Better still, how long will it take Humungous Bank & Broker (HB&B) to admit that the United States is mired in stagflation.

The yield on the 10-year US Treasury instrument has fallen in a month from 4.34 pct to just 4.00 pct. In mid-week, the yield on the 2-year Treasury was under 3.00 pct. Can the US recession be far off, as the bond market indicates, or have bond traders just mispriced inflation risk, or both?

One look at the inflation-indexes bond (TIPS), which is up with a bullet since the end of June, shows that traders are, in fact, betting on inflation, with the TIPS outperforming the important 20-year+ Treasury Bond index (TLT). But, one look at the Daily and Weekly price charts for the TLT Bonds also shows a rocket move from the end of June.

Two things happened at that point. First I noted in July that the US retailer stocks (RTH) absolutely hit the wall -- not one or two, but almost the whole group. Second, the first word was coming out about certain hedge funds losing billions in the credit markets as buyers were balking at the lack of marked-to-market asset collateral behind these Structured Investment Vehicles (SIV’s).

My take on it, in retrospect, is that HB&B insiders saw the writing on the wall, spelling tight credit and Recession to come, and they started to bail out ahead of the clients who were left on their own for a couple weeks to try to figure out what was happening. They bailed on their own stocks first as the $XBD, $BKS and XLF Weekly charts clearly show. It was the end of second week of July to be specific. Since then the whole complexion of the market changed.

After the July near-panic sell-off, HB&B spent from mid-August through September painting lipstick on pigs, ie, the mortgage companies and housing stocks and even the shares of their own group that they told us were on the way to recovery. But by mid-October, we discovered HB&B had changed their tune and these pigs had been on their way to market, ie, to the slaughter house.

When you see what happened to the mortgage companies this week (CFC -21 pct, FNM -25 pct and FRE -37 pct W/W), and that’s after being smashed from mid-October, you have to think that some of the comments that came from HB&B earlier in the summer in support of these housing and mortgage companies were outright criminal. HB&B had to have known it was going to be a massacre once the SIV buyers were able to peek beneath the covers.

The market trend has now changed, and trading has become volatile. We on the Buy-side are now day traders, like HB&B, because that’s what happens during trend junctures.

But, think about this, it is really the bigger picture we need to focus on. We now know that the three biggest mortgage companies in the world, Countrywide, Fannie and Freddie are down in price YTD -77 pct, -46 pct and -61 pct, and we can assume that nobody knows if any of the three are actually solvent. Yet, there on Friday in the US, HB&B was cranking up the market for a year-end rally. Wow!

Like it or not, traders have to go with the flow. Short-term, it now appears that most of the international markets are ready to carry through with an HB&B-inspired year-end rally.

If it were just the US markets, on the basis of the foregoing I might hesitate and suggest the rally will be narrowly focused, but almost all the equity markets seem ready to follow. In this WIR, I added 16 more international market charts from stockCharts.com for you to be able to see how the big picture changed on Friday, and probably next week.

Now, what could possibly happen to drive these market indexes higher through into the 1Q08? It could be that Crude Oil prices could come down sharply, with the Bulls jumping on the lower cost = greater corporate earnings story line. But, then the Bears would growl back that rapidly falling oil prices could only mean that the economy is going into recession and that corporate earnings will hit the wall, perhaps slowing, perhaps falling.

So I think the focus will remain on the interest rates and the $USD price. Right now both are falling, which indicates a recession on the horizon, but should the $USD continue to fall, oil prices will not come off, and will probably continue lifting, inviting more price inflation, which will soon impact wage inflation because too many people are being financially squeezed at this point.

So, I conclude the US authorities have no option but to support the $USD now, which they can do by not dropping the Fed rate further, and by taking steps to squelch speculative trading, which they can do by raising margin requirements at the broker-dealers and on the commodity exchanges. For that to work, though, the other G-7 authorities, at least, would have to comply. If not, more hot money will run into those markets, further driving up their currencies, and depressing the $USD. So this is a complex situation.

Time buys nothing for these central bankers because the asset-backed securities in the credit markets are having to be marked to market, which is often to zero, and these holders, mostly HB&B and major pension funds, will have to write them down, possibly as I say to zero. But, whether the hit is taken now or in a couple months doesn’t mean much because traders are always early on these things, and, when uncomfortable, they will sell. Basically it was the start of October when traders started taking action by selling holdings they were most uncomfortable with, which were the Financials, Consumer Discretionary, Technology, Industrials and Telecom. In November, the Energy and Utilities started to look shaky. So far, only the Consumer Staples sector has held up.

So, after the July-August sell-off, then a recovery wave to lower high levels, followed by the October-November sell-off to lower lows, it appears the market is now ready for another recovery rally, probably to lower high levels again. This Bear market rally, then, in my opinion, will just help HB&B and their premier accounts get off more paper. Those of the rest of us who are in denial, and cannot also sell into this strength, will ultimately take the biggest hit.

Although I cannot give you a specific date, I have seen in similar situations in years past where the Bulls would try to muddle through by what I refer to as The Rolling Bear, which is simply individual sector, group and individual stock rotation, over and over without taking the whole market down until the gnomes have offed their positions.

I don’t like to say this, lightly at least, but The Rolling Bear scenario needs the complicity of all the major proprietary trading desks at HB&B. What I am referring to in concept is a series of HB&B broad promotions followed by selective Bear raids intended to bilk the public in those stocks or groups. How this is done is simple: After the promo has been working for a month or so, load up on long put options at high prices and write short puts at lower prices. Then, at the anointed time, at say 3 pm, sell the stock, group or sector to kick off the public panic. With sector and industry ETF’s today, that is really easy.

Do I think this happens? I know it happens, and I’ll give you an example. But first let me say that it typically happens when HB&B and central bankers get squeezed, as they are today.

In the business of banking, there is one rule above all that matters: protect the firm’s capital at all costs... before the interests of individual officers and directors, before friends and family and certainly before clients’ interests.

Millions of registrants and former registrants in the securities industry have had it drilled into them, from Day 1 on the job, the rule of Know Your Client, which is to say, never let the client screw you. When times get tough -- I mean really tough -- what do you think desperate people in the financial services industry do? Well, we know what they do at the best of times. The regulators publish records of investigations and prosecutions. But, I’m talking about when the whole industry is in tough... You can only imagine the back-room deals.

In 1981-82, I travelled to and from my country home 75 miles from Toronto in an old Budd railroad car that made one trip into Union station and one trip back, daily. Our dayliner served perhaps 30 commuting senior traders, money managers, HB&B executives, securities lawyers, etc. On the way in we would read our papers and prepare for the day. The trip home was our bar car, where we always had a designated buyer of the beer, and we stood together jammed on the train’s rear platform talking shop. I learned a lot that way.

I learned, for example, before any of my firm’s officers and directors who I spoke to the next day, that we, Canada’s biggest broker-dealer, had closed a deal to buy one of the other largest firm’s on the Street. I’ll leave it at that, but you get the picture.

One evening, a couple of the fellows on the train told us they had been in conference calls that day with industry leaders out of New York and Boston where money was being lined up to paint the market the next morning with size bids. This involved multiple financial institutions. Let’s call it a planned Bull raid.

This was mid-August 1982 when the Bear market in the US had dragged on longer than Canada’s, which had been over in June. US trading volumes had been pathetic, the Dow was under 800, the clients didn’t care to put in a bid, and brokerage houses were shriveling to nothing.

Then suddenly, the next day after I was told this HB&B intervention would happen, all hell broke loose. The tape showed huge blocks one after the other in the most important stocks. Volumes more than doubled. And that, my friends, was how the Death of the Bear was engineered by market insiders, the supposedly lily-white HB&B crowd, the ones who preach transparency, but are anything but transparent.

Yes, these are the same people who tell you we have a level playing field, and have set the rules to penalize anybody (but them) who do wash trades or organize syndicates for the buying and selling of securities with the intention of manipulating prices.

This stuff has gone on for years, but as long as the Sell-side controls the capital markets by their playing all sides of a trade, it will always go on. They control the liquidity. They control the trade.

What really ticks me is that the leaders of HB&B and their people who run central banks actually believe that the capital market system can only function properly if they run it, and run it that way. The faulty premise is that we need debt, and that they have the exclusive right to provide it.

However, it is my assertion that with the principles of “full, true and plain disclosure” and “best price discovery” at work helping us, these people cannot beat the very simple and objective Relative Strength Index and Moving Average Departure Analysis technical indicator systems I offer you. I believe that this approach, combined with holding long positions, when indicated, in only the highest quality companies in the marketplace, gives us the edge.

That’s what we are fighting for, isn’t it? To keep our risk to a minimum?

Well HB&B have a job to do too. Their job is to create securities that pass the risk from them and their clients to us. Most independent traders simply don’t understand that fact.

But HB&B has been legislated with the exclusive authority to be our asset safekeeper, our advisor, our broker and our salesperson. We are now talking layers of conflict of interest. So, one way or another, HB&B does get to pass the risk from their clients and themselves to us. It is up to us, then, to remain independent and objective so we can reject their moves, ignore their speeches, and simply stick to the common sense business of buying quality at low prices and selling it at high prices.

Now and then, which happens to be now, the Sell-side has gotten into trouble. It seems that without schemes like their Plunge Protection Teams (PPT), Dark Pools, off-balance sheet transactions and transactions back-dating, these people still cannot make the money they feel entitled to, so they have to turn for help to the governments and the central bankers who have control of the People’s money.

This is all too much really.

From general observation, I suspect that the People now are catching onto the reasons why it is harder getting to the end of the month without being a dollar short, or why their portfolios are not getting ahead, so I am going to wrap this up by saying that I can see light at the end of the tunnel. The financial system as we know it is unwinding, and in the process I believe that major financial institutions will fail and prices will become massively bearish, or inflated to meaningless levels.

Today the number two of the Swiss National Bank, the central bank, responsible for the monetary policy of Switzerland and issuing the Swiss franc banknotes, said that the credit crunch in the US will generate much more damage next year and the situation appears to be extremely fragile. Philipp Hildebrand opined that the second wave of the crisis in the credit markets is beginning to surface now and this one will be more disrupting than the first one from July. He says there are no signs of a recovery in the US housing  market; on the contrary there will be another downturn and that the correction is the most severe of any since  the second world war.  A correction could cost the US economy about 1000 billion dollars, according to Hildebrand.

Listen to this qualified opinion and not to some salesperson on Financial Entertainment TV. And please don't get hung up by negativity or by wanting to shoot the messengers who have important things to say. Pragmatism is the bottom line.

The good news is that the system will never break because life must go on. There will be a new bull market starting in a year or two, some new financial institutions, new Buy-side to Buy-side real-time trading systems, and wiser investors come out of this mess.

We will all know who to blame for the extreme prices to come in this Bear market, and his first name starts with Henry.

It may take years for the shake-out of the financial services sector from having total control of our capital markets, but the process has begun. I, for one, couldn't be happier.

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International Economics Review

The US holiday is over. HB&B and the People are back to work tomorrow.

US Economic Calendar for next week.

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

The strong rally on Friday moved the market from a very over-sold condition to what I think may be the last stand for the Bulls.

RSI > 70 (0)

RSI < 30 (10)

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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. (Screenshots will return after I get a new webmaster/techie)

“Jock” reports:

THIS WEEK saw  1 GREEN industry (tobacco) and 23 RED, compared to last week’s 0 green, 20 Red.
 
(insert weekly impulse chart)
 
Of the Cara 100 components, 6 are GREEN (last week: 14) ,  56 are RED - (last week: 52) Teck Cominco is RED, but does not appear below for lack of historical data:
 
(insert Cara 100 tables)
 
The component stocks of the major indices, on a weekly basis,  were (green/red):
 
(insert table: index components green-red)
 
ALL major US stock indices (DJIA, NDX, S&P500, Nasdaq, Russell2000, Wiltshire4500) stayed RED this week, as did Shanghai.  Hong Kong turned RED; Bombay stayed neutral.
 
The CRB commodity index fell to RED. The US dollar index fell to RED, and a new all-time weekly closing low. GOLD & SILVER stocks stayed NEUTRAL.
 
BOTTOM LINE: This week’s damage wasn’t large, but it was consistent across the board. Among all the indices I’ve followed, only Bombay, and precious metals stocks are neutral. ALL else is RED. All index components saw less GREEN, and more RED.
 
Jock
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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.

For newbie traders, I do recommend Dr. Elder’s books, and I hear from many of you that his boot camps are well worth the time and money. And if you are interested in learning more about technical analysis, I recommend all the work done by Martin Pring.

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US Equity Markets Review

DJIA ino.com chart

DJIA stockcharts.com chart

“Traders are taking note of a possible double top.” (WIR 39, Sept. 29, DJIA=13,895.63)

The Dow 30 closed the week at 12,980.88, supported by XOM (+4.5 pct W/W) and MMM (+3.9 pct W/W). The Friday over-sold rally was led by some Financials, AIG +3.3 pct but -6.9 pct W/W, C +3.2 pct but -8.3 pct W/W, GM (Ditech) +2.9 pct but -9.9 pct W/W, AXP +2.4 pct but -4.5 pct W/W, and JPM +3.1 pct but -3.6 pct W/W.

Are you starting to get the picture now that the rally Friday was a bounce off extreme losses earlier in the week before the Thursday holiday?

So, the Bull has received the fatal blows in July and October, but is still staggering.

btw, I see somebody here has referred to this phenomenon as the Dead Bank Bounce. Cute.

As you know, I have pointed out for several weeks now 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.”

You may have a month to do this selling. Being day traders now, we will have to watch and see how the market plays out.

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NASDAQ Composite ino.com chart

NASDAQ Composite stockcharts.com chart

“Traders are taking note of a possible double top.” (WIR 39, Sept. 29, Nasdaq=2701.5)

During this shortened week, prices were falling until the holiday on Thursday, and then rallied as I expected on the Friday to close at 2596.60, down -1.54 pct W/W. Nasdaq prices still have a fairly firm under-pinning, although growing weaker, so I think the Tech and small cap stocks will participate in the present rally.

The Nasdaq Composite closed a week ago at 2637. I opined at the time that didn’t see anything that week to change my bearish outlook from the prior week, which was that “this index is likely to drop quickly to the 2400 level where upon there will be some gathering of the remaining Bulls to thwart a collapse below 2350. That 2350-2400 level is where I believe the next big fight will be.” Now I think we’ll see a lift, but not for long, and this 2350-2400 level will be tested again in December.

Here is the list of the ten highest-weighted non-financial stocks in the Nasdaq Composite. Put them in a watchlist (see Google Finance Portfolio) and watch them like a hawk:
AAPL MSFT GOOG QCOM RIMM CSCO INTC ORCL GILD EBAY

Daily RSI-7 for the Nasdaq 100 Big-10

Weekly RSI-7 for the Nasdaq 100 Big-10

Monthly RSI-7 for the Nasdaq 100 Big-10

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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.

This week the scoreboard reads 3 up (Energy, Utilities and Cons. Staples) and 7 down (Financials being the worst). That's consistent with the DJIA, of which 10 components were up, and 20 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
XLE	74.05	1.90	2.63%	4.59%	-2.37%	-2.48%	30.88%	9.38%	9.06%	28.43%
XLU	41.92	-0.04	-0.10%	0.60%	-0.80%	2.29%	13.85%	6.34%	-0.52%	16.25%
XLP	28.54	0.29	1.03%	0.35%	1.39%	1.39%	8.60%	6.18%	3.97%	10.49%
IYH	70.15	0.82	1.18%	-0.55%	0.29%	-1.60%	5.55%	2.96%	-3.12%	6.43%
XLY	33.55	0.58	1.76%	-1.44%	-3.31%	-7.14%	-12.90%	-7.91%	-15.77%	-12.06%
XLI	38.17	0.50	1.33%	-1.62%	-3.88%	-5.21%	8.35%	-1.78%	-1.06%	7.40%
XLB	39.52	0.58	1.49%	-1.94%	-6.79%	-7.01%	14.19%	2.65%	-1.76%	12.75%
SMH	31.79	0.36	1.15%	-2.78%	-3.81%	-6.09%	-5.30%	-14.61%	-13.19%	-10.50%
IYZ	28.50	0.28	0.99%	-3.16%	-6.37%	-11.35%	-3.91%	-13.16%	-15.93%	0.64%
XLF	29.27	0.68	2.38%	-4.63%	-3.62%	-10.49%	-20.72%	-15.04%	-22.69%	-19.17%

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 +2.63 pct on Friday, pushing the sector to a gain of +4.59 pct W/W (four days this week), closing at 74.05.

The prior Friday saw a huge rally of +2.26 pct, so for the past five sessions, if my calculations are right [they should be checked], XLE has rocketed +6.9 pct. There is no rationale unless OPEC and the G-7 have agreed to leave Crude Oil at $100/bbl for now.

After Exxon (XOM) suffered a $10 haircut in a month, which was a loss of $55 billion in market cap, this week XOM rallied +4.5 pct, and all the major Oil stocks were strong.

Crude Oil closed this week up +4.34/bbl (+4.62 pct) to 98.18.

I have been saying that I think it’s going lower and that in time will work itself down to about 75. In the interim, this is a day trader’s market, so you can expect hour to hour changes. The thing is that Crude Oil over $100/bbl must lead to a recession based on current levels of personal income.

The 200-day Moving Average of $WTIC is at 72.30. But, as I say this average is “moving”. The 50-day MA is now at 87.29 and rising, so in a month or two, the 200-day MA will likely move up through 75, which is where I think the current price will eventually intersect it.

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
STO	32.33	0.84	2.67%	6.03%	-5.55%	-3.84%	25.85%	17.14%	14.16%	21.31%
XOM	88.29	1.25	1.44%	4.50%	-1.26%	-3.58%	19.13%	5.42%	6.39%	21.09%
TOT	81.45	0.59	0.73%	4.44%	-2.92%	4.46%	14.77%	12.38%	7.21%	15.52%
CEO	173.70	14.70	9.25%	4.36%	-2.77%	-9.96%	84.26%	51.04%	84.34%	100.53%
CVX	86.67	0.92	1.07%	2.98%	-2.81%	-5.00%	22.12%	1.39%	6.47%	24.53%
SU	102.35	1.45	1.44%	2.59%	-8.07%	-3.58%	38.48%	19.36%	16.24%	34.14%
IMO	52.95	0.85	1.63%	1.34%	-8.60%	5.02%	48.49%	24.88%	13.07%	44.67%
PBR	100.78	1.74	1.76%	1.00%	-13.69%	14.81%	102.25%	75.67%	84.54%	121.06%
ECA	67.93	0.48	0.71%	0.85%	-7.21%	2.01%	49.82%	15.63%	10.38%	33.46%

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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) lost -1.94 pct this week, as well as -2.94 pct the prior week -2.58 pct the week before that. That’s quite a stumble, but on Friday XLB was up +1.49 pct and this sector will likely join the rally this coming week.

XLB closed the week at 39.52. It opened Oct 29 at 44.14. That’s a haircut of -10.5 pct in 20 sessions.

This week, Teck (TCK) dropped -9.6 pct after being down -11.0 pct the previous week [although there may be an overlap in the calculations because of the short week this week]. Rio Tinto was down -5.6 pct following the loss of -7.5 pct the previous week. So, the base metal miners are getting hammered, which is to be expected with $COPPER down -16.95 (-5.30 pct) to 302.95.

The major steelmakers, Nucor (NUE) and MittalArcelor (MT) recovered a bit, going up +4.4 pct and +2.7 pct respectively, after having been down the previous week -4.3 pct and -3.1 pct.

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
NUE	53.23	1.21	2.33%	4.41%	-5.87%	-14.52%	-2.33%	3.30%	-17.80%	-10.31%
MT	71.45	1.71	2.45%	2.73%	-6.87%	-9.49%	75.12%	19.88%	21.99%	69.27%
RTP	436.05	30.32	7.47%	-1.11%	-0.94%	24.05%	113.65%	66.69%	51.27%	107.95%
BHP	72.82	2.97	4.25%	-1.73%	-5.24%	-11.63%	87.34%	19.46%	40.69%	77.35%
PKX	153.48	3.97	2.66%	-2.00%	-5.15%	-12.19%	93.23%	11.14%	33.02%	99.69%
TS	45.94	-0.36	-0.78%	-2.21%	-3.75%	-10.74%	-5.32%	-1.71%	-3.22%	0.00%
AA	35.15	-0.02	-0.06%	-3.25%	-6.66%	-8.44%	19.84%	-1.73%	-12.93%	15.51%
RIO	32.56	0.13	0.40%	-5.62%	-11.90%	-2.78%	12.98%	-27.68%	-25.90%	20.68%
GGB	26.88	-0.29	-1.07%	-7.21%	-10.07%	-7.79%	63.70%	18.99%	23.08%	72.64%
TCK	37.84	0.30	0.80%	-9.63%	-19.44%	-22.92%	-45.36%	-10.31%	-5.57%	-48.94%

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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
MMM	82.75	1.51	1.86%	3.89%	-0.10%	-3.88%	5.74%	-6.76%	-5.90%	1.57%
UTX	73.46	0.68	0.93%	-0.66%	-1.66%	-2.98%	16.96%	0.22%	6.70%	11.66%
CAT	68.63	0.69	1.02%	-1.58%	-5.25%	-8.09%	12.21%	-8.70%	-9.73%	9.30%
GE	37.67	0.50	1.35%	-1.67%	-3.46%	-6.20%	-0.79%	-3.71%	0.19%	4.67%
BA	89.54	2.13	2.44%	-1.97%	-7.00%	-6.73%	0.41%	-7.44%	-6.31%	-0.62%
ABB	27.15	0.31	1.15%	-2.16%	-11.79%	-6.51%	52.36%	17.79%	27.82%	67.59%
HON	54.67	0.76	1.41%	-4.36%	-7.79%	-7.54%	21.22%	-2.15%	-3.31%	27.11%
FDX	93.60	1.89	2.06%	-7.66%	-8.63%	-9.39%	-14.73%	-15.15%	-11.75%	-21.10%
ERJ	44.25	-0.25	-0.56%	-7.74%	-5.53%	-7.81%	8.51%	7.74%	-5.17%	4.76%

XLI (Industrials) lost -1.62 pct to close at 38.17. This sector has taken major losses since early October. A rally attempt started Friday with XLI up +1.33 pct on the day.

3M (MMM) was up +3.9 pct W/W, but most of these stocks were soft. In fact all are down over two to four weeks.

After Fedex (FDX) was hammered -4.5 pct the previous Friday, this week the loss was -7.7 pct.

Traders will be watching US ISM Manufacturing Index on Dec 3, Factory Orders on the 5th, and Industrial Production data on the 14th. With further softness, I think FDX and UPS will drop further.

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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) dropped -1.44 pct, to close at 33.55, but was up +1.76 pct on Friday.

The biggest losers were Brunswick Corp (BC -9.2 pct) and JC Penny (JCP -6.8 pct).

JC Penny has has a tough go of it for such a superior company. The stock has been hammered down for a long while now and some of the senior management replaced. I think that so goes the US retail economy, so too with JCP.

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
NKE	63.75	0.87	1.38%	1.11%	0.71%	-0.14%	30.55%	17.99%	16.29%	31.42%
EBAY	31.94	0.35	1.11%	-0.59%	-1.42%	-9.39%	5.87%	-6.61%	-2.86%	-5.70%
WHR	77.88	1.85	2.43%	-0.60%	5.44%	-7.23%	-8.01%	-19.68%	-30.79%	-9.46%
TM	109.40	1.32	1.22%	-0.98%	0.38%	3.45%	-19.14%	-5.13%	-9.12%	-8.60%
DIS	31.84	0.34	1.08%	-1.73%	-5.32%	-7.58%	-6.90%	-3.98%	-12.72%	-3.49%
SBUX	23.07	0.26	1.14%	-4.27%	-1.41%	-11.85%	-34.55%	-16.17%	-20.15%	-36.59%
CCL	42.73	0.39	0.92%	-4.41%	-4.60%	-9.91%	-16.13%	-5.34%	-14.08%	-15.52%
JCP	41.30	1.23	3.07%	-6.84%	-17.84%	-25.36%	-47.09%	-36.02%	-47.58%	-49.14%
BC	19.26	0.33	1.74%	-9.19%	-10.13%	-4.65%	-39.66%	-23.96%	-44.21%	-41.78%

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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
PEP	75.51	0.47	0.63%	2.62%	2.73%	4.90%	20.39%	11.19%	9.93%	20.74%
PG	72.86	0.60	0.83%	1.43%	2.85%	2.12%	12.89%	12.02%	15.47%	14.49%
MO	72.97	0.56	0.77%	0.97%	0.34%	0.98%	12.40%	6.32%	2.21%	15.59%
BUD	50.19	0.95	1.93%	0.76%	-0.57%	-3.98%	1.97%	4.56%	-2.26%	7.89%
KO	62.30	0.05	0.08%	0.56%	1.35%	1.63%	28.24%	15.41%	21.37%	32.27%
DEO	89.32	1.33	1.51%	0.44%	-2.24%	-1.24%	12.31%	9.23%	4.60%	17.05%
WAG	39.73	0.33	0.84%	0.35%	1.79%	-0.63%	-13.76%	-11.34%	-11.10%	-3.19%
WMT	45.73	0.87	1.94%	-1.02%	4.84%	4.22%	-3.83%	5.93%	-1.30%	-4.79%
ABV	69.09	0.71	1.04%	-6.03%	-8.79%	-10.68%	40.71%	6.82%	3.57%	48.84%
WFMI	40.75	-0.68	-1.64%	-11.03%	-11.24%	-14.41%	-10.40%	-5.98%	0.94%	-17.41%

XLP (consumer staples stocks) is the one beacon of light through the Oct sell-off. A week ago, XLP gained a striking +2.47 pct to close at 28.57, giving this sector the #1 ranking. This week, the gain was just +0.35 pct, including +1.03 pct on Friday to close at 28.54.

Pepsi (PEP) gained +2.6 pct W/W while Whole Foods Market (WFMI) dropped a stunning -11.0 pct.

Here’s the skinny on WFMI, from BusinessWeek:

Sales in stores open at least one year rose 8.2% in the fourth quarter from a year ago, after a 7% growth rate in the first and third quarters and a dip to 6% in the second quarter.
On Nov. 21, Whole Foods reported a fourth-quarter profit of $33.9 million, or 24 cents a share, down from $39.8 million, or 28 cents a share a year ago, despite the 8.2% gain in same-store sales and a 35% increase in total sales to $1.74 billion. The results fell short of a 30-cent consensus estimate among analysts. For fiscal 2007, the company earned $182.7 million, or $1.29 a share, versus $203.8 million, or $1.46 a share, in fiscal 2006.
In the latest quarter, the store contribution was about $149 million, or 8.5% of sales, while general and administrative (G&A) costs were roughly $67 million, or 3.9% of sales, higher than average due to about $13 million, or six cents a share, in legal and integration costs, as well as the addition of Wild Oats' G&A expenses.
Sales at Wild Oats stores open at least one year were up 3.9% for the last five weeks of the quarter, and accelerated to a 6.6% growth rate in the first seven weeks of the new fiscal year.
For fiscal 2008, the company projects that sales will grow 25% to 30%, of which about 10% is expected to come from the Wild Oats stores. Comparable-store sales are estimated to grow at a rate of 7.5% to 9.5%.
But the company said it doesn't expect to produce operating leverage in fiscal 2008. That will be the result of a lower store contribution as a percentage of sales, driven by a higher percentage of sales coming from new and acquired stores, which contribute less than its existing stores, as well as by investments in labor and benefits at the Wild Oats stores and ongoing, but moderate, hikes in health care costs as a percentage of sales.

I recommend you read the whole article if you follow this stock.

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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
NVS	55.98	3.49	6.65%	6.04%	6.28%	8.32%	-3.72%	6.51%	0.23%	-4.55%
GSK	50.79	2.92	6.10%	3.06%	-0.22%	0.08%	-5.61%	-1.53%	-4.74%	-1.47%
UNH	54.07	0.66	1.24%	1.98%	7.52%	11.42%	2.85%	11.21%	0.26%	16.13%
BMY	28.08	0.62	2.26%	1.19%	-2.26%	-4.36%	6.44%	-3.17%	-6.40%	13.55%
DNA	74.82	0.66	0.89%	0.39%	-0.70%	0.19%	-8.53%	2.05%	-3.66%	-7.48%
BMET	45.99	0.06	0.13%	0.24%	0.31%	0.48%	10.90%	1.05%	8.47%	41.68%
JNJ	66.88	-0.26	-0.39%	0.00%	3.55%	4.58%	0.72%	7.68%	4.81%	0.16%
AET	54.14	0.34	0.63%	-1.29%	-0.88%	-3.30%	26.26%	9.57%	4.32%	31.06%
PFE	22.98	0.63	2.82%	-1.33%	-0.56%	-5.39%	-12.59%	-6.66%	-15.95%	-15.20%
AMGN	53.76	0.92	1.74%	-1.88%	-4.05%	-6.19%	-21.40%	6.99%	-1.79%	-26.03%

IYH (healthcare) lost -0.55 pct W/W to close at 70.15.

The winner was JNovartis (NVS) up +6.0 pct and Glaxo (GSK) up +3.1 pct W/W, which for GSK may finally be a turn. The loser was Amgen (AMGN) down -1.9 pct.

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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
DB	124.35	2.45	2.01%	1.07%	-0.02%	0.04%	-8.12%	0.33%	-21.17%	-6.17%
HBC	84.74	2.12	2.57%	-2.90%	-5.83%	-8.49%	-8.85%	-5.99%	-8.61%	-10.21%
LEH	60.86	3.11	5.39%	-3.35%	8.47%	6.92%	-22.60%	4.61%	-17.91%	-21.75%
JPM	41.95	1.27	3.12%	-3.63%	-1.55%	-8.90%	-12.73%	-8.15%	-19.31%	-11.85%
GS	216.48	6.98	3.33%	-4.64%	3.12%	-4.49%	7.85%	21.96%	-5.28%	7.01%
CS	57.17	0.58	1.02%	-5.11%	-6.23%	-11.23%	-18.46%	-13.64%	-24.46%	-13.76%
UBS	45.24	1.56	3.57%	-5.26%	-3.89%	-14.56%	-26.31%	-13.83%	-29.33%	-26.37%
MS	49.89	1.38	2.84%	-6.35%	-7.06%	-19.53%	-38.88%	-22.42%	-41.82%	-37.01%
MER	53.54	1.73	3.34%	-6.56%	-0.46%	-12.09%	-42.81%	-29.45%	-42.93%	-41.95%
C	31.70	0.97	3.16%	-8.33%	-3.65%	-23.11%	-42.62%	-34.44%	-42.37%	-37.56%

This week, the Financial ETF (XLF) returned to free fall. XLF lost -4.63 pct (although Friday’s gain was +2.38 pct), closing the week at 29.27.

The big losers were Citi (C) down -8.3 pct, Merrill (MER) down -6.6 pct, Morgan Stanley (MS) down -6.4 pct, UBS (UBS) down -5.3 pct and Credit Suisse (CS) down -5.1 pct. the are humungous losses for the world’s largest financial institutions.

But the Bulls cling to hope for Friday there were gains of +2 to +3.5 pct across the board, led by Lehman Bros (LEH) up +5.4 pct on the day.

“The Street is a mess. We just don’t yet know how bad it is.” (Earlier WIR). I later added, “We do know things will go from bad to worse. What we have to be careful about is that central bankers slip (HB&B) a trillion dollars to mend the errors of their ways so life as we know it can go forward... I think the Bernanke Reflation Plan goes like this: “A trillion here, a trillion there, should do it, and cutting rates ought to make the People happy.” That’s true, until they realize that their mortgages are not cheaper, their credit card debt not cheaper, inflation is rising, and stock prices are falling. With two new executive placements this week, I’m surprised Goldman Sachs didn’t have a bigger pop. I wonder when they start the re-org work at Citi and Merrill.”

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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
ADBE	41.91	0.07	0.17%	2.67%	-6.93%	-11.21%	4.98%	3.23%	-3.05%	0.24%
SAP	51.60	0.12	0.23%	1.90%	-1.55%	-3.30%	-3.01%	-1.30%	8.02%	-2.18%
ORCL	20.31	0.10	0.49%	-0.54%	-0.20%	-3.29%	15.99%	4.85%	6.00%	3.36%
QCOM	40.53	0.07	0.17%	-0.69%	1.94%	-0.64%	8.20%	7.05%	-9.61%	8.51%
INTC	25.07	0.44	1.79%	-1.80%	-3.32%	-3.17%	23.19%	3.47%	10.59%	15.37%
CTSH	30.46	0.35	1.16%	-2.03%	-3.52%	-22.30%	-21.66%	-18.29%	-20.01%	-24.10%
CSCO	28.69	0.44	1.56%	-2.08%	-3.17%	-7.99%	3.42%	-5.22%	10.47%	6.61%
SNDK	36.11	-0.08	-0.22%	-3.11%	-7.53%	-10.00%	-13.45%	-32.02%	-16.41%	-24.01%
ADSK	45.79	0.56	1.24%	-3.52%	-3.32%	-3.09%	12.89%	1.67%	0.62%	10.50%
INFY	39.10	0.44	1.14%	-5.19%	-7.74%	-19.51%	-29.95%	-14.98%	-20.91%	-27.77%

SMH (semi-conductors) dropped -2.78 pct W/W to close at 31.79. At the close six weeks ago, this ETF was sitting at 38.45. How fast the mighty fall. Now we have to see how fast HB&B can pump them back up again.

Adobe (ADBE +2.7 pct) and InfoSys (INFY -5.2 pct) were the Cara 100 Tech winner and loser this week, but they are almost all losers over 2 to 4 weeks.

I anticipate some bullish price action now. But for how long, we’ll have to wait and see.

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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:

This week IYZ (telecommunications) lost -3.16 pct W/W to close at 28.50. Over the past six weeks, this sector is the worst performer.

Verizon (VZ -0.9 pct W/W) and AT&T (T -4.4 pct) were down. Over 4 weeks, VZ is down -5.1 pct and T -8.2 pct, which despite a high dividend doesn’t say much for your Total Return

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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:

A week ago, XLU (Utilities) lost -0.60 pct. this week, it made it back, closing at 41.92.

Over four weeks, XLU is the #1 performer.

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Bonds & Yields Review

Table 10: US Treasury Yields

US Treasury Bonds

Maturity	Yield	Yesterday	Last Week	Last Month
3 Month	3.10	2.97	3.29	3.68
6 Month	3.23	3.16	3.42	3.82
2 Year	3.07	2.99	3.33	3.73
3 Year	3.01	2.89	3.24	3.73
5 Year	3.41	3.34	3.69	3.98
10 Year	4.00	4.01	4.16	4.34
30 Year	4.42	4.46	4.53	4.64

Municipal Bonds

Maturity	Yield	Yesterday	Last Week	Last Month
2yr AA	3.22	3.23	3.30	3.34
2yr AAA	3.31	3.27	3.29	3.35
2yr A	3.43	3.39	3.42	3.37
5yr AAA	3.53	3.38	3.43	3.44
5yr AA	3.45	3.31	3.46	3.40
5yr A	3.64	3.49	3.53	3.60
10yr AAA	3.76	3.80	3.82	3.76
10yr AA	3.82	3.68	3.77	3.68
10yr A	3.99	4.02	4.05	3.89
20yr AAA	4.23	4.44	4.48	4.38
20yr AA	4.79	4.59	4.67	4.57
20yr A	4.77	4.78	5.13	4.39

Corporate Bonds

Maturity	Yield	Yesterday	Last Week	Last Month
2yr AA	4.37	4.15	4.38	4.51
2yr A	4.49	4.28	4.59	4.68
5yr AAA	4.54	4.53	4.69	4.76
5yr AA	4.78	4.72	4.99	4.96
5yr A	4.63	4.55	4.83	4.93
10yr AAA	5.24	5.13	5.21	5.27
10yr AA	5.46	5.54	5.66	5.59
10yr A	5.66	5.54	5.68	5.57
20yr AAA	5.72	5.54	5.58	5.65
20yr AA	5.91	5.73	5.79	5.83
20yr A	6.17	6.00	6.04	5.99

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Yields in the bond market continue to fall. There is a steady move to the safety of fixed income.

US Treasury yields dropped -11, -16, -28 and -26 basis points to 4.42, 4.00, 3.41 and 3.07 pct for the 30-year, 10-year, 5-year and 2-year paper, respectively.

The yield on the 3-month T-Bills dropped -19 bp to 3.10 pct.

The sad fact is that even by the US government’s data, Treasury returns of shorter than 5 year duration represent destruction of capital because the inflation rate is higher. In addition, if true inflation rates were used, certainly the 10-year and possibly even the 30-year Treasuries would be under the inflation-adjusted waterline.

When traders won’t leave the supposed safety of bonds and go to equities, that’s a sad commentary on the state of the US capital market.

As you know, a few weeks ago, I opined that if the yields dropped further, there would be a recession. Money would just sit in bonds. Few traders would take risk. Capital intensive projects will dry up.

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 and TIP gained +1.70 pct and +1.57 pct respectively. A week ago the gains were +1.18 and +0.31 pct, and the week before that +0.32 pct and +1.31 pct respectively.

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!”

It is hard to believe that the 10-year Treasury issue is now yielding just +4.16 pct +4.00 pct.

Moreover, since the beginning of 2007, the TIPs have gained +7.52 pct while the TLTs have gained +5.23 pct, so the inflation-adjusted bonds are lifting in value faster.

So in addition to recession, the bond market is worried about inflation. What a combination. It’s called Stagflation.

And i continue to say that I have never before seen stagflation conditions result in anything but crashing prices in all capital markets, in time. I cannot believe from the weight of the evidence that 2008 will be a winner. It’s starting to look more like 1973-74 on the horizon.

These Weekly and Daily charts of the various US bond instruments clearly show the flight of capital to safety. Pretty soon it will look like the residential real estate market in 2005 with ridiculously low cash-on-cash returns. The problem with bonds is that you can wait forever, unlike real estate, and the US government is never going to pay you more than par on redemption. So, inflation is just killing your capital.

What is happening, I think, is that with such low yields, investors will have to go abroad for higher returns, and that will further depress the USD and cause Mr. Paulson’s Treasury Dept to raise rates. That is problematic in the extreme.

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
TIP	106.69	-0.07	-0.07%	1.70%	2.15%	3.14%	7.52%	6.00%	7.20%	6.53%
TLT	93.73	0.28	0.30%	1.57%	3.50%	3.33%	5.23%	7.16%	8.47%	3.61%
IEF	86.91	-0.26	-0.30%	0.94%	1.84%	2.14%	5.12%	4.31%	6.12%	4.22%
SHY	82.40	-0.09	-0.11%	0.50%	0.84%	1.13%	2.95%	1.77%	2.92%	2.68%
AGG	101.25	-0.52	-0.51%	0.19%	0.80%	0.40%	1.34%	1.96%	1.89%	0.61%
CFC	9.650	0.230	2.44%	-20.97%	-28.36%	-26.17%	-77.08%	-56.18%	-76.42%	-76.14%
FNM	32.20	2.97	10.16%	-25.19%	-35.34%	-43.77%	-46.21%	-52.74%	-50.94%	-44.55%
FRE	26.47	0.47	1.81%	-36.77%	-39.59%	-47.68%	-61.01%	-58.67%	-61.01%	-61.17%

The plunge in the share prices of Countrywide, Freddie and Fannie continues. This week, CFC went down -21.0 pct; FNM down -25.2 pct and FRE down -36.8 pct.

It was just a couple months ago that HB&B was telling you the worst of the credit markets was over. NOT.

Have you looked at the YTD performance? CFC is down -77.1 pct ; FNM -46.2 pct ; and FRE down -61.0 pct.

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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

After a lift on friday of +0.99 pct, the $CRB had a small weekly gain (+1.39 pct W/W) to close at 354.29, which is almost back to the 354.54 of two Friday’s ago.

A week ago I wrote, “There may have been a turn this week. Friday closed up +0.85 pct, but there was an enormous drop during the day. The spike high on Tuesday of 367.05 was probably the peak, and its downhill for the index from here. I think the 50-day MA will be tested probably within a week (at about 345), and then the 200-day MA (a few weeks later at about 325).” I am still of that mind except that if the US authorities decided to come to the continued aid of HB&B here, the liquidity pump that pushes equity prices higher could also boost commodities and bonds. So we may have to wait a couple weeks longer for my forecast to play out.

The 50-day Moving Average for $CRB is presently at 340.24 (up W/W from 337.02) and the 200-day MA is now 319.65 (up from 318.42), and rising.

$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

Crude Oil futures sure didn’t fall as much as I had anticipated.

$WTIC (US Light Sweet Crude called West Texas Intermediate) rocketed from 93.84 to 98.18 for a W/W gain of +4.62 pct.

Oil at $100/bbl is not helping the economy.

The 50d MA for $WTIC is now at 87.29, up W/W from 85.79, and the 200d MA is 72.30, up W/W from 71.53.

A week ago, I stated, “I expect the decent to intersect the 50-day MA at about 87.50 (soon) and then the 200-day MA at about 75-76 a few weeks later.” Maybe so, but first we have to see 90.

Oil stocks (XLE) also rocketed, up +4.6 pct this week, which was by far the leading sector. Even on Rally Friday, XLE was the leading performer (up +2.63 pct), which is a surprise because a broad market rally would normally be hurt by such price extremes in the oil market.

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

Interactive Chart of Weekly Crude Oil:

Interactive Chart of Daily Crude Oil:

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Gold & Precious Metals Review

A week ago, $GOLD plunged -47.70 (-5.71 pct), all of it in the first four days, to 787.00, which I said was a long way from 834.70.

With so many bows in the mirror, I threw my back out of whack.

This week, $GOLD shot higher along with Crude Oil by 37.70 (+4.79 pct), largely on the back of Friday’s rocket (+3.27 pct) as Americans, the blood all circulating around their bloated tummies (and away from the brain), couldn’t wait to send the rest of their holiday money abroad.

Ah, maybe they were buying gold jewelery ahead of the $1,000+/oz gold prices to come. Do you think?

Surprise. Surprise. It’s easier to intra-trade than write this WIR.

The 50-day MA for $GOLD is now 770.19 and the 200d MA is 696.09.

A week ago I wrote, “I expect the first test will be at the 50-day MA at about 770, and later the 200-day MA at about 700.” With this week’s +37.70 rally, my MA numbers have already arrived just in time to see the current price in the stratosphere.

Well stick around a day or two. Like they say about the weather in some cities, things change in a hurry.

As I also wrote a week ago, “Should $GOLD drop all the way to 700, back up the truck. Pay less attention to the stocks at that point because there will probably be a fully-grown Bear on the prowl. That Bear will eat the Good as well as the Bad and the Ugly.
But the Bear cannot hold back the inflationary costs facing the gold and silver miners, or make the exploration programs discover new gold, so the price of gold is going up, way up. There is not a doubt in my mind. Forget the $USD and focus on the all-in costs of the gold miners. In 2008, that cost will average in the 700’s, and low-grade and/or inefficient producing mines will be shut down rather than give the stuff away.”

So, yes, I do believe that any pullback to the mid to low 700’s would only be a temporary phenomenon. The reason is, as I wrote last week, “Only the central banks like to give the stuff away, and pretty soon they will be switching their selling habit for a buying habit because the price of gold is going a whole lot higher. (And) As and when that gold price soars, there will be a return to goldminer equities, and that will be the time to look seriously at the juniors and the miners that are steeply levered to higher gold prices. However, I think that most likely the options and futures on the gold physical will be the next great market play after the cycle has dropped to a bottom. Now I don’t know where that bottom will be, other than by looking at the continuous RSI and MACD data series, and the MA prices I give you, but I do expect it to be much lower than the current price.”

It’s much easier to say that this week after the gain of 37.70 !!

But, this is my thesis: “Fairly soon, there will be a purging of all speculative accounts at HB&B -- both theirs and the clients -- and all goods go on sale. In terms of gold and silver, that means a blow-out to come to clean out the weak hands and lay the groundwork for the Gold Bull to return.”

Nobody knows today how the cycle will play out tomorrow. It could be in harmony with the broad equities market or it could run counter-cyclical. Right now, I’m thinking the latter because I foresee higher $USD prices as the economy slows, and the broad market falls. Moreover, I think most traders now realize the overspending by government problem is not just an American phenomenon. It is all over the world, and all currencies are being depreciated.

That means any weakness in the gold market may be short-lived, and a move to the cycle bottom could happen quickly, so don’t stray too far from the Buy button.

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 +0.22 (+1.55 pct), closing at 14.73. That’s a far cry from the gold market. And you thought $SILVER leads $GOLD !! Well, it does, which is just another reason why I was surprised this week at the gold pump, and for why I’m still waiting for the dump.

A week ago, $SILVER lost -1.03/oz (-6.66 pct) dropping W/W from 15.55, so the rally this week doesn’t cut it as far as the enthusiasm I see evident in precious metals. Without the big move Friday (+2.18 pct), $SILVER would have ended the week on a losing note.

For $SILVER, the 50d MA is 14.02 and the 200d MA is 13.39.

Two weeks ago, I wrote, “On August 17, the price hit a low of 11.06, so the move to 15.55 in twelve weeks is a gain of +40.6 pct.” I don’t think we’ll see that again for a while.

With that move on Friday, though, the odds of a further lift on Monday are high. The weekend spot price appears to be wrong at ino.com. It shows a steady hourly move on Saturday culminating (bad word because there is no climax in sight) in a price of 16.12 (up +9.44 pct since Friday). Hmmm. The spot gold chart seems screwed up too.

The Kitco charts show no change for gold or silver:
http://kitco.com/charts/livegold.html
http://www.kitco.com/charts/livesilver.html

You’ll have to check tonight after the market opens. :-)

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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 +26.30 (+1.81 pct) this week to close at 1482.50.

The gain on Friday was +0.91 pct, which half made up the gain on the week.

Will that gain continue this coming week? We’ll have to wait to see.

The 50d MA for $PLAT is 1411.77 and the 200d MA is 1313.25.

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.

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This week, $PALL lost -4.25/oz (-1.15 pct W/W) to close at 370.75. The gain on Friday was +0.98 pct. A week earlier, the loss was -10.35/oz (-2.72 pct).

The 50d MA is 368.28 and the 200d MA is 363.90.

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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This week, $COPPER lost -16.95/contract (-5.30 pct W/W) to close at 302.95. But the Friday gain was +3.40 pct, so maybe the price is snapping back along with the Liquidity Pump-inspired market prices for Gold and Silver.

The 50d MA of $COPPER is 345.40 and the 200d MA is 334.61, so the current price (302.95) is below the 50MA and 200MA, and until Friday was pointing traders to a sure fire recession.

As I say, I don’t have much feel for the copper market. This seems to be a market run by the Metal Men of Zug.

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
GG	34.66	1.80	5.48%	10.45%	-3.24%	7.31%	26.77%	50.50%	48.63%	26.59%
KGC	18.62	0.89	5.02%	9.34%	-2.15%	6.40%	63.05%	62.48%	40.63%	60.93%
AUY	13.94	0.76	5.77%	7.73%	-1.83%	0.22%	13.06%	39.40%	4.81%	24.13%
ABX	43.10	1.36	3.26%	6.76%	-6.73%	1.96%	44.49%	32.09%	44.83%	48.36%
NEM	52.09	1.53	3.03%	6.74%	-3.64%	12.82%	17.85%	28.52%	32.28%	16.07%
MDG	38.04	1.58	4.33%	6.05%	-2.39%	-0.81%	44.69%	50.24%	50.36%	32.13%
AEM	52.22	1.44	2.84%	5.52%	-5.19%	-0.44%	34.17%	24.42%	47.26%	30.45%
GFI	17.62	0.54	3.16%	0.57%	-6.92%	-1.56%	-3.87%	20.85%	-0.06%	1.85%
BVN	54.78	1.42	2.66%	-2.41%	-10.20%	6.22%	98.41%	47.10%	65.90%	98.55%

This week, $XAU (the Philadelphia Exchange goldminer index) gained +3.40 (+1.97 pct), bouncing from 172.67 to close at 176.07.

To put it into perspective, a week ago $XAU lost -14.06 (-7.53 pct), falling from 186.73.

Yet everybody is asking did they sell too early and did they miss this move.

Here’s the skinny. On Friday, there was The Liquidity Pump at work. It was effective on gold and silver. The gain on Friday for $XAU was +4.08 pct !!, which means the rest of the week was a loser.

The 50d MA is 174.58 and the 200d MA is 149.33.

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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

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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.

The trade-weighted $USD index dropped -0.82 (-1.09 pct) to 75.04. It actually gained +0.06 on Friday giving it a reprieve from a 74 handle. Wow.

Two weeks ago I wrote: “The economy might be showing signs of a slowdown however, so maybe that will help the Fed drop rates, but also tighten liquidity through FOMC operations. That would strengthen the USD, and also help commercial banks continue to drop their prime rates, removing pressures from the imploding credit markets, which I think is the main reason why the USD (has been) plunging.” I don’t see it yet, unfortunately for the Americans who don’t yet realize the inflation and high interest rates this disaster in the USD will bring on.

Maybe the Fed Head and the Treasury Secretary have just agreed to let gold prices soar? Do you think?

I don’t think so because somebody (HB&B) appear to be short the precious metals.

The following data is a simulation of 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.”

Same old, same old. But the money aggregates are now soaring and the flipside of the coin is that prices are rising not because of value but because of too much money chasing too few goods.

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The Euro ($XEU) this week gained +1.72 (+1.17 pct) to close at 148.36.

The Euro’s 50d MA is 143.17 and the 200d MA is 136.92.

This currency is far over-bought.

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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A week ago, the Pound plummeted -3.98 (-1.90 pct) to close at 205.09. This week, the Pound lifted +0.89 (+0.43 pct) to 205.98. I take that as a corrective bounce and not the start of another Bull move.

This currency too is near the end of a three-month Bull run.

The 50d MA is 204.68 and the 200d MA is 200.45.

Weekly British Pound Index:

Daily British Pound Index:

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Weekly Japanese Yen Index:

The Japanese Yen ($XJY) had a massive gain this week (+2.12 +2.35 pct) to close at 92.36. The Carry Trade is beginning to unwind as yields on US Treasuries are too low now to incentivize Japanese traders to borrow in Japan and earn the spread offered by higher paying US Treasuries. Those Treasuries also collateralize some of the margin debt in equity trading accounts, so as they get sold, the equity market will come down to earth.

The 50d MA of the Yen is 87.53 and the 200d MA is 84.72.

Daily Japanese Yen Index:

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The Canadian Loonie plunged 3.57 (-3.36 pct) a week ago, and this week the loss was a further -1.35 (-1.31 pct) to close at 101.40 American.

Canadians talk that way, like 101.40 American. It used to be that a 60-year old Canadian could refer to his/her age as 54 American eh? Three weeks ago, it didn’t sound too good saying 66 American. :-)

I wrote this recently, but the sentiment still applies: “(C$) Probably headed for 95 as the price of oil and metals falls, and foreigners start to pull their capital out of Canada in order to pay down debts, and avoid the Bear. Canada is known to have big ones. There are Grizzlies, Kodiaks, Brown, you name it. None of them friendly when hungry. and they don’t stop for coffee and a donut at Tim Horton’s.”

The Loonie’s 50d MA is 102.30 and the 200d MA is 93.90, so the current price is below the 50d MA and sinking.

It goes without saying, “Last call (probably) for Canadians to buy ocean-front condos in Bahamas (US$ at par with B$)”

Weekly Canadian Dollar Index:

Daily Canadian Dollar Index:

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International Equity Markets Review

There were some terrific losses in international equity markets this week. Then along came Friday. Still, the week ended on a down note for most of the world’s equity markets.

Worst hit was the Bovespa of Brazil (went from Paso Doble to Quickstep), losing -5.63 pct to 60,971. Wow, what an attitude adjustment.

Close at hand was the Shanghai Composite, down -5.34 pct W/W to 5032.13. Also moving quickly on the dance floor were the Indians, with the Bombat Sensex dropping -4.29 pct to 18,853.

The gains on Friday in many of these markets, however, were significant.

I thought I would add another 16 country index charts from StockCharts.com (with their formal approval btw as long as I don’t publish too many) because I think it is important to be watching these markets move through a trend juncture together, or possibly apart as the case may be.

In addition, I added the $CDNX, which happens to be the Toronto Venture market. Enthusiasm for many of these stocks will wane during 2008. Unfortunately, some of them will drop by -80 pct or more from peak to trough. That’s what happens when Bears scare away the bids. A lot of these stocks are full of hot air (ie, press release fodder) and little else. They tend to lose the zip on the dance floor at times, like I suspect we’ll see in 2008.

So, what I advise if you are playing these stocks is to (i) track the volume and get nervous if and when you see flat prices on higher volume (which means the promoter is selling), and (ii) track the share prices of your stocks against the index, which will give you a comparative picture.

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.

Brazilian Bovespa stockcharts.com chart

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

Toronto 300 stockcharts.com chart

Toronto CDNX stockcharts.com chart

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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.

FTSE 100 stockcharts.com chart

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Here is the latest session data for the German DAX.

DAX stockcharts.com chart

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

CAC 40 stockcharts.com chart

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

Italian Milan Index stockcharts.com chart

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

Swiss Market Index stockcharts.com chart

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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.

Tokyo Nikkei 225 Index stockcharts.com chart

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Here is the latest chart for the Singapore index .

Singapore Straits Times Index stockcharts.com chart

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Here is the latest chart for the Shanghai Composite index .

Shanghai Composite Index stockcharts.com chart

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

Hong Kong Hang Seng stockcharts.com chart

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

Mumbai BSE 30 Sensex Index stockcharts.com chart

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

Sydney All Ordinaries Index stockcharts.com chart

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Russia (RTS) stockcharts.com chart

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Table 13: International equities via an ETF perspective (in $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
EWJ	13.64	0.30	2.25%	0.66%	0.44%	-1.87%	-3.94%	-1.87%	-5.34%	2.87%
IEV	118.18	2.49	2.15%	0.41%	-2.89%	-2.46%	11.91%	6.40%	0.99%	14.06%
QQQQ	49.84	0.53	1.07%	0.04%	-3.65%	-6.05%	15.26%	4.86%	6.43%	11.42%
EWU	25.01	0.66	2.71%	-0.20%	-4.36%	-5.12%	6.20%	3.56%	-1.54%	7.57%
SPY	144.13	2.43	1.71%	-0.97%	-2.06%	-5.08%	1.95%	-1.63%	-5.45%	2.28%
TRF	66.30	0.80	1.22%	-1.65%	-5.27%	-5.65%	-25.13%	8.90%	-3.25%	-12.06%
IFN	55.25	1.60	2.98%	-4.33%	0.09%	0.00%	21.86%	27.13%	26.92%	10.97%
EWZ	77.44	0.79	1.03%	-4.81%	-10.11%	-2.57%	65.82%	34.10%	33.24%	75.28%
FXI	172.29	8.78	5.37%	-5.59%	-6.58%	-16.97%	48.02%	24.71%	52.47%	79.64%
EWC	31.21	-0.80	-2.50%	-6.16%	-12.21%	-7.72%	26.36%	8.41%	4.70%	22.68%

The Canadian ETF (EWC) dropped -3.46 pct W/W, including -2.50 pct on Friday, which is strange in that (i) gold, silver and oil had a good day Friday, and (ii) I hear that Research In Motion is soon to roll out their iPhone Killer. Do you think they’ll call it Killer?

Can’t wait. Bandwidth, bandwidth! We will soon all need T3 capability.

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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
XOM	88.29	1.25	1.44%	4.50%	-1.26%	-3.58%	19.13%	5.42%	6.39%	21.09%
MMM	82.75	1.51	1.86%	3.89%	-0.10%	-3.88%	5.74%	-6.76%	-5.90%	1.57%
PG	72.86	0.60	0.83%	1.43%	2.85%	2.12%	12.89%	12.02%	15.47%	14.49%
MSFT	34.11	-0.12	-0.35%	1.04%	-1.81%	6.63%	14.23%	20.53%	11.54%	14.04%
MO	72.97	0.56	0.77%	0.97%	0.34%	0.98%	12.40%	6.32%	2.21%	15.59%
MCD	57.72	0.39	0.68%	0.94%	-2.78%	-0.60%	31.57%	15.79%	11.93%	36.94%
KO	62.30	0.05	0.08%	0.56%	1.35%	1.63%	28.24%	15.41%	21.37%	32.27%
HPQ	49.17	0.29	0.59%	0.55%	-1.54%	-4.32%	18.14%	3.19%	7.76%	23.79%
IBM	104.05	1.83	1.79%	0.43%	-1.94%	-7.77%	6.97%	-6.64%	-1.45%	11.26%
JNJ	66.88	-0.26	-0.39%	0.00%	3.55%	4.58%	0.72%	7.68%	4.81%	0.16%
HD	28.95	0.90	3.21%	-0.10%	-0.48%	-5.70%	-29.51%	-14.90%	-25.35%	-24.02%
MRK	57.66	1.14	2.02%	-0.45%	5.28%	1.05%	30.99%	14.18%	6.09%	29.92%
UTX	73.46	0.68	0.93%	-0.66%	-1.66%	-2.98%	16.96%	0.22%	6.70%	11.66%
VZ	42.64	0.69	1.64%	-0.93%	-0.21%	-5.05%	12.74%	1.16%	-0.07%	22.71%
WMT	45.73	0.87	1.94%	-1.02%	4.84%	4.22%	-3.83%	5.93%	-1.30%	-4.79%
PFE	22.98	0.63	2.82%	-1.33%	-0.56%	-5.39%	-12.59%	-6.66%	-15.95%	-15.20%
DD	44.69	0.34	0.77%	-1.50%	-5.99%	-7.55%	-8.87%	-8.68%	-14.24%	-8.08%
CAT	68.63	0.69	1.02%	-1.58%	-5.25%	-8.09%	12.21%	-8.70%	-9.73%	9.30%
GE	37.67	0.50	1.35%	-1.67%	-3.46%	-6.20%	-0.79%	-3.71%	0.19%	4.67%
DIS	31.84	0.34	1.08%	-1.73%	-5.32%	-7.58%	-6.90%	-3.98%	-12.72%	-3.49%
INTC	25.07	0.44	1.79%	-1.80%	-3.32%	-3.17%	23.19%	3.47%	10.59%	15.37%
BA	89.54	2.13	2.44%	-1.97%	-7.00%	-6.73%	0.41%	-7.44%	-6.31%	-0.62%
AA	35.15	-0.02	-0.06%	-3.25%	-6.66%	-8.44%	19.84%	-1.73%	-12.93%	15.51%
JPM	41.95	1.27	3.12%	-3.63%	-1.55%	-8.90%	-12.73%	-8.15%	-19.31%	-11.85%
HON	54.67	0.76	1.41%	-4.36%	-7.79%	-7.54%	21.22%	-2.15%	-3.31%	27.11%
T	37.63	0.18	0.48%	-4.42%	-4.35%	-8.22%	7.67%	-6.16%	-6.88%	15.18%
AXP	55.63	1.29	2.37%	-4.48%	-0.84%	-6.91%	-7.84%	-7.33%	-13.06%	-7.11%
AIG	53.03	1.70	3.31%	-6.88%	-5.30%	-14.18%	-26.50%	-20.95%	-26.26%	-25.90%
C	31.70	0.97	3.16%	-8.33%	-3.65%	-23.11%	-42.62%	-34.44%	-42.37%	-37.56%
GM	27.16	0.77	2.92%	-9.89%	-18.07%	-27.94%	-7.78%	-11.67%	-13.59%	-12.64%

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

The companies reported this week by Value Line: AIG (AIG), American Express (AXP), Citigroup (C), JP Morgan Chase (JPM) and Microsoft (MSFT).

None of the five Dow 30 companies being reported on this week by Value Line are in the Cara 100.

Citigroup (C) was removed from the list of Cara 100 Global Best companies this week. My thoughts on Citi are not much different than the Value Line analyst Douglas Maurer (see link below) who lowered his Safety rating on Friday and his Timeliness and Technical ratings the previous Friday.

This chart shows a broken company.

(C: StockChart chart)

In order to retain its place in the Cara list of 100 Global Best companies, I have to be satisfied that each company is financially strong, or at least stable during the rough patches. Since November 1, I have serious doubts with Citi, and I now believe there is a strong possibility the company needs to be restructured.

I did retain Citi on the Cara list of 100 USA Best companies this week, with the expectation of such a restructuring, but I will remove it if, as and when other rating agencies lower their ratings on Citi debt to less than A-, which is likely coming this week should an emergency plan not be successfully implemented.

In any case, I think nervous holders should dump the stock into any rally.

As for Microsoft (MSFT), you know my thoughts about the technology, which is not positive. But the stock is a different situation. First off, the Company has amassed an amazing record of almost unbroken gains in annual sales, cash flow, earnings and (since they started paying dividend in 2003) dividends. The financial strength is A++. The operating margins and Return On Equity are superb. The founder and chairman, in spite of all the inane remarks I make at times I get frustrated paying and re-paying and re-paying for MS software that ceases to work or is erased when other technology issues erupt, which is all too frequent, at the end of the day must be called a fine man, the phenomenal success story of our generation.

So, why not put Microsoft into the Cara 100 Global Best Companies list? At this point, it’s personal. :-)

(AIG: Value Line Report Nov. 23: next one is due Feb. 22)

(AXP: Value Line Report Nov. 23: next one is due Feb. 22)

(C: Value Line Report Nov. 23: next one is due Feb. 22)

(JPM: Value Line Report Nov. 23: next one is due Feb. 22)

(MSFT: Value Line Report Nov. 23: next one is due Feb. 22)

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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 Nov. 2: next one is due Feb. 1)

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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 Nov. 23: next one is due Feb. 22)

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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 Nov. 23: next one is due Feb. 22)

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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]
(C: Yahoo Finance file)
(C: StockChart chart)
(C: Billcara2 chart)
(C: ADVFN Financial Data)
(C: Value Line Report Nov. 23: next one is due Feb. 22)

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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 Nov. 2: next one is due Feb. 1)

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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 Nov. 16: next one is due Feb. 15)

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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 Nov. 23: next one is due Feb. 22)

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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 Nov. 16: next one is due Feb. 15)

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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 Nov. 23: next one is due Feb. 22)

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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 Nov 9: next one is due Feb 8)

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Wrap up:

Thirty-eight billion dollars will soon be paid out as annual bonuses to officers and directors of HB&B. This is not a piddling amount. Do you think they earned it?

Ask yourself, what did these firms do to increase your wealth this year. Then, look down the list at how their own share prices have fared Year To Date, and consider the hundreds of thousands of staff this industry terminated this year, and will have to again next year:

-12.73 pct-- JP Morgan (JPM)
-07.84 pct-- American Express (AXP)
-26.50 pct-- AIG (AIG)
-42.62 pct-- Citigroup (C)
-22.60 pct-- Lehman Bros (LEH)
-38.88 pct-- Morgan Stanley (MS)
-42.81 pct-- Merrill Lynch (MER)
-08.12 pct-- Deutsche Bank (DB)
-08.55 pct-- HSBC (HBC)
-26.31 pct-- UBS (UBS)

This is a disaster. These are among the leaders of HB&B, the world’s biggest financial services companies, and they are in financial difficulties, which is reflected by their share prices -- the worst of any sector we trade -- and yet they have decided to pay themselves out of shareholder capital a record high $38 billion.

If that isn’t contempt for society, I don’t know what is.

We need to wake up to how far these people have taken us down the road in their quest for power, prestige and perks.

These people are nothing special. They put their pants on every day same as you and me. I know. I used to be one.

What they have is a clique, built for years by under-the-table pay-offs to the legislators. It has got to be broken. Society needs better than what these people have given us.

We need to take it all back, for our children, and their children, and we can do it by learning how to trade, relying on facts and using common sense. We can beat these people at their game, and in time we will.

It’s just a matter of time.

Enjoy your weekend. And, please stay in touch.

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