Actually, what is happening on the global financial stage today is frightening. Forget Goldilocks; we’re looking at Halloween and the haunted houses of Humungous Bank & Broker, a Financial Armageddon in the making.

In order to help out HB&B get through the ARM re-fi’s of the next six months, without the global financial system crashing, the US Admin (led by Paulson) and Fed (under Bernanke) have unveiled a policy called Reflation.

Maybe, they think, that will give the big banks sufficient time to save their skin. I doubt they can pull it off, however.

Reflation is a policy that helps bankers and hurts the rest of us. The cycle kind of works this way: drop rates to pump the value of paper assets and the earning power of banks, crash the USD, send commodity prices through the roof, and let businesses and consumers pay through the nose. Who wins? Only the bankers.

Henry Paulson, Ben Bernanke, Guy Fawkes... doesn’t matter who. They are soon all to go up in flames. Why? Businesses and consumers will reject the policy. Traders will sell their stocks and bonds.

The past five years of economic growth were not funded by savings but by debt. There will soon be a reversion to the norm as the mountain of debt is repaid and/or written off.

What we don’t know at this point is to what extent the debt will be repaid or written off. The more that is repaid, the lower the broad market indexes (the DJIA, S&P 500, Nasdaq) will fall. The more that is written off, the higher the commodity prices (ie, oil and precious metals) will rise.

In any event, the game is over for America. The standard of living is in rapid decline. Katrina gave us a glimpse of the weak underbelly. Desperate people in need of food and shelter were shot on the bridge by their fellow Americans who were desperately trying to protect what little they had on the other side.

There is no yellow brick road; the bullion is stored in vaults for good reason. America is bankrupt. We just need to call a spade a spade.

So, why did we have the week we did if things are so bad? The ONLY losers on my monitors were the Semi-conductors (SNDK and INTC ouch!) and the $USD. The USD is the key. Not even higher Treasury yields (as we had this week) can save the USD at this point.

Every time the US authorities pump in more currency by issuing more debt, the stock market and commodity market gets a speculative boost (ie, there is no economic basis for the lift in prices), and the $USD falls. The pain in holding the $USD is no longer acute; it’s now a chronic form of Chinese water torture, according to the US authorities and bankers who refuse to be accountable for their own mistakes.

The debt and speculation in the world, and particularly in America, is mounting. The fact that traders are also waiting for the next bank or broker or fund to default cannot be ignored. Those of you who wish to chase prices higher (ie, the debt and speculation crowd) are ignoring a clear and present danger, capital risk.

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International Economics Review

The following is a very comprehensive report as to the economic situation around the world today. I hope you read it.

Econoday Weekly International Report

Next week’s US econ calendar includes the very important decision at 2:15pm Wednesday of the US Fed’s FOMC meeting. Are rates going to be pushed down again, which the market anticipates? If so, how high do commodity prices go?

US Economic Calendar for next week.

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

RSI > 70 (12 of 22)

RSI < 30 (7)

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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. (I apologize for not having the time to take screenshots.)

“Jock” reports:

THIS WEEK saw  18 GREEN industries, and 4 RED, compared to last week’s 2 greens, 7 Reds – quite a bounce-back!
 
(insert weekly impulse chart)
 
Of the Cara 100 components, 48 are GREEN (last week: 25) , 20 RED - (last week: 35):
 
(insert Cara 100 tables)
 
The component stocks of the major indices, on a weekly basis,  were (green/red):
 
(insert table: index components green-red)
 
The S&P500, and Russell2000 turned from RED to GREEN; the NDX, Nasdaq Comp, and Wiltshire 4500 turned from neutral to GREEN. The DJIA was neutral.
 
The CRB commodity index stayed GREEN.  GOLD & SILVER stocks stayed GREEN.
 
The US dollar index stayed RED, and hit another multi-decade low.
 
The Hang Seng stayed GREEN while the Shanghai Composited stayed neutral.  
 
BOTTOM LINE: This week, the market staged a comeback. This Friday was almost as positive as last Friday was negative. The index components all strengthened significantly. Lingering RED industries were: real estate, retail, specialty retail, and media.
 
NOTE: Alex Elder’s “impulse system” considers both the “inertia” in prices (where prices stand vs. their 26 wk. moving average) and their  “momentum” (the 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.

Sorry Jock. I hope to have a new screenshot routine figured out sometime soon. Maybe the MAC OS Leopard will help!! The issue, however, is not taking the screenshots, but archiving them on my server in a consistent format.

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US Equity Markets Review

DJIA (interactive) chart

“Traders are taking note of a possible double top.” (WIR 39, Sept. 29)

At the opening of this past week, the DJIA index continued its plunged from the earlier Friday, but it was soon a brand new ball game thanks to the US monetary authorities, whose job #1 apparently is to save American banks from destroying themselves, having been primed to do so by the easy money policies of the Greenspan Fed. So now, its out with the old and in with the new, in helicopter-speak.

All that pump, pump, pumping action set the Dow 30 up +2.11 pct W/W, and that was less than the S&P 500 (+2.31 pct), Nasdaq Composite (+2.92 pct) and Russell 2000 small cap (+2.83 pct).

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.”

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NASDAQ Composite (interactive) chart

The Nasdaq Composite gained +2.92 pct despite a loss of -5.2 pct in the Semi-conductors (SMH). The Semi’s sold down -2.0 pct a week ago, and -5.5 pct the week before that. So, how is it that the tech-heavy Nasdaq can fly when the main engine has been shut down?

If you look at the SMH daily chart for the week, you will see high closes on Monday and Tuesday, which set up large gap drops in the following morning. Something strange is going on here, which frankly I do not understand. But the unsmoothed Daily RSI-7 is 16.6, so this is no time to chase this ETF lower.

SanDisk (SNDK -4.0 pct W/W) and Intel (INTC -1.4 pct W/W but all of it Friday) may be now set up to rally Monday to try to keep the Nasdaq index on the rise. Let’s see.

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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 US equity market.

After a week when it was zero sector ETFs up,this week the scoreboard reads 8 up and 2 down. That's consistent with the DJIA, of which 25 components were up, and 2 down.

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 Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
XLU	41.54	0.56	1.37%	4.85%	0.36%	4.03%	12.82%	7.34%	-1.47%	15.58%
XLE	76.95	1.02	1.34%	3.36%	-0.29%	2.68%	36.00%	9.09%	19.97%	35.88%
XLF	33.69	0.99	3.03%	3.22%	-5.07%	-1.49%	-8.75%	-0.56%	-9.80%	-5.76%
XLB	43.21	0.71	1.67%	2.64%	-0.30%	2.59%	24.85%	8.49%	9.75%	29.72%
XLP	28.34	0.19	0.67%	2.20%	0.21%	1.43%	7.84%	5.75%	2.83%	8.79%
XLI	40.30	0.03	0.07%	1.51%	-2.35%	-1.71%	14.39%	1.13%	8.30%	16.81%
IYH	71.31	0.02	0.03%	1.28%	-1.38%	0.73%	7.30%	3.84%	-0.74%	6.67%
XLY	36.44	0.31	0.86%	1.22%	-4.05%	-0.79%	-5.40%	-3.16%	-8.19%	-2.64%
IYZ	32.41	0.26	0.81%	-1.04%	-4.25%	-4.25%	9.27%	-3.71%	1.03%	10.88%
SMH	33.79	-0.06	-0.18%	-5.16%	-7.02%	-11.78%	0.66%	-12.05%	-9.94%	-1.74%

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.

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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)

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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:

The Energy sector ETF (XLE) gained +3.36 pct W/W to close at 76.95, just shy of the 77.17 where it was two weeks ago.

This gain on the week was set up by two factors:
(1) The previous Friday, the XLE plunged -4.58 pct, so it was oversold going into the weekend, and
(2) Crude Oil contracts were up +5.65 pct this week and +5.09 pct a week ago, which represents a gain of $9.11/bbl in two weeks and $10.63/bbl in three weeks. This has nothing to do with economic fundamentals, but may in fact be tied to the US reflation policy and USD plunge plus the rumors that the US is readying a war against Iran.

“No, I never saw $90 crude oil coming.”

This week it closed at 91.86. The Turks are preparing to invade northern Iran and the Pakistani political situation appears to be out of control. What else is needed to take Oil to $100/bbl? Not much apparently.

Exxon (XOM) was flat this week, despite a gain of +0.70 pct on Friday and the previous Friday XOM dropped -3.1 pct, so while Crude Oil is up + $9.11/bbl in two weeks, XOM is going nowhere. Why do you think that is?

As I say, I like the (Energy) sector based on current period corporate cash flow and earnings per share metrics, but believe it is over-bought here as many of the major companies are guiding lower for these metrics going forward. So, when these stocks drop in price at all, triggering Sell Alerts when Daily or Weekly RSI-7 values fall below 70 (depending on your time horizon, ie, short or intermediate), I am quick to take profits.

Yes, the Big Oil stocks in China and Brazil are still on a tear. But, is that due to improving metrics across the globe or to the froth and enthusiasm of traders in China and Brazil chasing the stocks of favored sectors and industry groups, particularly the well-recognized names of the large caps?

This week in the Oil Patch, PetroBrazil (PBR +13.5 pct) and China National Offshore Oil (CEO +10.8 pct) were the big winners again. That’s a gain of +21.3 pct and +18.9 pct over 4 weeks for PBR and CEO respectively. Given that the market cap of PBR is now $201 billion and CEO is $86 billion, that is a gain of almost $50 billion in these two companies in two weeks.

Meanwhile, in 4 weeks, the market cap of XOM is down -0.38 pct and Chevron -2.06 pct, so about $6 billion was transferred from there. Where did the rest come from? I think it came from Funds who aren’t prepared to invest in America right now, while there is major economic growth in China and Brazil.

Also, a lot of it is due to increased levels of debt and speculation. As I say, there seems no end to the frivolity – until there is.

In any massive selling wave, even the stocks of the best quality companies get tossed. So bottom-picking is not advised. What until there is a bit of a recovery in these stocks before buying new positions. Use the Accumulation plus Buy Alert system (ie, Daily and/or Weekly RSI >30 depending on your time horizon) before you venture back in.

After the pull-back starts, it could be a few months, maybe longer, before share prices look attractive again. There are some who think the credit markets will so damage the US economy it will take a couple years to repair, in which case the domestic oils will likely be out of favor for a long time.

Table 2: Senior oil & gas equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
PBR	91.58	3.80	4.33%	13.47%	8.92%	21.30%	83.78%	42.01%	76.76%	103.78%
CEO	197.80	4.89	2.53%	10.81%	11.09%	18.85%	109.82%	73.62%	126.63%	133.81%
IMO	51.80	1.38	2.74%	5.35%	6.13%	4.52%	45.26%	10.45%	35.07%	42.31%
STO	34.15	0.53	1.58%	3.86%	0.98%	0.68%	32.93%	15.57%	21.31%	31.96%
ECA	66.97	0.38	0.57%	2.79%	3.14%	8.28%	47.71%	11.47%	25.55%	39.43%
CVX	91.65	0.42	0.46%	2.67%	0.26%	-2.06%	29.14%	4.79%	17.23%	35.78%
SU	106.48	0.33	0.31%	2.17%	7.46%	12.31%	44.07%	17.39%	31.68%	36.88%
TOT	80.44	2.47	3.17%	1.64%	1.82%	-0.73%	13.34%	2.35%	8.97%	16.90%
XOM	92.21	0.64	0.70%	0.08%	-1.36%	-0.38%	24.42%	4.51%	14.48%	28.75%

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Integrated Oil & Gas - Canada

Oil & Gas Exploration & Production -Canada

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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:

XLB (Basic Materials) gained +2.64 pct on the week to close at 43.21, which almost got back to the 43.34 of two weeks ago.

Yes, I have ridden the metals Bull for a couple years, but in the past couple weeks I started talking about a metals commodity price bubble that would sometime come to an end. To repeat, what I am doing here, just as I did for the Energy sector, is to say these stocks are in the Distribution Zone, and will soon trigger Sell Alerts. It will pay handsome returns to stay close to the Sell Button.

There were many Sell Alerts a week ago and on this Monday morning. Then the Interventionists returned to the game mid-day Monday with a full-court press. Once again, the short sellers got squeezed.

It’s only a matter of time before the sellers prevail. Even Bernanke can't print that much money.

Table 3: Senior metals and steel equities:

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
PKX	185.18	10.40	5.95%	16.21%	-0.57%	3.59%	133.14%	32.37%	73.75%	162.67%
RTP	368.00	16.48	4.69%	7.87%	-1.18%	7.16%	80.30%	32.07%	49.50%	69.91%
GGB	30.37	1.22	4.19%	7.31%	1.23%	15.83%	84.96%	19.33%	50.72%	98.76%
NUE	63.42	1.15	1.85%	7.26%	12.83%	6.64%	16.37%	20.87%	-4.17%	6.36%
RIO	35.50	2.01	6.00%	6.73%	-1.17%	4.63%	23.18%	-25.18%	-14.44%	37.76%
TS	54.08	2.61	5.07%	5.81%	1.62%	2.77%	11.46%	13.95%	16.35%	38.88%
AA	39.35	0.96	2.50%	5.10%	3.20%	0.59%	34.16%	3.55%	9.89%	42.52%
MT	81.57	2.63	3.33%	5.08%	4.03%	4.10%	99.93%	32.96%	52.18%	88.51%
BHP	86.16	3.76	4.56%	4.26%	1.66%	9.62%	121.66%	36.22%	75.02%	100.75%
TCK	49.64	0.55	1.12%	2.88%	-5.65%	4.05%	-28.32%	12.16%	-34.96%	-34.43%

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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 Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
ABB	29.67	0.63	2.17%	9.32%	6.46%	13.11%	66.50%	30.88%	46.16%	99.80%
BA	96.02	0.02	0.02%	2.26%	-0.69%	-8.54%	7.68%	-7.41%	1.87%	21.33%
CAT	75.04	0.37	0.50%	2.00%	-6.55%	-4.32%	22.69%	-4.15%	2.79%	20.35%
HON	59.44	0.31	0.52%	1.92%	-3.68%	-0.05%	31.80%	0.03%	10.71%	38.81%
GE	40.38	0.22	0.55%	0.85%	-1.58%	-2.46%	6.35%	2.15%	12.67%	13.46%
FDX	103.94	0.64	0.62%	0.60%	-3.32%	-0.77%	-5.31%	-6.28%	-4.00%	-9.97%
ERJ	47.95	-0.05	-0.10%	0.02%	-2.52%	9.18%	17.58%	7.66%	1.89%	13.95%
MMM	86.13	0.04	0.05%	-0.57%	-8.54%	-7.96%	10.06%	-4.35%	7.06%	8.70%
UTX	75.44	-0.28	-0.37%	-0.74%	-6.08%	-6.26%	20.11%	1.33%	11.52%	15.63%

XLI (Industrials) gained +1.51 pct this week to close at 40.30.

ABB ($29.67 +9.3 pct) was the winner on my monitor again. Here is what I wrote about ABB last week:

Two weeks ago I wrote, “Two months ago (Aug 16), ABB hit an intra-day cycle low of $20.42. (Today’s price represents) a move of +36.5 pct, which is an extreme one for a company with a market cap of over $63 Billion. (But) when you see a stock with M-W-D RSI-7 (smoothed) levels of 80.5/76.9/83.2, then you ought to have fairly tight stops.

Now the ABB RSI-7 is 95.2/78.6/79.0. I continue to advise tight stops.

Last week, I wrote,

“South Korea’s steelmaking giant Posco (PKX) dropped -14.4 pct W/W, so there is clearly some froth being removed there. And Big Miners Rio Tinto (RTP -8.4 pct) and CVRD (RIO -7.4 pct) were also hammered.

This week, PKX (+16.2 pct), RTP (+7.9 pct), and RIO (+6.7 pct) all boomed. The froth has been whipped up again. Tighter stops are required.

And steelmakers in Brazil (Gerdau GGB) and the US (Nucor NUE) each gained +7.3 pct. I only wish the market was as strong. Clearly (as clear as I can see it anyway), we are witnessing the cycle peak, caused partly by the plunging USD, which is bringing on inflation at a rapid clip.

This cannot go on too long before govt can no longer hide low inflation rates.

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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:

Consumer Discretionary (XLY) was carried along with the market higher due to pumping by the monetary authorities, but has been performer #8 and 9 for the past two weeks. I continue to say this ETF cannot go much higher because the American consumer has insufficient money or access to credit.

A week ago XLY dropped -5.21 pct W/W from 37.98 to close at 36.00. It’s was a pretty ugly picture and I pointed it out at the end of July. This week, XLY made a modest gain of +1.22 pct against a gain in the S&P 500 of +2.31 pct. The close was 36.44, a long way from 37.98 of two weeks ago.

After Brunswick Corp (BC) was hammered -10.6 pct a week ago, this week it gained +9.3 pct, which is still a loser over two weeks(-2.24 pct), 4 weeks (-4.37 pct), 3-months (-23.41 pct), 6-months (-35.21 pct). That’s what happens when Americans have no tickee.

Toyota (TM) gained +3.1 pct, and Whirlpool (WHR) dropped -3.0 pct W/W.

Table 5: Senior consumer discretionary equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
BC	21.86	1.66	8.22%	9.30%	-2.24%	-4.37%	-31.52%	-23.41%	-35.21%	-33.76%
TM	109.73	3.98	3.76%	3.13%	-2.57%	-6.10%	-18.90%	-7.94%	-10.31%	-8.57%
NKE	64.61	0.77	1.21%	2.02%	2.31%	10.14%	32.32%	13.55%	20.00%	37.97%
DIS	34.38	-0.07	-0.20%	1.69%	-3.07%	-0.03%	0.53%	0.88%	-2.25%	7.50%
JCP	56.01	0.68	1.23%	1.19%	-10.08%	-11.61%	-28.25%	-19.58%	-31.96%	-27.20%
CCL	47.67	0.24	0.51%	0.89%	-5.10%	-1.57%	-6.44%	5.82%	-1.65%	-3.62%
SBUX	26.17	0.00	0.00%	0.27%	-0.65%	-0.11%	-25.76%	-4.59%	-17.76%	-32.67%
EBAY	36.64	1.39	3.94%	-0.22%	-8.17%	-6.10%	21.45%	10.93%	7.07%	11.71%
WHR	83.57	-0.38	-0.45%	-2.98%	-6.39%	-6.21%	-1.29%	-20.19%	-21.93%	-3.59%

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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 Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
WAG	40.18	0.20	0.50%	6.16%	3.50%	-14.94%	-12.78%	-11.11%	-12.33%	-7.29%
KO	61.57	0.27	0.44%	4.78%	6.52%	7.13%	26.74%	16.21%	18.22%	30.61%
ABV	79.07	1.72	2.22%	4.12%	0.16%	8.12%	61.04%	13.17%	33.27%	82.36%
MO	72.97	0.71	0.98%	3.50%	4.15%	4.95%	12.40%	9.24%	5.25%	19.19%
PEP	72.34	0.36	0.50%	2.76%	0.78%	-1.26%	15.34%	8.23%	8.93%	13.35%
PG	71.75	0.40	0.56%	1.34%	0.07%	2.00%	11.17%	14.69%	13.91%	12.99%
BUD	51.80	-0.47	-0.90%	0.95%	-2.02%	3.62%	5.24%	6.78%	2.37%	7.42%
WFMI	47.70	0.09	0.19%	0.95%	-7.38%	-2.57%	4.88%	30.86%	0.61%	-27.06%
DEO	90.62	0.18	0.20%	0.35%	0.77%	3.29%	13.94%	11.93%	8.33%	21.20%
WMT	44.64	0.76	1.73%	-0.76%	-5.14%	2.27%	-6.12%	-4.66%	-8.34%	-13.74%

XLP (consumer staples stocks) gained +2.20 pct W/W, closing at 28.34. The stocks in this "defensive" sector have had a rather impressive relative performance in the past month or two.

Walgreen (WAG +6.2 pct), Coca-Cola (KO +4.8 pct) and InBev (ABV +4.1 pct) all had good weeks. Wal-Mart (WMT) was looking sickly until Friday’s gain of +1.73 pct helped the stock to a smaller loss (-0.73 pct) on the week.

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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 Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
AET	55.88	-0.11	-0.20%	5.73%	5.16%	2.97%	30.32%	12.10%	18.34%	35.01%
AMGN	57.18	-0.13	-0.23%	2.20%	-1.70%	1.08%	-16.40%	1.82%	-8.59%	-24.72%
BMY	29.75	0.39	1.33%	1.47%	-0.07%	3.23%	12.77%	-0.34%	1.78%	21.28%
UNH	47.99	-0.54	-1.11%	1.14%	-3.42%	-0.91%	-8.71%	-4.42%	-8.95%	-2.80%
PFE	24.31	0.02	0.08%	1.00%	-3.76%	-0.49%	-7.53%	0.66%	-9.02%	-10.89%
BMET	45.99	0.06	0.13%	0.24%	0.31%	0.48%	10.90%	1.05%	8.47%	41.68%
JNJ	64.30	0.35	0.55%	0.11%	-2.49%	-2.13%	-3.16%	5.48%	0.09%	-6.57%
GSK	50.52	-0.23	-0.45%	-0.47%	-3.26%	-5.04%	-6.11%	-1.39%	-13.52%	-7.89%
NVS	52.14	0.46	0.89%	-0.86%	-2.58%	-5.13%	-10.32%	-2.56%	-11.27%	-14.22%
DNA	74.14	-0.54	-0.72%	-1.15%	-4.03%	-4.97%	-9.36%	-2.95%	-8.49%	-12.28%

IYH (healthcare) gained +1.28 pct this week to close at 71.31, a gain of 90 cents.

The winner was Aetna (AET +5.7 pct W/W).

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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 Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
GS	235.92	9.26	4.09%	8.37%	1.01%	8.85%	17.54%	20.91%	4.94%	22.00%
LEH	60.42	3.50	6.15%	5.59%	-6.51%	-2.12%	-23.16%	-6.33%	-21.21%	-22.94%
JPM	47.32	1.27	2.76%	5.11%	1.07%	3.27%	-1.56%	7.35%	-10.62%	-0.94%
MS	64.78	2.78	4.48%	4.57%	-3.67%	2.83%	-20.63%	0.43%	-23.23%	-16.54%
HBC	95.85	3.25	3.51%	2.08%	-1.05%	3.51%	3.10%	6.62%	3.36%	0.09%
DB	127.05	2.75	2.21%	1.64%	-3.31%	-1.04%	-6.13%	-4.67%	-17.90%	1.03%
C	42.63	1.40	3.40%	0.64%	-10.95%	-8.66%	-22.84%	-10.83%	-20.41%	-16.13%
CS	66.15	1.75	2.72%	0.53%	-3.96%	-0.27%	-5.65%	3.02%	-15.85%	8.11%
MER	66.09	5.19	8.52%	-0.26%	-12.10%	-7.28%	-29.40%	-12.90%	-27.37%	-24.30%
UBS	53.83	0.88	1.66%	-1.27%	-6.06%	1.09%	-12.31%	-1.01%	-18.62%	-14.83%

Whenever you read of reflation, it’s a sign that the Financials are being pumped.

This week, the Financial ETF (XLF) gained +3.22 pct to close at 33.69. That is a big gain. The problem is that XLF two weeks ago closed at 35.49.

This week, Goldman Sacks (GS +8.4 pct), Lehman (LEH +5.6 pct), JP Morgan et al (JPM +5.1 pct) and Morgan Stanley (MS +4.6 pct) were the ones to get their marching orders from the Fed. The rest of us will have to wait until Wednesday afternoon, 2:15pm ET.

l don’t care how much they drop the rates, I still wouldn’t touch this group with a barge pole. These shares have been distributed all year, so why would I think the Fed dropping rates to help stall for time for HB&B to work out their credit market issues is going to be a fix-all?

You know it’s a BAD DAY for Merrill Lynch when the MER gained +8.52 pct on Friday and still lost -0.26 pct W/W, and that was after plunging -11.9 pct the previous week.

Their Chairman/CEO apparently thought the heat in the kitchen would be better over at Wachovia (WB). His colleagues straightened him out on Friday. Mess, mess, the Street’s a mess.

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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 Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
ORCL	21.35	0.35	1.67%	2.89%	-4.86%	-1.39%	21.93%	6.70%	12.66%	13.99%
QCOM	41.33	0.54	1.32%	2.53%	-1.97%	-2.20%	10.33%	-1.78%	-8.76%	8.79%
ADBE	47.00	-0.20	-0.42%	1.58%	1.91%	7.65%	17.74%	14.11%	8.65%	19.17%
ADSK	47.65	0.40	0.85%	1.47%	-6.20%	-4.64%	17.48%	9.21%	14.10%	27.82%
CSCO	31.90	0.72	2.31%	1.27%	-3.10%	-3.71%	15.00%	7.52%	20.15%	31.82%
INFY	49.22	0.64	1.32%	1.03%	-4.78%	1.72%	-11.82%	-3.30%	-7.31%	-5.74%
SAP	53.70	0.34	0.64%	0.26%	-3.85%	-8.47%	0.94%	0.02%	9.70%	7.29%
CTSH	39.94	0.74	1.89%	-0.20%	-2.39%	0.10%	2.73%	-2.18%	-10.41%	0.63%
INTC	25.94	0.05	0.19%	-1.37%	1.53%	0.31%	27.47%	7.77%	17.43%	19.10%
SNDK	41.02	0.90	2.24%	-3.96%	-13.46%	-25.55%	-1.68%	-27.54%	-9.25%	-18.19%

SMH (semi-conductors) plunged -5.16 pct to close at 33.79. Just think, at the close three weeks ago this ETF was sitting at 38.45.

SanDisk (SNDK) and Intel (INTC) were down -4.0 pct and -1.4 pct respectively.

Nothing much else happened in this sector.

Note that the July high was not surpassed by the Sep-Oct high. Bad sign if you are a Bull.

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Sector 50 (telecom: IYZ, VOX and IXP)

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Here’s the IYZ Monthly, Weekly and Daily data charts:

IYZ Monthly data:

IYZ Weekly data:

IYZ Daily data:

IYZ (telecommunications) dropped another -1.04 pct W/W to close at 32.41. Five weeks ago, IYZ closed at 38.58, so despite the big boys, this sector is on a slide.

Note that the July high was not surpassed by the Sep-Oct high. Bad sign if you are a Bull.

Verizon (VZ -3.0 pct) and AT&T (T +0.2 pct) were up W/W, but I think the Verizon story may have something to do with Internet TV.

Once the international broadcast rights are worked out, that is something I want for my place. Leaf Nation comes to Nassau and Paradise Island. :-)

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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) had a gain of +4.85 pct, which was sector performer #1, closing at 41.54. Unfortunately just two weeks ago, XLU closed the week at 42.39.

I hate to say it, but take note that the July high was not surpassed by the subsequent Oct high. Bad sign if you are a Bull.

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Bonds & Yields Review

Table 10: US Treasury Yields

US Treasury Bonds

Maturity	Yield	Yesterday	Last Week	Last Month
3 Month	3.80	3.79	3.63	3.57
6 Month	3.87	3.86	3.89	3.88
2 Year	3.76	3.77	3.77	3.98
3 Year	3.77	3.76	3.78	4.03
5 Year	4.05	4.02	4.02	4.26
10 Year	4.40	4.38	4.39	4.62
30 Year	4.70	4.68	4.68	4.89

Municipal Bonds

Maturity	Yield	Yesterday	Last Week	Last Month
2yr AA	3.26	3.32	3.34	3.40
2yr AAA	3.35	3.34	3.37	3.42
2yr A	3.39	3.36	3.47	3.40
5yr AAA	3.42	3.42	3.46	3.49
5yr AA	3.36	3.38	3.43	3.49
5yr A	3.59	3.59	3.71	3.72
10yr AAA	3.74	3.72	3.76	3.77
10yr AA	3.70	3.68	3.67	3.83
10yr A	3.87	3.85	3.89	3.90
20yr AAA	4.37	4.36	4.40	4.42
20yr AA	4.56	4.55	4.60	4.82
20yr A	4.38	4.37	4.41	4.42

Corporate Bonds

Maturity	Yield	Yesterday	Last Week	Last Month
2yr AA	4.57	4.56	4.52	4.84
2yr A	4.67	4.71	4.68	4.89
5yr AAA	4.80	4.77	4.79	4.99
5yr AA	5.01	4.98	4.95	5.16
5yr A	5.00	4.97	4.98	5.22
10yr AAA	5.27	5.21	5.30	5.45
10yr AA	5.58	5.50	5.59	5.79
10yr A	5.68	5.62	5.59	5.84
20yr AAA	5.71	5.65	5.68	6.01
20yr AA	5.88	5.85	5.87	6.37
20yr A	6.05	5.98	6.01	6.35

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Are you watching yields in the bond market?

Treasury yields lifted +2, +1 and +3 basis points to 4.70, 4.40 and 4.05 pct for the 30-year, 10-year and 5-year paper, respectively. The 2-year Notes dropped -1 bp in yield to 376, while the yield on the 3-month T-Bills moved from 3.63 to 3.80 as traders started to question how the Fed could chop rates again after such a fine week in the equity market where the major market indexes were up from +2 to +3 pct.

The question now is how low do the 3-month Treasury yields have to go before there is a recession. Why go to cash if the USD is sinking like a rock? If the govt isn’t going to pay much return on cash, traders ought to just move to gold.

Trick or Treat, Prof. Bernanke.

Surprise, no more tricks... thank you for the treat!

Here is the $USB 30-year Treasury Bond chart.

Interest rates and bond yields.

Interactive Daily data charts:

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Interactive Chart of Interest rates and bond yields.

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This week, TLT was flat following a loss of -0.23 pct on Friday.

When you look at these charts from the end of June, when the Consumer Spending disappeared and the Credit Fiasco appeared, the Bond market seems to be shouting, “Recession dead ahead!”

US Bond Funds -- Interactive Monthly Data Charts

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SHY Monthly data series chart:

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IEF Monthly data series chart:

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TLT Monthly data series chart:

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AGG Monthly data series chart:

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LQD Monthly data series chart:

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TIP Monthly data series chart:

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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:

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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:

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Table 11: Interest-sensitive securities

Sorted by 1-Week Price Performance.

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
CFC	17.30	4.23	32.36%	13.59%	-7.68%	-9.00%	-58.92%	-40.85%	-55.55%	-55.09%
FNM	60.03	2.77	4.84%	2.01%	-9.10%	-1.28%	0.28%	-1.75%	1.57%	0.23%
TIP	103.35	-0.09	-0.09%	0.37%	2.43%	1.29%	4.15%	3.08%	2.55%	3.32%
SHY	81.49	0.01	0.01%	0.07%	0.83%	0.28%	1.81%	1.28%	1.46%	1.60%
TLT	90.50	-0.21	-0.23%	0.04%	3.28%	2.01%	1.61%	3.99%	3.02%	2.31%
AGG	100.76	-0.09	-0.09%	0.03%	1.32%	0.74%	0.85%	1.95%	0.62%	0.92%
IEF	84.88	-0.21	-0.25%	-0.04%	2.20%	1.19%	2.66%	3.12%	2.38%	2.77%
FRE	52.69	2.10	4.15%	-0.68%	-13.10%	-10.71%	-22.39%	-11.28%	-19.56%	-23.80%

A week ago, Countrywide, Freddie and Fannie plunged -18.73 pct, -12.50 pct and -10.89 pct. One week.

This week, CFC jumped +13.6 pct on the back of a rocket (+32.4 pct) on Friday. This is not the definition of an efficient market. Henry Paulson wasted his breath last week telling the Chinese to change to a market-driven currency.

Trick or Treat, Henry. Pass the weed. You must be smoking something if you think you can sell your efficient market crapola on people who have an IQ higher than 80.

FNM gained +4.8 pct on Friday, leaving a gain of +2.0 pct W/W. FRE gained +4.2 pct on Friday, but that was not good enough to stay above water as the stock lost -0.7 pct W/W.

But, who cares anyway unless you are a gambler or an idiot to believe you are dealing with the same cards Henry Paulson is dealing his friends.

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Consumer Finance -USA -- Interactive Weekly Data Charts

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Consumer Finance -USA -- Interactive Daily Data Charts

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Commodities Review

The $CRB has had eight very impressive gains in the past nine weeks. The index now stands at 345.87 after a gain on the week of +1.69 pct., including +1.04 pct on friday.

The 50-day Moving Average for $CRB is now at 323.84 and the 200-day MA is 314.23.

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.”

$CRB Index

Open Futures Contracts

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Interactive Chart of Weekly CRB Commodities Index:

Interactive Chart of Daily CRB Commodities Index:

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Oil Review

I called last weeks move in Crude Oil futures a rocket. $WTIC (US Light Sweet Crude called West Texas Intermediate) jumpeded +4.21/bbl to close at 86.95, a record high weekly close at the time.

I said, “CNBC seemed to be in non-stop promotion of 90 and 100 oil. As I see it, CNBC is the take-out party for somebody big.”

Well, this week, $WTIC rocketed a further +4.91/bbl to close at 91.86, and, no, I did not see this coming. Then again, I guess oil is cheap with the $USD at 87.51, so I could just as easily say that I thought the US or the other G-7 monetary authorities would have protected the falling Dollar before now.

This is obviously bigger than Financial Entertainment TV. There seems to be a rush by nations to price their currency lower than the next one, which means that those who were smart enough to buy gold have been well hedged.

As oil is not a storehouse of value, and there is no user demand today or in the near future that could sustain such high prices, the price is being driven by speculation, whipped up by the falling USD. But there are huge margins between the cost to produce oil and the spot price, so speculators are at considerable risk. On the other hand, there are narrow margins between the cost to produce gold and the spot price, and gold is money, so gold is the better speculation and the better hedge against the falling USD.

The 50d MA for $WTIC is 79.43 and the 200d MA is 68.60, so Oil is so far above both the 50d MA and 200d MA lines that when it falls, and it will, the support is a long way down.

Recently I asked, “The question is, what happens if and when the major economies of the US, UK, Europe and Japan slow down. Does anybody really think that the flaming hot economies of the BRIC markets are going to accelerate from here, to make up the difference?” I replied that I don’t think so. But, maybe this talk of war between Turkey and Iraq and between the US and Iran will keep the price high for a while.

Oil stocks (XLE) have not kept pace with the $WTIC, and I think the gap must be closed, one way or the other.

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

Interactive Chart of Weekly Crude Oil:

Interactive Chart of Daily Crude Oil:

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Gold & Precious Metals Review

Since a low of 651.60 on August 17, $GOLD has zoomed to 787.50, a gain of +21 pct. Another way of looking at it, I could say that is a Bull market in ten weeks.

As house prices are deflating, gold is inflating. Why is that?

Well, maybe house prices were far over-priced to begin with and gold under-priced. Certainly there is an economic argument for that. In the summer of 2005 it was clear that 2 pct cash on cash returns from investing in houses was uneconomic and $GOLD, trading then in the 410-425 range despite an all-in cost of at least that much, was unsustainably low.

Anyway, thanks to an increasingly weaker $USD, the PM beat goes on. $GOLD jumped +19.10 (+2.49 pct) this week.

I am sure that the world’s leading Finance Ministers and Central Bankers are concerned. The cost inflation, ie, wages, materials, energy -- call it headline or core inflation -- (LOL) to produce gold is zooming. It is becoming increasingly hard to find new gold, and more countries like Venezuela and Mongolia are making it harder to get permits. Above or below the table, these people want theirs.

So the question is how much longer can the G-7 lie through their teeth about inflation. It is nowhere near 2 pct if you happen to be working in the oil fields or the gold mines. Maybe the elderly on social assistance programmes can be fed that line, but drillers, miners, poor countries and rich oil sheiks are no longer accepting wooden nickels.

For $GOLD, the 50day MA is now 725.33 and the 200d MA is 681.04.

Spot gold chart for the week

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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.

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Spot silver chart for the week

Interactive daily data

This week, $SILVER gained +0.64/oz (+4.73 pct) to close at 14.28.

For $SILVER, the 50d MA is 13.06 and the 200d MA is 13.25.

On August 17, the price hit a low of 11.06, so the gain in ten weeks is +29.1 pct.

That is a Bull in itself, but $SILVER, like gold, platinum, palladium and even copper broke out to higher prices on Friday. If the G-7 monetary authorities don’t step in tonight, there could be a serious melt up this week in prices.

Successful traders sell into strength but they also don’t sell a rally. They wait for a bit of a pull-back. that’s why I use the Distribution Zone and the Sell Alert system. With the prices rising so quickly, it pays to use an Hourly RSI-7 calculation. Many even use a 15-minute RSI system.

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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.

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$PLAT gained +20.50 (+1.42 pct) this week to close at 1469.10. On Friday, the gain was +1.06 pct, as all the precious metals got in gear.

Ten weeks ago, the low was 1228.20, so the gain has been +19.6 pct.

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.

The 50d MA for $PLAT is 1341.14 and the 200d MA is 1286.52.

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This week, $PALL gained+2.85/oz (+0.76 pct) to close at 380.30.

The 50d MA is 352.92 and the 200d MA is 360.97.

This precious metal is clearly less precious than the others. One of the reasons is that there is less industrial demand.

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.

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$COPPER lost -1.40/contract (-0.39 pct W/W) to close at 353.75. But there was a gain on Friday of +1.48 pct.

The 50d MA of $COPPER is 348.34 and the 200d MA is 328.16, so the current price (353.75) is still above both the 50d MA and 200d MA, which may be saying that either recession is closer at hand than we might think or the $USD is going to take a break from its southbound journey any time soon.

Like I say, maybe this market is leading the PM group? I am not so certain, but if I were unhedged, I’d be watching it all by the hour.

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.

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Table 12: Senior gold equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
KGC	18.40	0.90	5.14%	8.75%	12.40%	22.83%	61.12%	37.21%	38.76%	46.96%
GG	33.41	1.11	3.44%	4.73%	2.71%	9.33%	22.20%	30.92%	36.31%	35.87%
NEM	47.57	1.40	3.03%	4.18%	0.00%	6.35%	7.62%	14.57%	10.17%	6.54%
AUY	14.42	0.51	3.67%	3.52%	5.87%	22.41%	16.95%	27.16%	1.98%	48.35%
ABX	43.05	0.78	1.85%	3.49%	1.82%	6.88%	44.32%	31.93%	51.74%	41.29%
MDG	39.43	1.08	2.82%	2.47%	6.37%	19.12%	49.98%	38.98%	54.57%	61.00%
AEM	54.90	2.45	4.67%	2.25%	0.40%	10.24%	41.06%	32.64%	55.74%	55.52%
GFI	18.15	0.25	1.40%	1.91%	-3.46%	0.33%	-0.98%	8.55%	-1.04%	3.66%
BVN	52.84	1.27	2.46%	0.74%	-0.62%	10.59%	91.38%	28.82%	60.71%	102.61%

This week, $XAU gained +8.51 (+4.89 pct) to close at 182.81.

The 50d MA is 160.30 and the 200d MA is 145.28.

I continue to advise not to get caught in a smash-up, so move your stops up, tighten your seat belts, and don’t hand back those hard-earned gains.”

Btw, for Pierre Lassonde's IPO coming up for Franco-Nevada, I understand that this is being done to take Seymour Schulich out, as he is likely to retire. Interesting that Western Goldfields' Chairman Randy Oliphant is slated to be a Director. This is a ticket you want to punch. You get Pierre and Randy together, and somewhere in the mix there is the makings of the next Barrick.

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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

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

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Here are the key Silver miners and the SLV ETF:

SLV SIL CDE HL PAAS SSRI SLW MGN

Interactive Daily data
Interactive Weekly data

Some of you questioned my strategy of switching between Silver Wheaton (SLV), a silver royalty company (but still an equity that is leveraged because it has an operating cost structure like any company) versus futures.

Here is the background.

Over say 40 years, I think it is unwise to hold on average more than 3 pct to 8 pct in precious metals bullion or precious metals stocks. That does not make me a gold Bull. I understand the industry, I know many of the people in it, and many of them are my friends of 30 or more years. It is a tough business, and one where I respect and often admire the people in it. I, on the other hand, am a trader. I trade prices. Prices of securities, commodities and currencies rise and fall, so I study trends and cycles of the price series over a time horizon. At the end of the day I might decide to buy guy and gold shares, which you might say helps my friends because they depend on high prices, or I might sell, which has the opposite effect. I do whatever is needed to effectively manage a portfolio.

At times, like the past five years, I believe the market is in a rising inflation cycle, and that is the time to buy more commodities and less paper assets, like stocks and bonds, or USD because the important commodities, oil and gold, are priced in USD. The last time there was an inflation cycle was in the 1970’s -- before some of you were born, and that too is when house prices first went nuts, then oil prices, then gold and silver. So we are now repeating this cycle. It doesn’t come along too often, usually a few years after wartime when spending is much greater than the real economic value that results from it.

So, this time, the world is facing a much different conflict. This one is driven by religious extremism, which, and I don’t say this lightly, is happening on many sides, and may escalate due to the sheer numbers and zeal of the opponents. This one, too, is being waged using much costlier equipment in order to save lives because the taxpayers or patrons who fund these wars are better educated now and they can see the horrors of war in real-time and consequently will not support the type that occurred in WWI, WWII, and Vietnam. So, more money going in simply means more inflation coming out.

At the same time, business interests and their supporting capital pools have greater knowledge of the world and insights in how to exploit foreign opportunities, so they are taking them on, and as the people in those emerging economies gain wealth and knowledge they too have cell phones and Internet and can read blogs. they too can see the folly of HB&B and the G-7 monetary authorities, and they too want to hedge against inflation. This cycle, unlike the 1970’s, there are at least ten times the numbers of people ready, willing and able to buy the physicals or the contracts related to oil and precious metals. But there is nowhere near the comparable amount being produced.

So, this time, I found that my upper limit of eight pct portfolio weighting in precious metals (shares, call options and futures contracts) was extended to a maximum of 12 pct, then 15, 20 and 25 pct. And my holding of cash became one of holding short put options in precious metal shares, where my intention was to earn premiums from the disbelievers.

I suppose it was around the time that I realized the housing industry had gone crazy within a credit market few people understood (especially the derivatives), say 2 - 2 1/2 years ago, that I had to always have a full position in precious metals. In other words, I had to be prepared for a melt-up in gold and a break-down in the credit system, followed possibly by a break-down in currency markets and then a major economic recession. After thinking through the work of a couple people like Nouriel Roubini (http://rgemonitor.com) and Michael Panzner (http://financialarmageddon.com), I believed I had come to the correct decision.

But, being a student of market trends and cycles, I was also aware that cycles within cycles would lead to phases of market prices that were falling within the long-term upward trend. So, I realized that at times I would have to be holding greater or smaller holdings of common shares, call options and short put options. I then decided to switch at the top of those cycles into long-dated futures, where the downside of a falling price would be less. I suppose if I were more sophisticated in my approach and had been involved on a day to day basis, I could accomplish a better result from various option spread strategies. My trouble is that I have to do everything myself, and I have only so much time. Another is that my personal situation for the past two years has been less smooth than I wanted. I did try to take on some professionals, but I never followed through.

Some time in the near future, however, I will build a team of professionals to provide me and others (ie, clients) a proper service. When I see it working properly, I’ll probably take time off and do more traveling.

The final point I’d like to make on the subject is that this community has many hundreds of specialists in every aspect of what I write about that I know could do a better job than me. In fact, if there is a singular truth to the Wizard, it is in the broad scope of the knowledge (rather than the depth), which enables me to have insights possibly faster than the next person.

Another way of saying that is to remind you I often say that trading is not rocket science, but maybe there is a lot of rocket science and that I just ignore it because I have always found it more important to have perspective than detailed expertise. In fact, increasingly I am seeing multi-department specialists collaborating at HB&B because I think they too now realize markets don’t operate in a vacuum.

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Here are the Weekly and Daily Data charts of the indexes:

Weekly U.S. Goldminers Index:

Interactive Chart of Weekly U.S. Goldminers Index:

Interactive Chart of Daily U.S. Goldminers Index:

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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:

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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:

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Forex Review

Here is the chart of the week’s trading.

A week ago, I wrote, “The $USD lost ground yet again, dropping -0.80 (-1.02 pct) to close the week at 77.41. How low can it go?” This week, the $USD dropped -0.41 (-0.53 pct) to 77.00.

My how the mighty have fallen.

”This chart looks like a train track into the ocean. Nobody knows how far it can go down. (From a prior WIR)” Well this week, the Fed and HB&B did what they could to plug holes into the dike holding back the ocean. Do you think these people have more fingers than the dike has holes? I guess we’ll find out. (Three weeks ago in the WIR after the $USD had gained some strength to 78.89)”

From that point on: same old, same old.

I never thought it possible that the Fed would be cutting rates when, as the President says, stock and bond prices are strong and the economy is healthy. Obviously there is a disconnect here. Maybe we need a Cowboy President who, according to the Presidente, can actually ride a horse.

I josh of course. I actually like this man. It's the world of banking that doesn't know how to call a spade a spade. You listen to these bankers, it's like watching the Bud Abbott and Lou Costello "Who's on First" routine.

What I have been saying here is that traders are fearing that another Northern Rock is likely to happen soon, and then another, and another. There must be a reason for this reflation strategy. But, does anybody know who's on first.

The following data is a simulation of the M3 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. They have no option under the circumstances. The economy is relatively strong, but the credit markets are imploding.”

I don’t recall how long ago I wrote that, but it still applies.

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The Euro ($XEU) this week gained +0.98 (+0.69 pct) to close at 143.82.

The Euro’s 50d MA is 139.48 and the 200d MA is 135.35.

Interactive Chart of Weekly U.S. Dollar Index:

Interactive Chart of Daily U.S. U.S. Dollar Index:

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Interactive Chart of Weekly Euro Dollar Index, priced in USD:

Interactive Chart of Daily Euro Dollar Index, priced in USD:

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This week, the Pound gained +0.21 (+0.10 pct) to close at 205.16.

The 50d MA is 202.32 and the 200d MA is 199.44. The recent high was 206.40 (July).

Weekly British Pound Index:

Daily British Pound Index:

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Weekly Japanese Yen Index:

The Japanese Yen ($XJY) gained +0.49 (+0.56 pct) to close at 87.51. It appears the Japanese Carry Trade started closing shop a week ago, leaving the Fed to do what’s needed to hold the market up.

If you want another indicator of where the North American and European equity markets are headed, you can watch the Yen:USD pair. If the Yen strengthens a lot, it is likely that Japanese capital is being pulled out of foreign markets and debts to banks are being repaid.

Daily Japanese Yen Index:

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The Canadian Loonie continues on a tear. This week, it traded up +0.24 (+0.23 pct) to close at 103.92 American.

The Loonie’s 50d MA is 98.57 and the 200d MA is 92.03, which aren’t even in the same world with the current price 103.92).

You might say this is good opportunity for Canadians to buy ocean-front condos in South Florida and Bahamas (US$ at par).

Weekly Canadian Dollar Index:

Daily Canadian Dollar Index:

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International Equity Markets Review

Here is the latest session data for the exchanges of the Americas.

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Here is the latest chart for the Brazilian Bovespa stock exchange in Sao Paulo.

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Here is the latest session data for the Toronto Stock Exchange composite index.

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Europe

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

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Here is the latest session data for the London stock exchange FTSE.

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Here is the latest session data for the German DAX.

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Here is the latest session data for the French CAC 40.

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Here is the latest session data for the Milan Italy stock exchange MIBTEL.

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Here is the latest session data for the Swiss market index.

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Asia-Pacific

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.

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Here is the latest chart for the Singapore index .

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Here is the latest chart for the Shanghai Composite index .

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

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

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

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Table 13: International equities via an ETF perspective (ie, $USD)

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
IFN	57.80	2.55	4.62%	11.80%	0.56%	6.45%	27.48%	27.45%	36.93%	20.95%
EWZ	82.40	2.92	3.67%	8.98%	3.49%	11.22%	76.45%	32.37%	53.82%	94.71%
FXI	209.50	2.00	0.96%	5.12%	3.58%	16.39%	79.98%	54.16%	91.88%	143.04%
TRF	72.50	2.23	3.17%	4.54%	2.14%	5.58%	-18.13%	6.71%	0.49%	4.32%
EWU	26.81	0.45	1.71%	3.59%	0.45%	3.91%	13.84%	9.29%	7.67%	16.26%
IEV	122.94	1.78	1.47%	3.22%	0.49%	3.49%	16.42%	9.12%	6.61%	21.87%
EWC	34.54	0.64	1.89%	2.92%	0.91%	5.53%	39.84%	14.52%	24.92%	37.61%
QQQQ	53.93	0.88	1.66%	2.84%	0.75%	4.90%	24.72%	10.11%	15.85%	25.95%
SPY	153.62	1.78	1.17%	2.64%	-1.75%	0.68%	8.67%	3.78%	2.65%	10.69%
EWJ	14.14	0.24	1.73%	1.80%	-2.75%	-1.26%	-0.42%	-1.81%	-2.28%	0.43%

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Japanese equity market ETF: EWJ

Here is the Japanese (EWJ) equity market ETF Monthly, Weekly and Daily data charts:

Interactive EWJ Monthly data:

Interactive EWJ Weekly data:

Interactive EWJ Daily data:

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U.K. equity market ETF

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

Interactive EWU Monthly data:

Interactive EWU Weekly data:

Interactive EWU Daily data:

EWU Daily data:

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Canada’s equity market

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

Interactive EWC Monthly data:

Interactive EWC Weekly data:

Interactive EWC Daily data:

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US Equity Markets Review

A dozen NASDAQ stocks to watch.

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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.

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Table 14: Dow 30 List

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
MSFT	35.03	3.04	9.50%	16.11%	16.11%	18.91%	17.31%	16.84%	20.38%	23.56%
MRK	57.58	0.52	0.91%	8.42%	7.61%	11.39%	30.80%	10.79%	9.82%	24.61%
AXP	60.67	0.91	1.52%	6.23%	-4.05%	2.19%	0.51%	0.68%	-2.37%	4.93%
JPM	47.32	1.27	2.76%	5.11%	1.07%	3.27%	-1.56%	7.35%	-10.62%	-0.94%
AA	39.35	0.96	2.50%	5.10%	3.20%	0.59%	34.16%	3.55%	9.89%	42.52%
KO	61.57	0.27	0.44%	4.78%	6.52%	7.13%	26.74%	16.21%	18.22%	30.61%
MCD	58.47	0.40	0.69%	3.63%	2.54%	7.34%	33.28%	18.12%	18.77%	38.85%
MO	72.97	0.71	0.98%	3.50%	4.15%	4.95%	12.40%	9.24%	5.25%	19.19%
DD	48.37	0.03	0.06%	3.20%	-1.41%	-2.40%	-1.37%	1.30%	-2.44%	5.77%
VZ	45.60	0.69	1.54%	3.00%	0.15%	2.98%	20.57%	7.55%	20.09%	17.71%
BA	96.02	0.02	0.02%	2.26%	-0.69%	-8.54%	7.68%	-7.41%	1.87%	21.33%
HPQ	52.47	1.08	2.10%	2.08%	1.78%	5.38%	26.07%	11.40%	24.81%	33.95%
CAT	75.04	0.37	0.50%	2.00%	-6.55%	-4.32%	22.69%	-4.15%	2.79%	20.35%
HON	59.44	0.31	0.52%	1.92%	-3.68%	-0.05%	31.80%	0.03%	10.71%	38.81%
HD	31.35	0.65	2.12%	1.92%	-6.25%	-3.36%	-23.67%	-15.95%	-19.59%	-16.13%
DIS	34.38	-0.07	-0.20%	1.69%	-3.07%	-0.03%	0.53%	0.88%	-2.25%	7.50%
PG	71.75	0.40	0.56%	1.34%	0.07%	2.00%	11.17%	14.69%	13.91%	12.99%
IBM	113.73	0.92	0.82%	1.29%	-3.46%	-3.46%	16.92%	-2.40%	12.72%	24.24%
PFE	24.31	0.02	0.08%	1.00%	-3.76%	-0.49%	-7.53%	0.66%	-9.02%	-10.89%
GE	40.38	0.22	0.55%	0.85%	-1.58%	-2.46%	6.35%	2.15%	12.67%	13.46%
C	42.63	1.40	3.40%	0.64%	-10.95%	-8.66%	-22.84%	-10.83%	-20.41%	-16.13%
GM	37.77	0.08	0.21%	0.45%	-11.42%	2.92%	28.25%	17.30%	16.39%	9.92%
T	41.46	0.46	1.12%	0.22%	-1.96%	-2.01%	18.63%	3.73%	6.42%	20.52%
JNJ	64.30	0.35	0.55%	0.11%	-2.49%	-2.13%	-3.16%	5.48%	0.09%	-6.57%
XOM	92.21	0.64	0.70%	0.08%	-1.36%	-0.38%	24.42%	4.51%	14.48%	28.75%
MMM	86.13	0.04	0.05%	-0.57%	-8.54%	-7.96%	10.06%	-4.35%	7.06%	8.70%
UTX	75.44	-0.28	-0.37%	-0.74%	-6.08%	-6.26%	20.11%	1.33%	11.52%	15.63%
WMT	44.64	0.76	1.73%	-0.76%	-5.14%	2.27%	-6.12%	-4.66%	-8.34%	-13.74%
INTC	25.94	0.05	0.19%	-1.37%	1.53%	0.31%	27.47%	7.77%	17.43%	19.10%
AIG	62.15	0.36	0.58%	-1.77%	-8.72%	-8.13%	-13.86%	-6.71%	-10.95%	-8.31%

You 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)

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Value Line Report(s) this past Friday

There are two companies reported this week by Value Line: Caterpillar (CAT), which delivers heavy-duty earth moving equipment to the mining, construction and road building industries, and United Technologies (UTX), a diversified manufacturer of products like Pratt & Whitney jet engines, Carrier HVAC equipment, Otis elevators, Sikorsky helicopters and Hamilton Sundstrand electron controls.

United Technologies is a Cara 100 company based on financial strength, RoE, earnings predictability and consistent growth. Buy the stock after a significant pull-back, which seems to occur every couple years, and this will be a leading portfolio performer for you, with annual gains in the low to mid-20’s.

Some of you think Caterpillar Inc is the ideal company, like Switzerland’s ABB, for the times, and I agree enough to put it into the Cara US 100, but not the Cara Global 100.

I like many of the important metrics, like financial strength and RoE, but earnings are not as predictable for the CAT as I’d like to see. I haven’t mentioned this point too often, but when you hold the shares of a company like this you can be in for surprises of the kind pointed out by analyst David Reimer of Value Line. What that does is give an insider edge to the people who are really close to the company -- employees, customers, vendors, bankers, hedge funds, etc. What I look for is a more level playing field, where if we are going to be surprised, we are all surprised at close to the same time. When it comes to timing the Buy or Sell, I look to use a consistent application of RSI/MACD studies and not a reaction to news and rumor.

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Caterpillar (CAT)
(CAT: Value Line Report Oct. 26: next one is due Jan. 25)

United Technologies (Cara 100)
(UTX: Value Line Report Oct. 26: next one is due Jan. 25)

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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 Oct. 19: next one is due Jan. 18)

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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)

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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)

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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)

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AT&T [GICS 50, Dow 30]
(T: Yahoo Finance file)
(T: StockChart chart)
(T: Billcara2 chart)
(T: ADVFN Financial Data)
(T: Value Line Report Sep. 28: next one is due Dec. 28)

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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 Sep. 21: next one is due Dec. 21)

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Caterpillar [GICS 20, Dow 30]
(CAT: Yahoo Finance file)
(CAT: StockChart chart)
(CAT: Billcara2 chart)
(CAT: ADVFN Financial Data)
(CAT: Value Line Report Oct. 26: next one is due Jan. 25)

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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)

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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)

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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)

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Dupont [GICS 15, Dow 30]
(DD: Yahoo Finance file)
(DD: StockChart chart)
(DD: Billcara2 chart)
(DD: ADVFN Financial Data)
(DD: Value Line Report Oct. 19: next one is due Jan. 18)

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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 Sep. 14: next one is due Dec. 14)

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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 Oct. 13: next one is due Jan. 11)

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General Motors [GICS 25, Dow 30]
(GM: Yahoo Finance file)
(GM: StockChart chart)
(GM: Billcara2 chart)
(GM: ADVFN Financial Data)
(GM: Value Line Report Aug. 31: next one is due Nov. 30)

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Hewlett-Packard [GICS 45, Dow 30]
(HPQ: Yahoo Finance file)
(HPQ: StockChart chart)
(HPQ: Billcara2 chart)
(HPQ: ADVFN Financial Data)
(HPQ: Value Line Report Oct. 13: next one is due Jan. 11)

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Home Depot [GICS 25, Dow 30]
(HD: Yahoo Finance file)
(HD: StockChart chart)
(HD: Billcara2 chart)
(HD: ADVFN Financial Data)
(HD: Value Line Report Oct. 5: next one is due Jan. 4)

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Honeywell [GICS 20, Dow 30]
(HON: Yahoo Finance file)
(HON: StockChart chart)
(HON: Billcara2 chart)
(HON: ADVFN Financial Data)
(HON: Value Line Report Oct. 13: next one is due Jan. 11)

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IBM [GICS 45, Dow 30]
(IBM: Yahoo Finance file)
(IBM: StockChart chart)
(IBM: Billcara2 chart)
(IBM: ADVFN Financial Data)
(IBM: Value Line Report Oct. 13: next one is due Jan. 11)

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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 Oct. 13: next one is due Jan. 11)

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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 Aug. 31: next one is due Nov. 30)

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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)

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McDonalds [GICS 30, Dow 30]
(MCD: Yahoo Finance file)
(MCD: StockChart chart)
(MCD: Billcara2 chart)
(MCD: ADVFN Financial Data)
(MCD: Value Line Report Sep. 7: next one is due Dec. 7)

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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)

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Merck [GICS 35, Dow 30]
(MRK: Yahoo Finance file)
(MRK: StockChart chart)
(MRK: Billcara2 chart)
(MRK: ADVFN Financial Data)
(MRK: Value Line Report Oct. 19: next one is due Jan. 18)

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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)

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Pfizer [GICS 35, Dow 30]
(PFE: Yahoo Finance file)
(PFE: StockChart chart)
(PFE: Billcara2 chart)
(PFE: ADVFN Financial Data)
(PFE: Value Line Report Oct. 19: next one is due Jan. 18)

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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 Oct. 5: next one is due Jan. 4)

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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 Oct. 26: next one is due Jan. 25)

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Verizon [GICS 50, Dow 30]
(VZ: Yahoo Finance file)
(VZ: StockChart chart)
(VZ: Billcara2 chart)
(VZ: ADVFN Financial Data)
(VZ: Value Line Report Sep. 28: next one is due Dec. 28)

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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)

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Wrap up:

I had planned to spend more time reviewing the exhibitors at the Cambridge Toronto Natural Resources Show, but then I realized I didn’t meet too many new companies. I spent a lot of time meeting some of you (about 16 by my count) and talking to my friends among the exhibitors or their behind-the-scenes promoters plus some Toronto and Vancouver brokers and all.

There are too many companies I did meet that I ought to be mentioning, including US Gold, Lexam, Valgold, Freewest, Baltic, Fortuna, etc., but I don’t want to be accused of promoting, so I’ll leave you to do the homework.

I didn’t get around to see Midland Minerals, which I know, or Nautilus Minerals, which I’m hoping to find out more about. I did see the CNQ exchange, which I recommend (and will use if I go public), and Stockhouse/Stockgroup from Vancouver, which I once signed up for Qtrade because they have a good info service.

I spoke with Martin Quick, CEO of Khan Resources (TSX.V: KRI) who assured me that the US and UK govts straightened out the Mongolian govt following an ill-advised statement by a govt official in August that an Investment Agreement might not come for Khan. Ultimately, Quick said, these agreements are sure to come because Mongolia is (i) not a totalitarian state, and (ii) it depends on the help of the US/UK.

He also remarked that confidence must be restored in the market now because Ivanhoe Mines (IVN) is still waiting for their Agreement despite Rio Tinto (RTP) having removed the perceived obstacle in Robt Friedland from the negotiating table. Finally, he said that my wife’s cousin John Kita is no longer with the company as head geologist but he departed on good terms in order to take a job in Ontario where he would be close by his wife and young family. John apparently knew he was going to be required to be in Mongolia for months at a time, and decided against it.

I also spoke for a while with Norman Champigny, Exec VP of Azimut Explorations (http://azimut-exploration.com). I continue to be impressed. This company is small, tight and focused. The stock is about $5. I think it was about $4.50 when I met them at PDAC in March, and it ran up to close to $9.50 in June after i recommended it, then fell back about $4, largely because of the falling uranium price. But Azimut has quite a diversified claims group of which they are selling off working interests to major mining companies. Do a Google search on my site to see what I have written on Azimut.

A new company I met, because of my personal interest in Guyana, is Gold Port Resources (TSX.V: GPO). CEO Adrian Hobkirk checks out from a couple of my friends in addition to Rob McEwen who has invested $2.9 million. The stock has 25.6 million shares outstanding according to the brochure, and traded between 44 and 46 cents following the show on Sunday-Monday. Lots of drilling underway here and the prospects look promising. Assay results are expected shortly.

Several broker friends of mine liked the Geologix (TSX.V: GIX), and you have heard that from others who attended the Show, plus from several newsletter writers. The properties are in Mexico, Nevada and Peru. I know some of you like it, and will be buyers on pull-backs.

A long-time friend, Tony Garson, is now CEO of Excaliber Resources (CNQ: EXBR) (Frankfurt: A0MMDH), presently trading at 9 cents. The company used to be a high-tech play taken over from another long-time friend of mine, but that didn’t work out between these guys, so early this year they filed for a name change and bought the old Silver-King silver-copper mine near Nelson BC, hoping to develop a reserve base there that would support new mining. The company is close to finishing $800,000 financing. I’m too close to the people to make objective comment, but Tony Garson was formerly the senior gold analyst for Bank of Nova Scotia, Dean Witter, Haywood Securities and Canaccord Capital. He knows the business inside-out, and it's widely known in the industry that he is the consummate professional, a geologist (U Waterloo) with MBA (U Toronto).

I did meet one new company, Terra Ventures (TSX.V: TAS), a North America uranium play. Greig Hutton is the CEO and his well-known financier brother James Hutton (CEO, Canada Dominion Resources Group, which has completed close to $1 billion in flow-through exploration financing) is a director. Looks interesting. I will look at their web site (http://terrauranium.com).

Jock Gunter and I are going to start on the Cara Junior Resources 100 report. With the new technology I plan to use for this one and for the Cara Microcaps 100 report, there will be embedded slide-shows and video, etc. It should be good.

Eventually, I intend to establish separate Funds to trade shares of those high-risk companies, and I’ll probably list the Funds on CNQ/Frankfurt.

Sometime before year-end, I will meet with a securities lawyer to discuss how I can do a legal offering of shares to this community. The problem is that most of you are not “accredited” investors who are exempt from public IPO requirements in your 100-plus countries and all the state and provincial securities of those countries. Rules are rules for good reason. I’ll just have to find an optimal solution.

As to taking myself public, I have a much different take on this than many of you do. Yes, the regulations and filing costs can be prohibitive, and yes, dealing with sponsoring brokers and so-called market makers can be a challenge, but I can do this with very low cost and without any sponsors or market makers. Also, I will have no need to promote because (i) I am a cash-flow positive business from the get-go, and (ii) I already have a bigger following than most companies on the Venture board.

That’s not to say I will go ahead, but I am considering it. In any case, I will be doing a Cara Junior Resources 100 Fund and a Cara Microcap 100 Fund, for my company, and possibly a public Bahamas Real Estate Investment Trust in conjunction with a lawyer associate in Nassau/Freeport.

Back to the here and now, without my MS Office templates for screenshots and the simple routine for archivable uploads to my web server, I again cancelled the 30-some odd screenshots (Knobias Cara 100 tables, David’s RSI tables, Jock’s Impulse tables and many other screen shots I take as I work myself through the WIR.

I’ll get back to my usual routine, however, as soon as I get my Windows systems up to speed. This week, I’ll try to download OpenSource Office Suite to help me do that. And I’m looking fwd to meeting Leopard.

Leopard btw is the new Operating System for the iMAC, which btw you CANNOT BUY at the Apple Store as I discovered yesterday. You must order it online and wait a week for delivery. This is the way Steve Jobs runs a company, ie, I’ll make it pretty, but you’ll do it my way.

Not so many insights this week other than on Apple. Just glad to have my two Windows systems returned so I can now start to work on stuff that has been piling up.

Have a good one. Wherever you are in the world, we are connected... discussing, listening, thinking, improving… thanks to this community.

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