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October 24, 2007
Daily Report, Wed., Oct 24, 2007
After an initial sell-off to begin the week, ‘Goldilocks Lives’ -- apparently. Did I not say in the Week In Review that would be the headline and you would be hearing the media shout “Read all about it”?
Reminds me of my first job -- I was 12 years old with a monster newspaper route. I delivered both the Toronto Star and the (then) competing Toronto Telegram to customers in the executive and administrative offices of General Electric and Westinghouse Electric somewhere near Caledonia Road and Eglinton Ave, on the northern boundary of the working class Italian District where I was raised. “Read all about it” I would shout on my delivery run through the offices, holding up the headlines to show the people in white shirts and neat haircuts what was important in the world that day.
Fifty years later, General Electric doesn’t need that kid. They own the delivery system (CNBC) and everybody is connected. Who would have thought.
But, 50 years later, here I am still telling all who will listen just what’s happening in the news. Only now, with the benefit of age and experience, I’m telling you Tomorrow’s headlines.
The other lead stories will be that (i) commodity prices are falling, (ii) interest rates are falling, and (iii) Finance Ministers and Central Bankers of the economically most powerful nations will be gathering to fix what ails us... nothing kills a good story in equity markets faster than collapsing stock prices, so we are close to the end of that particular storyline... Oh, there will be the usual stories that the grass is greener in the emerging economies, which are now the engine behind the global economy, yada yada. But that sucking sound soon to be heard around the world will be air escaping from the BRIC Balloon... Is anybody truly optimistic that equity prices are going higher? Well, some of you must be because, apparently, there will be 110 of the S&P 500 components that next week will report an expected +10 pct to +11 pct Y/Y Earnings Growth Rate. That will be the lead cover story to get the People to hang in to what is a collapsing equity market... Here we go again; the fleecing of the Middle Class. It happens every four or five years and it is never pretty. As HB&B is in tough this time around, desperate to save their own skin, it could get downright ugly.
Yes, last weekend, I think I set it up pretty well for you.
International Economics Review
US New Home Sales data will be reported at 10am ET.
Econoday publishes a brief but comprehensive weekly report as to the economic situation around the world today. I hope you read it.
Econoday Weekly International Report
Relative Strength Index (RSI) analysis of the Cara 100 company stocks .
US Equity Markets Review
“Traders are taking note of a possible double top.” (WIR 39, Sept. 29)
After the initial market pull-back to open the week, it was patently obvious to me that Humungous Bank & Broker was in pumping, pumping, pumping... setting up the public for the fleecing that would start later in the week, perhaps even today.
I have pointed out for several weeks that “selling into strength the stocks in your portfolio that have already had a Sell Alert and then a subsequent big run-up in price to a second Sell Alert is usually the right decision.”
NASDAQ Composite (interactive) chart
The US equity market Sector ETF Summary
I am trying something new today that may not work. If not, please give me some time to remove the 14 tables that I use in the WIR, but will now try to do on a daily basis.
My problem is I can see the other charts in advance, and I know they are correct, but until I publish the tables I can’t see if they work. I’d do one of them as a test, but don’t have the time to do things the right way. So I’ll cross my fingers and hope I get it right.
The tables I show are for ten (GICS) Sector Index Funds (ETF’s) only, but they cover the full spectrum of the US equity market.
Table 1: Cara ETF List is sorted by price performance Week over Week (W/W), i.e. 1W%N.
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %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)

Bonds & Yields Review
Table 10: US Treasury Yields
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 3 Month | 3.83 | 3.82 | 4.10 | 3.62 |
| 6 Month | 3.93 | 3.96 | 4.15 | 3.92 |
| 2 Year | 3.82 | 3.85 | 4.12 | 4.02 |
| 3 Year | 3.82 | 3.86 | 4.13 | 4.09 |
| 5 Year | 4.05 | 4.08 | 4.33 | 4.29 |
| 10 Year | 4.40 | 4.41 | 4.64 | 4.62 |
| 30 Year | 4.69 | 4.69 | 4.90 | 4.88 |
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 2yr AA | 3.37 | 3.38 | 3.43 | 3.40 |
| 2yr AAA | 3.37 | 3.39 | 3.44 | 3.48 |
| 2yr A | 3.41 | 3.49 | 3.46 | 3.46 |
| 5yr AAA | 3.46 | 3.47 | 3.55 | 3.53 |
| 5yr AA | 3.40 | 3.40 | 3.54 | 3.54 |
| 5yr A | 3.58 | 3.57 | 3.76 | 3.75 |
| 10yr AAA | 3.76 | 3.75 | 3.84 | 3.78 |
| 10yr AA | 3.66 | 3.65 | 3.78 | 3.76 |
| 10yr A | 3.89 | 3.87 | 3.97 | 3.91 |
| 20yr AAA | 4.37 | 4.40 | 4.45 | 4.48 |
| 20yr AA | 4.57 | 4.59 | 4.65 | 4.98 |
| 20yr A | 4.38 | 4.40 | 4.46 | 4.76 |
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 2yr AA | 4.54 | 4.61 | 4.80 | 4.85 |
| 2yr A | 4.71 | 4.77 | 4.93 | 5.08 |
| 5yr AAA | 4.82 | 4.88 | 4.83 | 5.10 |
| 5yr AA | 5.00 | 5.06 | 5.19 | 5.18 |
| 5yr A | 4.98 | 5.02 | 5.25 | 5.28 |
| 10yr AAA | 5.23 | 5.33 | 5.45 | 5.42 |
| 10yr AA | 5.60 | 5.68 | 5.68 | 5.84 |
| 10yr A | 5.57 | 5.62 | 5.77 | 5.89 |
| 20yr AAA | 5.74 | 5.71 | 5.87 | 6.03 |
| 20yr AA | 5.87 | 5.88 | 6.06 | 5.97 |
| 20yr A | 6.08 | 6.05 | 6.21 | 6.36 |
Are you watching yields in the bond market?
It was impossible to price bonds accurately last week because there was a bit of a panic move from equities to the safety net of fixed income, especially the US Treasurys. That may start to happen again.
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 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
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
Consumer Finance -USA -- Interactive Weekly Data Charts
Consumer Finance -USA -- Interactive Daily Data Charts
Commodities Review
Until last Friday, there were seven weekly gains in the past eight weeks.
As I say, “As long as the $USD is headed south, $CRB is going to be going north. Fool those commodity producers once, shame on the Fed; but, fool them twice, shame on the producers. They are not that stupid to be producing metals, and oil & gas, and agri products in exchange for wooden nickels.”
But, with the G-7 meeting this week, traders have to realize that ALL CURRENCIES are becoming wooden nickels, so these finance ministers and central bankers are likely to try to put a floor under the plunging USD and Yen, and ... (you got it!). So be cautious here. Holding commodities for the near term may be a mistake.
Interactive Chart of Weekly CRB Commodities Index:

Interactive Chart of Daily CRB Commodities Index:

Oil Review
After I watched the Crude Oil futures market ($WTIC in the US for Light Sweet Crude called West Texas Intermediate) rocketing to 87, 88, etc, and that CNBC (featuring their pal, oil billionaire T. Boone Pickens) was in non-stop promotion of 90, 95 and 100 oil, I said to you
As I see it, CNBC is the take-out party for somebody big. Investigators ought to sniff around.
At every cycle top, CNBC is asking the wrong people to give an assessment of markets. Does anybody think for a heartbeat that T. Boone Pickens would ever say anything other than “The Oil price is going up”?
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
Everybody is asking about gold. Thanks to an increasingly weaker $USD, the PM beat goes on. I am sure that the world’s leading Finance Ministers and Central Bankers are concerned.
Clearly, there is support for Gold, not just from the public (in growing numbers), but from most of the HB&B analysts, UBS, CS, BMO, RBC, etc. As you know, I have been leading the charge for a couple years.
But, now is a dicey time to be taking entry positions. I believe that as and when the broad equity market falls (to a significant degree, which I am anticipating possibly starting today), that gold and silver prices will join the rush for the exit.
To answer one reader, I do expect a larger than average pull-back. You see, I think that HB&B is in a no-win situation unless they immediately clean up their internal problems with improperly priced assets. I think they will squeeze credit, eliminate speculation, write off doubtful accounts, and so forth. That will support the $USD from crashing further, at least for several weeks, perhaps a few months. During that time, I think equity prices will fall, commodity prices will fall, and bond prices and the USD will improve.
$GOLD could drop -10 pct to (just a guess) $700. If so, there will be a basing period, where smart money will be accumulating positions in preparation for a subsequent run to over $1,000 per oz.
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
In a declining Precious Metals market, $SILVER is a dicier proposition that $GOLD. I would avoid it until the next bearish phase of the short-term cycle is complete.
Silver Bulls have been concerned that the weekly price chart clearly shows that $SILVER has not broken out, and over about the past six weeks has under-performed $GOLD. Typically, $SILVER is the leader as Precious Metals get bullish.
As I wrote in the WIR this past Saturday, I think this Bull run for PM is getting a little long in the tooth. The $USD will need some support soon. If that happens, it could spell the end of this intermediate term Bull cycle for PM. But, longer-term, “I hardly think the monetary authorities of the world are going to take away the signing pens of the govt legislators who continue to spend money in terms they cannot possibly fathom”.
So, longer term, say one year (maybe even 4 to 6 months) or longer, Gold and Silver prices are going much higher. This next short-term period will, I believe, give traders the trade of the generation opportunity to buy Gold and Silver.
With bullion, I would never hold the ETF. That is a paper instrument controlled by HB&B. I would trade the spot and futures contract prices only. ALSO; this is the best time to line up your best prospects in the equities, which is a new ball game.
Within the equities, I would never go back into the major producers. These are the companies that are now run by the suits, the lawyers, accountants and bankers. These are not mining people. they are paper pushers. They are the people who for example took control of the Newmont’s (NEM), which for a generation saw constantly rising reserves and production of gold and a flat share price. Why? The answer is in the constant dilution of stock these financial brainiacs issued in order to grow their empires.
At the end of the day, there was only one group in these large companies that was enriched, and it wasn’t the shareholders. The same thing is happening now and will happen in the future, as the big guys go acquiring the mid-size guys. The mid-size guys will sell out for huge premiums, but the problem is that the mid-sized miners are all over-priced right now, so prices will have to be knocked down (absolutely, but most importantly relatively) before the big guys can offer those 40 pct premium take-out offers.
So, if you can time this pull-back ok, you can make some good money in the mid-sized goldminers. But that is not where you should be.
After the pull-back bases to a point where entry is advised, I would be chasing the best juniors and explorers with an eye to filling the truck.
What I am saying, then, is that volatility will pick up, probably starting today. This is not the time to buy.
If you own positions, I am not going to say sell because I don’t give investment advice for two reasons: (i) I’m not licensed for that and (ii) this is just a general publication, and I don’t know you, so it would be impossible to say one thing that would apply to all people in this community.
Pierre Lassonde is bringing Franco-Nevada back to the market. He and Seymour Schulich have returned to Canada from their years with Newmont. They are among the cream of the crop of Canadian traders. Whatever they do, they will rightfully have a huge following, and the shares will be big traders. I will put the company onto the Cara 100 at some point when the historical data can be charted and analyzed. But you should know I will do that.
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.
Just remember, to the Chinese, platinum is even better than Gold.
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 is a strange market. I think i need to spend more time analyzing it. For the short-term, it will likely follow the other PM’s down.
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 rises and falls, and I continue to write, “I suppose the Metal Men of Zug have a better idea than you or me as to why.”
On recent weakness, I have written, “But, maybe this market is leading the PM group? I am not so certain, but if I were unhedged, I’d be watching this market by the hour.”
In a slowing global economy, the demand will slow faster than production will slow, I believe. That means prices ought to fall.
Table 12: Senior gold equities
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
I gave you a waring in the recent WIR, and the gold price opened down -$15/oz on Monday before recovering a bit. I said, a week ago, I asked you politely, “Don’t get fickle on me. These PM markets are not always headed northbound. In fact, once the expressway turns south for all vehicles, the yellow-colored ones almost always join the crowd. They may be last to turn around, but they have this powerful engine and emotional drivers that usually speed up to catch the rest. So, don’t get caught in a smash-up. Move your stops up, tighten your seat belts, and don’t hand back those hard-earned gains.” That was fair warning.
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.
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:

Weekly British Pound Index:

Daily British Pound Index:

Weekly Japanese Yen Index:

Daily Japanese Yen Index:

Weekly Canadian Dollar Index:

Daily Canadian Dollar Index:

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.
Here is the latest session data for the Toronto Stock Exchange composite index.
Europe>
Here is the latest session data for the bourses of Europe.
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.
Here is the latest chart for the Singapore index .
Here is the latest chart for the Shanghai Composite index .
Here is the latest chart for the Hong Kong Hang Seng index .
Here is the latest chart for the India BSE 30 index .
Here is the latest chart for the Australian All Ordinaries index .
Table 13: International equities via the USD-denominated ETF perspective
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
Japanese equity market ETF: EWJ
Here is the Japanese (EWJ) equity market ETF Monthly, Weekly and Daily data charts:


U.K. equity market ETF
Here is the United Kingdom (EWU) equity market ETF Monthly, Weekly and Daily data charts:

EWU Daily data:

Canada’s equity market
Here is the Canadian (EWC) equity market ETF Monthly, Weekly and Daily data charts:


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
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |


















