPM: Yahoo Finance file)
(JPM: StockChart chart)
(JPM: Billcara2 chart)
(JPM: ADVFN Financial Data)
(JPM: Value Line Report Aug. 24: next one is due Nov. 23)
McDonalds [GICS 30, Dow 30]
(MCD: Yahoo Finance file)
(MCD: StockChart chart)
(MCD: Billcara2 chart)
(MCD: ADVFN Financial Data)
(MCD: Value Line Report Jun. 8: next one is due Sep. 7)
3M Company [GICS 20, Dow 30, Cara US 100 June 25-06]
(MMM: Yahoo Finance file)
(MMM: StockChart chart)
(MMM: Billcara2 chart)
(MMM: ADVFN Financial Data)
(MMM: Value Line Report Aug. 17: next one is due Nov. 16)
Merck [GICS 35, Dow 30]
(MRK: Yahoo Finance file)
(MRK: StockChart chart)
(MRK: Billcara2 chart)
(MRK: ADVFN Financial Data)
(MRK: Value Line Report Jul. 20: next one is due Oct. 19)
Microsoft [GICS 45, Dow 30]
(MSFT: Yahoo Finance file)
(MSFT: StockChart chart)
(MSFT: Billcara2 chart)
(MSFT: ADVFN Financial Data)
(MSFT: Value Line Report Aug. 24: next one is due Nov. 23)
Pfizer [GICS 35, Dow 30]
(PFE: Yahoo Finance file)
(PFE: StockChart chart)
(PFE: Billcara2 chart)
(PFE: ADVFN Financial Data)
(PFE: Value Line Report Jul. 20: next one is due Oct. 19)
Procter & Gamble Co. [GICS 30, Dow 30, Cara 100]
(PG: Yahoo Finance file)
(PG: StockChart chart)
(PG: Billcara2 chart)
(PG: ADVFN Financial Data)
(PG: Value Line Report Jul. 6: next one is due Oct. 6)
United Technologies [GICS 20, Dow 30, Cara 100]
(UTX: Yahoo Finance file)
(UTX: StockChart chart)
(UTX: Billcara2 chart)
(UTX: ADVFN Financial Data)
(UTX: Value Line Report Jul. 27: next one is due Oct. 26)
Verizon [GICS 50, Dow 30]
(VZ: Yahoo Finance file)
(VZ: StockChart chart)
(VZ: Billcara2 chart)
(VZ: ADVFN Financial Data)
(VZ: Value Line Report Jun. 29: next one is due Sep. 28)
Wal-Mart [GICS 30, Dow 30, Cara 100]
(WMT: Yahoo Finance file)
(WMT: StockChart chart)
(WMT: Billcara2 chart)
(WMT: ADVFN Financial Data)
(WMT: Value Line Report Aug 10: next one is due Nov 9)
Wrap up:
Have a nice Sunday. You may not be rocking back and forth on a fishing yacht in paradise (well some of you maybe), but, wherever you are, I know we are connected.
"BTW, if you have to ask if this is work, then you are not a trader. I’d much rather be doing this than walking a golf course, but that’s me."
As you know, my friends at Forbes and Barron’s call me “eccentric”. They may be right. But then, I’m the one sitting in a marina right beside Paradise Island’s Atlantis Resort and they are huddled away in an office tower in the bowels of New York. (LOL)
With good access to the Internet and phones here, I’ll probably relax somewhat. Even in paradise, I was getting a little tense the past few days.
I set a record in getting this WIR done in under 4 hours. It was either that or get sea sick. :-)
Posted by Posted by Bill Cara on August 26, 2007 03:45:39 PM | Category: Cara Week in Review
