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February 17, 2008
Week in Review #7 (2008-02-17) FINAL
The question is, do governments now intervene more than ever in capital markets, or is it just that we notice it more because we have better communication systems and perhaps a little more market savvy in recent years.
Decisions of the UK government to take over Northern Rock and the US decision to stop publishing many important economic data series are dubious ones at best when government is at the same time telling us that markets are private sector driven and transparent.
Are these not the foundations of capital markets that are being removed one brick at a time?
Estimated today because Bernanke’s Fed stopped calculating it, the US money aggregate called M3 continues to grow at an excessive rate, as it does in Europe and Japan. Central bankers everywhere are constantly diluting fiat money at extreme rates in order to maintain narrow forex trading ranges for purposes of optimizing international trade.
The following data is a simulation of M3 as of the past week.
The money supply is growing at an annual rate of change of almost +20 pct, which is the highest rate for at least the past 40 years. Now the monetary base has become the issue. The US M3 has grown to almost $13.5 trillion, up from about $11.5 trillion just one year ago.
To put this into perspective, the M3 has grown more in the past year than all the money that existed when I started in the securities industry at the end of 1980. But, wealth certainly has not grown to anywhere the same degree. What is happening in the US (and abroad) is that government is depreciating the value of money in order to stay on the treadmill they have created by their spending.
The stores of value, being precious metals and art prices, and the controlled prices for consumable commodities such as crude oil, have soared.
This chart for the spot (cash) price of Platinum shows the price skyrocketing from under $1,200 pr oz in early March 2007 to $2,100 this morning.
The price of Crude Oil (West Texas Intermediate $WTIC) almost doubled in ten months from mid-January, from $51 to $100, and is still almost $96 today.
The only US politician who has ever understood this fiat money depreciation issue is Dr. Ron Paul, but because there is a growing percentage of Americans who want to be provided for, rather than make their own way in life, his constituency is quite small.
Interesting is that young people and independents have widely endorsed him, while the political base of America, both Republican and Democrat, has rejected his ideas as being unelectable.
But Mom & Pop understand that they cannot write checks they cannot cash, nor buy assets like homes they cannot afford to pay from income or savings. So, seeing government acting irresponsibly, they too “want theirs”. Let somebody else pay for their “entitlements.”
Unbelievable as it seems, both Republicans and Democrats are driving this mindset, nevertheless allowing it. Apparently, there is no shame in politics. The politicians’ credo is doing whatever you need to do to get elected, or die.
Americans could put a stop to the nonsense of course, if they wanted to. All they need to do is flood the coffers of Dr. Ron Paul – more than the huge amounts the man is already receiving.
Let political contributions be a referendum on the future course of America. Finance the man to run as an Independent to break the spirit of both other party organizations until they change their ways.
As I see it there are fewer than 10 million Americans who control US society with their money and 100 million Americans who have none except for what the federal government transfers to them. There are over 200 million other American adults and their families who have the bulk of the money, who are the ones who are being forced to work harder for less (some call it being marched into slavery) as capital flees the country to build factories and good paying jobs abroad.
These are the people who should be contributing to a Ron Paul campaign – for the principle of it.
Traders are watching the government spending treadmill throw most people aside. They foresee a developing liquidity crisis on a massive scale because simply a barrel of crude oil cannot go $100, $110, $125… or an ounce of platinum $2100, $2200, $2500… without those 200 million productive Americans shutting down, no longer having an ability to take from income or savings the funds they need to afford the most basic necessities like food, shelter, transportation, safety and so forth.
As people walk away from their foreclosed homes by the millions, which is precisely what I forecasted in 2006, a lot of property tax is no longer being paid. Cities then have to pay to tear down those structures. Cities too have to pay inflated costs for everything. Many are on the verge of bankruptcy.
Driving around the supposedly rich city of Toronto yesterday, the place is snowbound. It hasn’t snowed much for ten days, so where are the snow removal machines? People now think the City is bankrupt.
To maintain a balanced budget, taxes would have to increase by +25 pct, but people cannot afford it. Politicians can only get elected and re-elected by promising to cut taxes, which they cannot do without cutting services, printing money or borrowing it, because the People can no longer pay for it.
What kind of life is this? I thought Canada and the US were rich?
Smart traders are waiting for the massive liquidity crunch that must happen to bring the spending back into line with the savings and income needed to pay for it, with commodity prices under control.
I hardly think that the S&P 500 at 1350 or the DJIA at 12348 or Nasdaq Composite at 2322 can stand up to the pressures of “the price of a barrel of crude at $100, $110, $125… or an ounce of platinum at $2100, $2200, $2500…”
Remember, prices are merely bids. The liquidity crunch happens when bids are withdrawn, as we saw starting in 2005 as house prices reached a very high level.
To parody the dim-witted TV advertising that runs day and night for one of Canada’s largest banks, “We are not as rich as we think we are.” In fact, a lot of us in six months are going to be that much poorer.
I wonder if that bank will refrain from margin calls.
Global Economics Review
US Economic Calendar for next week.
It is important to review economics reports published this past week on the US economy that continues to worsen. As I say, the positive news is now infrequent.
Whether the case is negative or very slow real economic growth, the fact is that global inflation is now in the 3- and 4-pct range by even the most positively-biased calculations, so investment returns from dividends and short-term debt instruments and money market funds is clearly negative. Moreover, as equity prices are falling, the total returns from most stocks are negative. In summary, wealth is being destroyed by the trillions, month after month. One of the reasons is that the economy is in a downswing.
Along with many weekly reports, the big three monthly reports that arrived this week were all negative, as follows:
US Consumer Spending for January, which covers 2/3 of the GDP.
US Industrial Production for January, which accounts for 20-pct of the US GDP.
US International Trade Balance (exports minus imports) for December, which shows how much consumer and industrial capital is flowing out of the US every month.
So much for last week. Let’s look ahead.
US Consumer Price Index for January, which is a key measure of inflation.
US new housing starts for January, the trend of which points to rising or falling demand for furniture, home furnishings and appliances.
Minutes of the previous FOMC meeting.
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:
THIS WEEK closed with 3 GREEN industries (mining) and 4 RED’s, compared to last week's 1 green and 18 Red.This week’s “market tenor” of 1 net RED was just the same as two weeks ago.
25 industries rose in price, only 6 declined.
27 Cara100's were GREEN and 22 were RED. (Last week's count was 13 to 52.)
Ticker Name Score
-5wksScore
-4wksScore
-3wksScore
-2wksScore
-1wksScore
-0wksABB ABB Ltd. -2 -2 -2 +0 -2 -2 ABV COMP DE BEBA AM ADS +2 -2 -2 +2 +2 +2 ABX Barrick Gold Corp. +2 +0 +2 +2 +0 +0 ADBE Adobe Systems Inc. -2 -2 -2 -2 -2 +0 AET Aetna Inc. +2 +0 -2 -2 -2 -2 AMAT Applied Materials Inc. -2 +0 +0 +2 +0 +2 ATVI Activision Inc. +0 +0 +0 +0 +0 +0 BA Boeing Co. -2 -2 -2 +0 +0 +2 BBBY Bed Bath & Beyond Inc. -2 -2 +0 +2 +0 +0 BBD Banco Bradesco S.A. +0 -2 -2 -2 -2 +0 BC Brunswick Corp. -2 -2 +0 +2 +0 +0 BDK Black & Decker Corp. -2 -2 +0 +0 +0 +0 BHP BHP Billiton Ltd. -2 -2 -2 +2 -2 +2 BMY Bristol-Myers Squibb Co. +0 -2 -2 -2 -2 +0 CCJ Cameco Corp. +0 -2 -2 -2 -2 +0 CCL Carnival Corp. -2 -2 +0 +2 -2 +0 CEO CNOOC Ltd. +2 -2 -2 -2 -2 +0 CHA China Telecom Corp. Ltd. +2 +0 -2 -2 -2 +2 CHL China Mobile Limited +0 -2 -2 -2 -2 +0 CHRW CH Robinson Worldwide Inc. -2 -2 +0 +2 +2 +2 COST Costco Wholesale Corp. +0 -2 -2 +2 -2 -2 CSCO Cisco Systems, Inc. -2 -2 -2 +0 -2 +0 CTSH Cognizant Technology Solutions Corp. -2 -2 -2 +0 +0 +2 CVX Chevron Corp. +0 -2 -2 -2 -2 +0 DB Deutsche Bank AG -2 -2 -2 -2 -2 -2 DELL Dell Inc. -2 -2 -2 +0 +0 +0 DEO Diageo plc -2 -2 -2 +0 +0 +2 DIS Walt Disney Co. -2 -2 -2 +0 +2 +2 DOW Dow Chemical Co. -2 -2 +0 +2 +0 +0 DNA Genentech Inc. +0 +0 -2 +0 +0 +2 ECA EnCana Corp. +0 -2 -2 +2 +2 +2 ERJ EMBRAER - Empresa Brasileira de Aeronáutica S.A. +2 -2 -2 +0 -2 +0 ERTS Electronic Arts Inc. -2 -2 -2 -2 -2 +0 EXC Exelon Corp. +2 -2 -2 -2 -2 +2 GE General Electric Co. -2 -2 -2 +0 -2 +0 GFI Gold Fields Ltd. +2 +0 -2 -2 -2 -2 GG Goldcorp Inc. +2 +0 +2 +0 +0 +0 GGB Gerdau S.A. +2 -2 -2 +0 -2 +2 GOL GOL Linhas Aéreas Inteligentes S.A. -2 -2 -2 +0 -2 +0 GOOG Google Inc. -2 -2 -2 -2 -2 -2 GRMN Garmin Ltd. -2 -2 -2 +0 +0 +0 GS Goldman Sachs Group Inc. -2 -2 -2 +2 -2 -2 GSK Glaxosmithkline plc +2 -2 -2 -2 -2 -2 HBC HSBC HLDGS PLC ADS -2 -2 -2 +0 -2 +0 HDB HDFC Bank Ltd. +0 -2 -2 -2 -2 -2 IBKR Interactive Brokers Group, Inc. IBN ICICI Bank Ltd. +2 +0 +0 +0 -2 -2 IMO Imperial Oil Ltd. +0 -2 -2 -2 +2 +2 INFY Infosys Technologies Ltd. +0 -2 -2 +2 +0 +0 INTC Intel Corp. -2 -2 -2 +0 -2 +0 JCP J. C. Penney Company, Inc -2 +0 +0 +2 +2 +2 JNJ Johnson & Johnson +0 +0 -2 -2 -2 -2 KB Kookmin Bank -2 -2 -2 +0 -2 +0 KO Coca-Cola Co. +2 +0 -2 -2 -2 -2 KSS Kohl's Corp. -2 -2 +0 +0 +0 +0 LEH Lehman Brothers Holdings Inc. -2 -2 -2 +2 -2 -2 LLTC Linear Technology Corp. -2 -2 -2 +0 +0 +0 MBT Mobile Telesystems OJSC +0 -2 -2 -2 -2 -2 MFC Manulife Financial Corporation -2 -2 -2 +0 -2 +0 MICC Millicom International Cellular SA -2 -2 -2 +2 -2 +2 NKE Nike Inc. -2 -2 -2 +2 +0 +2 NOK Nokia Corp. -2 -2 -2 +2 -2 +0 NTES Netease.com Inc. -2 -2 -2 -2 -2 -2 NUE Nucor Corp. -2 -2 +0 +2 +2 +2 ORCL Oracle Corp. +0 -2 -2 -2 -2 -2 OXPS optionsXpress Holdings, Inc. +0 -2 -2 -2 -2 -2 PAYX Paychex Inc. -2 -2 +0 +0 +0 +0 PBR PETROLEO BRASILEIRO +0 -2 +0 +2 +0 +0 PDA Perdigao S.A. +2 -2 -2 +0 -2 +2 PG Procter & Gamble Co. +0 -2 -2 -2 -2 +0 PTR PetroChina Co. Ltd. +0 -2 -2 -2 -2 +0 QCOM QUALCOMM Inc. -2 +0 +2 +2 +2 +2 RIO COMPANHIA VALE ADS -2 -2 -2 +2 +0 +2 RIMM Research In Motion Ltd. -2 -2 -2 -2 -2 +0 RY Royal Bank of Canada -2 -2 +0 +2 +2 +0 SBUX Starbucks Corp. +0 +0 +0 +0 +0 +0 SLW Silver Wheaton Corp. +0 -2 +0 -2 -2 -2 SNDK SanDisk Corp. -2 -2 -2 +0 +0 +0 STO StatoilHydro ASA -2 -2 -2 +0 -2 +2 SU Suncor Energy Inc. +0 -2 -2 -2 -2 +0 SWK Stanley Works +0 +0 +0 +2 +0 +2 TCK Teck Cominco Ltd. +0 -2 +0 +0 +0 +0 TEF Telefonica SA +2 -2 -2 -2 -2 -2 TGP Teekay LNG Partners LP. +2 +0 -2 +0 +2 +0 TGT Target Corp. +0 +0 +0 +2 +0 +0 TM Toyota Motor Corp. -2 -2 +0 +2 +2 +2 TOT Total SA +2 -2 -2 -2 -2 -2 TS Tenaris SA -2 -2 -2 +0 +0 +0 TT Trane Inc +0 +0 +0 +0 +0 +0 UBS UBS AG +0 -2 -2 +0 -2 -2 UTX United Technologies Corp. -2 -2 +0 +2 -2 +0 VCP Votorantim Celulose e Papel S.A. -2 -2 -2 +2 +2 +2 VIP Vimpel-Communications +0 -2 -2 +0 -2 +2 WAG Walgreen Co. -2 -2 +0 +0 +0 +0 WBK Westpac Banking Corp. -2 -2 -2 +2 -2 -2 WFMI Whole Foods Market Inc. -2 -2 +0 +2 +0 +0 WHR Whirlpool Corp. -2 -2 +0 +2 +2 +2 WMT Wal-Mart Stores Inc. +2 +0 +0 +2 +0 +0 XOM Exxon Mobil Corp. +0 -2 -2 -2 -2 +0 YHOO Yahoo! Inc. +0 -2 -2 +2 +2 +2 Summary: (+2/-2/other) 18/51/30 0/80/19 3/69/27 33/31/35 14/54/31 28/22/49 Net: (+2)-(-2) -33 -80 -66 +2 -40 +6 ÂAll the major US stock indices rose from RED to NEUTRAL.
The Bombay and Shanghai composite indexes were also RED.
The $USD index was neutral, and the $CRB index closed GREEN.
GOLD stocks stayed neutral, while SILVER stocks stayed RED.
BOTTOM LINE: Last week, the “market tenor” fell from -1 to -17. This week, it rose back to -1. Drugs have been RED for 5 straight weeks.
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 stockcharts.com chart
This week, for the Dow 30 stocks, 20 were up and 10 down. Despite pullbacks on Thursday and Friday, the DJIA moved from 12181 to 12348.
This week the biggest losers in the Dow 30 continued to be banks and companies that have a huge financial component: AIG -11.9 pct, JPM -5.54 pct and C -3.78 pct.
These are not quite the humungous hits taken by the financial sector in the previous week, but large nonetheless.
The biggest gains on the week were capital-intensive leaders like AA +7.87 pct, BA +6.86 pct, HPQ +6.81 pct, XOM +4.47 pct, IBM +3.70 pct and CAT +3.62 pct.
NASDAQ Composite ino.com chart
NASDAQ Composite stockcharts.com chart
The Nasdaq Composite moved up from 2304.9 to 2321.8. Technology started the week on a very strong note, but cooled out on Thursday and Friday, which took the broad market into a final two day funk.
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
This week I added charts for the S&P 500 ETF (SPY) as well as inserting SPY into the expanded sector performance tables so that you can see how each sector is doing relative to the industry benchmark. (The server may take a while to update.)
Here’s the SPY Monthly, Weekly and Daily data charts:
SPY Monthly data:
SPY Weekly data:
SPY Daily data:
The tables I will soon show are for eleven GICS Sector Index Funds (ETF’s), including two for Technology, for the ten GICS sectors, but they cover the full spectrum of the US equity market.
As you know, the equity market is up and down like a yo-yo. Two weeks ago, the scoreboard read ten sectors up and zero down. A week ago was the reverse. Then Monday through Wednesday the strong were strong, while Thursday and Friday were not.
Two weeks ago, on the back of a huge rally in the Financials, I wrote, “Volatility means traders must use prudence as in a Bear market, there are many confounding whip-saws.” Since then the Financials (XLF) placed in 10th place out of ten sectors.
Then one week ago XLF plunged -8.25 pct. This week XLF was down -3.76 pct. Even the loss on Friday was -1.15 pct.
With the announcement this weekend that the UK will take control of one of the nation’s largest lending institutions, Northern Rock, it’s abundantly clear that (i) other financial institutions do not have the wherewithal to buy up their own, and (ii) the hidden losses to come in these syndicated mortgage-backed assets, and the industry lawsuits to follow, are massive.
It’s nice to talk about Goldilocks and all, but when you don’t know whether her dowry comes with nothing except a vial of poison, why bother making advances.
In fact, the expression “Not too hot; not too cold; just about right” is the most stupid turn of phrase to come out of the mouths of supposedly intelligent people this decade. I can’t even bear to watch Financial Entertainment TV anymore; based on drivel like that, it’s just not entertaining. It’s even painful to watch.
With the US economy taking hits like a piñata, more corporations have reduced guidance for 2008. But, since many companies seem to be weathering the storm, there is either (i) a rolling bear market occurring today, or (ii) the Bear is headed in a SSE direction rather than due South.
This makes sense as stagflation in the 1970’s took equities through a grinding 1973-74 bearish period and another milder one in 1978. At the end of the decade, however, the liquidity that had to be pumped into the system (similar to today) pushed inflation higher and interest rates soaring.
But in today’s reality, soaring rates in the next two years would cause a run on mortgage foreclosures, evictions, property tear-downs and financial service company failures. So, the interventionists are likely to stay the course with more Northern Rock-type deals to come.
That is not the picture of a capital market ready to snap back to health. Good health will return as and when the dubious assets on the books of banks and investors have been written off to their realistic economic value. The prospects of that, as I say, will take time.
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. SPY XLE XLB XLI XLY XLP IYH XLF XLK 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)
I shall return in about 24 hours to complete this WIR....
Individual Sector ETF Review
One quick look at the Daily RSI-7 of even the strongest sectors (the inflation-beneficiaries Energy and Basic Materials) shows that values could not cross back above the 70 line, despite trends (MACD) that are still rising. The weakest sectors (Financials in particular) failed to reach the 50-line during the recent rally.
There is nothing in the technical indicators of these charts, across all sectors that show a recovering Bull.
Let’s be honest: the Bull is dead. Goldilocks is dead.
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), finally did get pumped by Crude Oil contracts that jumped a further +3.68/bbl (following the +2.81/bbl increase a week ago).
The tells I spoke about a week ago didn’t help at all because out of the blue came word that ChevronTexaco (CVX) was joining the Dow 30. In order to match the indexes, there was huge buying in CVX. Accordingly, XLE this week popped +5.64 pct. Given that Energy is also factored into many of the Basic Materials sector indexes, XLB also popped +4.26 pct. The rest of the US equity market did zip.
A week ago, I wrote, “XOM (-4.9 pct to 81.71) and CVX (-3.9 pct) led Big Oil down.” This week, XOM +4.5 pct and CVX +5.3 pct enjoyed the pop.
The cynic I am, I will now ask the SEC how many of those players knew in advance that CVX was going into the Dow 30 index (DJIA) and deliberately pulled it down (despite higher oil prices) a week ago so that they could profit very nicely this week.
Given the timely nonsense from Chavez in Venezuela re XOM and Big Oil, and the buddy-buddy stuff coming out of Russia-Iran regarding their mutual interest in pricing oil in Russian rubles, is it any wonder why $WTIC jumped to $95.45?
With Crude Oil zeroing in on $100, and supply from Venezuela and Nigeria now being questioned, is it any wonder that the big three of the Canadian oil&gas industry that I follow (IMO +8.7 pct; ECA +7.9 pct; and SU +5.9 pct) are bursting the pipes of futures and equity traders.
As I write about them all the time, these moves are not coincidental. The capital market game is so rigged in the US that traders will one day walk away altogether.
The 200-day Moving Average of $WTIC is up to 80.79, up from 80.07, 79.46, 78.81, and 78.30 over the past four weeks. The 50-day MA is now back up to 92.20, up from 91.74, after being at 92.55, 92.69 and 93.21 the previous weeks.
So the short-term MA has kicked it back into gear, for what is a very high-risk buy. I call it “very high risk” because a few exogenous events like Chavez, the Putin group talking to Iranian leaders, and some rebel fighting in Nigeria, are not sufficient to hold global oil prices so high when economic demand is falling, and alternative sources getting cheaper and also cozier with environmentalists by the day.
Here now is the next big issue for traders to dwell on in the Energy sector. Like the major gold producers, Big Oil is not replacing reserves as quickly as being used for production. These companies have been spending the capital instead to buy back shares and boost dividends.
Everybody wants to get “theirs” today. Not enough planning is being done for tomorrow.
(Dow Jones)--Citing the loss of Venezuelan oil reserves, Exxon Mobil Corp. (XOM) Friday became the latest oil major to fall short of 100% reserve replacement in 2007, posting a 76% reserve replacement for the year.The Irving, Texas oil giant said it replaced 1.2 billion oil-equivalent barrels in 2007, compared with production of about 1.6 billion barrels, a ratio of 76%. The result is the latest sign of the growing challenge the private oil majors face in replacing production.
Despite failing to replace production for the first time in recent memory in 2007, Exxon, which has generally outperformed the other oil giants on leading metrics, can point to some caveats that are likely to resonate with leading investors.
"Even 76% is a pretty good show compared to its peers," said Lysle Brinker, vice president at John S. Herold's Equity Research in Connecticut. "Exxon's diversity of resources and technological and operational acumen (are) behind its success."
Exxon shares closed at $85.37, down 18 cents, on Friday, a bad day for many petroleum equities.
Points to Extenuating Circumstances
Exxon said its 2007 ratio would have reached 107% if it had still included reserves from Venezuela. Exxon announced it was leaving Venezuela last summer after rejecting a change in fiscal terms amid a nationalization of heavy oil assets. The company recently launched a spate of legal challenges to try to force Venezuela to compensate Exxon for its loss of assets.
Exxon also pointed to the effects of a U.S. securities rule that requires oil companies to use year-end prices in its reserve calculation. Oil prices traded above $90 a barrel at the end of 2007, but many leading energy experts believe long-term prices won't be that high. Higher oil prices tend to equate to somewhat lower oil reserves for larger oil companies, due to their effect on production-sharing contracts with foreign governments and national oil companies.
Excluding the year-end price rule, Exxon said it would have replaced 101% of its reserves in 2007, "assuming the pricing basis the Corporation uses to make investment decisions," Exxon said in a news release.
An Exxon spokesman declined to disclose Exxon's long-term pricing assumption.
"We don't release the pricing assumptions," said Exxon spokesman Alan Jeffers.
"They're proprietary."Jeffers said Exxon strongly supports a recent move by the U.S. Securities and Exchange Commission to review its reserves booking rules. The review could lead to a change in the year-end pricing rule.
Exxon's disclosure Friday marks the latest weak reserves replacement figure for an oil major.
Chevron Corp.'s (CVX) executive warned analysts on Feb. 1 that the company replaced just 10-15% of its reserves in 2007. Royal Dutch Shell (RDSA) also has hinted at bad results, raising suggestions that reserves replacement will come in well below 100%. But BP PLC (BP) said it replaced 120% of its output in 2007.
BP management state that 2007 was a huge success, but inventory and long-term debt has sky-rocketed and profits before taxes from continuing operations is down close to -10 pct in absolute dollars (which is masked on a per share basis by the huge share buybacks), and working capital declined by almost -15 pct. Their internal accounting now prices oil at $60/bbl, up from $40. So what am I missing here? Why the hype from BP?
Sounds like Crystallex repricing their resource base and putting out news releases exclaiming a huge increase in resources. Not! In the case of Crystallex, that sure didn’t help their share price, did it?
These people must take traders for idiots?
In 20 or 30 years, if I’m around that long, we’ll all be using alt energy anyway.
I have really had it with this nonsense from commodity-price sensitive companies trying to dupe the public that their shares are attractive on the basis of improved operations and finances. It’s mostly a bad joke. What these companies have going for them is government that continues to spend but not tax, which means they print money, and, with abnormally low interest rates, the resultant increase in commodity prices makes them look “richer than they really are”. (LOL Scotiabank). It also helps to spend the shareholders’ capital by needless share buybacks (instead of increasing reserves and other important metrics in a meaningful way) and paying incredible premiums to market in buying control of competitors, thereby building in oligopoly-based price controls.
But don’t get me started. In the wrap-up, I tell you, I plan my own version of “fatwa” by moving toward a focus on supporting a healthier global ecology.
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:
Basic Materials (XLB +4.26 pct W/W) made a killing from Monday through Wednesday.
But, like the Energizer Bunny, some prices didn’t pull back as the week came to an end.
This week it became apparent to everybody that there is a commodity bubble in platinum. By Friday’s close, the RSI-7 moved up to 91.69 for the Daily and 96.96 for the Weekly price series data. When was the last time you saw a Weekly RSI-7 for anything at 97? Can’t last.
With the Point & Figure chart, there is a price objective, for now at least, of 2180 !!
When the Daily RSI-7 drops below 70, a low-risk, potentially high-reward trade will be to put on long puts on the platinum futures.
In addition, with the price now at 2100, a straddle may be another good play, closing out the call at the perceived top and adding more puts at that point.
XLB was supported by some good moves in steel. GGB jumped +1.5 pct and NUE +9.2 pct.
One of the few losers was Teck-Cominco (TCK -2.7 pct W/W), which dropped -1.8 pct on Friday.
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) gained +1.54 pct W/W after dropping -1.23 pct on Friday, closing at 37.00. That didn’t make up for the loss of -4.44 pct from 37.85 the prior week.
The big sector loser this week was ABB again (-3.6 pct W/W after losing -4.6 pct on Friday. A week earlier, ABB plunged -9.8 pct. The Chairman fired the CEO, but says he didn’t. The games people play. But do they fool smart traders?
Aircraft manufacturers this week had a good one with BA +6.9 pct and ERJ +5.4 pct. I guess that traders are factoring in another round of central bank rate cuts, which will make it easier for these capital-intensive manufacturers to roll over their debt at lower rates, that is if they can find a banker whose got any money.
Brother, can you spare a dime?
That got me thinking that what the world really needs is a virtual credit union, a debt bank banked by gold.
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) gained +1.20 pct W/W to 32.06, but most of the consumer discretionary stocks I monitor went down on Friday. XLY was at 32.80 two weeks ago.
I wrote five weeks ago in the 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.”
Politics aside, the Crude Oil price lifted +6.49/bbl over the past two weeks, and traders feel that’s a negative for consumers. Also, the data on consumer spending is looking bad.
A week ago, CCL (-8.9 pct) plunged, and this week it recovered a little ground (+3.0 pct) as the winner in this sector. Over two weeks, that’s no Obama.
A week ago I wrote, “CCL operates 3,000-passenger cruise ships. The deals to Nassau are really sweet.” I guess traders are wondering why there are any deals in what is supposed to be peak season.
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) is a matter of you need it, they got it. Yes, they thought you needed it and they stocked their shelves, but now the inventory is growing because, not being the government, you can’t pay for it. When you write a bad check, you get to go straight to jail. When govt writes such a check, they have your children and their children to pay for it.
XLP managed a slight gain this week (+0.44 pct), despite a loss on Friday of -0.91 pct.
Now you can say Friday was a bad day, like Thursday, or you can say it’s reality check time.
Beer drinkers on Friday saw the head come off ABV (down -4.8 pct on Friday). DEO managed a gain of +7.1 pct (including +4.1 pct on Friday). At some point, you can get a copy of the latest annual report of this Cara 100 best of the best here.
Being a friend of the ecology means you like WFMI, which popped +4.8 pct this week.
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 -0.76 pct this week to 66.45.
DNA lifted +3.2 pct W/W, while AET -5.3 pct and UNH -4.9 pct stumbled.
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 |
The Financials (XLF) got creamed again this week.
After XLF plunged -8.25 pct a week ago, the price dropped a further -3.76 pct this week.
I guess all those humungous bonuses are margining the shorts and buying the puts in their own stocks. Do you think? Well, before the Bull returns to his stomping grounds, the “boys” will be well positioned for the next run. I was thinking (two weeks ago) that what we need are better toreadors because this Bull has been dragging his rear-end around Wall Street too long. Then out of the blue (a week ago) there is another round of selling the Financials. I figure since nobody really knows what’s going on inside the banks these days, the selling must be coming from insiders. (LOL) Well maybe not so funny.”
The losers this week were UBS -10.5 pct to a 52-week low on account of record losses, which were shocking in light of the fact this bank is Europe’s largest and is the world’s largest wealth manager, plus LEH -10.1 pct W/W, which is amazing in that they have a seat at the New York Fed board table. How can a member of the US Fed board lose over 10 pct of its capitalization in a week? Maybe the question ought to be, how can it lose that much with no insider selling?
GS lost -7.2 pct this week as well and JPM dropped -3.4 pct on Friday, taking the loss W/W to -5.5 pct.
Brother can you spare a dime?
I’m talking to those “brothers” who recently cleared some $38 billion in personal bonuses for the so-called good performance they put in during 2007. If you look down the 12-month price performance in this table, you’ll quickly see how the rest of the shareholders fared.
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:
It’s time to start looking closer at the broad Technology sector (XLK), in addition to just the leading Semi-conductors (SMH). So this week I have added charts for XLK as well as inserting it into the expanded performance tables.
Here’s the XLK Monthly, Weekly and Daily data charts:
XLK Monthly data:
XLK Weekly data:
XLK 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 |
Semi-conductors were on a yo-yo this week. SMH gained +3.32 pct W/W but also dropped -2.30 pct on Friday. How’s that possible? Well, INTC gained +2.0 pct on the week, but dropped -3.5 pct on Friday. SNDK dropped -3.9 pct on Friday.
Some of the Tech stocks did well. CTSH enjoyed a moonshot of +19.9 pct W/W despite a loss of -2.5 pct on Friday. That’s a good definition of “profit-taking”. Also, ADBE gained +7.2 pct W/W.
Although Japan’s Sony Corp (SNE) will likely not make it into the Cara Global Best 100 Companies list because of low operating margins and return on capital, the company’s Blu-ray disk technology is all the rage. Toshiba’s HD DVD technology is all but dead.
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:
Two weeks ago, T jumped +8.6 pct. I said “I didn’t think Ma could jump that high. Must have had a McDonald’s coffee spilled in her lap in the drive-thru. I see that MCD was only up +0.22 pct over the whole five days.”
I nailed it because a week ago I wrote, “MCD was one of only two winners in the Dow 30 (+2.62 pct) while IYZ played limbo, going down -6.14 pct. Short squeeze pain is over. Ma is back to her normal self. Please, there is no way AT&T could be up +8.6 pct in a week unless, somehow, Houston discovered a lively Alexander Graham Bell sitting in the space station. In other words, it doesn’t happen without games being played.”
This week, T lifted +2.3 pct, despite being down -2.2 pct on Friday, and VZ was up +2.9 pct, despite its Friday loss of -2.2 pct.
Telecom (IYZ) managed a gain W/W of +1.15 pct to 25.49, while suffering a loss on Friday of -2.34 pct.
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) gained +0.51 pct to 39.50, while losing -0.75 pct on Friday.
Bonds & Yields Review
Table 10: US Treasury Yields
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 3 Month | 2.09 | 2.19 | 2.13 | 3.03 |
| 6 Month | 2.00 | 2.02 | 2.03 | 2.93 |
| 2 Year | 1.87 | 1.89 | 1.92 | 2.51 |
| 3 Year | 1.93 | 1.92 | 1.92 | 2.43 |
| 5 Year | 2.75 | 2.76 | 2.68 | 3.00 |
| 10 Year | 3.77 | 3.80 | 3.64 | 3.73 |
| 30 Year | 4.58 | 4.62 | 4.42 | 4.34 |
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 2yr AA | 2.30 | 2.26 | 2.25 | 2.53 |
| 2yr AAA | 2.31 | 2.26 | 2.25 | 2.66 |
| 2yr A | 2.36 | 2.36 | 2.66 | 2.77 |
| 5yr AAA | 2.87 | 2.78 | 2.75 | 2.87 |
| 5yr AA | 2.82 | 2.68 | 2.67 | 2.82 |
| 5yr A | 2.92 | 3.07 | 3.03 | 3.15 |
| 10yr AAA | 3.48 | 3.47 | 3.42 | 3.42 |
| 10yr AA | 3.64 | 3.49 | 3.31 | 3.37 |
| 10yr A | 3.92 | 3.70 | 3.65 | 3.65 |
| 20yr AAA | 4.40 | 4.41 | 4.33 | 4.15 |
| 20yr AA | 4.43 | 4.44 | 4.35 | 4.29 |
| 20yr A | 4.86 | 4.43 | 4.43 | 4.10 |
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 2yr AA | 3.38 | 3.32 | 3.25 | 3.79 |
| 2yr A | 3.29 | 3.39 | 3.33 | 4.08 |
| 5yr AAA | 4.05 | 4.04 | 3.93 | 4.34 |
| 5yr AA | 4.07 | 4.09 | 4.08 | 4.49 |
| 5yr A | 4.29 | 4.45 | 4.29 | 4.55 |
| 10yr AAA | 5.25 | 5.18 | 4.98 | 4.98 |
| 10yr AA | 5.35 | 5.40 | 5.20 | 5.35 |
| 10yr A | 5.57 | 5.68 | 5.58 | 5.54 |
| 20yr AAA | 5.66 | 5.72 | 5.55 | 5.34 |
| 20yr AA | 6.19 | 6.10 | 5.83 | 5.72 |
| 20yr A | 6.24 | 6.30 | 6.11 | 6.04 |
The fixed income market saw more selling in the long-end, but a little buying of the short-end this week.
Yields on the 30-year, 10-year and 5-year US Treasuries lifted by +16, +13, and +7 basis points to 4.58 pct, +3.77 pct and +2.75 pct respectively.
The yields on the 2-year Note and 3-month T-Bill dropped by -5 and -4 bp respectively to 1.87 pct and 2.09 pct. As these yields are under the inflation rate, wealth is being lost in holding short-term risk-free liquid holdings.
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.
Countrywide, Fannie and Freddie moved in different directions. I suppose politics played a role.
CFC gained +1.17 pct W/W, but FNM -6.27 pct and FRE -8.89 pct were serious losers. On Friday all of them dropped: -2.26 pct, -3.59 pct and -2.95 pct respectively.
Over 52-weeks, the loss of wealth in the biggest three mortgage lenders is -83.5 pct, -48.3 pct and -57.5 pct.
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 |
Consumer Finance -USA -- Interactive Weekly Data Charts
Consumer Finance -USA -- Interactive Daily Data Charts
Commodities Review
The $CRB lifted this week +2.28 pct from 375.67 to 384.23. Two weeks ago, $CRB had been 364.34. This is mostly energy related.
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) rocketed a further +3.68/bbl (+4.01 pct) to 95.45. The price had been 88.96 two week’s ago.
The 50d MA for $WTIC is now at 92.20, up from 91.74, but down from 92.55, 92.69, and 93.21 the previous three weeks, whereas the 200d MA is 80.79, which continues to rise from 80.07, up from 79.46, up from 78.81, and up from 78.30 the previous four weeks.
I am not convinced the market will take the Crude Oil price back to $100. Economic data in oil-consuming Japan, Europe and the US is growing softer by the week.
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 -16.20 (-1.76 pct W/W) to close at 906.10.
A week earlier, the gold contract was down on the week until that Friday’s move (+12.30/oz +1.35 pct) as the $USD weakened, I believe, temporarily on negative news from Venezuela and Nigeria.
The 50-day MA for $GOLD is now 868.70, up from 857.42, up from 847.93, up from 834.69, up from 829.09, and the 200d MA is 750.20, up from 744.36, up from 738.94, up from 733.05, and up from 728.68, over the past four weeks.
The precious metals jury seems to be out as platinum and maybe palladium are locked in parabolic moves higher. Can gold and silver do the same? Of course. But, this is a day-to-day market, but there are major speculators involved at this time.
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 lifted just +0.01 (+0.05 pct) from 17.11 to 17.12. Two weeks ago, $SILVER closed at 16.87.
For $SILVER, the 50d MA is now 15.75, up from 15.46, up from 15.25, up from 15.02, up from 14.95, and the 200d MA is 13.95, up from 13.85, up from 13.78, up from 13.71, up from 13.66 over the previous four weeks.
After the G-7 meeting of finance ministers and central bankers just over a week ago, I opined, “I think that Gold & Silver will likely move in the direction that the G-7 authorities would like, which is down in price. They stated that it would be ok for the IMF to sell its gold starting April. IMF conveniently doesn’t have a currency, so I guess they will sell it in Euros, to help the $USD and the interests of the ECB, which doesn’t want to lower rates, but needs a lower Euro exchange rate with the USD as the ECB opined at Tokyo. To me, I see this statement that precious metals are headed south, and the rally on Friday was a good move by bankers and insiders to squeeze the shorts and sell into higher prices.”
This week, gold sold off a bit and silver flattened out. If it weren’t for plat and pall, I’d be more comfortable in my assessment that gold and silver will pull cack in the short-run (before later this year having a huge move upward).
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.
A week ago, “the $PLAT went parabolic, which means the end is near. But I wonder how many hedge funds get taken down in the short squeeze? Seriously.This week, $PLAT soared another $110/oz or +6.30 pct to 1868.20. On Friday alone the price jumped +27.10 (+1.47 pct). There is an obese woman edging closer to the stage. I can hear her practicing off-stage.”
I can still hear her, but she hasn’t made her entry. The shorts must be coming apart. This week, $PLATINUM gained +184.90/oz (+9.90 pct) to 2053.10. The spot price closed the week at 2078. Today (Monday), the price is well above 2100. The metal men of Zug must be making a fortune. How many hedge funds are going to be finished when all is said and done?
The 50d MA for $PLAT is 1625.64, up from 1573.96, up from 1539.30, up from 1505.71, up from 1487.62 over four weeks. The 200d MA is 1414.43, up from 1397.68, up from 1385.29, up from 1372.28, up from 1359.50.
When markets run to extremes like this, traders put on straddles. After they leg out, they double up on the opposite side. That may happen soon because the Weekly RSI-7 for the Platinum futures is 96.96. For momentum traders, that’s a danger zone.
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 soared jumped +2.46 pct after soaring a week ago +5.61 pct. The price is now 455.30.
The 50d MA is 387.65, up from 378.36, up from 370.90, and the 200d MA is 370.45, up from 368.73, up from 367.40, up from 366.92.
I don’t see evidence this move is based on economic fundamentals. So, I have to think it’s another short squeeze.
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 was flat at 353.90. A week earlier it had rocketed +8.14 pct from 327.30 to 353.95, which I think was a short squeeze somewhat like Platinum and Palladium.
I wrote a week ago, “I don’t believe that parabolic rises in price can carry on too long. Hitting the peak, however, is not something I’d try to do here. Suffice it to say that these metal and PM prices will be lower in a month or two, and the $USD higher, as I see it.”
The 50d MA of $COPPER is 320.07, up from 315.47, up from 311.99, up from 310.61, but down from 328.81 just nine weeks ago, and the 200d MA is 336.88, down a bit from 336.96, down from 337.57, down from 338.37, down from 339.05 over the past month.
I have already opined, “I think this is a move to squeeze the shorts before taking the price down to recession-based lower levels. Too many traders think the $USD is going to zero, and they haven’t looked at the charts for the past couple months.”
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) dropped -2.17 pct, after dropping -1.82 pct a week earlier. The price has moved down from 193.55 to 184.61 to 181.25 to 177.32 over a few weeks.
Are you getting the message? There’s a squeeze on the futures traders of the commodity contracts, but the big capital pools are offing their stock positions.
The 50d MA for $XAU is 178.40, up from 177.75, up from 177.18, up from 175.69, and the 200d MA is 160.17, up from 159.17, up from 158.31, up from 157.28, up from 156.51. Another round of selling will reverse these rising trends.
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
Stagflation is an issue in Japan as well. Confidence as measured by the Tankan survey is at a three-year low because the economy is slowing rapidly in the past couple months and inflation is now growing at +0.8 pct according to government data. There is now talk among traders of the Bank of Japan lowering the key bank rate from +0.5 pct. People there are more concerned with the pullcack in the economy than they are over inflation prospects.
Here is the chart of the week’s trading.
This week the $USD dropped -0.76 pct W/W.
The 50d MA of the $USD is 76.32, up from 76.26, up from 76.15, down from 76.20, and up from 76.16 four weeks ago, and above where it was five weeks ago at 76.20. The 200d MA is 78.94, down from 79.07, down from 79.21, down from 79.37, down from 79.51, and from 79.68 five weeks ago.
“But it is the short-term MA that traders are watching at this point.”
Two weeks ago I wrote, “At some point, I am expecting to see a rally in the $USD – right around the time that HB&B cleans the Street of the small speculators in precious metals.” The short squeeze that is on now with some of the metals and precious metals, is likely the Bull Trap that is used to hammer these speculators in the precious metals.
But the door hasn’t closed yet.
Interactive Chart of Weekly U.S. Dollar Index:
Interactive Chart of Daily U.S. U.S. Dollar Index:
The Euro ($XEU) surged +1.07 pct to 146.68. The ECB would like to see it lower, which could mean they drop rates soon.
The Euro 50d MA is 146.44, down from 146.57, down from 146.79, and the 200d MA is 140.74, up from 140.50, up from 140.24, up from 139.92.
Interactive Chart of Weekly Euro Dollar Index, priced in USD:
Interactive Chart of Daily Euro Dollar Index, priced in USD:
The Pound rallied from 194.63 to 195.85 (+0.63 pct).
The 50d MA is now 198.29, down from 199.33, down from 200.41, down from 201.10, and from 203.30 five weeks ago, and the 200d MA is at 201.25, not much changed for five weeks.
Weekly British Pound Index:
Daily British Pound Index:
Weekly Japanese Yen Index:
The Japanese Yen ($XJY) dropped -0.25 pct to 92.90.
The 50d MA of the Yen is 91.43, up from 91.21, up from 91.07, up from 90.74, up from 90.40, and from 89.80 five weeks ago, and the 200d MA is 86.75, up from 86.52, up from 86.29, up from 86.05, up from 85.85, and from 85.64 five weeks ago.
“As the Yen gains, the money flow is out of US and Japanese equities and back into the banks to repay loans… And vice versa.” Banks are getting reliquified on a Just In Time basis…
Daily Japanese Yen Index:
The Loonie (Cdn Dollar) dropped -0.74 pct W/W to close at 99.33.
The Loonie’s 50d MA is 99.52, down from 99.54, down from 99.68, down from 99.93, down from 100.56, and from 101.45 five weeks ago. The 200d MA is 97.61, up from 97.36, and from 97.09 two weeks ago.
Although the Loonie is strengthened by higher oil and metals prices, I feel it is likely to stay in a trading range just below par with the $USD.
Weekly Canadian Dollar Index:
Daily Canadian Dollar Index:
International Equity Markets Review
The international markets were hammered this week. The Toronto Exchange regained 13226.76 up from 12989.3 a week earlier, largely on the strength of Wednesday’s almost +200 point move.
The FTSE (5787.6), DAX (6832.4) and CAC (4771.8) were quiet.
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.
I made some additions to the country-based ETF tables this week, and I intend to focus more on that in 2008.
I will also set up tables and track the domestic market prices.
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. 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 DJIA, S&P 500 and Nasdaq Composite regained a little ground this week, but I see nothing happening to inspire the Bulls. I think the market is biding time until the next decline.
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 Disney [GICS 25, Dow 30, Cara 100] and 3M Company [GICS 20, Dow 30, Cara US 100 June 25-06]
(DIS: Value Line Report Feb. 15: next one is due May 16)
(MMM: Value Line Report Feb. 15: next one is due May 16)
Disney
Earnings were reported well ahead of Street estimates and they were strong, based on pricing power at ABC and at the entertainment parks, which has strengthened the stock, and the financial strength of this Cara 100 company has really picked up in the past two years. CEO Robert Iger is doing a great job.
Speaking of jobs, Steve Jobs owns 7.3 pct of the stock.
Dividends paid annually in January are not much, but have been growing rapidly, up from $0.21/share in 2004, to $0.24, $0.27, $0.31 and $0.35 this year.
With the pricing power, the operating margins really picked up lately. The Return on Equity is not as high as other Cara 100 companies, but what the heck, with Pirates, Cars and Toy Story and the theme parks, this is a fun company, so I’ll accept it.
The big share buy-back that started in the past year will continue for at least the next two. Earnings and cash flow are growing now and into the foreseeable future at double the rate of the past ten years.
It is in fact a cash cow or mouse or whatever. The 2006 cash flow per share of $2.94 will likely be $3.50/share this year and $4.40/sh next year, according to Value Line.
Back in 4Q02, when the stock dropped under $14 in the jaws of the last Bear, what a steal this company was.
My only concern is that during the last recession, the earnings and cash flow were severely cut, and that took the stock price down with it. The share price high of $43.90 in cash-rich 2000 fell all the way to $13.50 in 2002. I fear that can happen again, so I’m not interested in buying at these levels.
Already the stock fell from $33.50 to $26.30 in less than a month’s time this year. Yes, it snapped back to $32.50, but the risk to capital is simply too high at present to be holding for the long term. I’d just wait until the next Cara Accumulation Zone and subsequent Buy Alert before venturing back in.
3M
I don’t think much effort went into the analysis of 3M by Value Line’s Jeremy Butler.
On one hand he says, “We look for 3M Company to increase its sales by 7 pct in 2008” and on the other he says, “2008 will probably be challenging, with sales rising only 4 pct.” I think that Butler’s challenge is to figure out the difference in 4 pct and 7 pct. The data in the Quarterly Sales table shows a +6.9 pct rise from $24.462 billion to $26.150 billion.
In any case, there is likely to be a drop in net earnings, and, despite a share buy-back, a decline in earnings per share. Markets don’t care for that. I think the stock has a way to go from its 52-week high on Oct 10 of $97.00. Of course, sitting for now at $79.95, it has come down a ways, but I think there is more to come.
Yes, I think DIS has more to fall than MMM, but at the perceived bottom, I will be a buyer of DIS, and not MMM.
Speaking of 3M, one of the Caraistas wrote me (tongue-in-cheek) to say watch for these mergers in 2008. I gather the list has been circulating for some time.
1) 3M will merge with Goodyear and become:
MMMGood.
2) FedEx is expected to join its competitor, UPS, and become:
FedUP.
Yes, I am FDX mad.
3) Fairchild Electronics and Honeywell Computers will become:
Fairwell Honeychild.
HON ain’t getting any affection from me.
4) Zippo Manufacturing, Audi Motors, Dofasco, and Dakota Mining will merge and become:
ZipAudiDoDa.
I like it.
5) Hale Business Systems, Mary Kay Cosmetics, Fuller Brush, and W. R. Grace Co will merge and become:
Hale, Mary, Fuller, Grace.
6) PolyGram Records, Warner Bros., and Zesta Crackers join forces and become:
Poly, Warner Cracker.
7) Grey Poupon and Docker Pants are expected to become:
PouponPants.
8) Knotts Berry Farm and the National Organization of Women will become:
Knott NOW!
And finally...
9) Victoria 's Secret and Smith &Wesson will merge under the new name:
TittyTittyBang Bang
Maybe we can come up with some more…
The Dow 30 Company links in chronological order of next reports
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
Alcoa [GICS 15, Dow 30]
(AA: Yahoo Finance file)
(AA: StockChart chart)
(AA: Billcara2 chart)
(AA: ADVFN Financial Data)
(AA: Value Line Report Jan. 18: next one is due Apr. 18)
Dupont [GICS 15, Dow 30]
(DD: Yahoo Finance file)
(DD: StockChart chart)
(DD: Billcara2 chart)
(DD: ADVFN Financial Data)
(DD: Value Line Report Jan. 18: next one is due Apr. 18)
Merck [GICS 35, Dow 30]
(MRK: Yahoo Finance file)
(MRK: StockChart chart)
(MRK: Billcara2 chart)
(MRK: ADVFN Financial Data)
(MRK: Value Line Report Jan. 18: next one is due Apr. 18)
Pfizer [GICS 35, Dow 30]
(PFE: Yahoo Finance file)
(PFE: StockChart chart)
(PFE: Billcara2 chart)
(PFE: ADVFN Financial Data)
(PFE: Value Line Report Jan. 18: next one is due Apr. 18)
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 Jan. 25: next one is due Apr. 25)
Caterpillar [GICS 20, Dow 30]
(CAT: Yahoo Finance file)
(CAT: StockChart chart)
(CAT: Billcara2 chart)
(CAT: ADVFN Financial Data)
(CAT: Value Line Report Jan. 25: next one is due Apr. 25)
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 Feb. 1: next one is due May 2)
Coca Cola [GICS 30, Dow 30]
(KO: Yahoo Finance file)
(KO: StockChart chart)
(KO: Billcara2 chart)
(KO: ADVFN Financial Data)
(KO: Value Line Report Feb. 1: next one is due May 2)
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 Feb 8: next one is due May 9)
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 Feb. 15: next one is due May 16)
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 Feb. 15: next one is due May 16)
Wrap up:
I have extended the price performance tables, and added some. As we shift to a new website platform, I will do more linking to charts and news.
We are going to do more analysis of the post-Buy and Sell Alerts for the Cara Global Best 100 Companies. These Alerts will become increasingly sophisticated as we factor in additional quantitative measures.
In addition, the Cara Global Best 100 ETFs will be featured.
We will also spend more time on (i) income securities, (ii) fast growing small and micro-cap companies, and (iii) the top quality junior metals and minerals explorers.
Finally, I decided to focus this blog around the plight of our physical environment, which global society has a need to protect. It might be a tough life for many, but we can work together to making it a better one.
Ciao.
Posted by Posted by Bill Cara on February 17, 2008 02:45:26 PM | Category: Cara Week in Review