At the end of the week, after the US PPI and CPI data was released, equity markets moved much lower, although the major drop is yet to be experienced.

Stocks were crushed on Friday as traders also see that global banks could write down potentially trillions in bad real-estate mortgages, which due to the fractional reserve system of banking will have a crippling economic effect.

The share prices of lending banks and near-banks are being flattened around the globe. In fact, bank companies are failing everywhere, and the evidence is sitting at the end of your nose. This weekend, for example, the government of Taiwan paid HSBC $1.5 billion to take a small bankrupt bank off their hands, and that bank apparently deals in Chinese trade, not US sub-prime debt. Even at that, HSBC states the acquisition (sic) would not be accretive to earnings. Hopefully, the brainiacs who run HSBC understand the extent of the liability this transaction brings to their balance sheet.

By the close Friday, 30 pct of the Dow 30 stocks were down at least -5.0 pct on the week, and 20 pct of them had plunged -7.34 pct or more. Citigroup shares dropped -10.5 pct, AIG -9.4 pct, and American Express -8.2 pct.

Traders who remain bullish ought not ignore the significance of this move. The DJIA is now at 13340, off its 52-week high of 14198 on Oct 11. The line in the sand for the Bull-Bear struggle is 12800, but that measure of support could be easily taken out in a day or two as we saw in October 1987. Other major equity markets, like Japan, have already caved in.

Traders know that the Fed will have great difficulty lowering rates again, which would further weaken the $USD and lift the price of imported goods, including commodities such as oil. The US public cannot afford it, and they are fed up with the constant lies and misrepresentation from authorities regarding this issue.

The lower $USD policy had been in effect by the US authorities to raise the price of foreign currencies in order to make US Treasury securities more attractive, which was driving up the price of bonds and the yields lower, which was relieving the pressure on the stressed mortgage and housing market in the US.

The problem with a lower dollar policy is that it invites inflation. If pushed to extreme limits, that inflation will become extreme. The collateral positive through this period was that non-US investors were experiencing a wealth effect, and lower domestic inflation, which also encouraged them to buy equities, which drove these markets to record highs.

The $USD rallied hard and the gold price dropped sharply on Friday as traders expected a worsening liquidity crisis. The calamity in forex and precious metal markets will continue for several weeks and probably months before gold falls to probably 730, possibly as low as 650, and the $USD moves higher to at least 82, which will relieve some pressure on the US inflation front. At that point, I anticipate Crude Oil to be priced in the 75 range.

During the liquidity crisis and tightening process, I anticipate the US equity markets to possibly fall back to 10 and 2, which is to say to 10,000 for the DJIA and 2000 for the Nasdaq Composite.

Anybody who sugarcoats this situation is either incompetent or refusing to act in a fit and proper manner, and ought to be held accountable.

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Global Economics Review

US Economic Calendar for next week.

Inflation is surging in many countries for both producers and consumers as shown by the following report.

Econoday International Report.

It is important to review the following two reports on US inflation.

Econoday Report on US CPI.
Econoday Report on US PPI.

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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’s close saw 2 GREEN industries and 15 RED, compared to last week's 20 green, 0 Red – the largest weekly decline of the year!

Of the Cara 100 components, are 20 GREEN (last week: 40) 43 are RED - (last week: 20) Teck Cominco is RED, but does not appear below for lack of historical data:

Components of major indices (green/red) were as follows:

In all the above indices, the number of GREEN components has at least HALVED, and the RED components at least DOUBLED from last week!
Among the indices themselves, the DJIA fell from GREEN to neutral. The S&P500, NDX, Nasdaq COMP, and Wiltshire4500 fell from GREEN to RED. The Russell 2000 and Hang Seng fell from neutral to RED. The Shanghai composite remained RED. Bombay stayed neutral
The CRB commodity index stayed neutral, while the US dollar index rose to GREEN. GOLD stocks remained neutral, while SILVER stocks fell from neutral to RED.
BOTTOM LINE: This week, the party ended abruptly! – This was the largest weekly deterioration of the year.
Jock
______________________________________________________________
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.

Jock’s work will soon be automated and put directly into the MT html script, after which you will see the charts and tables.

Also, for newbie traders, I do recommend Dr. Elder’s books or those of Martin Pring.

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US Equity Markets Review

DJIA ino.com chart

DJIA stockcharts.com chart

DJIA=13,340. “Traders are taking note of a possible double top.” (WIR 39, Sept. 29, DJIA=13,895.63)

The bearish trend direction must be confirmed in the Nasdaq-listed big cap tech stocks of which only MSFT and INTC are in the Dow 30.

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NASDAQ Composite ino.com chart

NASDAQ Composite stockcharts.com chart

Nasdaq=2635. “Traders are taking note of a possible double top.” (WIR 39, Sept. 29, Nasdaq=2701.5)

“I think we’ll see a lift, but not for long, and this 2350-2400 level will be tested again in December.”

Although the time frame is short, I believe there will be a major sell-off in the next couple weeks.

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 1 up and 9 down. Energy XLE remained firm until this Friday when it dropped -1.21 pct in a day.

On Friday, all my long-side ETF’s dropped. Basic Materials XLB (-2.27 pct) was the worst.

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	76.75	-0.94	-1.21%	0.62%	4.56%	8.40%	35.65%	5.53%	9.47%	24.29%
XLP	29.02	-0.36	-1.23%	-1.49%	-0.58%	2.04%	10.43%	5.99%	5.14%	10.98%
IYH	71.71	-0.67	-0.93%	-1.93%	-1.40%	1.66%	7.90%	2.96%	1.00%	8.23%
IYZ	29.43	-0.31	-1.04%	-2.00%	0.62%	0.00%	-0.78%	-9.81%	-13.75%	-0.20%
XLI	39.46	-0.44	-1.10%	-2.08%	0.15%	1.70%	12.01%	-0.20%	0.38%	11.82%
SMH	32.67	-0.50	-1.51%	-2.24%	1.08%	-0.09%	-2.68%	-12.04%	-12.76%	-4.36%
XLU	43.18	-0.82	-1.86%	-2.26%	1.05%	3.62%	17.27%	8.77%	7.47%	15.73%
XLB	41.77	-0.97	-2.27%	-2.70%	-0.02%	3.65%	20.69%	5.56%	2.38%	17.70%
XLY	33.32	-0.51	-1.51%	-4.12%	-3.89%	-2.12%	-13.50%	-9.33%	-16.07%	-14.01%
XLF	29.47	-0.54	-1.80%	-5.70%	-5.09%	-3.98%	-20.18%	-12.99%	-21.46%	-19.74%

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) remained best performer, based on higher crude oil prices that were caused by supply shortages and interruptions as opposed to economic growth.

The CVX was up +1.2 pct W/W. Canada’s SU and IMO were up +1.0 pct and +0.8 pct respectively W/W.

Crude Oil ($WTIC) closed this week up +3.27/bbl (+3.70 pct) to 91.55. However, XLE lifted just +0.62 pct W/W, closing at 76.75. But Friday, it was down -1.21 pct

“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 200-day Moving Average of $WTIC is at 74.58. But, as I say this average is “moving”. The 50-day MA is now at 90.36 and still rising, “so (as I wrote a couple weeks ago) 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
CVX	92.02	-1.06	-1.14%	1.17%	4.84%	9.34%	29.66%	1.51%	11.77%	21.13%
SU	103.26	0.18	0.17%	1.00%	7.83%	3.50%	39.71%	7.21%	14.57%	26.50%
IMO	52.16	0.53	1.03%	0.77%	6.38%	-0.17%	46.27%	9.81%	9.63%	35.45%
PBR	107.33	-3.26	-2.95%	0.58%	11.45%	7.57%	115.39%	59.93%	81.39%	120.34%
ECA	67.62	0.03	0.04%	0.51%	3.63%	0.39%	49.14%	9.52%	4.13%	29.17%
XOM	91.18	-1.54	-1.66%	-0.35%	2.27%	7.92%	23.03%	2.83%	7.56%	15.81%
STO	29.71	-0.75	-2.46%	-1.66%	-8.08%	-2.56%	15.65%	-6.75%	5.43%	6.22%
TOT	79.61	-1.83	-2.25%	-3.89%	-1.62%	2.08%	12.17%	2.16%	2.62%	9.23%
CEO	159.59	-2.96	-1.82%	-10.81%	-13.53%	-4.12%	69.29%	20.31%	48.37%	78.31%

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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) dropped -2.70 pct W/W, including -2.27 pct on Friday.

Stocks like NUE, PKX and RIO that had up strongly in recent weeks dropped hard. NUE (-3.3 pct) was the best of them. RIO (-9.9 pct), RTP (-9.7 pct), TCK (-9.5 pct), PKX (-8.2 pct) and BHP (-7.7 pct) were hit bad.

Inflation alarm bells, tight credit and a slowing global economy will do that.
W/W), the stocks were hammered. $XAU (-4.93 pct) and GDX (-4.50 pct) reflectedthe widespread losses.

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	59.93	-0.83	-1.37%	-3.31%	1.22%	17.56%	9.96%	5.01%	-4.22%	2.74%
MT	71.28	-2.56	-3.47%	-3.58%	-3.44%	2.49%	74.71%	4.44%	10.44%	71.63%
AA	35.19	-1.14	-3.14%	-4.66%	-3.24%	-3.14%	19.98%	-0.82%	-14.50%	14.40%
TS	44.55	-1.38	-3.00%	-4.87%	-5.57%	-5.17%	-8.18%	-3.72%	-7.50%	-10.07%
GGB	27.64	-0.51	-1.81%	-7.59%	-1.67%	-4.59%	68.33%	19.34%	12.82%	70.62%
BHP	71.07	-3.27	-4.40%	-7.70%	-6.28%	-4.09%	82.84%	7.78%	23.17%	74.62%
PKX	155.75	-8.46	-5.15%	-8.15%	-1.34%	-0.55%	96.08%	-5.24%	21.97%	89.45%
TCK	35.25	-0.38	-1.07%	-9.45%	-7.75%	-15.81%	-49.10%	-17.74%	-23.07%	-56.40%
RTP	422.50	-15.52	-3.54%	-9.72%	-9.62%	-4.19%	107.01%	41.38%	39.55%	89.14%
RIO	32.90	-0.69	-2.05%	-9.86%	-4.86%	-4.64%	14.16%	20.73%	-28.12%	9.56%

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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
HON	59.98	-0.67	-1.10%	2.51%	5.93%	4.93%	32.99%	6.27%	2.99%	40.50%
MMM	85.93	-0.99	-1.14%	-0.30%	3.21%	7.88%	9.80%	-3.47%	-1.70%	9.09%
ERJ	47.20	0.38	0.81%	-0.84%	8.31%	-1.58%	15.74%	12.89%	-6.46%	8.66%
GE	36.91	-0.67	-1.78%	-0.86%	-3.60%	-3.65%	-2.79%	-8.53%	-2.35%	1.93%
CAT	73.39	-0.83	-1.12%	-1.09%	2.07%	5.25%	20.00%	0.31%	-9.09%	18.14%
UTX	76.69	-0.92	-1.19%	-1.77%	2.57%	3.71%	22.10%	0.72%	7.59%	23.57%
FDX	95.92	-1.27	-1.31%	-4.29%	-2.59%	-5.38%	-12.62%	-12.15%	-13.41%	-16.57%
BA	88.42	-0.13	-0.15%	-5.09%	-4.45%	-3.20%	-0.84%	-11.00%	-10.66%	-1.68%
ABB	27.68	-0.69	-2.43%	-6.17%	-5.79%	-0.25%	55.33%	16.30%	25.19%	61.97%

XLI (Industrials) lost -2.08 pct W/W, including -1.10 pct Friday, to close at 39.46.

As I wrote two weeks ago, “the econ data is still coming through quite soft and this week the same thing is likely (which happened). So I wouldn’t go chasing the Industrials unless there is a definite reversal in the data.”

BA and ABB were losers, down -5.1 pct and -6.2 pct, respectively. HON climbed +2.5 pct.

Fedex (FDX -4.3 pct W/W) closed Friday at 95.92. A week ago I wrote, “(despite the big gain this week) the stock (at 100.22) is still down -14.2 pct Y/Y, and the economic data, which drives Fedex, is not robust.”

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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) lost -4.12 pct W/W, to close at 33.32.

A week ago I wrote: “The biggest gainer a week ago, JCP (+6.8 pct), gained a further +8.6 pct this week. But the previous three weeks, there were W/W losses of -6.8 pct, -7.9 pct, and -12.0 pct, so maybe this is a corrective rally in a Bear phase, or maybe its just time to roll the dice.” Well, this week JCP plunged -11.3 pct and BC -10.7 pct.

“Clearly the market has become a crapshoot for long-term oriented traders, and a joy for daytraders. I suspect that the hugely advantaged prop traders at HB&B are having a profitable time cleaning the Street, and most of you are getting fed up.“

Three weeks ago, I wrote, “JC Penny has had 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.” Last week I added, “I hardly think that JC Penny resolved their issues this month or that the market cap deserves to be up +16.03 pct in ten sessions.” I guess you agreed!

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
DIS	33.01	0.25	0.76%	0.67%	-0.42%	1.88%	-3.48%	-1.64%	-2.31%	-4.93%
CCL	45.02	0.23	0.51%	0.04%	-0.22%	0.72%	-11.64%	1.08%	-9.56%	-5.82%
NKE	64.32	-0.64	-0.99%	-1.65%	-2.03%	2.01%	31.72%	12.39%	19.82%	32.62%
EBAY	32.70	-1.39	-4.08%	-3.05%	-2.48%	1.77%	8.39%	-13.51%	3.45%	0.40%
WHR	81.29	-2.15	-2.58%	-5.23%	0.41%	3.75%	-3.98%	-10.87%	-27.54%	-5.33%
SBUX	21.25	-0.25	-1.16%	-6.06%	-9.15%	-11.83%	-39.72%	-23.12%	-23.04%	-41.94%
TM	106.30	-4.13	-3.74%	-6.93%	-5.47%	-3.78%	-21.43%	-6.08%	-14.08%	-15.43%
BC	18.20	-0.55	-2.93%	-10.74%	-10.74%	-14.19%	-42.98%	-17.31%	-46.25%	-43.76%
JCP	42.52	-1.07	-2.45%	-11.27%	-3.63%	-4.08%	-45.53%	-33.79%	-44.07%	-47.24%

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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	78.46	-0.23	-0.29%	1.90%	1.66%	6.63%	25.10%	12.79%	17.30%	25.54%
KO	63.81	-0.28	-0.44%	1.05%	2.75%	3.00%	31.35%	13.14%	24.36%	30.22%
BUD	52.76	-0.73	-1.36%	-0.06%	0.08%	5.92%	7.19%	5.14%	-0.19%	8.96%
PG	73.90	-0.50	-0.67%	-0.30%	-0.14%	2.88%	14.50%	8.98%	18.39%	16.65%
MO	76.82	-0.94	-1.21%	-1.01%	-0.95%	6.30%	18.33%	14.61%	9.01%	20.46%
WAG	36.59	-0.06	-0.16%	-1.40%	0.00%	-7.58%	-20.58%	-19.19%	-16.56%	-17.96%
DEO	85.53	-0.98	-1.13%	-1.59%	-5.58%	-3.82%	7.54%	1.74%	0.61%	9.14%
WMT	47.63	-0.70	-1.45%	-2.84%	-0.56%	3.10%	0.17%	9.95%	-3.35%	2.39%
WFMI	40.58	-0.92	-2.22%	-5.74%	-5.65%	-11.40%	-10.77%	-6.45%	3.26%	-17.52%
ABV	71.68	-2.51	-3.38%	-5.86%	-4.53%	-2.50%	45.99%	3.93%	-1.88%	47.10%

XLP (consumer staples) lost -1.49 pct W/W to close at 29.02, but Friday’s loss (-1.23 pct) made the week.

PEP bubbled up +1.9 pct W/W, but ABV (-5.9 pct) lost its head. The food at WFMI wasn’t up to par, down -5.7 pct W/W.

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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
BMET	45.99	0.06	0.13%	0.24%	0.31%	0.48%	10.90%	1.05%	8.47%	41.68%
UNH	56.73	-0.30	-0.53%	0.14%	3.15%	7.00%	7.91%	13.66%	7.14%	14.14%
DNA	68.43	-1.31	-1.88%	-0.09%	-10.26%	-8.18%	-16.34%	-13.37%	-10.26%	-15.89%
JNJ	67.59	-0.28	-0.41%	-0.13%	-0.22%	1.06%	1.79%	6.95%	8.23%	2.02%
GSK	53.00	-0.93	-1.72%	-0.51%	0.61%	7.55%	-1.51%	-0.77%	1.65%	0.45%
AET	57.85	-0.10	-0.17%	-1.83%	3.53%	5.47%	34.91%	12.37%	14.35%	35.80%
BMY	28.08	-0.73	-2.53%	-3.93%	-5.23%	1.19%	6.44%	-1.06%	-5.87%	9.73%
NVS	54.98	-1.27	-2.26%	-4.33%	-2.72%	4.15%	-5.44%	1.18%	0.04%	-6.26%
PFE	23.10	-0.54	-2.28%	-5.33%	-2.78%	-0.82%	-12.13%	-4.90%	-12.47%	-9.62%
AMGN	48.40	-1.02	-2.06%	-7.10%	-12.40%	-11.66%	-29.24%	-14.06%	-16.88%	-30.91%

IYH (healthcare) this week had a loss of -1.93 pct to close at 71.71.

Nothing looked good here. AMGN took a loss of -7.1 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
JPM	45.20	-0.56	-1.22%	-1.91%	-0.92%	3.84%	-5.97%	-0.75%	-10.17%	-5.74%
LEH	62.24	0.87	1.42%	-1.94%	-0.62%	-1.16%	-20.84%	4.61%	-21.02%	-18.19%
MS	50.30	0.10	0.20%	-2.69%	-4.59%	-5.58%	-38.37%	-23.91%	-43.67%	-36.81%
HBC	84.32	-1.26	-1.47%	-2.99%	-1.38%	-3.38%	-9.30%	-6.22%	-8.61%	-7.66%
DB	127.58	-3.88	-2.95%	-3.03%	-3.17%	3.70%	-5.73%	1.98%	-12.98%	-3.98%
CS	59.97	-1.71	-2.77%	-3.12%	-0.58%	-0.46%	-14.46%	-6.89%	-18.24%	-12.90%
GS	210.67	2.19	1.05%	-3.31%	-7.05%	-7.20%	4.96%	10.54%	-6.68%	5.27%
UBS	47.35	-0.88	-1.82%	-6.20%	-6.20%	-0.84%	-22.87%	-8.71%	-23.10%	-23.39%
MER	56.84	-0.99	-1.71%	-7.46%	-5.17%	-0.80%	-39.28%	-23.86%	-36.94%	-37.29%
C	30.70	-0.31	-1.00%	-10.52%	-7.81%	-11.22%	-44.43%	-34.18%	-42.80%	-42.20%

Traders are obviously not too interested in all the plans to bail out bankers. XLF (Financials) dropped -5.70 pct W/W to close at 29.47.

JPM and LEH were the best of the group I follow and they both lost -1.9 pct. C plunged -10.5 pct, MER -7.5 pct and UBS -6.2 pct. That’s a tough week for banks the size of Citi, Merrill and UBS.

Watch for the share dilution to come. Balance sheets will need to be shored up to maintain reserves before the full SIV losses are taken.

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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
CSCO	28.65	-0.41	-1.41%	4.37%	2.25%	-2.22%	3.28%	-9.22%	6.78%	4.87%
ADSK	49.56	-0.77	-1.53%	2.82%	5.25%	4.42%	22.19%	4.21%	9.43%	19.88%
ORCL	21.20	-0.41	-1.90%	0.28%	5.05%	3.82%	21.07%	5.63%	7.94%	17.65%
QCOM	39.38	-0.48	-1.20%	-1.84%	-3.43%	-3.50%	5.13%	-0.13%	-7.60%	-0.13%
CTSH	32.72	-0.82	-2.44%	-1.92%	5.21%	5.24%	-15.84%	-9.19%	-17.27%	-18.87%
SAP	51.13	-1.46	-2.78%	-2.33%	-0.18%	0.97%	-3.89%	-11.06%	4.82%	-0.54%
INFY	42.59	-0.31	-0.72%	-4.87%	1.04%	3.27%	-23.70%	-9.79%	-19.96%	-22.84%
ADBE	42.11	-1.78	-4.06%	-5.09%	-0.07%	3.16%	5.49%	-2.99%	-4.21%	3.31%
INTC	26.29	-0.87	-3.20%	-5.19%	0.81%	2.98%	29.19%	5.46%	13.17%	26.64%
SNDK	36.34	-1.10	-2.94%	-5.98%	-2.94%	-2.50%	-12.90%	-29.15%	-19.21%	-14.81%

SMH (semi-conductors) was down -2.24 pct W/W, closing Friday at 32.67.

I continue advising traders to watch the Big Ten of Nasdaq in order to get a feel for where the market is headed.

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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) lost -2.00 pct W/W to close at 29.43.

A week ago, Verizon (VZ) rocketed +4.84 pct W/W including +1.98 pct on Friday and +1.72 pct the prior Fri. This week VZ dropped -2.1 pct.

This week it was time for AT&T (T) to get the rocket booster. Thank you Houston. T hit a moonshot of +6.9 pct.

If you think that will happen again, you must be on a rocket something yourself.

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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:

XLU (Utilities) lost -2.26 pct, closing at 43.18.

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Bonds & Yields Review

Table 10: US Treasury Yields

US Treasury Bonds

Maturity	Yield	Yesterday	Last Week	Last Month
3 Month	2.76	2.77	2.96	3.27
6 Month	3.13	3.10	3.12	3.52
2 Year	3.30	3.23	3.10	3.50
3 Year	3.25	3.18	3.09	3.45
5 Year	3.62	3.56	3.49	3.82
10 Year	4.23	4.20	4.10	4.25
30 Year	4.66	4.64	4.57	4.60

Municipal Bonds

Maturity	Yield	Yesterday	Last Week	Last Month
2yr AA	3.06	3.05	3.11	3.31
2yr AAA	3.08	3.09	3.10	3.31
2yr A	3.39	3.37	3.38	3.43
5yr AAA	3.32	3.30	3.28	3.44
5yr AA	3.31	3.22	3.26	3.41
5yr A	3.42	3.39	3.39	3.54
10yr AAA	3.80	3.73	3.73	3.86
10yr AA	3.63	3.61	3.64	3.90
10yr A	4.03	3.96	3.96	4.09
20yr AAA	4.41	4.37	4.37	4.46
20yr AA	4.20	4.16	4.16	4.65
20yr A	4.65	4.69	4.74	4.99

Corporate Bonds

Maturity	Yield	Yesterday	Last Week	Last Month
2yr AA	4.52	4.36	4.26	4.47
2yr A	4.97	4.63	4.72	4.69
5yr AAA	4.78	4.67	4.60	4.67
5yr AA	5.00	4.89	4.83	5.09
5yr A	5.13	4.87	4.83	4.95
10yr AAA	5.41	5.33	5.22	5.18
10yr AA	5.64	5.59	5.45	5.76
10yr A	6.03	5.86	5.70	5.74
20yr AAA	5.73	5.60	5.52	5.62
20yr AA	5.88	5.85	5.78	5.87
20yr A	6.47	6.35	6.25	6.08

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A week ago, I wrote, “Some flight-to-safety capital appears to have departed the bonds and returned to the equities again this week.” This week the Bonds dropped hard, but there was nowhere to flee to!

A week ago, US Treasury yields gained +19, +16, +10 and +9 basis points. This week, yields gained +9, +13, +13 and +20 basis points to 4.66, 4.23, 3.62 and 3.30 pct for the 30-year, 10-year, 5-year and 2-year paper, respectively.

That is a huge drop in bonds over two weeks, but then again “it’s inflation, stupid”.

A week ago, the yield on the 3-month T-Bills dropped -9 bp to 2.96 pct. This week the loss was -20 bp to 2.76 pct. Pretty soon, the US Treasury Secretary Paulson will be paying zero! Traders will just be too scared to sit in bonds or equities at all.

How’s that for a successful 700 million dollar man. What it is is a man working you over for HB&B. This is the biggest transfer of wealth from the public to HB&B in history – all to pay for their stupid decisions to crank up the real estate market on the back of Liar Loans they syndicated for the hundreds of billions in fees they needed to pay their annual bonuses of some $38 billion to a relatively few executives and so-called managing directors. The shame of it.

If you are laughing now, you won’t be a year from now. All those bonuses and the outrageous dividend hikes to Friends & Family will soon have to be refinanced – if their banks can manage to stay afloat in the meantime. Of course, by lying and misrepresenting the true state of affairs inside these banks, they will buy some time.

I watched Nortel do this sort of thing a few years ago, and the senior execs were prosecuted. I wonder if belonging to HB&B gets you a free ‘Get out of Jail’ card from the President before he leaves office. I mean the Metal Man Mark Rich, who was also the Oil Fraudster Man for changing the color of his oil (read about it), was given that freedom by President Clinton in the final 24 hours of office.

Seedy politics and capital markets never ceases to amaze me.

A few weeks ago, I opined that if the yields dropped further, there would be a recession. Money would just sit in bonds (to maturity). Few traders would take risk. Capital intensive projects will dry up. This is not a process that happens overnight.

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 lost -1.24 pct and -0.11 pct respectively. Last week they I remarked they “dropped hard -2.79 pct and -2.11 pct respectively. The pressure is back on the inflation story because (i) for four days, oil prices surged and inventory levels dropped, (ii) Central Banks in England and Canada lowered rates, and (iii) Project HOPE has to be paid for by somebody !! I feel that if the bond market correctly prices risk (i) recession (ii) potential insolvency issues coming out of the SIV/MLEC Plan, and (iii) the inevitable failure of the hastily crafted HOPE Plan (seems to be something conceived at FEMA), then bonds will drop lower, and yields will rise. The market will not like the growing differential between market rates and Fed rates or LIBOR rates and Fed rates.”

Somebody’s listening.

Without covering old ground, here is what I previously wrote on the subject: “I’d like you to look at the Monthly data bond charts for the US Treasuries (for the most part) that follow. After Goldman Sachs ran into a couple billion liquidity crunch in July, and Lehman Bros and Merrill Lynch were having obvious problems, it is a fact that HB&B never told the world what these problems were. I believe Goldman and others saw the writing on the wall and started buying bonds. These charts look like a rocket launch. This is not merely the dawning of a possible recession; this is the credit market system unwinding because some banks couldn’t find the liquidity they needed within their own sources to meet their obligations to other bankers…There needs to be an investigation into why the Fed and HB&B, and Treasury Sec Paulson (still the world’s most powerful banker) offered us nothing but complaints that sub-prime mortgage holders were not meeting their obligations. What a total crock that was. Same old story: if you want to deflect scrutiny, find yourself an enemy. ..Breaking news: HB&B is the enemy. Muddy the waters, but tell the public we live in an age of transparency… these things have to change!! ..I think after some States like Florida, and others to follow, see how their employees have been screwed over mightily in the past five years, Washington will not be able to stem the outpouring of anger from the State level…Now in the past couple days, these bond prices are starting to plunge (and yields rocket), so what’s that all about? Do traders really believe that MLEC and HOPE will actually work? Just watch the mortgage companies crater even more if these bond prices continue to fall like this.”

Did you see the size of the so-called Alternative or Enhanced Money Market Funds that were shut down this week? When “A CLIENT” dips into your fund to pull $20 billion, get real. It means you don’t have a Fund. What you just heard was the music stop and the Fat Lady, not finding a chair, screaming. Whether she came from Florida or California doesn’t matter; they are all going to de doing the same.

Can you imagine if you are a syndication executive at HB&B hearing not one but a chorus of Fat Ladies screaming!! You know what they say about a woman scorned!!

Citi has a new CEO and a brilliant solution (I mean it): load as much SIV garbage onto your balance sheet as possible and get some emergency bailout capital as soon as possible – before that capital funding source dries up when there is a line up of wailing bankers at their doors. In other words, when in dire straits don’t go in extremis; do what it takes to live another day. Let the arrogant (‘what me worry?’ stuffed shirts in the other banks sit around denying they have any problem in a global liquidity crisis.

For Pete’s sake, THEY are the global liquidity and if it’s in crisis, they are in crisis. Do they expect the People will tolerate their govt administrations and central bankers handing out more life lines? I think when the $USD dropped to 74, that game was OVER. Not even Hank Paulson can save the slow-afoot. He’s soon going to be busy saving his own reputation for the stupidities he started in June 2006 when he should just have let the Bear market start on its own.

This will get worse.

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US Bond Funds -- Interactive Monthly Data Charts

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	104.33	-0.14	-0.13%	-0.11%	-2.22%	-0.55%	5.14%	2.08%	6.73%	3.96%
SHY	81.88	-0.20	-0.24%	-0.35%	-0.75%	-0.13%	2.30%	1.02%	2.74%	2.17%
AGG	100.38	-0.28	-0.28%	-0.48%	-1.59%	-0.67%	0.47%	0.48%	2.91%	0.05%
IEF	85.72	-0.25	-0.29%	-0.72%	-2.12%	-0.44%	3.68%	1.68%	7.32%	3.17%
TLT	90.61	-0.42	-0.46%	-1.24%	-3.99%	-1.81%	1.73%	0.78%	9.01%	1.04%
FNM	34.68	-0.08	-0.23%	-6.37%	-9.73%	-19.42%	-42.06%	-43.41%	-49.34%	-42.41%
FRE	31.85	-0.61	-1.88%	-10.38%	-9.18%	-23.91%	-53.09%	-44.48%	-51.18%	-53.81%
CFC	9.800	-0.280	-2.78%	-15.08%	-9.43%	-19.74%	-76.73%	-49.54%	-74.07%	-76.11%

A week ago, I wrote,

“For the week, the share prices of Countrywide (CFC +6.65 pct), Freddie (FRE +1.34 pct) and Fannie (-3.59), were all over the map. But after watching the Bush/Paulson Project HOPE lunacy, the Big Three mortgage lenders on Friday all had bad days on Friday: CFC -4.63 pct; FRE -4.20 pct; and FNM -4.39 pct…When I first heard about the prospects of such a plan coming together, I wrote,

It boggles the mind that when HB&B need desperately to pull themselves out of the hole they dug for themselves they would stoop so low as to actually support such a plan. …From frying pan into the fire... No, actually, I wouldn’t touch CFC, FNM or FRE with your ten foot pole because I think they have serious problems in getting to the bottom of their problems. Should interest rates stop being pushed lower, which is killing the $USD, and making all Americans pay for the shambles that HB&B and Henry Paulson have left the credit markets in their quest for billion dollar bonuses, then these mortgage lenders are finished. ..What that means is that their shareholders are finished.

So two things come to mind: (i) when bond yields pop like they did on Friday, CFC-FNM-FRE prices are going to be cooked, (ii) if bond yields ever reach proper risk-adjusted levels, then CFC-FNM-FRE shareholders are going to be cooked, which means their bankers are cooked, and (iii) Henry Paulson was sent to Washington to convince the President and Congress to get the Govt sponsored agencies (Fannie and Freddie) to take the hit for HB&B, which means the American taxpayer will pay the price. How sad.

I think I made the point.

This week Countrywide (CFC -15.1 pct), Fannie Mae (FNM -6.4 pct) and Freddie Mac (FRE -10.4 pct) cost its shareholders a bundle. Combined with the previous Friday losses, these stocks are down from -11 pct to -20 pct IN SIX SESSIONS. Thank the people in charge of your govt! If you had any margin, you got wiped out in six sessions.

Paulson’s friends btw will still get their $38 billion. How much again for John Thain who used to report to him as COO of Goldman Sachs who went to the NYSE and then to Merrill? Yes, how many millions in bonues does John get for what three weeks of meeting people at their festive holiday occasions?

Fiction writers would not get away with this stuff. It is just too far removed from reality.

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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 was higher this week +1.66 pct W/W from 342.92 to 348.60.

I recall saying that when the 320 threshold was broken, the US economy would be broken.

The 50-day Moving Average for $CRB is presently at 344.53 (up W/W from 342.65) and the 200-day MA is now 322.39 (up from 321.40), 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

$WTIC (US Light Sweet Crude called West Texas Intermediate) jumped again +3.27/bbl (+3.70 pct) from 88.28 to 91.55.

The 50d MA for $WTIC is now at 90.36, up W/W from 89.30, and the 200d MA is 74.58, up W/W from 73.85. The current price is below the 50-day MA.

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

$GOLD dropped -2.20 W/W (-0.27 pct) to close Friday at 798.00. It lifted on Friday afternoon, but the gold stocks continued south. This sector is in trouble.

The 50-day MA for $GOLD is now 791.47 and the 200d MA is 706.15. $Gold was down -0.75 pct on Friday, and $Silver -1.78 pct. On the week $SILVER dropped -3.60 pct.

What I wrote in this space two weeks ago still applies, “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… (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.”

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Spot gold chart for the week

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 lost -0.52 (-3.60 pct W/W) to close at 13.98.

For $SILVER, the 50d MA is 14.35 and the 200d MA is 13.42.

Five 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.” Then I added, “I don’t think we’ll see that again for a while.”

The longer the price doesn’t get back to that 15.55 cycle high, the more likely sellers will come in and knock it down to a lower base from which to try a major rally. That is what I am anticipating.

Silver was down -1.78 pct on Friday.

The precious metal royalty companies are getting hammered.

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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 +14.00 (+0.96 pct) this week to close at 1479.20, so even with the huge gain of a week ago, it is still not back to three week’s ago (1482.50).

The 50d MA for $PLAT is 1448.66 (so the price a week ago bounced off the rising 50-day MA). That is the first line of defense. The 200d MA is 1331.24.

As I said two weeks ago, “the charts for Platinum and Palladium show they are entering a bottoming pattern, which might be an indication that gold and silver are ready to bottom as well. But I don’t think so because gold and silver are taking their cue from the strengthening $USD, which is going to push those prices lower. “ That’s what happened to gold and silver as plat and pall lifted. The lift will soon head down.

I have to think the plat and pall will play like their precious metal counterparts.

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 gained 9.75/oz (+2.80 pct W/W) (+1.59 pct on Friday) to close at 357.40.

The 50d MA is 369.61 (which is now falling) and the 200d MA is 364.34, so the $PALL is staying below the both MA’s, which is a negative.

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 (-5.42 pct W/W) to close at 295.55.

The 50d MA of $COPPER is 328.81 and the 200d MA is 337.36, so the current price (295.55) is well below the 50MA and 200MA, and may continue pointing traders to a recession. With the economies of the world slowing, how can copper prices stay high?

A week or two ago I wrote, “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, who btw might be taken over by a major miner. Now, wouldn’t that be a classic “tell” that the equity market has reached the peak. “

Enter the Fat Lady here too. The writing is on the wall. Xstrata of Zug has put itself up to the highest bidder. Time to move on for these money men.

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
BVN	54.22	-1.56	-2.80%	-1.72%	-2.88%	-3.40%	96.38%	26.86%	56.89%	96.95%
AEM	47.73	-0.49	-1.02%	-2.37%	-0.81%	-3.56%	22.64%	-0.85%	32.77%	13.10%
GG	32.23	-0.40	-1.23%	-3.88%	-0.56%	2.71%	17.89%	17.80%	31.34%	11.56%
NEM	47.81	-1.01	-2.07%	-4.44%	-3.78%	-2.03%	8.17%	5.42%	19.97%	0.50%
MDG	34.99	-0.45	-1.27%	-4.48%	-2.29%	-2.45%	33.09%	15.02%	35.41%	20.70%
ABX	38.00	-0.22	-0.58%	-4.50%	-6.20%	-5.87%	27.39%	2.15%	33.76%	23.22%
GFI	14.84	-0.47	-3.07%	-4.99%	-9.79%	-15.30%	-19.04%	-11.56%	-8.11%	-18.68%
AUY	12.55	-0.35	-2.71%	-5.99%	-2.41%	-3.01%	1.78%	6.45%	-1.26%	-1.26%
KGC	17.22	-0.62	-3.48%	-6.51%	-0.75%	1.12%	50.79%	23.97%	34.53%	42.20%

This week, $XAU (the Philadelphia Exchange goldminer index) lost -8.59 (-4.93 pct) to close at 165.80.

The goldminer ETF’s (the US’s) GDX (-4.50 pct) and (Canada’s) XGD (-3.13 pct) were down hard this week. The trend is down.

The 50d MA for $XAU is 175.94 and the 200d MA is 151.56, which are both up on the week. I venture one of them (the 50-d MA) will be down next week.

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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

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.”

What the central banks have to do is get control of this monster !!

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Here is the chart of the week’s trading.

This week the $USD lifted +1.14 (+1.49 pct) to close at 77.43.

“When it had a 74 handle a couple weeks ago, I opined that we’d soon see 75, then 76, then 77.” But you heard that already. Now I figure it could run to 82, which would hammer gold, and give you the buying opportunity that I have been addressing for some time.

Interactive Chart of Weekly U.S. Dollar Index:

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

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The Euro ($XEU) this week lost -2.40 (-1.54 pct) to close at 144.17.

The Euro’s 50d MA is 145.06 and the 200d MA is 138.10.

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

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

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The Pound dropped -1.56 (-0.77 pct W/W) to close at 201.58.

Three weeks ago I wrote here, “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 now 205.51 and the 200d MA is 201.14.

Weekly British Pound Index:

Daily British Pound Index:

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Weekly Japanese Yen Index:

The Japanese Yen ($XJY) had a second consecutive losing week.

The Yen this week, dropped -1.39 (-1.55 pct) to close at 88.15.

“I thought the Carry Trade was beginning to unwind. Maybe the Bulls can keep it going?”

The 50d MA of the Yen is 88.60 and the 200d MA is 85.25.

As the Yen falls, the money flow is into US and Japanese equities.

Daily Japanese Yen Index:

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The Canadian Dollar continues the journey south, losing -1.40 (-1.41 pct) closing at 98.17.

The Loonie’s 50d MA is 102.36 and the 200d MA is 94.94, so the current price is below the 50d MA and still sinking. Its a far cry from 110.17, just a few weeks ago. But then, you did buy that property down south when the Loonie was stronger, right?

Weekly Canadian Dollar Index:

Daily Canadian Dollar Index:

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International Equity Markets Review

I have added 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.

In addition, I added the $CDNX, which happens to be the Toronto Venture market. Enthusiasm for many of these stocks will wane during 2008. In a Bear market, some will drop by -80 pct or more from peak to trough. Don’t shoot the messenger. I do think there will be another bull move before the full Bear sets in. Operating costs and tight money by traders are at fault. Not enough big discoveries for the billions of funds going into exploration and holidays for the promoters. :-)

So, what I advise if you are playing these Toronto Venture 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.

The India IFN was flat, but the China FXI -9.5 pct, the Brazilian EWZ -6.6 pct and the Japanese EWJ -7.0 pct were the big losers.

A week ago, I wrote here, “ I advise watching the MACD and RSI indicators closely in the next month as I believe we are seeing the topping process work out since the end of September. The next down-draft could be a big one, although it will probably hit unexpectedly.”

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

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

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
TRF	77.60	-0.29	-0.37%	8.38%	12.63%	15.12%	-12.37%	25.91%	14.54%	-3.78%
IFN	65.49	-0.42	-0.64%	0.06%	7.45%	13.40%	44.44%	31.77%	58.19%	38.84%
EWC	31.45	-0.26	-0.82%	-1.53%	-2.96%	-5.44%	27.33%	1.78%	5.54%	21.99%
SPY	147.17	-1.89	-1.27%	-2.48%	-1.00%	1.12%	4.10%	-1.16%	-3.72%	2.83%
QQQQ	50.97	-0.53	-1.03%	-2.60%	-0.66%	2.31%	17.88%	3.56%	7.62%	14.87%
EWU	25.05	-0.48	-1.88%	-3.54%	-2.22%	-0.04%	6.37%	1.38%	-1.38%	3.26%
IEV	116.67	-3.02	-2.52%	-3.77%	-3.11%	-0.88%	10.48%	3.05%	0.62%	9.43%
EWZ	80.00	-2.40	-2.91%	-6.62%	-0.88%	-1.66%	71.31%	24.80%	31.10%	72.75%
EWJ	13.26	-0.54	-3.91%	-6.95%	-5.69%	-2.14%	-6.62%	-2.36%	-8.80%	-6.29%
FXI	171.50	-4.55	-2.58%	-9.45%	-8.53%	-6.03%	47.34%	10.08%	43.10%	70.82%

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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

The US stock indexes were down -2.1 to -4.0 pct this week. The Russell Small Cap index was down -2.0 pct on Friday as retail traders are particularly nervous. A lot of their capital is held by institutional capital managers who are trying to hold the fort – at least til year-end, when they too get bonused.
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
T	41.14	-0.66	-1.58%	6.94%	7.67%	4.50%	17.71%	1.73%	1.43%	15.37%
HON	59.98	-0.67	-1.10%	2.51%	5.93%	4.93%	32.99%	6.27%	2.99%	40.50%
MSFT	35.31	0.09	0.26%	2.26%	5.09%	4.59%	18.25%	21.59%	15.69%	17.43%
MCD	61.16	-0.35	-0.57%	1.66%	4.60%	6.96%	39.41%	10.30%	17.05%	39.99%
KO	63.81	-0.28	-0.44%	1.05%	2.75%	3.00%	31.35%	13.14%	24.36%	30.22%
DIS	33.01	0.25	0.76%	0.67%	-0.42%	1.88%	-3.48%	-1.64%	-2.31%	-4.93%
HPQ	52.14	-0.23	-0.44%	0.58%	1.92%	6.63%	25.28%	7.77%	14.17%	30.64%
JNJ	67.59	-0.28	-0.41%	-0.13%	-0.22%	1.06%	1.79%	6.95%	8.23%	2.02%
PG	73.90	-0.50	-0.67%	-0.30%	-0.14%	2.88%	14.50%	8.98%	18.39%	16.65%
MMM	85.93	-0.99	-1.14%	-0.30%	3.21%	7.88%	9.80%	-3.47%	-1.70%	9.09%
XOM	91.18	-1.54	-1.66%	-0.35%	2.27%	7.92%	23.03%	2.83%	7.56%	15.81%
GE	36.91	-0.67	-1.78%	-0.86%	-3.60%	-3.65%	-2.79%	-8.53%	-2.35%	1.93%
MO	76.82	-0.94	-1.21%	-1.01%	-0.95%	6.30%	18.33%	14.61%	9.01%	20.46%
CAT	73.39	-0.83	-1.12%	-1.09%	2.07%	5.25%	20.00%	0.31%	-9.09%	18.14%
UTX	76.69	-0.92	-1.19%	-1.77%	2.57%	3.71%	22.10%	0.72%	7.59%	23.57%
MRK	59.57	-0.22	-0.37%	-1.81%	0.35%	2.85%	35.32%	20.25%	18.59%	36.63%
JPM	45.20	-0.56	-1.22%	-1.91%	-0.92%	3.84%	-5.97%	-0.75%	-10.17%	-5.74%
VZ	44.37	-0.65	-1.44%	-2.05%	2.68%	3.09%	17.32%	4.35%	2.66%	22.94%
WMT	47.63	-0.70	-1.45%	-2.84%	-0.56%	3.10%	0.17%	9.95%	-3.35%	2.39%
IBM	105.77	-2.41	-2.23%	-2.84%	0.56%	2.09%	8.74%	-8.13%	1.85%	10.92%
AA	35.19	-1.14	-3.14%	-4.66%	-3.24%	-3.14%	19.98%	-0.82%	-14.50%	14.40%
BA	88.42	-0.13	-0.15%	-5.09%	-4.45%	-3.20%	-0.84%	-11.00%	-10.66%	-1.68%
INTC	26.29	-0.87	-3.20%	-5.19%	0.81%	2.98%	29.19%	5.46%	13.17%	26.64%
DD	44.73	-1.49	-3.22%	-5.21%	-3.08%	-1.41%	-8.79%	-6.89%	-11.43%	-7.58%
PFE	23.10	-0.54	-2.28%	-5.33%	-2.78%	-0.82%	-12.13%	-4.90%	-12.47%	-9.62%
GM	26.52	-0.43	-1.60%	-7.34%	-11.10%	-12.01%	-9.95%	-22.50%	-21.07%	-10.92%
AXP	52.29	-1.55	-2.88%	-8.20%	-11.34%	-10.22%	-13.37%	-11.28%	-17.18%	-15.53%
AIG	55.65	-1.40	-2.45%	-9.44%	-4.27%	-2.28%	-22.87%	-14.33%	-23.07%	-22.74%
HD	26.63	-1.01	-3.65%	-9.70%	-6.76%	-8.11%	-35.16%	-25.36%	-29.53%	-33.38%
C	30.70	-0.31	-1.00%	-10.52%	-7.81%	-11.22%	-44.43%	-34.18%	-42.80%	-42.20%

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

ExxonMobil [GICS 10, Dow 30, Cara 100] $91.18.
(XOM: Value Line Report Dec. 14: next one is due Mar. 14)

(XOM: Yahoo Finance file)
(XOM: StockChart chart)
(XOM: Billcara2 chart)
(XOM: ADVFN Financial Data)

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The Value Line analyst Robt Mitkowski lowered the Technical rating on XOM from 2 (good) to 3 (average) on 11/30. He must have been listening to me at much higher prices. :-)

Despite much higher crude oil prices and processed prices, Exxon actually made less profit this year. However, “a formidable $8.5 billion stock buyback program” ensured a rising earnings per share figure!!

With a current dividend yield of +1.7 pct, the anticipated annual Total Return (dividends and price appreciation) is listed by Value Line as in a +3 pct to +7 pct range. That simply doesn’t cut it if you expect to be earning Buffett-type portfolio returns. I saw that two months ago and jumped the Valdez – I mean the ship.

Operating margins and (thanks to $30 billion share buybacks in 2007) return on equity, however, are superb, and so Exxon will stay in the Cara 100.

I will give you a heads up. As the price of oil recedes in the next year, the price of the stock XOM will fall too (along with the rest of the equity market), you will start to read all kinds of nonsense that Exxon is a lousy company, yada yada. Laugh at them. Call them clowns. Tell them you sold XOM at 94 and that you still think it’s a world-class company and that you are just waiting for the stock to hit the Cara Accumulation Zone (AZ) before you’ll even venture a peek at it again.

The AZ is when you need to start doing your homework, a little reading of well written reports, like from Value Line, and waiting for the Buy Alert before you start to re-enter positions with put writes, some calls, some outright purchases.

The bottom line is that the energy business is the world’s biggest, and Exxon the industry’s biggest company, but in this case biggest is better because Exxon is a money machine. If any company can make profits in this industry, it’s Exxon. And this is a company that loves to buy back shares. In 1999, there were almost 9 billion shares out, and soon there will be under 5 billion. Had JP Morgan, Bank of America and Citigroup done the same instead of putting their capital into SIV’s to support their Liar Loan business, they would be in good shape today. I’ll put it this way, Exxon doesn’t do a Liar business. You get to the fuel pump with cash or credit in hand, you get to keep driving. All the b.s. in the world isn’t going to keep your auto or home fueled up.

Unfortunately, when economies falter like 2001-2002, even Exxon financials and its stock takes a hit, and it will this time too. So buy the shares back when XOM gets down to under seven times 2008 projected cash flow per share of $9.95, ie, at about $70. That ought to be about 10x earnings, probably a little lower because earnings for 2008 may not quite hit the VL projected $7.25.

But, we’ll have to watch whether the Company decides it is prudent in an illiquidity-driven recession to continue spending at the rate of $80 billion over 3 years to buy its shares. If they do keep up this massive buying, you may have to pay 75. The stock is at $91.18 today. Wait for it.

I have a saying: “I love the company, but I hate the stock!” Burn that into your trading plan, and be patient.

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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 Dec. 14: next one is due Mar. 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 Feb. 29)

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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 Feb. 29)

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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 Dec. 7: next one is due Mar. 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:

It is amazing what a return here to the Bahamas will do for your spirit – not to the casinos, but to the people, the food and music, the water, the smell of the land. This is a place that no matter what the obstacles makes me smile. It’s a good feeling.

You can live the high life here I suppose, but the people I know don’t put on airs. They do like to dress down, and they do like to party. Today I will be out with the local chapter of the least pretentious club in the world, the Hash House Harriers of Nassau. That’s a running group with a drinking problem advantage.

It’s about community. http://nassauhash.com/

The Hash does its thing on Sunday afternoons in the winter and Mondays during the rest of the year. Today will be weekly Run Number 1369. As the website says, if you're in town visiting - on a vacation or for business - why not join us for a run!.

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