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January 20, 2008
Week in Review #3 (2008-01-20)
The Bears took full control of the US equity market this week. But we need to know whether, from this point, they intend to run south-east like 2000-2002 or due south like 1987.
For three weeks, the tell-tale signs and the scent of Bears has been unmistakable, but after Friday’s $150 billion speech by the President and the discussion of 50 to 75 basis point drop in the Fed Rate couldn’t hold the Bears away from the garbage dump, it’s pretty obvious now what’s happening in this market.
Of course I did explain it a week ago when prices were almost 5 pct higher.
In any case, the slowing of the global economy, the liquidity crisis among the major banks and the need for Humungous Bank & Broker to obtain cash infusions is now a reality that is painfully obvious.Although there may be pockets of Bull support, the resistance of the Bears will win the day, and equity prices will continue to seek lower levels.
The process of writing down assets and, without printing money excessively, rebuilding capital to once again lead to global economic expansion will take some time. Whether traders will decide to hang in and ride their portfolios slowly down from the top or perhaps sell off the riskier positions quickly, causing another October 1987 scenario, is still unknown.
One opinion I now hold is that the Bear is half over. Using the DJIA as a measuring device, the cycle top was 14200 and my target for the low is 10,000. We are now watching Dow=12100. The market has erased 2100 of the 4200 points I was expecting.
If the DJIA is going to drop that much further, I believe the Financials (C, JPM, AXP, AIG, and GE [has a huge financial component]) will not be the problem. The damage there is already three quarters done, or more.
I expect the largest losses will be in the Energy, Basic Materials, Consumer Cyclicals and Staples, Telecom and Technology.
Newbie traders are always shocked to see how rapidly prices can fall. This year, for example, the huge Energy sector ETF (XLE) has fallen in just eleven sessions about -17 pct from about 81 to Friday’s low of 67.14 (closing at 68.90). But Crude Oil ($WTIC) is still extremely high at 89.92 vs about 51 a year ago.
So what happens to the oil price if a US recession or a significant global slowdown were to occur? I believe $WTIC will fall to its 200-day Moving Average (presently 78.30) and probably below. It might even fall to its 400d MA. Yes, I believe the world will soon see oil priced in the mid-70s and that will clearly hurt the operating results of the major oil companies and hence their share performance. I can see good prospects of XLE rallying in the short term to possibly 70 and then falling a further -25 pct to the low 50’s.
As for gold and gold stocks, traders are already forgetting the five-week pullback of $GOLD in May 2006 from 730.40 to 542.27, which was a crash of over -20 pct. So far, in the past three trading sessions, $GOLD has dropped back from a high of 916.10 on Tuesday to a low of 870.67, closing at 881.70. But with that decline of just -3.76 pct, the major goldminer share indexes ($XAU, GDX and XGD) dropped this week by -8.40 pct, -8.22 pct and -7.42 pct, respectively.
So, in a Bear the leverage in the equities vs the commodities is working against you. Where do you think these goldminer share indexes will be should $GOLD pull back to its 200d MA (presently 728.68) from today’s price of 881.70?
$XAU, for example, hit a record high of 199.25 on the 14th and closed on the 18th (Friday) at 177.30, which is a drop of -11 pct. Should $GOLD drop all the way to the 740-760 level from today’s 870, I believe that $XAU could test the 120.41 low of August 2006. Even a drop to 130 from today’s 177.30 would be a further pullback of about -27 pct.
My point to this discussion is (i) commodity-based equities like oil and gold are the leading late-cycle performers on the downside as well as the upside, and (ii) I anticipate declines in the related share indexes of -25 to -27 pct, still, whereas I believe the DJIA, for example, may have a further -17 pct to drop.
If there is a place to hide, relatively speaking, it is in XLF, the giant Financials ETF, which has dropped from 36 in mid-October to a low of 24.97 on Friday (-30.6 pct loss to 25.50). There may only be another -10 pct losses remaining in this cycle before the bottom is reached.
My reasoning there is that, with the Financials, traders have been inundated with negatives in terms of write-offs, accusations, executive terminations, media discussion, and so forth whereas for the Oils and Precious Metals, we’re just starting to see the potential of the downside, and prices have just started to pull back.
Moreover, the US economic stimulation package announced Friday by the President and the upcoming round of Fed Rate cuts, as widely expected, are designed to primarily help shore up the financial system first, and then in six to 12 months result in widespread economic relief that will be enjoyed by the other sectors.
In the meantime, there are more skeletons to come out of the bankers’ closets, and the economic slowdown (probably recession in the US) and liquidity issues and risk management policy changes facing the banks will continue to plague their share performance for a while, I believe. In addition, the housing industry, which is closely linked to the banks, will take a year or more to resolve its problems.
In summary, the market pull back so far this year has shocked and awed some traders, but before all is said and done, I expect the worst is yet to come. Following a brief attempt to rally from a short-term oversold condition, to be helped largely by traders closing short positions, rather than initiating new Buy programs, I anticipate more losses. Prudent traders ought to consider selling their risky positions into the strength of rallies, and gather the ammunition in cash or near-cash to be ready and able to buy the stocks of the best quality companies at or near the long-term cycle bottom.
One look at this week’s performance of the Bond market will tell you that traders are engaged in that flight to safety. The 2-year US Treasury Note dropped -24 basis points to an extremely low 2.32 pct yield and the 5-year Note is now yielding just 2.73 pct. Wealth is being destroyed in the billions of dollars because inflation is still growing at a faster clip.
One final point is that oil and gold, should they pull back to their 200d MA’s, or a bit lower, would still be considered to remain in long-term Bull markets. Within a couple years I believe new cycle highs will be reached, particularly for gold, which has become, with the strength of the emerging BRIC economies, and the decline in relative importance of the $USD, the new reserve currency of the world.
Given the reluctance of finance ministers and central bankers of the economically powerful G-20 nations to revert to a gold standard that hinders their domestic political and monetary policy freedoms, I think that traders now are generally in agreement that gold is the standard.
Government leaders and central bankers clearly have the power to move markets in the short term, but in the total picture the world economy is so huge and the capital base of the buy-side so large that normal (ie, long term) economic relationships will continue to dominate. The present sophistication of independent traders backed by the power of advanced computer and telecommunications technology ensure that capital will flow from one asset class to another and from industry to industry, sector to sector and country to country, faster that any ability of market interventionists to dominate.
Yes, for the cost of a penny or two a minute, we now conference on a global scale. The news in say Santiago Chile is instantly known in San Francisco, Shanghai, Sydney and Stockholm. What was once called “hot” money is now just called money.
The world can see that governments are printing and spending money three and four times faster than economic wealth is being created. That fact will become the biggest story of the next several years in the capital markets. Oil and gold will continue in the long-term bull phases until the major country governments come to an agreement to balance budgets and the finance ministers and central bankers hold them to it.
I don’t see that happening in the foreseeable future, but I do see a time, following a deep Bear market in equities, where the economy will right itself, at least temporarily.
Global Economics Review
Econoday International Report (Jan 18).
US Economic Calendar for next week.
It is important to review the following reports published this week on the US economy that worsened in December.
US Retail Sales report.
The US Producer Price Index (PPI) report.
US Consumer Price Index (CPI) report.
US Industrial Production report.
US Leading Economic Indicators report.
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.
“Jock” reports:
insert the report here
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.
US Equity Markets Review
DJIA=12099, down from 13450 four weeks ago Friday. That’s a loss of -1351 points in 18 trading sessions, including -507 this week. A couple weeks back, when I saw the initial sell-off reaction to the inflation and econ slowdown data, I said I wouldn’t sugar-coat it, and that I was expecting significant downside action.
“Traders are taking note of a possible double top.” (WIR 39, Sept. 29, DJIA=13,895.63)
This week, of the Dow 30 stocks, eleven were down -5 pct or more. Three were down -11 pct or more.
Three weeks and -1267 Dow points ago, I wrote: “I do not think the US major market levels are sustainable. Inflation is too high and also on the rise, which is hurting buying power of consumers, which in turn is leading to lower corporate profits. I do not believe that money by decree of the US Administration and the European Union is any solution. It is merely putting off the day of reckoning for HB&B and providing a longer window for insiders of these distressed financial institutions to be selling their shares.”
A week ago, HB&B in the form of XLF was one of the US sectors that actually gained, but this week the XLF dropped a further -7.44 pct after shares of Citi (C -14.4 pct), UBS (UBS -10.6 pct), Credit Suisse (CS -9.5 pct) and Deutsche Bank (DB -7.8 pct) were met with a wave a heavy selling as they wrote down their assets, changed their management, guided more negatively, and discussed share dilution that would be required to meet the capital reserve levels required by central bankers.
The more serious problems with the US market this week were actually in the Telecoms (-7.7 pct), Utilities (-7.8 pct) and Energy (-8.9 pct).
NASDAQ Composite ino.com chart
NASDAQ Composite stockcharts.com chart
Nasdaq=2340 down -100 points from a week ago Friday at 2440, but -334 points in two weeks.
“Traders are taking note of a possible double top.” (WIR 39, Sept. 29, Nasdaq=2701.5)
This week, the tech-heavy Nasdaq was supported by a relatively strong Semi-conductor group. The SMH was down -1.03 pct W/W but actually gained +1.38 pct on Friday. 800-pound gorilla Intel (INTC) issued a solid financial report for the past quarter, but guided caution in the present and next quarter, which smashed the stock -13.6 pct on the week.
Google shares also were beaten down further. There was a major pullback in GOOG after the Cara RSI-7 system generated a Sell Alert 2007-12-11 at $699.20. GOOG traded below $600 on Friday.
Several weeks ago I wrote in this space, “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” I said that the Techs would lead the market one way or the other, and you know which way I was indicating.
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
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 zero up and ten down.
Presently there are 6 of the Cara 100 in the Accumuation Zone (UBS, HBC, SNDK and LLTC, CCL and DIS) and there have been several recent Buy Signals. This is where traders must use prudence however as in a Bear market, there are many confounding whip-saws. Still, if there is to be a rally, this is a place to look.
Before the market started plunging a couple weeks ago, there were a large number of Cara Distribution Zone/Sell Alerts. Obviously most of those worked out rather nicely.
A week ago, I wrote,
“Barrick (ABX +51.20) has been in the Distribution Zone for seven days M-W-D RSI-7 at 76.03 : 77.55 : 80.47. To trigger a Sell Alert, ABX would need to fall below 70 on the Daily (for short-term traders) and the Weekly and Daily for Intermediate-term traders.Goldcorp (GG/G), which is the ABX peer, btw gave a Sell Alert three days ago after just one day in the DZ (2008-01-09 at $37.15), but since then GG has gained +2.45 pct to close the week at $38.06.
ICICI Bank from India (IBN) is another in the Distribution Zone. The BSE 30 Sensex index has been on a tear recently, and IBN has been very strong. This is a well run bank that is attracting considerable foreign buying of its shares because it is a major player in the stable and rapidly growing economy of India.
If I recall correctly, the other Indian bank I follow (HDB) gave a Sell Alert in December.
Four sessions ago, ABX and IBN triggered Sell alerts and these stocks are already down -7.00 pct (from $50.25 to $46.73) and -5.59 pct (from $66.03 to $62.34) respectively.
And Coca Cola (KO), which triggered a Sell Alert 6 sessions ago at $63.77, is now down -4.75 pct to $60.74.
On the other hand, even in a plunging market, the Buy Alerts have been performing well for the most part. JC Penny (JCP) gave a Buy Alert seven sessions ago at $$37.55 and closed Friday up +9.00 pct at $40.93.
However, like I say, these are volatile markets, and extremely bearish ones, so you have to use your common sense when entering Buy trades.
You do know that large, sophisticated traders will wait for the Buy signals in Bear markets to sell positions into strength. All traders have to learn this tactic. And, when you do, you will easily spot the nonsense that paid-and-bought-for Talking Heads use to aid pump-and-dump schemes. Sometimes the charade is so dreadful, I say to myself, “That person needs some considerable time in crowbar motel!”
In any case, a technology feature I hope to implement will be a table that tracks the gains and losses of this simple RSI-7 system. It is an unsophisticated system that I can easily flesh out into something very valuable. And when the vested interests try to trade against these Alerts, which they often do, it would be my pure joy to see enough of you independent traders keep the heat on, and cause the interventionists to blow up their capital. At the end of the day, nobody wants to destroy capital, so these others will sooner or later come around to dealing straight-up. It’s only a matter of time.
Btw, the Daily Report tables can be helpful in many ways. For instance, a week ago I wrote in this space, “By tracking the changes, you could see that (SanDisk) SNDK ($28.58) is rather over-sold (M-W-D RSI-7 at 26.01 : 15.21 : 12.95). If you are monitoring the stock of a quality company whose RSI-7 on the Daily and maybe the Weekly drops to about 10, sometimes it’s best not to wait until the RSI-7 jumps back to a cross-over at 30, but to wait until the peer group appears headed for a rally – even a mini-rally – and then write puts and buy calls.”
This week, SNDK has fluctuated up and down in and out of the Accumulation Zone. The stock is now at 27.74, but the Daily RSI-7 is up to 29.0, almost to a Buy Alert. If there is a bounce in the overall market early in the week, this could be one that moves up nicely. But with a Weekly RSI-7 down at 14.35, the rally is likely to be a short one, ie a couple days only. As I was saying, this is a good market environment for put and call option traders.
“That approach btw is used by day traders, but is not recommended for others.”
Table 1: Cara ETF List is sorted by price performance Week over Week (W/W), i.e. 1W%N.
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
You can do this table yourself by entering the following string into the Summary window at Billcara2.com and then clicking on the link for Performance. XLE XLB XLI XLY XLP IYH XLF SMH IYZ XLU . You can also add more ETF’s – up to 30 in total.
For a list of components to any ETF, go to the AMEX.com web site, and click on ETF’s.
10 (energy: XLE)
15 (basic materials: XLB)
20 (industrial: XLI)
25 (consumer discretionary: XLY)
30 (consumer staples: XLP)
35 (healthcare: IYH)
40 (financial: XLF)
45 (technology, semiconductor: SMH)
50 (telecom: IYZ)
55 (utilities: XLU)
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), in three weeks, has dropped from 80.31 to 68.90, a loss of -14.2 pct. The loss this week was -8.77 pct. Also, West Texas Intermediate Crude ($WTIC), which had hit 100.09 just 12 sessions ago, and Talking Heads were pointing you to $200 oil, has now fallen to 89.92, which this week was a loss of -2.43 pct.
Three weeks ago, the XOM closed at 95.00, and I opined that once again the market was giving you an opportunity to make money by selling it. XOM closed this week at 85.08.
Yes, I wrote in this space last week, “A week ago, I wrote, “Isn’t the market terrific? It’s possibly giving you yet another chance to sell XOM at 94 or better. You’ll look back in six months and say thank you, Mr. Market.” You’ll be even happier selling at 95 for all the reasons I gave off the top… With Crude at 96, I added, “I have been saying that I think $WTIC is 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.” Now it’s at 92.16, and I still believe the price is in a down cycle.”
The 200-day Moving Average of $WTIC is at 78.30, which continues to rise. The 50-day MA is now at 93.21, but now falling. Last week it had been rising and I wrote, “…and rising, but I believe it will now start to fall.”
“As I wrote a few weeks ago when the 200d-MA was down at 70) 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.” You heard that from me at $100 oil.
Big Oil is having bad days as the Japanese Carry Trade is in an unwind, evidenced by a sharply higher Yen. This week, for instance, the Yen gained +1.78 pct W/W.
Yes this week XOM (-5.8 pct) and Baby Exxon (IMO) (-5.7 pct) were actually the relatively best off. CNOOC of China (CEO -16.3 pct W/W), PetroBrazil (PBR -15.1 pct) and Suncor (SU -12.9 pct) were hit much harder.
For XLE, the Weekly RSI-7 has slipped below the 30 line (29.7), but the Daily is down to 18.9. It’s not in the best interests of Big Oil to see their share prices collapse all at once because it doesn’t give the insiders and friends with big belt buckles much time to accumulate big positions for the next Bull cycle. So use prudence in trading or you will get whip-sawed.
XLE has dropped -6.49 pct over the past six months.
Table 2: Senior oil & gas equities
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
Oil & Gas Exploration & Production -Canada
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 a lot of ground, dropping -6.58 pct W/W, despite a gain on Friday of +1.14 pct, closing the week at 37.35.
Nucor Steel (NUE) dropped -5.0 pct W/W and that was the best of my list. Gerdau steel (GGB -14.0 pct), Teck-Cominco (TCK -12.2 pct), Kinross Gold (KGC -11.4 pct) and Agnico-Eagle (AEM -10.1 pct) were dreadful performers.
XLB has dropped -13.36 pct over the past six months.
Table 3: Senior metals and steel equities:
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
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:
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
XLI (Industrials) lost -4.65 pct W/W, which was the 4th best sector performer, to close at 34.68.
As I wrote about six weeks ago, with XLI at 39.40, “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.”
In six months, XLI is down -15.68 pct.
This week, Fedex (FDX -0.04 pct) held up, for once. The losers were Brazil’s Embraer (ERJ -8.0 pct), the Swiss giant ABB (ABB -7.0 pct) and United Technologies (UTX -5.1 pct).
I guess the people flying Fedex are happy with the President’s $150 billion stimulus package. We’ll see because FDX moves on reality, not hope. Also, as I have said in the past, there is linkage between FDX and the monthly Industrial Production report, which excluding large aircraft manufacturing (Boeing and all), was not too bad, giving some inspiration to FDX traders.
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) continues to ring up losses, but this week the losses were relatively subdued. Traders must have been listening to the President’s $150 billion stimulus package speech. Besides oil prices are on the downswing.
XLY dropped -2.28 pct W/W and -25.98 pct over the past six months, which is the 4th worst sector/industry ETF that I follow.
I wrote in the last WIR, “I can’t see US shoppers returning to the stores and malls until the gasoline price drops at the fuel pump. Right now, they are tapped out according to the credit card companies.”
This week, JC Penny (JCP +8.11 pct) enjoyed the benefits of a Cara Buy Alert on Jan-10 at $37.55. (LOL) But, the stock closed at $40.93, in an otherwise terribly bearish week, so the system can’t be all bad. Eh?
Nike (NKE -8.5 pct) and Disney (DIS -6.0 pct) were hit. I guess the $150 billion doesn’t buy running shoes and trips to Disneyworld for the kids. Well, maybe the kids of the execs at HB&B who took down an aggregate $39 billion in performance and profit (??) bonuses in December. Actually, I guess the writers’ strike has hurt the revenue of the Disney-owned TV business.
Table 5: Senior consumer discretionary equities
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
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
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
XLP (consumer staples) lost -3.96 pct to 27.15, including a loss of -1.45 pct on Friday.
The good news is that defensive stalwart XLP has dropped only -0.95 pct over the past six months.
The worst of this lot this week were ABV (-9.2 pct), PEP (-8.1 pct) and BUD (-6.8 pct), so I guess the President has cut out wine and liquor, soda pop and beer from the $150 billion stimulus package. Do you think?
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
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
IYH (healthcare) lost -4.72 pct this week to close at 69.40. A week earlier, IYH had lifted a powerful +4.39 pct W/W.
This week, however, Novartis (NVS -7.6 pct) and Merck (MRK -11.9 pct) and Pfizer (PFE -6.29 pct) were dreadful. The last two are Dow components.
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
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
Whereas a week ago traders had returned to the Financials (XLF), which lifted +0.62 pct W/W to close at 27.55, this week was a sell-off. But you were forewarned. Last week in this space, I wrote, “Unfortunately, all (the weekly gain) came from a few hours of trading on Friday.”
This week, XLF dropped -7.44 pct W/W to close at 25.50.The loss has been -29.56 pct over six months.
Reminds me of the movie with George Segal robbing Ma Bell and all the subscribers in line to pay their bill were cheering. How funny was that?
A week ago I wrote, “Traders are watching for the share dilution to come in this sector. Balance sheets need to be shored up to maintain reserves before the full SIV losses, and reserves against lawsuits, are taken. The SIV fiasco could lead to a global write-off of up to $1 trillion (my guess, although I have read others talk about $250 billion). That is about 1 pct of total global wealth, but the impact is even greater because now interest rates will have to be higher than otherwise anticipated, which means all bondholders are going to suffer and inflation will be higher, which hurts the profits of producers and the pocketbooks of consumers.”
I’ll tell you, I don’t think consumers like to suffer. So, in another funny line this week, the CEO of Deutche Bank (I think) was saying that his peer group had better smarten up or they would lose the confidence of the market. Hmmm, was that one dumber than the US Congresswoman suggesting to Prof Bernanke in questioning his testimony to Congress that maybe HB&B would return their salary and bonuses to the American people. How funny is that? Then Ms Loonie Tunes actually thanked Prof Bernanke for “correcting the record” that he was not the past CEO of Goldman Sachs, but in fact the CEO of the Princeton University Economics Department.
Who needs Hollywood writers back at work with this kind of entertainment on TV?
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
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
The SMH (semi-conductor) had another bad week, but despite the smashing of Intel (INTC -13.6 pct W/W), dropped just 1.03 pct, closing at 27.91.
Semi-conductors (SMH) have lost -30.74 pct over the past six months, which means, you know, that when the Bull market does start, this group will be either number #1 or #2 on the leader board.
On the software scene, Oracle (ORCL) and SAP (SAP) lifted +2.3 pct W/W.
Sector 50 (telecom: IYZ, VOX and IXP)
Here’s the IYZ Monthly, Weekly and Daily data charts:
IYZ Monthly data:
IYZ Weekly data:
IYZ Daily data:
IYZ (telecommunications) dropped -7.69 pct as the 8th worst performer among the ten sectors I follow. Last week IYZ came in 9th.
This week, IYZ closed at 25.22, which has taken the six month performance to a shocking loss of -27.61 pct.
There were some of you who were enthralled by the high dividends of some of these companies, opining that would protect the downside. In response, I said the game is all about Total Return (TR).
T (-5.5 pct) and VZ (-8.0 pct) were both crushed this week, particularly Friday.
AT&T had just been highest rated by Deutsche Bank for 2008, about seven or eight sessions ago, and the next day issued a dreadfully weak guidance for the 1Q, which crunched the stock. T is down -11.7 pct in two weeks. I’m sure the Deutsche Bank analyst, if he or she still has a job, wishes that rating of theirs had been delayed by ten days.
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), which a week ago had actually been up +2.55 pct to 43.43, fell -7.83 pct W/W to 40.03. With 2-year US Treasuries now yielding -2.32 pct, which is far less than Utility stocks, I’d have to say the concern is that the economy is going to rapidly slow here, and interest rates fall too quickly meaning that with inflation they will later have to rise too quickly, which will hurt the bonds held by those Utility companies. Maybe there’s a problem with the CDO junk the banks sold them, and every time the HB&B stocks take a tumble, the fear of further asset write-downs is being extended to Utilities that also hold a lot of this junk.
Bonds & Yields Review
Table 10: US Treasury Yields
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 3 Month | 2.68 | 2.90 | 2.99 | 2.76 |
| 6 Month | 2.70 | 2.86 | 2.95 | 3.19 |
| 2 Year | 2.32 | 2.40 | 2.56 | 3.10 |
| 3 Year | 2.27 | 2.33 | 2.48 | 3.05 |
| 5 Year | 2.73 | 2.87 | 3.04 | 3.43 |
| 10 Year | 3.62 | 3.62 | 3.78 | 4.03 |
| 30 Year | 4.28 | 4.25 | 4.37 | 4.45 |
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 2yr AA | 2.63 | 2.57 | 2.70 | 3.04 |
| 2yr AAA | 2.65 | 2.66 | 2.77 | 3.07 |
| 2yr A | 2.77 | 2.77 | 3.10 | 3.56 |
| 5yr AAA | 2.87 | 2.84 | 2.94 | 3.32 |
| 5yr AA | 2.84 | 2.77 | 2.92 | 3.27 |
| 5yr A | 3.15 | 3.13 | 3.23 | 3.53 |
| 10yr AAA | 3.41 | 3.39 | 3.49 | 3.78 |
| 10yr AA | 3.39 | 3.53 | 3.43 | 3.48 |
| 10yr A | 3.64 | 3.61 | 3.71 | 4.01 |
| 20yr AAA | 4.17 | 4.15 | 4.20 | 4.40 |
| 20yr AA | 4.31 | 4.29 | 4.33 | 4.19 |
| 20yr A | 4.12 | 4.10 | 4.15 | 4.60 |
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 2yr AA | 3.64 | 3.72 | 3.87 | 4.37 |
| 2yr A | 3.80 | 4.02 | 4.06 | 4.51 |
| 5yr AAA | 4.20 | 4.24 | 4.39 | 4.59 |
| 5yr AA | 4.19 | 4.38 | 4.57 | 4.91 |
| 5yr A | 4.24 | 4.51 | 4.45 | 4.87 |
| 10yr AAA | 4.97 | 4.90 | 5.00 | 5.14 |
| 10yr AA | 5.22 | 5.26 | 5.23 | 5.43 |
| 10yr A | 5.17 | 5.43 | 5.32 | 5.79 |
| 20yr AAA | 5.30 | 5.25 | 5.40 | 5.25 |
| 20yr AA | 5.68 | 5.64 | 5.66 | 5.70 |
| 20yr A | 6.03 | 5.98 | 6.05 | 6.23 |
As you know, US Treasury yields have been dropping quickly as traders have been seeking a safe haven from the effects of recession on equity prices. But this week, the yields plunged.
The yield for the 2-year dropped -24 basis points on top of last week’s -16 bp decline, not sitting at just 2.32 pct. The 5-year yield dropped -31 bp this week as well as -14 bp a week earlier, and now stands at 2.73 pct.
In the December 15 WIR, I reported the yields on the 5-year and 2-year were 3.62 pct and 3.30 pct respectively. That is a huge (some say panic) move in five weeks. Will everybody soon be talking of the possibility of moving from Recession to Depression in the US? Anything is possible, but I don’t think we’ll see a Big D with all the funds on hand in the Middle East and Asia. They may end up buying America, but that’s another story.
The 10-year and 30-year US bonds are now yielding 3.62 pct and 4.28 pct. The 3 month T-Bills are trading at 2.68 pct. Some traders – those with a five-year time horizon – have gone to gold, which pays nothing, because they believe it will best hedge against inflation and fiat money depreciation. I concur, but I also think it’s best to wait a month or two to try to get a better price from sellers of gold.
Here is the $USB 30-year Treasury Bond chart.
Interest rates and bond yields.
Interactive Daily data charts:
Interactive Chart of Interest rates and bond yields.
This week, TLT jumped to again to 95.49, while TIP moved to 108.50.
TLT gained +1.43 pct and TIP +1.16 pct. The TLT lost ground on Friday, while the TIP was marginally higher.
Last week I pointed you to some of the issues, when I wrote, “This move into the safety of US Treasuries is an interesting one in that I have been pointing you to central bank re-po issues. What I wrote earlier was, “After year-end, I am expecting some fireworks as central bank funds have to be repaid the massive short-term borrowing they made to banks to avert a year-end liquidity crisis. If the cb’s are repaid, without apparent difficulty, then Bond prices will likely rally because the economy is slowing. But if there are problems in settlement (even possible failures at financial institutions) or if the central banks extend these emergency loans, then I have to believe rates are going to rise and bond prices fall…. The charts are showing the opposite picture though. Looking through the squiggly Stochastics for the Daily and now the Weekly data, it appears that bond prices could rally a bit more. If so, maybe that’s an indication the central banks will extend the loan window an extra couple weeks. That wouldn’t be good for equities though.””
US Bond Funds -- Interactive Monthly Data Charts
SHY Monthly data series chart:
IEF Monthly data series chart:
TLT Monthly data series chart:
AGG Monthly data series chart:
LQD Monthly data series chart:
TIP Monthly data series chart:
US Bond Funds -- Interactive Weekly Data Charts
SHY Weekly data series chart:
IEF Weekly data series chart:
TLT Weekly data series chart:
AGG Weekly data series chart:
LQD Weekly data series chart:
TIP Weekly data series chart:
US Bond Funds -- Interactive Daily Data Charts
SHY Daily data series chart:
IEF Daily data series chart:
TLT Daily data series chart:
AGG Daily data series chart:
LQD Daily data series chart:
TIP Daily data series chart:
Table 11: Interest-sensitive securities
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
Four weeks ago in this space I warned of more problems to come with the mortgage lenders Countrywide (CFC 8.77 then, 4.96 now), Fannie Mae (FNM 36.99 then, 32.15 now) and Freddie Mac (FRE 30.96 then, 27.66 now). After some gains the following week, until that Friday, I wrote, “The whole issue of Countrywide, Fannie Mae and Freddie Mac could become a red alert at any moment. This week, on Friday, CFC and FNM were both down -3.21 pct and FRE was down -2.79 pct. Yes, there has been some recent buying, but I prefer to call that short-covering to book some profits before year-end, and some bottom-fishing, which I think is stupid (but it’s not my money!).”
A week ago I added, “Stupid money” was the $2 billion that Bank of America injected into Countrywide at over $22/share in August and the $4 billion they added this week. CFC, this week, closed down -24.8 pct, including a loss on Friday of -18.3 pct, to $6.33. Like I say, it’s not mine. Maybe yours? “
This week, CFC closed down a further -21.6 pct, FNM -12.5 pct and FRE down -6.1 pct. Over the past six months, CFC has plunged -85.8 pct, FNM -50.8 pct and FRE -54.8 pct.
Long ago I said I wouldn’t touch these stocks with your ten foot pole, and that I didn’t understand them and that I figure nobody actually knows if they are still solvent. I’m surmising that the govt guarantees or assurances that stand behind Fannie and Freddie are actually the only difference between their losses and CFC’s.
Whatever bad you might think of Angelo Mozilo, CEO of Countrywide, at the very least I have to believe he ran a better shop than Fannie and Freddie that couldn’t even manage to take off a proper balance sheet for the SEC and meet the listing requirements of the NYSE. It was only friends in Washington that kept those two from being delisted.
Consumer Finance -USA -- Interactive Weekly Data Charts
Consumer Finance -USA -- Interactive Daily Data Charts
Commodities Review
The $CRB was lost -1.17 pct W/W to 360.87.
The 50-day Moving Average for $CRB is presently at 353.32 and the 200-day MA is now 328.11, and still rising.
The Ag commodities are holding up this index because the oils and precious metals are now weighing it down.
Interactive Chart of Weekly CRB Commodities Index:
Interactive Chart of Daily CRB Commodities Index:
Oil Review
$WTIC (US Light Sweet Crude called West Texas Intermediate) fell -2.43 pct to 89.92.
The 50d MA for $WTIC is now at 93.21, down from 93.60, whereas the 200d MA is 78.30, up from 77.65.
As I wrote in this space a week ago, “The price probably peaked seven sessions ago at 100.09. I look for lower prices over the next several months.”
Here is the e-miNY Dec-07 Crude Oil chart.
Interactive Chart of Weekly Crude Oil:
Interactive Chart of Daily Crude Oil:
Gold & Precious Metals Review
The $GOLD contract dropped -16.00 (1.78 pct) this week to 881.70.
A week ago I wrote in this space, “The lift this week was a remarkable +32.00/oz to 897.70 (+3.70 pct). Friday hit a record of 900.10, and I believe the probabilities are that traders will now take profits.”
The 50-day MA for $GOLD is now 829.09, up from 820.72 and the 200d MA is 728.68, up from 723.20.
I think $GOLD is at a crucial point right now. There could be a rally or the price could collapse. A short straddle might be effective.
There are indications from the price chart of gold, platinum and palladium (but not for silver) that the price might break downward. Watch the silver for the key.
Interactive Chart of Weekly Gold EOD Continuous Contract Index:
Interactive Chart of Daily Gold EOD Continuous Contract Index:
Interactive chart of recent trading for the Gold Bullion index.
Spot silver chart for the week
This week, $SILVER lost -0.15 (-0.95 pct W/W) to close at 16.22. The relative performance against its peer group has been most impressive.
For $SILVER, the 50d MA is now 14.95, up from 14.80 and the 200d MA is 13.66, up from 13.60.
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.
$PLAT lost -3.90 (-0.25 pct) this week to close at 1565.50.
The 50d MA for $PLAT is 1487.62. The 200d MA is 1359.50.
Volatility was lower this week, but if the Shanghai market (down -5.5 pct this week) continues to crumble, I anticipate a lot of selling of platinum by Chinese speculators.
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.
This week, $PALL lost -6.35/oz (-1.65 pct) to move to 379.30 from 385.65.
The 50d MA is 368.84 up marginally from 368.51 and the 200d MA is 366.68, up from 365.96.
I think the 50d and 200d technical support may not hold for palladium, but we will have to see on that score.
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.
This week, $COPPER dropped -6.95 (-2.10 pct) to close at 323.45, down from 330.40.
The 50d MA of $COPPER is 310.77, down from 312.04, and down from 328.81 just five weeks ago, and the 200d MA is 339.05, up from 339.02, and from 337.82 four weeks ago. The current price (323.45) is well below the 200MA, and may, despite a strong past four of five weeks, continue pointing traders to a recession. The $COPPER price could, in fact, easily burst down through support of the 50d-MA (310.77).
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.
Table 12: Senior gold equities
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
This week, $XAU (the Philadelphia Exchange goldminer index) plunged -8.40 pct to 177.30 from 193.55. The past few weeks have been much more explosive to the upside than I had expected, and I was looking for a pull back.
The goldminer ETF’s (the US’s) GDX (-8.22 pct) and (Canada’s) XGD (-7.42 pct) all sold down hard.
The 50d MA for $XAU is 175.86, down from 176.17, and the 200d MA is 156.51, up from 155.39. So, the 50d MA is now on the decline.
After the rally of a week ago, I wrote in this space last week, “The precious metals stocks could begin to see profit-taking any day. The current price vs the 50d MA and 200d MA is quite extreme. Day traders have been and will continue to enjoy the ride. If I wasn’t so stressed from overwork, I’d be right there with them.”
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
Here are the key Silver miners and the SLV ETF:
SLV SIL CDE HL PAAS SSRI SLW MGN
Interactive Daily data
Interactive Weekly data
Here are the Weekly and Daily Data charts of the indexes:
Interactive Chart of Weekly U.S. Goldminers Index:
Interactive Chart of Daily U.S. Goldminers Index:
The U.S. goldminer share trust ETF trades under the ticker symbol GDX.
Here are the U.S. Goldminer ETF (GDX) index Weekly and Daily data charts:
GDX Weekly data:
GDX Daily data:
The Toronto Exchange-listed goldminer iUnits S&P/TSX Capped Gold Index ETF trades under the ticker symbol TSE:XGD. Yes, just like GDX on the AMEX, you can trade XGD on Toronto.
Here are the Weekly and Daily data charts for the TSX Goldshares (XGD) index:
Interactive Chart of XGD Weekly data:
Interactive Chart of XGD Daily data:
Forex Review
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.”
Here is the chart of the week’s trading.
This week the $USD gained +0.36 (+0.47 pct) to close at 76.37.
A week ago, I wrote, “Now what does Bernanke do? Well, if he wants to see $1000 gold at the end of the month, he’ll drop the Fed rate by -50 basis points. The alternative is to watch equity prices get smashed. Choose your poison.”
I may have miscalculated. The talk now is that the Fed Rate might be cut on the 30th of Jan by up to -75 pct, but that would be a signal that HB&B is going to severely tighten on credit for speculators. $GOLD actually dropped -$16.00/oz this week. Also, there might be an adjustment to the margin rules for the commodity indexes, which would not surprise me. That might pull gold and oil down further and let the Fed drop rates, but I think -50 bp is all they would do at one time. Sometimes less is more, you know.
The 50d MA is 76.16, down from 76.20 (and still below market price of 76.37) and the 200d MA is 79.51, down from 79.68 a week ago.
Interactive Chart of Weekly U.S. Dollar Index:
Interactive Chart of Daily U.S. U.S. Dollar Index:
The Euro ($XEU) this week lost -1.10 pct to close at 146.25, down from 147.88.
The Euro’s 50d MA is 146.60, up from 146.35 and the 200d MA is 139.66, up from 139.32.
A week ago I wrote, “Had there been a rate cut by the ECB on Thursday, the Euro was headed south and $GOLD would have been dumped. Traders are on edge here.” Even with the $16 haircut in $GOLD this week, I think it’s still a concern.
Interactive Chart of Weekly Euro Dollar Index, priced in USD:
Interactive Chart of Daily Euro Dollar Index, priced in USD:
The Pound lost -0.13 pct to 195.48 from 195.73.
The 50d MA is now 202.08, down from 203.30, and the 200d MA is 201.46 almost unchanged from 201.48 a week ago.
Weekly British Pound Index:
Daily British Pound Index:
Weekly Japanese Yen Index:
The Japanese Yen ($XJY) was the currency on fire this week. The Yen gained +1.78 pct to close at 93.45, up from 91.82, and edging toward 100 to the Dollar.
The 50d MA of the Yen is 90.40, up from 89.80 and the 200d MA is 85.85, up from 85.64.
“As the Yen falls, the money flow is into US and Japanese equities… And vice versa.”
But you know that… :-)
Daily Japanese Yen Index:
A week ago, the Loonie (Cdn Dollar) dropped -1.89 to 98.09. This week’s loss was -0.74 pct to 97.36.
That is consistent with the lower oil price and a lower gold price, which the market gave us this week.
The Loonie’s 50d MA is 100.56, down from 101.45, and the 200d MA is 96.55, up from 96.27.
It is a far cry from 110.17, just a few weeks ago.
Weekly Canadian Dollar Index:
Daily Canadian Dollar Index:
International Equity Markets Review
The international markets were mostly weak again this week. The Toronto Exchange index dropped -6.6 pct W/W, the FTSE 100 -4.8 pct, Shanghai composite -5.5 pct and the Nikkei 225 of Japan -1.8 pct. The Cdn ETF (EWC) dropped -7.37 pct), the UK (EWU) -4.34 pct, Shanghai (using FXI as a proxy) -7.68 pct, and Japan (EWJ) -2.19 pct.
The EWC of Canada has a Daily RSI-7 of 14.7, so it pays to watch these markets and their technical indicators on a daily basis. Remember they are only indicators, but after a while, through observation, you will see the importance of using indicators.
The domestic equity markets are, of course, quite different than ETF and closed-end fund securities that are $USD denominated and trade in the US.
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, and in relation to currency and commodity strength or weakness.
One of the improvements I plan to make in 2008 is to set up tables that include sector and industry indexes within various international markets so that you can observe and determine commonality of trends and cycles across different markets.
The world is now a very small one in capital markets and international business. No longer are corporations just American, British, French, German, Italian, Canadian or Japanese, for example. Most do business internationally. We need to observe their businesses and capital market prices on a global basis.
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
Here is the latest session data for the Toronto Stock Exchange composite index.
Toronto 300 stockcharts.com chart
Toronto CDNX stockcharts.com chart
Europe
Here is the latest session data for the bourses of Europe.
Here is the latest session data for the London stock exchange FTSE.
FTSE 100 stockcharts.com chart
Here is the latest session data for the German DAX.
Here is the latest session data for the French CAC 40.
Here is the latest session data for the Milan Italy stock exchange MIBTEL.
Italian Milan Index stockcharts.com chart
Here is the latest session data for the Swiss market index.
Swiss Market Index stockcharts.com chart
Asia-Pacific
Here is the latest session data for the Asia-Pacific stock exchanges.
Here is the latest chart for the Japanese Nikkei 225 index.
Tokyo Nikkei 225 Index stockcharts.com chart
Here is the latest chart for the Singapore index .
Singapore Straits Times Index stockcharts.com chart
Here is the latest chart for the Shanghai Composite index .
Shanghai Composite Index stockcharts.com chart
Here is the latest chart for the Hong Kong Hang Seng index .
Hong Kong Hang Seng stockcharts.com chart
Here is the latest chart for the India BSE 30 index .
Mumbai BSE 30 Sensex Index stockcharts.com chart
Here is the latest chart for the Australian All Ordinaries index .
Sydney All Ordinaries Index stockcharts.com chart
Russia (RTS) stockcharts.com chart
Table 13: International equities via an ETF perspective (in $USD)
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
Japanese equity market ETF: EWJ
Here is the Japanese (EWJ) equity market ETF Monthly, Weekly and Daily data charts:
U.K. equity market ETF
Here is the United Kingdom (EWU) equity market ETF Monthly, Weekly and Daily data charts:
EWU Daily data:
Canada’s equity market
Here is the Canadian (EWC) equity market ETF Monthly, Weekly and Daily data charts:
US Equity Markets Review
The major US stock indexes were all down this week, but, once again, the losses were not more significant than the key international markets.
While the DJIA dropped -4.02 pct and the Nasdaq Composite -4.10 pct, the Footsie was down 4.8 pct, the Toronto Exchange –6.6 pct and the Shanghai Composite -5.5 pct.
A tactic I use to watch momentum changes was described in this space a week ago: “One thing traders need to watch for is a sign that the Bulls can muster some strength. I look to the Daily RSI-7 for that – across the major market indexes in the US and then the various industry groups. If you see a STO bouncing across the bottom, take that as a sign the Bulls have been cut into steak and are grilling on the barbi.”
There was more bottom bouncing this week. Next, however, may be different. We’ll just have to keep our eyes open.
A dozen NASDAQ stocks to watch.
Here is the Monthly data chart of the Interactive Chart of Nasdaq Composite, S&P 500, Dow30, and Russell 2000 (small cap) indexes.
Here is the Weekly data chart of the Interactive Chart of Nasdaq Composite, S&P 500, Dow30, and Russell 2000 (small cap) indexes.
Here is the Daily data chart of the Interactive Chart of Nasdaq Composite, S&P 500, Dow30, and Russell 2000 (small cap) indexes.
Table 14: Dow 30 List
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
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)
Value Line Report(s) this past Friday
This week, Value Line reported on Alcoa (AA), DuPont (DD), Merck (MRK), and Pfizer (PFE).
None of these stocks are in the Cara 100, although Pfizer had been and in the 1980’s Merck was one I continuously pushed at large accounts.
Alcoa and DuPont are particularly sensitive to shifts and momentum swings in the global economy. The pharmaceuticals obviously are less impacted by changes in business and personal spending. In fact during the Bear that started in March or April of 2000, these Big Pharma stocks held up and actually performed well through the first year of that major Bear whereas AA and DD were smashed.
The Value Line pharma analyst Doug Maurer points you to the shares of MRK ahead of those of PFE, and I would agree. The Technical Rating for MRK was raised on Jan-11 from a 2 to a 1. Moving out five years, however, Maurer does like the appreciation potential and the Dividend Yield of PFE better. Obviously, from his report, he believes the company has challenges, but he is impressed by their new CEO Jeff Kindler.
As for me, there is not much more I’d add to the Value Line Reports. My focus right now is on the broad market price trends and cycles. If I happen to see continued comparative relative strength (ie, the pharma vs the other sectors), I think that both MRK and PFE could be what are known as safe harbors in a storm.
But, everything is relative.
I cannot believe that AA and DD would perform well in a global economy with stormy seas.
Alcoa [GICS 15, Dow 30]
(AA: Value Line Report Jan. 18: next one is due Apr. 18)
Dupont [GICS 15, Dow 30]
(DD: Value Line Report Jan. 18: next one is due Apr. 18)
Merck [GICS 35, Dow 30]
(MRK: Value Line Report Jan. 18: next one is due Apr. 18)
Pfizer [GICS 35, Dow 30]
(PFE: Value Line Report Jan. 18: next one is due Apr. 18)
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)
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)
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)
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)
AT&T [GICS 50, Dow 30]
(T: Yahoo Finance file)
(T: StockChart chart)
(T: Billcara2 chart)
(T: ADVFN Financial Data)
(T: Value Line Report Dec. 28: next one is due Mar. 28)
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 Dec. 21: next one is due Mar. 21)
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)
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)
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)
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)
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)
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)
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 Jan. 11: next one is due Apr. 11)
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)
Hewlett-Packard [GICS 45, Dow 30]
(HPQ: Yahoo Finance file)
(HPQ: StockChart chart)
(HPQ: Billcara2 chart)
(HPQ: ADVFN Financial Data)
(HPQ: Value Line Report Jan. 11: next one is due Apr. 11)
Home Depot [GICS 25, Dow 30]
(HD: Yahoo Finance file)
(HD: StockChart chart)
(HD: Billcara2 chart)
(HD: ADVFN Financial Data)
(HD: Value Line Report Jan. 4: next one is due Apr. 4)
Honeywell [GICS 20, Dow 30]
(HON: Yahoo Finance file)
(HON: StockChart chart)
(HON: Billcara2 chart)
(HON: ADVFN Financial Data)
(HON: Value Line Report Jan. 11: next one is due Apr. 11)
IBM [GICS 45, Dow 30]
(IBM: Yahoo Finance file)
(IBM: StockChart chart)
(IBM: Billcara2 chart)
(IBM: ADVFN Financial Data)
(IBM: Value Line Report Jan. 11: next one is due Apr. 11)
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 Jan. 11: next one is due Apr. 11)
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)
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)
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)
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)
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)
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)
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)
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 Jan. 4: next one is due Apr. 4)
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)
Verizon [GICS 50, Dow 30]
(VZ: Yahoo Finance file)
(VZ: StockChart chart)
(VZ: Billcara2 chart)
(VZ: ADVFN Financial Data)
(VZ: Value Line Report Dec. 28: next one is due Mar. 28)
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)
Wrap up:
I delayed the move between residences in Nassau a day or two, which takes some pressure off. One day this week, I might just not publish a Daily Report, particularly if I have to return to Canada.
The market is very interesting at the present time. Many of you are thanking me for putting your finger near to the Sell button. But, prices move up and down; so it’s more important that you learn to treat the market holistically, as a system with component sub-systems. Doing so, will be a real eye-opener.
Have a great day and week to come. Please stay connected. Some of your discourse has risen to a superb level, both in the quality and content of the writing. The community now, I think, shares my belief that by working closely together we can help each other.
Hopefully, Jeff will add Jock's report at some point today.
Ciao.
Posted by Posted by Bill Cara on January 20, 2008 12:58:03 PM | Category: Cara Week in Review