The housing industry crisis, which now appears to be 12 to 18 months from bottoming out, “faced fresh concerns today with Lennar Corp reporting extraneous losses and a grim existing home sales report” (Knobias). Existing home sales fell to a five-year low, down -4.3 pct to a 5.50 million annual rate. Contributing to lower sales was a steady rise in jumbo mortgage loan rates, resulting in increased unsold inventory.

Lennar (LEN $23.22 -4.0 pct) swung to fiscal 3Q07 net loss of $513.9 million (-$3.25/share), compared with year-earlier net income of $206.7 million (+$1.30/sh) because of ongoing write-downs. The company announced it has cut its work force by 35 pct.

US consumer confidence for September fell to 99.8, an almost two-year low from 105.6 in August. Lynn Franco, director of the Conference Board Consumer Research Center, said, "Looking ahead, little economic improvement is expected and with the holiday season right around the corner, this is not welcome news."

The International Council of Shopping Centers-UBS Retail Chain Store Sales Index fell by -1.0 pct in the week ended Sept. 22.

Target (TGT $61.35 -6.6 pct) and Lowe's (LOW $28.51 -6.7 pct) cut their forecasts, acknowledging retailer troubles. Target revised its sales down to a range of 1.5 to 2.5 pct, down from its previous forecast of 4 to 6 pct. Lowe's said they expect to report sales on the low end of its $1.97 to $2.01 a share forecast.

It appears TGT is headed for $56 and LOW down to $26.

Crude Oil dropped -1.75 pct to below $80/bbl. The story is that “production is being ramped up in the Gulf region, putting downward pressure on prices.” Just for once, I’d like to see supporting data to these “news” stories.

I anticipate higher prices in the major market indexes in the US today.

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International Economics Review

US Economic Calendar

At 8:30am ET, the US Durable Goods Orders report came in with extremely weak numbers. Watch Fedex (FDX) today.

The Econoday report will be updated later this morning.
Durable Goods Orders Report and analysis by Econoday

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The Cara Global 100 Stockwatch

Here are the Tuesday session Cara 100 gainers.

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Here are Cara 100 losers from Tuesday.

Note that on August 11 (at a price of $17.01), I dropped E*Trade Financial (ETFC $11.89) from the Cara 100, replacing it with Interactive Brokers (IBKR) after I noted that E*Trade had become a Sub-prime mortgage company when I had been led to believe it was an electronic broker-dealer. The Knobias table will be changed.

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Here are the Cara 100 stocks that hit 52-week intra-day highs or lows in the Tuesday session. The New Highs list is growing. Watch the Distribution Zone for Sell Alerts. Successful traders sell into strength (and buy into weakness), like any businessperson would do.

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

There has been a pick-up in trading volume in the US equity market following the FOMC decision to cut rates -50 basis points this month. It pays to watch the price and volume extremes, ie, Money Flow, especially when markets start trending. Note how enthusiastic traders have become, with price increases on huge volume expansions, but some stocks are being sold as heavily well.

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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.

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

RSI > 70 (12 of 37)

RSI < 30 (3)

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Here are the Cara 100 stocks that traded Tuesday 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”.

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US Equity Markets Review

DJIA (interactive) chart

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NASDAQ Composite (interactive) chart

Tech was very strong yesterday, which represents the much larger gain in the Nasdaq than the DJIA.

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International Equity Markets Review

Asia-Pacific

The indexes across Asia-Pacific equity markets were mostly positive today except for Shanghai, which has taken a two-day breather to consolidate recent gains.

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

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

The Nikkei Dow traded up today by +0.21 pct to 16435.74.

The N225 was well over 18000 in July.

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Here is the latest chart for the Singapore index .

Today, the Singapore STI was up +0.70 pct at 3650, trading higher at the close.

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Here is the latest chart for the Shanghai Composite index .

The Shanghai Composite lost -1.61 pct to 5338.52, which is down almost -3.0 pct in two-days.

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

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

Today, the Bombay Stock Exchange BSE 30 Sensex index gained +0.13 pct to 16921.39, which is a fresh record high. A new intra-day high was set at 17073.87.

In March this year, the Sensex had dropped to 12316, so this has been a very impressive Bull run.

Here is the Deepak Lalwani weekly report on the India market: Download file

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

The All Ordinaries index of Australia was flat today at 6491, which is at or close to a record high.

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Europe

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

Solid green (up) arrows trading in Europe today (8:05am ET).

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

The FTSE is up +0.87 pct at 6452.7 today in mid session (1:06pm GMT). All the action happened at the open as it did for most of the European exchanges. I attribute that to the report of the history making UAW-GM deal.

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US Dollar Review

Here is the chart of the recent trading.

The trade-weighted USD is trading a little stronger at 78.561 at 7:38am ET. The bids started coming in about 12:30am ET, shortly before the UAW was saying they had a new agreement with General Motors.

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Oil Review

Interactive Chart of Weekly Crude Oil:

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

Crude Oil is presently (about 7:41am) at 80.075, which is stronger from mid-day, but precisely the same as at the time of my report yesterday (8:38am).

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Gold & Precious Metals Review

Here is the Recent Spot Gold chart.

Spot gold is presently (about 8:15am ET) at 729.60.

INO.com had some data problems today.

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Here is the Recent Spot Silver chart.

Spot silver is weaker today (8:17am ET), presently at 13.41.

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.

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Here is the The Goldminers stock index chart.

Gold stocks ($XAU) yesterday took a hit of -1.58 pct. Should the USD strengthen here again today, I expect some selling among the miners.

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Wrap-up

It is a big world out there. Unquestionably, the traders in the leading Asia-Pacific (ex-Japan) and Brazil stock exchanges are confident of a continuing primary Bull market, and I think they have it right.

But, the US, UK and Europe and Japan are going to be saddled with the fall-out of the HB&B lending practices of the past several years (ie, the “Liar Loans”) that the Financials are severely damaged and going to be a long time in recovery. And, I haven’t seen a primary Bull market yet that wasn’t led by (or at least inclusive of) the Financials.

Moreover, the US Consumer Discretionary sector hit the wall in mid-July (see my article on that), and headed south. So, I believe the Financials and Consumer-dominated markets (US, UK and Europe and Japan) started their cyclical Bear phase in mid-July. The place to be in these markets, as I have been pointing out is (i) the metals, which I think will be the next bubble, (ii) the energy sector until now (where individual groups may be ok but the weighting of the sector being the Integrated Oils is going soft because the global economy is slowing), and (iii) companies with heavy weightings of foreign revenues and earnings, like General Electric (GE 87 pct of rev) and Coca Cola (KO 71 pct of rev/74 pct of profit).

Have a good day.

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