By day’s end, the DJIA (+92.83), S&P 500 (+16.87), and Nasdaq Composite (+23.50) had been led higher by strength in commodity-related stocks, if not the commodity prices themselves, which fell during the session.

There were five very strong sectors out of ten: Utilities (XLU +2.60 pct), Financials (XLF +2.52 pct), Energy (XLE +2.51 pct), Basic Materials (XLB +2.43 pct), and Industrials (XLI +2.30 pct), with Airlines ($XAL +5.90 pct) and Semi-conductors ($SOX +5.77 pct) being the strongest industry groups.

The three consumer sectors were the laggards, but all were up: Healthcare (XLV +0.47 pct), Discretionary Spending (XLY +0.89 pct) and Staples (XLP +0.99 pct).

The US Labor Department reported January non-farm payrolls fell by 17,000, but the market Bulls were pointing to heavy upward revisions to the two previous months data, making what appears to be a rapidly softening jobs market to be not so bad after all, they say. The spin that happens every US Jobs Friday is always something to behold, but this was extra special.

The US ISM Manufacturing index recovered slightly to a positive reading of 50.7 in January from a negative 48.4 in December, which handily beat consensus of 47.0, and even the highest estimate on Wall Street of 48.5. All of these numbers are estimates, subject to revision.

Friday started off with what potentially could be a candidate for Deal of the Year [based on implications for media and a changing Internet] when Microsoft (MSFT) offered to buy Yahoo! (YHOO) for $44.6 billion. If that happens to get done, traders are looking to Google (GOOG) for a response, such as has been suggested buying AOL. YHOO closed at 28.38, up +48 pct.

Exxon Mobil (XOM) posted the highest quarterly earnings in corporate history as net income grew +14 pct to $11.66 billion vs $10.25 billion a year earlier.

Crude Oil ($WTIC) plunged -2.79/bbl (-3.04 pct) on the day to $88.96/bbl, perhaps due to the negative optics of those massive earnings at Exxon. XOM lost -0.5 pct to 85.95, probably for the same reason that traders are concerned that politicians will soon get into their usual act of pointing the public to “exorbitant” profits of the Big Oil companies.

The trade-weighted $USD rebounded +0.41 to 75.48, and the Euro ($XEU) dropped -0.32 pct to 1.4816 to the USD. Those forex moves pulled down gold and silver. $GOLD closed the session down -14.50 (-1.56 pct) to $913.50 per oz.

US Treasury prices, which had opened a little stronger, closed higher, up +0.39 pct on the $USB (30-year bond), while yields fell by -0.83 pct on the $TYX (30-year bond) and -1.07 pct (10-year note) as traders reacted to falling commodity prices.

Earlier on Friday, Asian-Pacific equity markets finished mixed [Hong Kong was up +2.85 pct while the Japanese Nikkei 225 was down -0.70 pct] before prices on European bourses closed the week quite strong [FTSE +2.54, DAX +1.71 pct and CAC +2.22 pct].

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Comments & Outlook

The past couple of sessions of higher equity market prices was merely a small Bear market rally that I believe will fizzle out when prices reach technical resistance levels of the falling Moving Average lines.

I do think that commodity prices will pull back further. For example, Crude Oil futures, which now have an 88 handle, will likely soon drop into the low 80’s. Gold futures at $913.50 will likely drop into the 800’s.

Gold Bulls have been enthused by new price targets in the $1000 to $1500 range being set by top-tier HB&B firms, but these are targets that are long-term focused, and depend on a continuing crash of the $USD. But the $USD (75.48) has been sidetracking for three and a half months, and could at any time pop back to the 40-week Moving Average (presently 79.01) or higher, which would have a devastating impact on currently high gold prices.

Gold producers, even with rapidly growing operating cost inflation (energy, drilling crews, pay-offs to foreign governments and locals, etc) are presently earning significant margins on $900 gold. The strongest ones are now on the prowl to buy up resources from the weaker and smaller companies, and that means competing for acquisitions and eventually over-paying with +40 pct premiums, which means share dilution. So, the risk of holding the larger goldminers is rising, and the big capital pool managers will soon have to admit that (i) the new HB&B price targets have been priced into share prices, and (ii) those share prices are under-pricing the growing short-term risk.

If, as and when the $GOLD futures drop to say $740-$780, which is my forecast for the cycle low in a sudden and sharp price pullback, based on an upward – if brief -- spike in the $USD, then the share prices of the goldminers will drop a lot.

But, I am still very positive/bullish on the goldminers. In fact, I think the well-funded juniors that have been getting major successes in their exploration programs are under-priced today. I think they will really pop after the whole group pulls back briefly. Meanwhile, if that pullback does happen (admittedly it might not), look for the shares of Noront, Geologix and Aurelian to hang in.

I’m not so positive/bullish on the oil producers. I think they will be hit by much lower top-line revenues as well as higher costs, and shrinking demand growth over the next couple years. I believe the cycle high was reached in December, after momentum was looking shaky for a few months, and then two weeks ago, prices dropped well below the 50- and 200-day MA’s for the first technical indication that share prices would start to break down much as I had been recently forecasting.

With increasing popularity of the blog, more people are asking what aspects of markets are most likely to change in the next five years. I say that apart from a switch from chasing growth to placing more emphasis on value, there will be more focused examination of the work being done in the alt energy and human genome science fields. People want to live healthier and more cheaply. So, in addition to seeking lower cost energy supplies, they need and want new discoveries in medical diagnostics/therapeutics.

Other than the fundamental switch from growth to value, which will mean accepting lower PE’s and lower Total Returns on investments, many of us will be doing more research (some call it sleuthing) and speculating, as well.

With lifestyle changes being forced upon us because of global conflict and terrorist and counter-terrorist methods, I believe I am now well positioned to take advantage of what I believe will be a massive development of the Family Islands of The Bahamas over the foreseeable future, say 20 to 40 years. Although I won’t be around in 40 years, there is not an iota of doubt in my mind that island communities in places like Abaco, Eleuthera, Exumas, Cat Island, Long Island, Andros, the Berries, and the like, will flourish. Mini resorts and second home developments there, as well as inter-island air and sea cruise travel in The Bahamas will boom.

Personal safety, relaxing ambiance, a comfortable life of the sun, sand and sea, and real-time connection to global trading markets, all situated just 100 to 300 miles offshore the global transportation hub of Miami in a completely stable, highly democratic sovereign nation that has long used the $USD at par, and has no personal or corporate income taxes… what’s not to like. I made my choice! Moreover, I’m going to help grease the wheels (and wheelchairs) of others who find such a proposition inviting.

That’s the great thing about life. We can all have something special to look forward to.

Have a great weekend. Remember it is the US Super Tuesday. The leading candidate for both Republicans and Democrats will emerge. The issues will be enjoined and the future course of America will soon be decided.

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Links & Charts

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International Economics Review

US Economic Calendar.

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Knobias Cara100 Tables

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Cara 100 Daily RSI-7 Charts

At least one RSI value >70:

Ticker	Last	RSI-7M	RSI-7W	RSI-7D	Zone
PBR	113.06	83.20	62.14	68.91
IBKR	35.47	82.47	74.94	73.47	Distribution Zone (for 1 days)
COST	67.79	82.46	53.87	58.44
ABX	50.90	82.34	67.26	51.85	Sell alert (trig. 2 days ago [on 2008-01-31 at $51.44, -1.05% chg], after a 3 day DZ)
NOK	37.62	78.15	55.53	68.84
GG	36.75	72.40	58.63	47.22
KO	59.26	71.69	42.80	44.28
TT	44.79	71.29	66.94	59.81
VCP	30.25	71.28	55.49	71.89
NKE	62.51	68.87	54.42	73.56
WMT	51.18	67.13	72.05	74.34
CHRW	56.27	64.67	66.26	78.76
ECA	67.78	64.17	55.65	70.96
BHP	73.72	63.81	55.90	78.14
NUE	59.58	55.93	58.15	73.81
QCOM	42.20	55.05	63.05	70.21
RY	51.75	54.55	56.29	76.10
YHOO	28.38	52.97	63.82	77.80
LEH	66.00	50.39	63.10	74.54
AMAT	18.88	48.56	59.35	74.67
TGT	57.05	46.62	58.12	73.73
WHR	85.72	46.02	59.22	76.43
SWK	51.32	45.53	59.01	80.87
DOW	39.89	42.20	53.12	78.26
BBBY	32.38	41.22	62.83	72.60
WFMI	40.76	40.04	51.08	73.15
TM	109.80	39.47	55.28	78.22	Buy alert (trig. 8 days ago [on 2008-01-23 at $99.25, +10.63% chg], after a 1 day AZ)
INFY	43.50	39.36	51.16	77.45
JCP	48.50	32.98	57.29	78.96
BC	19.28	27.70	55.52	87.51
KSS	45.93	25.22	47.98	71.12

At least one RSI value <30:

Ticker	Last	RSI-7M	RSI-7W	RSI-7D	Zone
SBUX	19.22	17.59	30.27	45.77
UBS	42.04	24.37	27.21	45.96
SNDK	27.55	24.37	23.77	55.51	Buy alert (trig. 2 days ago [on 2008-01-31 at $25.45, +8.25% chg], after a 2 day AZ)
KSS	45.93	25.22	47.98	71.12
BC	19.28	27.70	55.52	87.51
WAG	36.32	27.91	47.67	69.82
DELL	20.35	28.84	23.01	42.92	Buy alert (trig. 7 days ago [on 2008-01-24 at $21.09, -3.51% chg], after a 2 day AZ)
KB	65.87	29.11	35.86	47.84
GSK	47.01	31.96	33.45	29.27
GFI	14.08	33.94	34.10	24.27
ADBE	34.48	34.95	20.17	29.69
CCJ	33.34	35.70	31.37	23.17
GOOG	515.90	43.51	25.31	23.00
PG	66.05	50.49	29.17	41.41

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International Equity Markets Review

Europe

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

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

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Here is the latest session data for the German DAX.

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

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

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

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Asia-Pacific

Here is the latest session data for the Asia-Pacific stock exchanges.

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Here is the latest chart for the Japanese Nikkei 225 index.

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Here is the latest chart for the Singapore index .

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Here is the latest chart for the Shanghai Composite index .

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

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

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

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US Equity Markets Review

DJIA (interactive) chart

NASDAQ Composite (interactive) chart

Table: 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
GM	28.98	0.77	2.73%	12.37%	26.88%	21.15%	18.72%	-22.20%	-11.46%	-12.26%
AA	34.28	1.19	3.60%	11.70%	19.07%	-5.28%	-5.12%	-9.55%	-9.67%	4.51%
C	29.69	1.52	5.40%	11.45%	18.95%	2.63%	2.66%	-22.90%	-36.63%	-45.75%
JPM	48.25	0.85	1.79%	10.56%	20.50%	15.21%	14.42%	8.87%	8.72%	-5.78%
AXP	49.60	0.47	0.96%	9.15%	16.24%	-1.61%	-2.82%	-15.05%	-16.82%	-14.59%
INTC	21.77	0.67	3.17%	8.85%	12.62%	-11.76%	-14.12%	-17.85%	-8.53%	3.13%
CAT	71.76	0.77	1.08%	8.84%	14.87%	1.96%	1.60%	-2.11%	-10.45%	10.42%
T	38.28	-0.21	-0.55%	8.56%	2.63%	-7.51%	-6.63%	-5.39%	-4.85%	1.40%
MMM	81.21	1.56	1.96%	7.55%	8.34%	-1.80%	-1.81%	-3.21%	-8.82%	9.76%
BA	82.76	-0.42	-0.50%	7.44%	4.07%	-4.85%	-4.46%	-14.33%	-20.83%	-9.10%
DIS	30.66	0.82	2.75%	6.90%	6.57%	-3.49%	-3.71%	-9.29%	-9.37%	-12.43%
HD	30.45	-0.19	-0.62%	6.73%	16.00%	17.93%	16.62%	-0.78%	-19.38%	-25.88%
WMT	51.18	0.44	0.87%	6.43%	7.79%	10.35%	9.13%	16.24%	10.73%	7.12%
GE	36.16	0.80	2.26%	6.35%	8.88%	-1.74%	-1.63%	-10.36%	-7.16%	-0.19%
AIG	55.73	0.76	1.38%	4.72%	2.69%	-1.28%	-1.01%	-6.00%	-13.69%	-19.13%
IBM	109.08	1.97	1.84%	4.36%	7.89%	3.98%	4.19%	-4.02%	-2.64%	10.18%
PFE	23.59	0.23	0.98%	4.33%	2.74%	1.77%	2.97%	-1.50%	-0.17%	-11.38%
HON	60.21	1.14	1.93%	3.36%	8.35%	0.02%	0.52%	1.98%	5.35%	31.09%
DD	45.95	0.77	1.70%	2.75%	7.36%	4.24%	5.05%	-4.15%	-2.92%	-9.15%
VZ	38.75	-0.08	-0.21%	2.62%	-5.28%	-10.73%	-10.32%	-13.39%	-10.38%	1.97%
XOM	85.95	-0.45	-0.52%	2.39%	2.43%	-8.40%	-8.08%	-2.88%	0.13%	14.48%
MO	75.44	-0.35	-0.46%	2.01%	-1.77%	-0.25%	0.68%	4.95%	13.31%	14.91%
UTX	74.12	0.85	1.16%	1.88%	8.86%	-2.83%	-1.45%	-0.80%	-0.71%	8.08%
HPQ	44.42	0.70	1.60%	1.55%	3.30%	-10.53%	-10.82%	-13.75%	-4.94%	4.86%
KO	59.26	0.26	0.44%	1.46%	-4.48%	-4.00%	-3.00%	-2.69%	11.24%	23.20%
JNJ	63.36	0.10	0.16%	1.44%	-6.59%	-3.90%	-3.87%	-2.01%	3.94%	-5.45%
PG	66.05	0.63	0.96%	1.13%	-2.97%	-8.66%	-8.66%	-3.70%	4.58%	1.09%
MCD	54.22