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.

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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 Housing Starts report.

US Consumer Sentiment report.

US Leading Economic Indicators report.

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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.

“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.

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US Equity Markets Review

DJIA ino.com chart

DJIA stockcharts.com chart

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).

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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

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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 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.

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
SMH	27.91	0.38	1.38%	-1.03%	-4.58%	-13.75%	-11.00%	-23.99%	-30.74%	-15.83%
XLY	29.52	-0.14	-0.47%	-2.38%	-4.28%	-10.27%	-8.32%	-19.74%	-25.98%	-25.49%
XLP	27.15	-0.40	-1.45%	-3.96%	-3.45%	-6.15%	-4.37%	-3.38%	-0.95%	2.18%
XLI	34.68	-0.07	-0.20%	-4.65%	-8.13%	-10.46%	-9.95%	-15.29%	-15.68%	-2.69%
IYH	69.40	-1.11	-1.57%	-4.72%	-0.54%	-2.21%	-1.00%	-2.69%	-1.74%	0.87%
XLB	37.35	0.42	1.14%	-6.58%	-8.41%	-8.59%	-9.56%	-12.51%	-13.36%	6.02%
XLF	25.50	-0.30	-1.16%	-7.44%	-6.87%	-12.49%	-10.08%	-24.08%	-29.56%	-30.80%
IYZ	25.22	-1.21	-4.58%	-7.69%	-11.04%	-13.12%	-13.54%	-24.01%	-27.61%	-14.85%
XLU	40.03	-0.60	-1.48%	-7.83%	-5.48%	-7.02%	-4.89%	-1.50%	-1.16%	11.07%
XLE	68.90	0.15	0.22%	-8.87%	-11.10%	-9.97%	-13.33%	-11.69%	-6.49%	25.11%

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), 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

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
IMO	49.16	0.81	1.68%	-5.68%	-8.11%	-5.53%	-10.49%	-2.36%	-0.53%	50.43%
XOM	85.08	1.17	1.39%	-5.78%	-7.60%	-6.95%	-9.02%	-10.49%	-6.66%	18.23%
TOT	78.21	1.00	1.30%	-7.03%	-6.97%	-1.14%	-6.09%	-3.29%	-6.88%	17.50%
ECA	62.22	0.59	0.96%	-7.41%	-10.60%	-7.48%	-10.62%	-7.15%	-2.57%	36.06%
STO	26.56	0.79	3.07%	-7.78%	-13.20%	-8.54%	-14.98%	-21.19%	-18.50%	9.80%
CVX	83.46	0.71	0.86%	-7.95%	-10.59%	-8.18%	-10.70%	-9.69%	-10.34%	17.68%
SU	90.49	0.99	1.11%	-12.86%	-17.29%	-13.07%	-17.94%	-14.66%	-4.25%	25.58%
PBR	94.37	1.81	1.96%	-15.14%	-14.12%	-10.31%	-20.57%	9.16%	35.78%	107.54%
CEO	150.01	2.62	1.78%	-16.28%	-12.02%	-4.60%	-10.40%	-22.29%	24.49%	77.34%

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Integrated Oil & Gas - Canada

Oil & Gas Exploration & Production -Canada

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Sector 15 (basic materials: IYM, XLB, IGE and VAW)

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

XLB Monthly data:

XLB Weekly data:

XLB Daily data:

XLB (Basic Materials) lost 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:

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	51.22	0.92	1.83%	-4.99%	-6.57%	-12.46%	-11.64%	-14.96%	-17.81%	-7.48%
MT	62.70	1.52	2.48%	-6.52%	-14.27%	-10.86%	-17.93%	-21.06%	-4.17%	53.11%
PKX	129.78	0.08	0.06%	-6.88%	-8.91%	-14.22%	-11.39%	-23.95%	-9.98%	60.74%
TS	36.52	-0.04	-0.11%	-7.22%	-15.48%	-16.22%	-17.73%	-29.96%	-27.29%	-22.05%
RTP	367.50	23.98	6.98%	-7.75%	-9.66%	-10.26%	-12.44%	3.67%	20.61%	82.96%
AA	29.10	0.31	1.08%	-8.29%	-16.55%	-15.63%	-19.46%	-24.18%	-37.35%	-3.96%
RIO	28.83	0.54	1.91%	-9.91%	-9.23%	-9.71%	-11.86%	-18.77%	-43.70%	-2.14%
BHP	60.72	0.04	0.07%	-10.30%	-12.37%	-11.97%	-13.76%	-29.12%	-7.71%	56.90%
TCK	29.57	-0.84	-2.76%	-12.18%	-15.39%	-11.84%	-18.41%	-39.74%	-39.23%	-56.59%
GGB	25.20	-0.24	-0.94%	-13.96%	-11.14%	-10.45%	-12.20%	-15.58%	-9.03%	65.90%

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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
FDX	84.01	1.23	1.49%	-0.04%	-0.11%	-11.22%	-2.50%	-20.23%	-27.93%	-24.19%
GE	34.31	1.10	3.31%	-2.45%	-4.80%	-6.18%	-6.66%	-15.89%	-15.18%	-9.71%
BA	78.40	-1.12	-1.41%	-2.63%	-8.65%	-9.49%	-9.49%	-19.13%	-23.00%	-10.91%
HON	55.30	-0.27	-0.49%	-2.64%	-5.11%	-9.48%	-7.68%	-8.88%	-8.66%	22.78%
MMM	74.91	-0.05	-0.07%	-3.44%	-8.38%	-11.80%	-9.43%	-20.92%	-18.11%	-4.95%
CAT	62.81	0.34	0.54%	-4.85%	-8.35%	-11.34%	-11.07%	-19.12%	-27.16%	4.86%
UTX	68.05	-0.04	-0.06%	-5.06%	-9.29%	-10.22%	-9.52%	-12.11%	-9.94%	4.84%
ABB	23.68	0.18	0.77%	-7.03%	-11.31%	-12.43%	-17.32%	-15.91%	-1.66%	33.11%
ERJ	42.09	-0.28	-0.66%	-8.04%	-8.04%	-8.22%	-6.74%	-14.75%	-12.33%	3.93%

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.

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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) 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

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
JCP	40.93	1.91	4.89%	8.11%	8.74%	-7.06%	-1.73%	-28.08%	-45.59%	-51.03%
BC	15.09	0.22	1.48%	-2.65%	-4.13%	-15.32%	-10.82%	-26.75%	-53.24%	-51.13%
WHR	71.53	1.73	2.48%	-2.73%	-5.43%	-11.26%	-10.45%	-19.10%	-37.51%	-16.80%
TM	99.70	1.10	1.12%	-3.14%	-4.08%	-5.57%	-6.35%	-8.52%	-18.69%	-24.52%
CCL	38.26	0.13	0.34%	-3.29%	-8.27%	-13.54%	-12.37%	-20.69%	-19.52%	-26.35%
EBAY	28.33	0.21	0.75%	-4.55%	-9.49%	-10.55%	-12.80%	-25.64%	-16.80%	-4.00%
SBUX	18.66	-0.39	-2.05%	-5.71%	3.04%	-6.84%	-3.37%	-30.01%	-29.58%	-47.83%
DIS	28.51	-0.26	-0.90%	-5.97%	-8.42%	-11.62%	-10.46%	-18.03%	-17.60%	-20.47%
NKE	56.50	0.52	0.93%	-6.92%	-8.49%	-11.44%	-10.71%	-10.69%	-5.33%	13.39%

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Sector 30 (consumer staples: XLP, VDC, RTH and IYK)

Here's the XLP Monthly, Weekly and Daily data charts:

XLP Monthly data:

XLP Weekly data:

XLP Daily data:

Table 6: Senior consumer staples equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
WAG	33.71	0.37	1.11%	0.03%	-1.69%	-7.34%	-9.72%	-12.14%	-24.75%	-27.35%
WMT	47.58	0.10	0.21%	-0.29%	4.07%	-1.04%	1.45%	3.68%	-0.96%	-1.67%
DEO	77.62	0.16	0.21%	-2.96%	-7.24%	-8.57%	-8.75%	-15.47%	-8.70%	-1.16%
PG	67.15	-0.92	-1.35%	-4.32%	-6.76%	-7.99%	-7.14%	-5.29%	7.29%	2.46%
MO	75.42	-1.38	-1.80%	-4.56%	0.69%	-1.64%	0.65%	6.39%	7.28%	14.26%
KO	60.74	-1.30	-2.10%	-4.75%	-1.79%	-3.36%	-0.57%	2.32%	13.68%	25.63%
WFMI	35.08	-0.18	-0.51%	-6.45%	-7.49%	-14.19%	-11.77%	-27.01%	-13.70%	-22.99%
BUD	48.76	-0.99	-1.99%	-6.77%	-5.69%	-7.49%	-5.56%	-7.28%	-2.48%	-3.94%
PEP	71.46	-0.64	-0.89%	-8.13%	-5.41%	-6.94%	-5.09%	-0.58%	8.06%	10.07%
ABV	67.49	3.04	4.72%	-9.19%	-6.22%	-4.41%	-6.88%	-15.65%	-9.48%	34.09%

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?

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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%	0.00%	0.46%	10.90%
AMGN	47.45	0.03	0.06%	-0.36%	5.92%	0.55%	1.82%	-16.33%	-14.96%	-35.61%
JNJ	66.29	-1.54	-2.27%	-2.34%	0.68%	-1.53%	0.58%	2.14%	6.58%	-2.10%
UNH	54.40	0.04	0.07%	-2.70%	-2.86%	-5.16%	-4.01%	13.10%	1.53%	1.12%
DNA	68.77	-0.98	-1.41%	-3.82%	3.60%	2.14%	2.03%	-6.40%	-8.64%	-21.43%
AET	56.09	-0.74	-1.30%	-3.97%	0.21%	-2.20%	-0.97%	4.16%	9.98%	34.09%
GSK	50.43	-0.27	-0.53%	-5.10%	0.28%	-1.18%	0.52%	-1.62%	-3.56%	-9.54%
PFE	22.51	-0.45	-1.96%	-6.29%	-1.40%	-3.27%	-1.75%	-8.27%	-10.43%	-17.15%
BMY	24.48	-0.38	-1.53%	-7.55%	-4.93%	-12.45%	-6.31%	-17.24%	-23.62%	-8.21%
NVS	53.53	0.42	0.79%	-7.64%	-2.28%	-0.78%	-1.91%	0.45%	0.32%	-7.79%

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.

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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	39.40	-0.64	-1.60%	-3.57%	-3.74%	-10.41%	-6.57%	-14.16%	-19.16%	-18.17%
MER	51.87	2.42	4.89%	-5.16%	3.14%	-5.23%	-1.69%	-25.97%	-37.81%	-45.63%