Energy (XLE -1.49%) was the hardest hit sector. The strongest sector was Utilities (XLU +1.21%), and the strongest industry group was Airlines ($XAL +2.0%).

The Oils ($XOI -3.1%) and Goldminers ($XAU -1.9%) were weakest as the equity market was hinged on oil prices and the US Dollar.

The ADP/Macroeconomic Advisors employment report forecasted a +40,000 increase in private payrolls, well above the expected -60000 decline. Will Friday’s Jobs Report be better than expected?

With record high energy costs, the airlines are losing a bundle—over $6 billion in losses expected this year. The #2 US carrier United Airlines announced it is grounding older jets (mostly 737’s), which are less fuel efficient, and will cut 1,600 employees. Continental Airlines today announced 3,000 job cuts. With high oil prices, this industry is in its death throes.

On the financing scene, a number of banks have put their goodwill on the line. Royal Bank of Scotland (RBS) appears to have dodged the bullet—this time at least.

UK mortgage lender Bradford & Bingley also dodged a bullet, but the circumstances appear to be questionable.

Lehman Bros (LEH) was desperately issuing statements (via bought-and-paid-for Talking Heads) that the bank needs no new capital, or hasn’t been borrowing, or whatever. The stock gained +3.0% to 31.40.

This morning, Goldman opines that Wachovia Bank (WB) needs to cut its dividend. Imagine!

The strongest stocks for the Cara 100 companies were Whole Foods Market (WFMI +4.4%), Disney (DIS +3.5%) and Qualcomm (QCOM +3.1%).

The Cara 100 losers were mostly oils, including China National Offshore Oil (CEO), PetroBrazil (PBR), and Statoil (STO) as well as Vimpel (VIP), all of them down -3.9%.

With the stronger $USD (+0.27% to 73.49), precious metal prices softened. $GOLD closed down -$1.70/oz to 883.80. There will be more of that today because the $USD is very strong at this point in the morning.

The US Treasury market weakened yesterday after equites looked like they would rally. At the close, the long bond ($USB) closed down -0.55% to 115.25. The T-Bill yield closed at 1.805 percent.

In the morning spot market, prices for precious metals are a tad lower (with prices compared in brackets to the previous morning) for Gold, Palladium, Platinum and Silver: 870.27 (878.52); 422.5 (426); 1971 (1986); and 16.64 (16.64), respectively.

The Euro futures are trading down to 1.5385 (1.5463) …. Crude Oil futures are down to 122.58 /bbl (123.70) …. And the DJIA near futures are up a tad to 12408.

Overnight, the equity indexes were mixed: Australia -1.13% to 5633.8; Shanghai -0.54% to 3351.65, and Japan (Nikkei) -0.65% to 14341.1; while the Hong Kong market was up +0.55% to 24255.3 and India (Sensex) +1.64% to 15769.7.

This morning the CAC of France and DAX of Germany are flat in mid-session, while the UK FTSE is down -0.35% to 5950. The Bank of England(BoE) monetary policy was released a couple minutes ago, remaining as expected unchanged. The European Bank (EB) will announce shortly, and is expected to remain unchanged.

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Comments & Outlook

The Bombardier story has played out as expected. You heard it here first.

Twenty months ago, while the stock languished at much lower prices and almost every Talking Head on Canada’s financial TV hated it, I am happy to say this community was starting to get interested in Bombardier (BBD-B.TO).

I started to write about Bombardier in the $2-$3 range during 2004-05. Then I really gave it a push in the blog in October 2006 at just under $4. http://www.billcara.com/archives/2006/10/canadas_bombardier_set_to_fly.html

I like it when a plan comes together. I thought it might, so in that 2006 article I referred to TerryC as “a long-time reader who is an investment pro in Canada” just so you might get the message, and I entitled that blog entry, “Canada's Bombardier set to fly”. Then, just so you wouldn’t miss the opportunity, I wrote it up again in the Week In Review that week.

Yesterday the stock closed at C$8.90. How’s that for a solid return?

Bill, We can't say your reader's weren't given a "heads up" on BBD.B over the past year or two. What's wrong with doing a double in 18 months when a little D.D. showed a turn-around was definitely underway? I sold my complete position when the price arrived at $7 a couple of weeks ago, anticipating a correction and possibilities of a re-load. What I didn't look into was the short position - 20 million shares when I checked a week or so ago! The squeeze is on and this stock could run up and over $10 very quickly, especially when daily volume is over 20M or better and a restoration to investment-grade rating on their debt seems inevitable. This stock could also be a good hedge vs a falling Canadian dollar.

Regards, TerryC

That was October 2006. TerryC came back on Feb 24 of this year to add some more words of encouragement:

…I have taken so much away from this blog that I feel it is necessary to share an opportunity on an item I have posted on before....... Bombardier , despite knowing how hard it is to make money on aviation stocks representing an industry that seems to rarely make money itself. Do your own DD but here are the simple facts: record sized Order Book, financial restructuring that is working, diversified global income that has nowhere to go but up, etc. A pending (Jan 31st year-end) announcement could be an all-time record year for revenue and profit. Recent news that Bombardier is about to announce the go-ahead of the new C class regional jet and the possibility of building it in the USA says volumes to those who have traded the BBD.B for years, as I have. This is a clarion call to the Canadian government that they and the province of Quebec better ante up another billion or so, or (Bombardier) are flying south. Such a move would also set the stage for speculation that BBD might soon find itself under the wing of Boeing. I have long held the view that this will happen and the Transportation Division that remains will relocate to Berlin where it can more effectively conduct global business. So there you have it...... a global brand flying under the radar with a stock price that should be in the $7-$10 range, or higher, in the next 12 months. Very limited risk that the (Bombardier stock) price will collapse with a falling market.
Posted by: TerryC at February 24, 2008 9:21 PM [link]

The stock closed at just C$5.62 immediately before his post on Feb 24. Three and a half months later, it closed yesterday at C$8.90. That’s a +37% gain in 100 days in an otherwise tough market environment.

Just like TerryC wrote the book, Bombardier earnings did take flight. Hence, this stock did move up for legitimate reasons—not share buy-backs and pumped dividends.

Having met his expectations, he sold. Maybe he was early, but this is a Bear market. In Bull markets, you ought to let your profits run. But with a Bear, you need to be always conscious of market risk.

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The KINGZ/Cara managed forex account performance has been updated. This net, net return on invested capital for the client is excellent.

The performance for May-08 was +4.93%; resulting in a 3 month simple return=11.21% (11.62% compounded), and 12-month simple return=43.61% (53.24% compounded).

The performance for Apr-08 was +3.79%; resulting in a 3 month simple return=10.11% (10.45% compounded), and 12-month simple return=39.68% (47.50% compounded).

The chart on the website sidebar will be updated today.

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Finally, the table of Cara 100 M-W-D RSI-7 studies done by korvus are now correct and can be accessed here. Just hit go!

In time, we will increase the sophistication of this tool.

Have a great day.

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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
GGB	48.00	88.43	70.61	46.09	Sell alert (trig. 5 days ago [on 2008-05-29 at $49.59, -3.21% chg], after a 1 day DZ)
ATVI	34.12	86.75	91.79	76.88	Distribution Zone (for 5 days)
PBR	65.40	85.37	54.26	32.47
SYT	62.97	81.15	68.95	64.59
EXC	87.55	80.80	64.36	50.09	Sell alert (trig. 6 days ago [on 2008-05-28 at $88.82, -1.43% chg], after a 1 day DZ)
ECA	87.53	80.79	57.69	33.43
PDA	60.10	79.80	62.66	45.17	Sell alert (trig. 3 days ago [on 2008-06-02 at $63.80, -5.80% chg], after a 3 day DZ)
WMT	57.68	78.93	71.34	59.68
ABB	32.18	78.83	74.39	46.66	Sell alert (trig. 8 days ago [on 2008-05-23 at $32.76, -1.77% chg], after a 1 day DZ)
TT	46.49	76.24	68.43	56.96
RIMM	134.29	75.62	65.14	45.36
QCOM	48.45	75.30	82.28	61.35	Sell alert (trig. 4 days ago [on 2008-05-30 at $48.54, -0.19% chg], after a 1 day DZ)
TS	59.25	73.40	69.22	45.45	Sell alert (trig. 7 days ago [on 2008-05-27 at $59.21, +0.07% chg], after a 6 day DZ)
NUE	74.14	72.96	53.47	42.18
BHP	82.86	72.77	54.68	32.69
SU	64.71	72.73	59.87	35.26	Sell alert (trig. 7 days ago [on 2008-05-27 at $68.68, -5.78% chg], after a 13 day DZ)
STO	35.92	72.00	56.90	29.62	Sell alert (trig. 7 days ago [on 2008-05-27 at $39.07, -8.06% chg], after a 7 day DZ)
NKE	67.94	71.27	60.58	59.46
VCP	33.33	70.05	63.08	62.99
LLTC	36.43	66.53	80.53	51.80
ORCL	22.91	64.45	74.96	68.33
ADBE	44.25	60.73	79.68	74.29
CTSH	35.51	52.92	67.12	74.88
DELL	23.89	52.36	79.59	83.65
GRMN	53.94	39.17	54.40	80.44

At least one RSI value <30:

Ticker	Last	RSI-7M	RSI-7W	RSI-7D	Zone
UBS	23.77	16.61	21.74	20.68	Accumulation Zone (for 7 days)
BC	13.84	21.45	29.19	28.60	Accumulation Zone (for 1 days)
ERJ	34.61	24.27	25.51	20.32	Accumulation Zone (for 2 days)
WFMI	29.34	24.87	32.48	53.69	Buy alert (trig. 6 days ago [on 2008-05-28 at $28.69, +2.27% chg], after a 5 day AZ)
GOL	14.40	27.25	34.26	34.34
GFI	12.26	28.58	31.00	18.55
BDK	63.02	29.70	31.42	38.52
SBUX	18.12	29.81	56.48	67.44
DB	101.80	30.48	26.05	8.84
JCP	39.36	30.55	37.44	29.84
GE	30.45	32.48	30.87	27.40
WHR	70.56	33.74	28.47	33.91
NOK	27.11	34.06	31.63	26.05
IBN	35.02	36.90	27.67	13.80
BA	78.02	39.33	38.93	23.01
PAYX	33.61	40.31	36.59	26.56
ABV	66.13	41.94	32.93	11.45
HDB	89.09	42.80	31.65	20.62
UTX	69.26	44.66	37.72	27.98
CHA	62.63	45.45	39.40	19.79
DOW	39.34	46.14	47.30	24.85
CHL	72.67	50.27	34.61	23.80
XOM	85.75	52.39	40.58	20.75
TEF	83.21	54.31	38.14	21.84
CEO	167.74	63.93	46.42	26.89
TOT	82.12	64.42	52.75	23.52	Sell alert (trig. 7 days ago [on 2008-05-27 at $87.15, -5.77% chg], after a 6 day DZ)
CVX	96.04	67.98	56.91	28.77	Sell alert (trig. 8 days ago [on 2008-05-23 at $100.73, -4.66% chg], after a 6 day DZ)
RIO	37.23	68.33	48.16	25.76
STO	35.92	72.00	56.90	29.62	Sell alert (trig. 7 days ago [on 2008-05-27 at $39.07, -8.06% chg], after a 7 day DZ)

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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 14: Dow 30 List

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
JNJ	66.55	-0.21	-0.31%	2.57%	0.60%	-1.52%	0.97%	6.24%	-2.05%	4.64%
PG	66.45	1.04	1.59%	2.44%	0.90%	-0.30%	-8.10%	0.61%	-9.33%	5.16%
AIG	35.72	-0.29	-0.81%	2.32%	-6.30%	-26.20%	-36.55%	-22.06%	-35.81%	-50.76%
DIS	34.35	1.17	3.53%	1.45%	0.76%	1.84%	7.88%	7.78%	4.89%	-3.78%
WMT	57.68	-0.09	-0.16%	1.03%	3.09%	2.36%	22.99%	15.66%	19.69%	12.63%
HPQ	46.81	0.57	1.23%	0.62%	0.75%	-3.76%	-6.02%	-3.38%	-7.69%	1.81%
INTC	23.48	0.54	2.35%	0.04%	-2.53%	-0.42%	-7.38%	17.40%	-10.76%	5.96%
GE	30.45	-0.01	-0.03%	-0.33%	-4.00%	-7.73%	-17.17%	-9.16%	-16.00%	-19.47%
MMM	76.36	0.13	0.17%	-0.70%	-1.51%	-1.80%	-7.68%	-2.61%	-6.98%	-13.30%
GM	17.01	-0.57	-3.24%	-0.82%	-14.35%	-23.86%	-30.32%	-26.27%	-38.55%	-43.99%
CAT	82.46	0.04	0.05%	-0.88%	-1.65%	-0.93%	16.75%	14.94%	14.51%	5.33%
HD	27.18	0.09	0.33%	-0.91%	-0.69%	-7.17%	4.10%	1.15%	-5.59%	-31.71%
AXP	45.64	1.33	3.00%	-1.11%	-3.53%	-10.44%	-10.58%	7.01%	-20.08%	-29.81%
MCD	57.98	0.42	0.73%	-1.21%	-2.85%	-4.15%	-0.21%	8.11%	-3.41%	13.46%
MRK	38.17	-0.18	-0.47%	-1.27%	-3.95%	-1.73%	-33.47%	-12.77%	-34.63%	-26.24%
KO	56.70	0.30	0.53%	-1.29%	-0.68%	-2.69%	-7.19%	-4.50%	-9.64%	7.65%
UTX	69.26	-0.50	-0.72%	-1.38%	-5.64%	-7.26%	-7.91%	0.52%	-7.34%	-2.20%
IBM	127.55	-0.29	-0.23%	-1.54%	1.89%	3.85%	21.84%	10.23%	19.62%	20.07%
DD	46.77	0.13	0.28%	-1.81%	-4.45%