The news yesterday that sales contracts for existing homes plunged -12 pct in July, according to the National Association of Realtors, turned the mood of traders sour from the get-go. They were already unnerved by reports from Europe of more credit market issues, and the Debt Dilemma.

While traders are wondering if and when the Fed will cut its fed funds rate, the federal and state banking regulators have been urging lenders and investors to restructure the loans of millions of borrowers.

The MBA Mortgage Application Survey Index advanced +1.3 pct on a seasonally adjusted basis last week as mortgage interest rates remained mostly unchanged.

The International Council of Shopping Centers-UBS Retail Chain Store Sales Index increased +0.2 pct for the week ended Sept. 1.

The ADP/Macroeconomic Advisors Non-Farm Payrolls Forecast reported an increase of +38,000 private jobs in August, which prompted Joel Prakken, chairman of Macroeconomic Advisers, to comment that "This month's ADP National Employment Report suggests that a deceleration of employment may be underway... The August increase of 38,000 was the smallest since June of 2003 and the second consecutive weak monthly reading."

On the deal front, insurers MGIC Investment Corp. (MTG) and Radian Group Inc. (RDN) have decided not to follow through with their previously announced merger agreement. Canadian Pacific Railways (CP) agreed to buy Dakota Minnesota & Eastern Railroad Corp. for $1.48 billion.

Unilever PLC (UN, UL) confirmed yesterday that it will cut between 10,000 and 12,000 jobs in Europe over the next four years.

Oil closed below $76/bbl ahead of the weekly crude, gasoline, and distillate inventory data due out today. After 9am ET today, the Crude Oil price spiked higher to $77.15. There was an immediate negative impact in the share prices of the airlines ($XAL).

Longer-term US Treasury notes and bonds pulled back in a flight to safety as stock prices dropped during the session.

Asian markets finished mixed earlier yeaterday before European stocks closed lower; Germany's DAX -1.73 pct, the UK FTSE -1.66 pct, and France's CAC 40 -2.14 pct, all suffered serious losses.

Today is a new day, however. After Wal-Mart Stores (WMT) and Target (TGT) posted better sales than forecast during August (school-related shopping) and after US productivity data were revised higher, equity futures traded higher. About 45 minutes before the start of trading today, DJIA futures had risen +17 to 13360, the S&P 500 futures added +1.1 to 1477.7, while the Nasdaq 100 futures were off -0.5 to 2002.75.

After the open this morning, $XAU jumped ahead of the pack, rising over +2 pct to a 146 handle. But the broker-dealers ($XBD) are still hurting and ought to be avoided.

---

International Economics Review

US Economic Calendar

Economic Calendar provided by BMONesbittBurns.

Econoday Weekly International Report

---

The Cara Global 100 Stockwatch

Here are the Wednesday session Cara 100 gainers.

---

Here are Cara 100 losers from Wednesday.

---

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

---

Here are the Cara 100 stocks that had extreme volume changes.

It pays to watch the price and volume extremes, ie, Money Flow, especially when markets start trending.

---

Key Stocks plus Cara 100 In Focus

There are various sources for up/down grades by broker-dealers. One is at Briefing.com. Traders ought to check everyday for ratings changes. That website is updated later in the morning.

I am appreciative to the folks at KNOBIAS, Inc for providing the Cara 100 summaries.

---

Relative Strength Index (RSI) analysis of the Cara 100 company stocks .

There are now zero stocks with a daily RSI-7 under 30 and 16 with a RSI-7 over 70. Hence, stocks are gaining strength.

RSI > 70 (8)

RSI < 30 (1)

---

Here are the Cara 100 stocks that traded Wednesday with the highest and lowest RSI-7, sorted by (i) daily and (ii) monthly values:

“Chris,” used BillCara2.com data that is unsmoothed, unlike the data from Worden used by “David”.

---

US Equity Markets Review

DJIA (interactive) chart

On Wednesday the DJIA lost -143 points (-1.07 pct) to close at 13305.

---

NASDAQ Composite (interactive) chart

The Nasdaq Composite lost -24 points (-0.92 pct) to close at 2607. This tech-heavy index continues to show stronger strength than the financials heavy NYSE.

---

International Equity Markets Review

Asia-Pacific

The indexes across Asia-Pacific equity markets were mostly strong.

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 today was up +0.61 pct at 16257.

The N225 closed last Friday at 16569.

---

Here is the latest chart for the Singapore index .

Today, the Singapore STI was up +0.61 pct at 3466.

The STI last Friday closed at 3393.

---

Here is the latest chart for the Shanghai Composite index .

The Shanghai Composite gained +1.56 pct to 5393.7, with another new intra-day and closing record high.

---

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

The Hong Kong market was near 52-week highs in today’s session, closing at 24050.

---

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

Today, the Bombay Stock Exchange BSE 30 Sensex index gained +1.10 pct to 15616. Onwards and upwards.

Last Friday the index closed at 15305.

A record high (15868.8) is close by, which I have been saying is inevitable.

---

Here is the latest chart for the Australian All Ordinaries index .

The All Ordinaries index of Australia lost -0.14 pct today to close at 6265.
The index closed last Friday at 6248.

“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.”
I continue to believe it will.

---

Europe>

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

Europe is basically flat today as traders are waiting for the media spin on the inaction of the BoE and ECB to be played out.

---

US Dollar Review

Here is the chart of the recent trading.

The trade-weighted USD is trading this morning at 80.593, down about -40bp from yesterday morning.

---

Oil Review

Interactive Chart of Weekly Crude Oil:

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

Within minutes after 9am this morning, the Crude Oil contracts spiked to 76.85, which is almost +$1.00/bbl stronger today because of the weekly inventory data.

---

Gold & Precious Metals Review

Here is the Recent Spot Gold chart.

Spot gold is presently (about 10:17am) at 688.00, which is about +8 higher than yesterday morning. The rally tarted about 8am this morning.

As I have been opining, “Gold traders are looking for a weaker USD (say below 80.50) before rallying the bullion. I think they are soon to get it. “

Good things happen to traders who are patient.

---

Here is the Recent Spot Silver chart.

Spot silver is stronger today (10:20am ET), presently at 12.29, which is a move of just 8 cents from yesterday morning, but the chart looks poised for an upside break-out.

Recent Spot Silver chart.

I like the Kitco.com charts btw, but also need the ones at Yahoo Finance, StockCharts.com, BillCara2.com and ADVFN.com before making any opinion.

---

Here is the The Goldminers stock index chart.

“As the price of the $XAU index has broken out of its trading range, I expect it will go on now to set record highs, first stopping at the $149.95 level. I’m happy I kept the full-court press on as technically gold and silver and the miners broke down two week ago. I was not fooled.”

But you heard that from me before when traders were full of doom and gloom.

---

Wrap-up

I had a delay in getting onto the Internet after I uploaded the Commentary this morning. Sorry for the lateness of this report.

I intend to enjoy the good weather here today. Have a good one.

---