If GM wants to come clean, why don’t they tell us there really was a loss of sales to the public, while a $250 per vehicle cash payment to fleet buyers returned a flood of orders. You see, GM is now a bank (the source of Cerberus’s interest in the company) and banks print money when their best customers need it.

Why doesn’t GM tell us more about the issues they face with Ditech?

Yesterday saw the Dow (+91.1), S&P (+15.4), and Nasdaq (+33.9) close solidly higher as incredulous traders and spinmasters alike had sifted through economic data for signs that a fed funds rate cut would become a reality in the near term.

An Energy and Tech rally followed. Somebody asked me a week ago, why I opined that Tech would take the lead. I didn’t reply because I thought it was obvious that the Financials are looking weaker by the week.

Early this morning I wrote about the Debt Dilemma. Yesterday, Deutsche Bank AG (DB) CEO Josef Ackermann reaffirmed that his company has suffered due to the credit crunch but its business model remains intact and is not experiencing a lack of funding. Hmmm.

In any event, the Techs are strong, and yesterday IBM (IBM) hit a 6-year high and Hewlett Packard (HPQ) hit a 7-year high.

The Cara 100 stocks that hit 52-week highs yesterday were Cisco (CSCO) and Garmin (GRMN). I am amazed at the strength of GRMN, but then again we do live in a crazy world and everybody wants a GPS to see where they are positioned under the satellites.

Speaking of wireless, I was telling an associate yesterday that the bandwidth needed by the new Internet TV, Phones and movie downloads was growing by leaps and bounds and was enabled by Cisco to the point where CSCO now has a $200 billion Microcap. Not being in the Dow 30, CSCO seems to fly under the radar.

Do you recall my May 10, 2006 report on Cisco? The stock price was $21.68 and I advised to buy when the RSI-7 dropped CSCO into the Accumulation Zone, probably down near 18.

Well, you know my favorite expression is “Proof of Concept”. Re-read the May 10 article, and tell me if this chart is good proof of concept?

Now, tell me you were patient and waited to buy CSCO at 18 or better all through July and into August 2006. Thirteen months later, the stock is $32.32. The last time I looked at a calculator that’s a gain of +80.0 pct.

MetroPCS Communications Inc. (PCS) has proposed to acquire Leap Wireless International Inc. (LEAP) in a stock-swap deal worth $5.27 billion. The future, my son, is plastics … no, that was 40 years ago. Now it’s wireless.

And in 25 years maybe the future will be space travel and Garmin will need to deploy satellites around the moon and other planets.

Advanced Semiconductor Engineering (ASX) announced yesterday it plans to spend $784 million to buy out 50.5 pct-owned unit ASE Test Ltd (ASTSF).

Nymex Crude Oil gained over a dollar to close above $75/bbl. If stock prices are going to rally as I have been suggesting in recent weeks, there needs to be leadership from the commodity producers, including the oil stocks. But, if Caribbean hurricanes stop going on a southerly track down by Barbados, Grenada, the ABC islands, into Central America, away from the US energy infrastructure in the Gulf of Mexico, as they have, then Crude prices could really pop if, as and when the next one starts a trajectory swinging toward the Gulf.

Treasury yields experienced a modest upswing on the day.

The USD traded higher against the Yen, Euro, and Pound during yesterday.

European shares were strong yesterday: Germany's DAX +0.96 pct, England's FTSE +0.98%, and the French CAC +0.38 pct, all closed higher. Earlier yesterday, Asian markets closed down across the board, while consolidating the strong gains in the days before that.

Today, Asia-Pacific was mixed, but Western Europe and the UK are hurting. This SIV-thing is a bit like HIV. Sometimes it turns to AIDS. The Europeans are concerned that SIV may unravel the equity market and the added risk is driving up the LIBOR.

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International Economics Review

According to the US Commerce Department, total construction spending “alarmingly” fell by -0.4 pct at a seasonally adjusted annual rate of $1.17 trillion on reductions in outlays for housing.

Manufacturing activity as measured by the ISM Manufacturing Business Index increased in August at a slower pace, 52.9 versus 53.8 in July. A reading above 50 indicates economic expansion. But, the trend in the index is what has numerous economists uttering the “R” word.

I have to ask, who cares what these economists opine. It is stock prices that we are interested in, stupid. Maybe there’s an economist out there who can tell us why Hovnanian (HOV) was up +6.1 pct yesterday?

The only economists I like are the ones who can link the dots between econ datapoints and price trends and cycles in the capital markets.

Few do. Few can.

US Economic Calendar

Economic Calendar provided by BMONesbittBurns.

Econoday Weekly International Report

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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.

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

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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.

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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 .

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 (12 of 16)

RSI < 30 (0)

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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

The DJIA gained +91.1 points (+0.68 pct) to close at 13449.

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NASDAQ Composite (interactive) chart

The Nasdaq Composite gained +33.9 points (+1.29 pct) to close at 2630. The 50-day MA (2595) and 200-day MA (2509) had represented resistance and support levels, until yesterday. The tech-heavy index continues to rally and is now clearly bullish.

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International Equity Markets Review

Asia-Pacific

The indexes across Asia-Pacific equity markets were all over the board with very strong moves in both directions.: China, Hong Kong and Singapore higher, while Japan, Australia and India are down.

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 today was down -1.60 pct at 16150. That’s a two-day loss of -2.3 pct.

The N225 closed Friday at 16569.

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Here is the latest chart for the Singapore index .

Today, the Singapore STI was up +2.04 pct at 3445.

The STI on Friday closed at 3393.

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Here is the latest chart for the Shanghai Composite index .

The Shanghai Composite gained +0.31 pct to 5310.7, with a new intra-day record high. The index also set a new closing high on Monday.

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

The Hong Kong market was at 52-week highs, intra-day and at the close, in today’s session, closing at 24069.

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

Today, the Bombay Stock Exchange BSE 30 Sensex index lost -0.12 pct to 15446. There was an afternoon sell-off.

On Friday the index closed at 15305.

A record high (15868.8) is close by, which I think is inevitable.

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

The All Ordinaries index of Australia lost -0.36 pct today to close at 6274.
The index closed 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.

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Europe>

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

There are all red arrows today (7:00am ET) across Europe. Traders are stuck on the weaknesses of the banks and the rising LIBOR.

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

The FTSE is down -0.64 pct at 6335 today in mid session.

The German Dax (-0.64 pct) and French CAC (-0.97 pct) were also hit by the sell-off in the banks.

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US Dollar Review

Here is the chart of the recent trading.

The trade-weighted USD is rising early this morning at 80.98.

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Oil Review

Interactive Chart of Weekly Crude Oil:

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

Crude Oil is presently (about 7:00am) at 75.125, which is $1.00/bbbl stronger today..

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Gold & Precious Metals Review

Here is the Recent Spot Gold chart.

Spot gold is presently (about 7:25am) at 679.7, which is well up from Friday morning’s 666.6.

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

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Here is the Recent Spot Silver chart.

Spot silver is stronger today (7:27am ET), presently at 12.21, which is a pop after Friday morning’s 11.84. As I wrote on Friday, “I think silver will trade above 12 in the near future, then 13… 14, but it needs a weaker USD to do that.”

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.

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.

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Wrap-up

I’ll put “Chris” in touch with “Quentusrex” re the RSI-7 spreadsheet to see if we can automate this function. We could start with the Cara Global 100 and then extend it to the Cara 500 later in the year. We could also do the S&P 100 and Nasdaq 100 possibly.

I have to go into town around mid-day. Have a good one.

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