Do you recall what happened 12 weeks ago (WIR#14 April 6)? I wrote:

This was a week spurred by a single day record gain, April 1, the biggest move since April 1, 2038, signaling the end of the Great Depression. How ironic that some people are saying this April Fool’s Day joke is signaling just the opposite. On that I am not so certain, but I am wary nonetheless.…But, really, the week was all about Tuesday, probably a forerunner to the testimony in the Congressional meetings over the next couple days in which it would become clear that Bear Stearns and JP Morgan had not only received a govt guarantee of some $29 billion of Bear Stearns illiquid and possibly dubious assets, but that the two had received a like amount in short-term (hopefully) borrowings from the Fed.

As I see it, HB&B made their move immediately before this testimony became apparent. In fact, all testimony to Congressional committees is supposed to be submitted days in advance and the chairs complained that these docs had been submitted (held?) to the last minute. Clearly, the TV shots showed these Congressmen reading the docs intently and pointing with one another to particular items of interest. But isn’t that another example of how Wall Street is purposeful in hiding transparency. If that wasn’t enough, the complicated responses they gave to the simplest questions only showed me that obfuscation was the name of their game.

So, here we are up on average +4.2% W/W, with the Financials (XLF) up +7.0%, but I don’t think the public feels elated.

XLF closed that week (April 6) at 26.36. Today it is just 20.60, which is a drop of -22% in 12 weeks. Considering the losses reported and all, that’s appropriate. But going back to that week in April, in reviewing the winners, there lays the evidence of manipulation and the nonsense that has gone on in this Financial sector. The strongest stocks that week were UBS +21.1%, LEH +16.3%, MER +15.8% and, yes, C +15.6%. These were the banks that have had the biggest write-downs and needed the biggest capital infusions, but when the Fed was in helping them, and lying to us and to Congress, we were told that those share price increases were believable, that the write-downs would be partially recovered in the future, and that no further capital was required, etc.

For more of what I call proof of concept, which is why I write this blog, let’s see what I wrote about HB&B in that WIR#14:

This week, the Financials (XLF +6.94% W/W following the previous Friday’s gain of +6.02%) were far and away the leaders of the rally.

And why not? Henry Paulson, the People’s keeper of the Treasury, has ensured his Friends & Family on Wall Street are well treated. You know who’s paying for all this, right?

The volatility in this sector is even greater than Mom & Pop’s retailers. But I’ll tell you, XLF is not Mom & Pop’s bankers.

This week, can you say, without smiling, that UBS can write down $19 billion in dubious assets they own and tell the public they have to quickly raise $12 billion in new equity (because the ECB isn’t as friendly as the Fed), and the stock still rockets +21.2% W/W. Image that; these are the free markets that price the value of assets. (LOL)

What happened here is that the Fed has now become the world’s banker, just like I suppose the US military has become… (you know). Incredible as it might seem, there will be no major international bank go under because that would be a counter-party risk management issue that couldn’t be managed. It would bring down the whole system because JP Morgan, Bank of America, Merrill Lynch and the rest of Wall Street lends and borrows every day from UBS. Ergo: the Fed to the rescue of a Swiss bank that a long time ago stopped being Swiss, in the ‘prudent’ sense of the word.

Did you take note of the (other) biggest gains W/W on Wall Street. Yes, you might have guessed, they were the biggest problems: Lehman, Merrill Lynch and Citigroup, which were up +16.3%, +15.8%, and +15.6% W/W respectively (but not respectfully I might add).

Did you check out the comments I made in the Saturday Report? The world is illiquid and in fear of shutting down, but the banks are rocking and rolling. Mr. Moral Hazard has really pulled one over on America… Oh, I forgot: the new reality (illiquidity) vs 1-800-HOPE… Donald Trump casting is looking for actors for his new Apprentice Show. We saw several auditions in Congress this week. The world was watching… Getting practice for the Summer Olympics, I was rating the nonsense… Dimon 9.9, Geithner 9.6, Bernanke 9.2, Cox 10.0,… It doesn’t get better than the awesome performance of the simplest questions… Mr. Cox, do you know what city this is? How many fingers am I holding up?...

Well, maybe I was a little tough on Mr. Cox that week, but the rest of the nonsense I had figured out at the time. That was the week the bond market started selling off. TLT was about 96 and two months later was under 89. And why not? We discovered that week that the Treasury Secretary went off to the other side of the world so he wouldn’t have to perjure himself in what was to be the most important testimony of any Treasury Secretary since oh maybe the Great Depression.

Did Paulson want to admit that he conned the Fed into saving every failing major Broker-Dealer in the world after the Bear Stearns collapse? Anyway, I saw what was going on, and it stinks.

Imagine that Henry Paulson was over in China chastising the Chinese government for not letting his so-called free market forces determine their monetary policy decisions. The gall of this man seems to have no bounds.

In fact, I’ll say this about him; since he took control of the US Treasury, the capital markets of the world have never come under such intense manipulation by the PPT, which goes to figure since, in private business, he was the chairman of the PPT, as I showed in documents I published here.

The question now, everybody should be asking, is to what extent are the current policies of the US Treasury and Fed and their anticipated impact on capital markets contrived to bring about enough economic slowing, regardless of damage to Mom & Pop, to arrest the inflation that was started by (i) the US government’s forays into the Middle East and (ii) the greediness of HB&B in the international housing industry.

I even believe that the housing industry boom (and its inflation) was contrived in order to generate wealth and taxes needed to pay for the so-called war on terrorism (or move to control the oil market, however you see it). How many times did the President go on TV to urge home ownership, and how many General Motors Ditech Mortgage commercials could be crammed into a single hour at Financial Entertainment TV before calling FETV a flat-out infomercial for vested interests?

We all know the problems; the Bear market, the deficits, the loss of consumer and business confidence, the crashing US Dollar, failing banks and airlines, inflation, credit squeezes, etc. The point I am making is that today’s results are the direct result of crucially important market-related decisions that were made, with intent, seven years ago, and today’s losers, anticipated by the vested interests who made those decisions in September 2001, were exploited to the fullest during the long Bull market run.

Now I am asking, why shouldn’t we believe that current events (ie, the Bear market, deficits, loss of consumer and business confidence, weak US Dollar, failing corporations, credit squeezes, etc) are not being similarly managed, with just two new names, Paulson and Bernanke, serving as Talking Heads for the same vested interests? To the winners go the spoils. That would be things like (i) the right to drill offshore in US environmentally protected regions, (ii) control of the international financial services industry by the private US Federal Reserve System, (iii) a weakened SEC, (iv) corporate takeovers of once viable competitors, and (v) whatever else can be had from the political and financial system these people control.

How long can this go before the public just says enough is enough?

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Global Economics Review

The macro-economic data continues to worsen, both in America and abroad.

Weekly International Economic Report .

Here are the key US economic reports and the Econoday analysis from last week.

US Economic Calendar. In addition to the US Consumer Confidence index and the Fed monetary policy decision being reported on Wednesday, there are some other key reports.

US Durable Goods data for May. Econoday reported: “May's overall number matched market forecasts for no change. However, excluding the transportation component, new orders fell back -0.9%, following a +1.9% surge in April.”

US New Home Sales for May. Econoday reported: “The latest bad news comes from the new homes sales report which shows a 2.5% month-on-month decline in May to an annual adjusted unit sales rate of only 512,000. Sales levels were this low back in the early 90s and during the recessions of the 80s and 70s (note that the latest comparison is against smaller populations). The year-on-year decline remains in the 40% column at 40.3%.

US Existing Home Sales for May. Econoday reported: “Sales of existing homes rose 2.0% in the month to a 4.990 million annual rate, the best rate since February and the second best rate since November. The year-on-year contraction eased more than 1 percentage point to 15.9%, much better than the 40% contraction for new home sales (data released Wednesday). Supply remains badly swollen but a little less so in May at 10.8 months vs. 11.2 months in April. Price readings were positive especially given the size of supply. Both the median and average prices showed solid low single digit month-to-month gains with year-on-year contraction easing more than 1 percentage point to 6.3% for the median ($208,600) and 6.5% for the average ($253,100).” I don’t think the data was nearly as positive as the media made it out to be. Moreover, some improvement had been expected.

US Personal Income and Spending for May. Econoday reported: “Personal income got another huge spike from income tax rebate checks and a sizeable portion of those checks appears to be going into spending - even if for higher priced gasoline. Headline inflation has heated up more but core inflation is staying cool. Personal income in May jumped 1.9%, following a 0.3% rise in April. The boost in May topped the consensus forecast for a 0.4% gain. While the huge gain from income tax checks is important, a rebound in wages and salaries actually should be more comforting. The wages and salaries component rebounded 0.3%, following a 0.1% dip the month before. On the spending side, personal consumption soared 0.8% in May after rising 0.4% in April. The market had forecast an increase of 0.7% for personal spending. But spending was led by a 1.2% boost in nondurables which includes gasoline. Durables slipped 0.2% while services posted a 0.7% gain.”

U of Michigan’s Consumer Sentiment Index for June. Last week I stated, “The question is how low will the index fall before bottoming.” After the report, Econoday reported: “There may not be a recession but it feels like one -- and a very deep one -- to the consumer. The Reuters/University of Michigan consumer sentiment index slipped further in the final June report, to 56.4… This is the third lowest reading … all the way back to 1952 (lowest readings are 52.7 April 1980 and 51.7 May 1980).”

How is next week’s calendar looking?

US Economic Calendar. In addition to the US Consumer Confidence index and the Fed monetary policy decision being reported on Wednesday, there are some other key reports.

US Manufacturing data for June. Conditions stabilized in May, but employment levels were down and prices paid for materials had soared. A positive report for June will help rally the $USD, and vice versa.

US Factory Orders for May. The question is how bad was it for vehicles and construction machinery. The auto manufacturers reported that sales hit the wall to begin June, but I think the seriousness of the latest pullback was felt in May. I only look at Brunswick Corp to see the layoffs and plant closings in this segment.

On Thursday morning ET, the European Central Bank will release its decision on monetary policy. There is a growing expectation that the benchmark lending rate will be lifted, which will put pressure on the USD$ and on the Fed to take a similar action.

US employment report for June. In last month’s report, the biggest surprise was a half percentage point jump in the unemployment rate to 5.5% vs an expected 5.1% rate. Nonfarm payroll employment in May declined 49,000, following a decrease of 28,000 in April and a fall of 88,000 in March. These numbers are estimates, but with layoffs growing more widespread, I think the report will not be a good one.

US Non-Manufacturing Business index for June. The ISM's composite non-manufacturing index came in at 51.7 for May, down 3 tenths from April.

Friday is the Independence Holiday day in the US. All capital markets are closed there.

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US Equity Markets Review

DJIA ino.com chart

DJIA stockcharts.com chart

This week was another bad one for the Bulls.

There were 9 of 10 sectors that dropped in price. There were 26 of 30 Dow components that were down, just slight improvement over the previous week. While the DJIA index was actually down more this week, the overall market loss was about the same as the previous week.

The DJIA index was down -4.2% (vs -3.8% the week before). The S&P 500 lost -3.00% (vs -3.1% the prior week).

Only Merck (MRK +5.3%), Exxon (XOM +1.9%), Chevron (CHV +1.2%) and Wal-Mart (WMT +0.07%) gained.

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NASDAQ Composite ino.com chart

NASDAQ Composite stockcharts.com chart

The NASDAQ Composite dropped -3.76% W/W vs the prior week’s loss of -2.0%, but the extra losses were generated in stocks like RIMM (-16.3% W/W).

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. If you want, add a couple like SNDK and ADBE:
AAPL MSFT GOOG QCOM RIMM CSCO INTC ORCL GILD EBAY

Daily RSI-7 for the Nasdaq 100 Big-10

Weekly RSI-7 for the Nasdaq 100 Big-10

Monthly RSI-7 for the Nasdaq 100 Big-10

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The US equity market Sector ETF Summary

This week, there was 1 sector up (Energy XLE +1.7%) and 9 down, which was 1 better than a week earlier. On Friday the scoreboard read 3 up and 7 down. Volume increased.

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

SPY Monthly data:

SPY Weekly data:

SPY Daily data:

The tables I now show are for eleven GICS Sector Index Funds (ETF’s), including two for Technology (XLK and SMH), for a total of ten GICS sectors. They cover the full spectrum of the US equity market.

Table 1: Cara ETF List is sorted by price performance Week over Week (W/W), i.e. 1W%N.

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
XLE	87.18	0.69	0.80%	1.67%	0.67%	1.37%	9.66%	18.26%	9.41%	26.81%
IYH	61.07	0.23	0.38%	-0.65%	-2.85%	-5.63%	-12.88%	-3.46%	-14.32%	-12.94%
XLP	26.57	-0.18	-0.67%	-1.70%	-5.51%	-6.74%	-6.41%	-4.70%	-8.13%	-1.85%
XLU	39.84	-0.23	-0.57%	-2.16%	-3.51%	-3.56%	-5.35%	4.62%	-6.48%	1.25%
XLK	23.04	-0.04	-0.17%	-2.58%	-5.81%	-9.11%	-11.79%	2.49%	-14.41%	-10.00%
SPY	127.68	-0.55	-0.43%	-2.96%	-6.22%	-9.03%	-11.90%	-3.84%	-13.54%	-15.15%
XLB	41.82	0.25	0.60%	-3.31%	-6.11%	-6.04%	1.26%	3.34%	-0.55%	4.29%
IYZ	23.68	-0.23	-0.96%	-3.31%	-7.64%	-11.94%	-18.82%	1.72%	-20.70%	-29.77%
SMH	29.89	-0.11	-0.37%	-3.89%	-5.92%	-8.45%	-4.69%	3.43%	-8.70%	-22.54%
XLY	28.60	-0.11	-0.38%	-4.28%	-9.84%	-11.48%	-11.18%	-8.13%	-13.23%	-27.34%
XLI	33.84	-0.08	-0.24%	-5.79%	-8.59%	-12.87%	-12.13%	-8.34%	-14.07%	-13.19%
XLF	20.60	-0.24	-1.15%	-6.15%	-11.89%	-16.80%	-27.36%	-18.03%	-28.99%	-43.47%

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 many ETFs, go to the AMEX.com web site, and click on ETF’s.

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10 (energy: XLE)

15 (basic materials: XLB)

20 (industrial: XLI)

25 (consumer discretionary: XLY)

30 (consumer staples: XLP)

35 (healthcare: IYH)

40 (financial: XLF)

45 (technology, semiconductor: SMH)

50 (telecom: IYZ)

55 (utilities: XLU)

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Individual Sector ETF Review

Sector 10 (energy: XLE, IYE, VDE, OIH, PBW and IXC)

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

XLE Monthly data:

XLE Weekly data:

XLE Daily data:

Table 2: Senior oil & gas equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
PBR	69.23	0.91	1.33%	6.07%	1.90%	-1.80%	-41.73%	-32.03%	-40.30%	14.89%
CEO	166.62	-1.07	-0.64%	4.96%	-0.64%	-6.02%	-0.48%	15.74%	1.14%	52.16%
TOT	83.43	1.79	2.19%	3.99%	3.72%	-4.39%	0.18%	13.23%	1.64%	7.25%
RIG	152.50	1.22	0.81%	2.48%	4.45%	1.54%	4.49%	13.73%	3.81%	41.94%
XOM	86.55	0.14	0.16%	1.93%	-2.05%	-2.49%	-7.44%	0.41%	-7.60%	3.68%
SLB	105.90	0.89	0.85%	1.73%	6.23%	4.72%	5.29%	24.03%	8.78%	21.77%
CVX	97.80	0.39	0.40%	1.22%	-1.61%	-1.36%	4.64%	15.88%	4.32%	16.58%
ECA	89.07	0.15	0.17%	-0.13%	-2.19%	-1.44%	27.96%	17.68%	30.14%	43.31%
IMO	54.53	0.20	0.37%	-0.94%	-3.95%	-6.06%	-0.71%	2.21%	-1.99%	19.22%
STO	36.70	0.85	2.37%	-1.08%	-1.63%	-6.26%	17.48%	23.15%	20.92%	24.15%
SU	58.93	-0.77	-1.29%	-3.30%	-7.82%	-13.78%	6.89%	20.41%	9.05%	34.82%
PTR	127.94	-1.02	-0.79%	-4.15%	-1.58%	-10.25%	-26.32%	5.10%	-28.49%	-12.55%

Crude Oil ($WTIC +4.85/bbl W/W to 140.21) set a new all-time record weekly close.
Accordingly, XLE gained +1.67% to close at 87.18.

While none of us knows the future, I believe that, ultimately, oil will be priced off the current supply and demand, not peak oil concepts or industry Talking Heads like Boone Pickens. If the economy stays weak, oil prices will likely drop from here. I think the economy is being squeezed by central bank policy in most countries in a joint effort to force oil prices lower.

The winners this week were PBR (+6.7%), CEO (+5.0%) and TOT (+4.0%). PTR (-4.2%) was a loser.

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Integrated Oil & Gas - Canada

Oil & Gas Exploration & Production -Canada

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

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

XLB Monthly data:

XLB Weekly data:

XLB Daily data:

Table 3: Senior metals and steel equities:

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
TS	72.29	3.26	4.72%	6.58%	15.53%	17.93%	62.85%	49.30%	62.63%	48.14%
RIO	35.48	-0.05	-0.14%	1.92%	2.63%	-10.81%	8.47%	3.47%	5.56%	-20.09%
TCK	47.50	0.20	0.42%	1.19%	1.47%	-4.14%	31.07%	14.43%	30.21%	10.59%
BHP	82.91	1.80	2.22%	-0.85%	0.77%	-1.70%	17.75%	27.44%	16.48%	43.29%
NUE	74.88	1.01	1.37%	-0.90%	-2.83%	0.11%	29.17%	8.19%	23.69%	29.80%
MT	99.36	0.96	0.98%	-0.99%	4.28%	0.03%	30.05%	26.01%	30.36%	60.47%
PKX	126.00	1.12	0.90%	-2.88%	-4.95%	-7.79%	-13.97%	5.51%	-16.75%	6.31%
RTP	457.69	4.01	0.88%	-4.45%	-0.94%	-5.24%	9.05%	13.04%	7.34%	52.87%
GGB	23.12	-0.02	-0.09%	-4.54%	-52.41%	-53.72%	-19.44%	-25.08%	-22.02%	-7.22%
VCP	27.04	0.36	1.35%	-4.82%	-14.46%	-19.67%	-8.96%	-5.92%	-10.99%	18.44%
AA	35.38	0.08	0.23%	-5.25%	-10.34%	-12.84%	-2.08%	0.00%	-4.35%	-9.21%
DOW	34.83	-0.27	-0.77%	-7.32%	-10.81%	-13.79%	-10.12%	-5.56%	-13.51%	-21.84%

Basic Materials (XLB -3.31% closing at 41.82) was a loser this week, even more so than the prior week’s loss of -2.90%.

The economy is a great leveler. For the past couple weeks, the Papers and Chemicals have fared badly.

In this sector, TS (+6.6%) had another strong week, but AA again did not, and Dow Chemical lost -7.3% this week.

As you can see in my table, the source data for GGB does not recognize the share split.

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Sector 20 (industrial: IYJ, XLI, VIS, and IYT)

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

XLI Monthly data:

XLI Weekly data:

XLI Daily data:

Table 4: Senior capital goods makers and transportation:

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
FLR	184.38	0.91	0.50%	-3.74%	-0.97%	-1.16%	27.69%	33.23%	27.26%	77.08%
FDX	77.25	-0.84	-1.08%	-4.08%	-10.15%	-15.77%	-10.34%	-15.78%	-15.94%	-30.78%
GE	26.26	-0.27	-1.02%	-4.09%	-9.91%	-14.52%	-28.56%	-28.70%	-29.39%	-31.00%
MMM	69.51	-0.75	-1.07%	-4.81%	-8.68%	-10.38%	-15.96%	-10.72%	-18.61%	-20.22%
ABB	28.77	0.56	1.99%	-5.30%	-3.91%	-11.42%	0.45%	9.06%	-0.10%	29.59%
CAT	73.75	-0.53	-0.71%	-6.74%	-9.51%	-10.76%	4.42%	-4.26%	1.40%	-7.24%
TXT	47.93	0.20	0.42%	-7.22%	-17.62%	-23.37%	-28.26%	-11.65%	-32.64%	-12.55%
UPS	60.36	0.48	0.80%	-9.06%	-11.64%	-15.01%	-12.72%	-17.12%	-16.05%	-17.94%
HON	49.23	0.09	0.18%	-9.17%	-12.85%	-17.43%	-17.81%	-10.49%	-19.55%	-12.57%
UTX	61.15	-1.64	-2.61%	-11.12%	-10.81%	-13.92%	-18.69%	-11.90%	-20.42%	-14.48%
BA	66.92	-1.29	-1.89%	-11.75%	-10.92%	-19.15%	-22.74%	-9.84%	-24.71%	-29.30%
ERJ	26.84	-1.07	-3.83%	-12.00%	-14.93%	-28.46%	-40.53%	-32.83%	-42.82%	-44.88%

The Industrials (XLI -5.79% W/W) had another tough week, closing at 33.84. The prior week’s loss was -2.97%.

FLR was relatively the strongest again this week, but this week there was a loss of 3.74% in the stock. The biggest losers were: ERJ (-12%), BA (-11.8%), UTX (-11.1%), HON (-9.2%) and UPS (-9.1%).

As I opined last week, “Interesting comparison between the styles of the FDX and GE CEO’s. The Fedex guy says business is terrible and not looking good for the foreseeable period, while Jeff Immelt at GE is always saying things are coming up roses.” This week, UPS takes a big hit.

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Sector 25 (consumer discretionary: XLY, IYC and VCR)

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

XLY Monthly data:

XLY Weekly data:

XLY Daily data:

Table 5: Senior consumer discretionary equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
BBBY	29.06	-0.73	-2.45%	0.87%	-3.23%	-8.79%	2.47%	-3.52%	0.07%	-22.63%
JCP	36.83	0.85	2.36%	-0.14%	-6.69%	-8.47%	-11.57%	-9.11%	-14.86%	-48.67%
BDK	58.41	-0.33	-0.56%	-0.15%	-3.09%	-9.72%	-16.47%	-11.35%	-16.09%	-34.38%
DIS	31.57	0.04	0.13%	-1.16%	-6.96%	-6.04%	-0.85%	0.61%	-2.65%	-7.88%
EBAY	27.61	0.02	0.07%	-1.99%	-2.71%	-8.00%	-15.02%	-10.18%	-17.95%	-13.93%
WHR	63.77	-2.48	-3.74%	-3.38%	-6.93%	-13.45%	-20.17%	-25.41%	-21.74%	-43.39%
TM	94.33	-0.17	-0.18%	-3.46%	-8.16%	-7.56%	-11.39%	-7.75%	-12.27%	-23.84%
TGT	47.87	0.23	0.48%	-4.22%	-10.59%	-10.29%	-3.31%	-6.10%	-5.47%	-24.91%
BC	11.25	-0.31	-2.68%	-5.22%	-14.45%	-17.88%	-33.51%	-33.04%	-35.49%	-65.80%
CCL	32.93	-0.54	-1.61%	-7.16%	-10.98%	-17.80%	-24.58%	-19.23%	-25.98%	-32.10%
NKE	60.34	0.84	1.41%	-9.58%	-12.54%	-11.74%	-4.65%	-8.55%	-7.17%	3.52%
GOL	11.26	-0.05	-0.44%	-11.96%	-9.92%	-26.69%	-53.06%	-32.17%	-55.91%	-65.71%

Consumer Cyclicals (XLY -4.28% closing at 28.60) was a big loser. Even with the rebates, the US consumer is not putting more cash in the register than the cost of goods sold is being impacted by material and delivery costs. A week earlier, XLY lost -5.80%, but the loss that Friday was -3.61%, so the loss over six days is -7.9%, which is slightly better than the six day loss for XLI (also -7.9%), which is almost as bad as the six-day loss of -9.7% in the Financials (XLF).

The big Cara 100 losers here were GOL (-12.0%), NKE (-9.6%) and CCL (-7.2%).

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

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

XLP Monthly data:

XLP Weekly data:

XLP Daily data:

Table 6: Senior consumer staples equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
KR	28.65	0.04	0.14%	6.51%	3.80%	3.65%	11.61%	15.76%	6.55%	1.42%
BUD	62.26	0.91	1.48%	2.62%	1.87%	8.35%	20.59%	29.74%	17.56%	20.94%
WMT	56.30	-0.53	-0.93%	0.07%	-4.87%	-2.49%	20.04%	7.50%	17.86%	16.18%
DEO	72.70	-1.11	-1.50%	-0.68%	-4.68%	-7.53%	-14.53%	-12.73%	-15.83%	-14.59%
PEP	63.93	-0.84	-1.30%	-1.77%	-5.34%	-6.40%	-15.09%	-10.20%	-16.65%	-1.90%
KO	51.84	-1.38	-2.59%	-3.39%	-6.46%	-9.47%	-15.14%	-15.45%	-16.79%	-1.14%
ABV	63.25	-0.61	-0.96%	-3.54%	-8.09%	-7.89%	-12.73%	-18.99%	-12.66%	-7.41%
PG	60.49	-1.76	-2.83%	-4.23%	-8.97%	-8.42%	-16.35%	-12.85%	-18.14%	-1.53%
PDA	54.78	1.17	2.18%	-4.46%	-6.77%	-16.62%	13.82%	13.91%	10.15%	39.11%
SBUX	16.35	0.07	0.43%	-5.11%	-10.02%	-10.12%	-15.33%	-7.21%	-20.09%	-37.43%
WAG	32.97	0.09	0.27%	-5.99%	-9.07%	-8.47%	-11.70%	-11.51%	-14.10%	-25.19%
WFMI	24.65	-0.45	-1.79%	-6.34%	-9.24%	-15.00%	-38.00%	-25.69%	-40.39%	-36.55%

If Consumer Discretionary stocks have been hammered so badly the past six sessions, you might think the same was true for the other two consumer-oriented sectors (ie, Staples and Healthcare), but that wasn’t the case. This week, Consumer Staples (XLP -1.70% W/W) closed at 26.57, and Healthcare was down just 0.65%. And the previous Friday also wasn’t that bad. So, what’s happening here in the broad market is that, besides the Energy play, traders are taking a safest-haven move into Staples and Healthcare.

KR (+6.5%) was the Consumer Staples winner on the week. The losers were WFMI (-6.3%) and WAG (-6.0%).

As an aside, when I reviewed the backtesting results of my ‘simple little’ RSI system, the worst results by far were in the Staples and Healthcare sectors. Geoff reported that, for our most basic models, over the period from October 1, 2003 through June 17, 2008, the S&P 500 returned +28% vs a portfolio of leading Cara 100 stocks (ex-Staples & Healthcare) where the portfolio returned +441%. Due to the sampling methods, our study results are not useful for apples to apples comparison, but can be used for conceptual discussion. In any case, our objective is to build decision-support systems, ie, for guidance only, not decision-making systems. At the end of the day, we make our own buy and sell decisions.

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Sector 35 (healthcare: IYH, XLV, VHT, IXJ, and IBB)

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

IYH Monthly data:

IYH Weekly data:

IYH Daily data:

Table 7: Senior healthcare equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
NVO	66.00	-1.85	-2.73%	3.90%	7.39%	1.07%	3.45%	-1.95%	1.34%	-37.99%
BMY	20.30	0.63	3.20%	3.73%	0.89%	-10.93%	-22.31%	-4.69%	-25.89%	-36.66%
NVS	53.42	-0.13	-0.24%	3.45%	6.65%	2.04%	-2.11%	5.18%	-1.87%	-3.71%
AMGN	46.37	0.01	0.02%	2.66%	5.46%	5.31%	-0.49%	11.76%	-2.09%	-16.45%
GSK	43.98	-0.32	-0.72%	1.52%	4.61%	-1.24%	-12.34%	3.29%	-14.30%	-16.50%
MDT	51.24	0.16	0.31%	0.73%	-0.58%	1.12%	3.52%	6.62%	1.95%	-0.85%
PFE	17.28	0.11	0.64%	-0.29%	-3.95%	-10.74%	-24.57%	-15.95%	-24.61%	-32.53%
WLP	48.08	0.30	0.63%	-0.46%	-10.65%	-13.87%	-44.74%	7.20%	-45.20%	-40.35%
JNJ	63.57	-0.69	-1.07%	-0.76%	-4.07%	-4.75%	-3.55%	-1.62%	-5.58%	3.45%
AET	40.31	0.72	1.82%	-1.56%	-9.42%	-14.53%	-28.83%	-6.80%	-30.24%	-19.54%
DNA	72.72	0.28	0.39%	-2.73%	-1.42%	2.61%	7.89%	-9.25%	8.33%	-2.18%
UNH	26.01	0.04	0.15%	-4.09%	-15.39%	-23.97%	-54.10%	-23.50%	-55.43%	-49.74%

The Healthcare sector (IYH) lost -0.65% W/W to close at 61.07.

Once again, the losers were insurance-related stocks like UNH (-4.1% W/W). UNH lost -11.8% a week earlier. When the Financials turn around or recover a bit, you should anticipate similar moves in stocks like UNH, WPT, and AET.

), WLP (-10.2%) and AET (-8.0%) getting smoked.

The leaders on my list are NVO (+3.9%), NVS (+3.5%) and BMY (+3.7%). A week earlier the big winners were NVO (+3.4%) and NVS (+3.1%). So, Pharma is holding up. In fact two of the top five Dow 30 performers this week were MRK (+5.3%) and PFE (-0.3%).

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Sector 40 (financial: IYG, IYF, XLF, VFH, IXG, VNQ, RWR, IYR, and ICF)

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

XLF Monthly data:

XLF Weekly data:

XLF Daily data:

Table 8: Senior financial company equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
UBS	21.70	-0.35	-1.59%	-0.91%	-12.04%	-8.28%	-52.61%	-25.51%	-52.46%	-63.83%
CS	45.18	-0.07	-0.15%	-1.42%	-6.42%	-11.22%	-24.30%	-10.18%	-24.19%	-36.26%
HBC	76.55	-1.39	-1.78%	-3.06%	-4.84%	-9.10%	-7.14%	-6.26%	-8.94%	-17.31%
BBD	20.60	-0.14	-0.68%	-3.78%	-6.62%	-14.20%	-32.30%	-27.00%	-35.32%	-14.06%
DB	86.90	-1.82	-2.05%	-4.60%	-9.81%	-18.38%	-32.67%	-23.05%	-32.54%	-39.48%
GS	174.56	-1.70	-0.96%	-5.01%	-2.09%	-1.36%	-15.92%	3.82%	-17.64%	-20.41%
MS	36.71	-0.12	-0.33%	-5.09%	-10.55%	-17.00%	-27.95%	-19.65%	-31.15%	-56.97%
JPM	35.05	-1.27	-3.50%	-7.42%	-11.45%	-18.49%	-16.88%	-18.22%	-19.68%	-28.82%
LEH	22.25	-0.36	-1.59%	-8.06%	-13.79%	-39.55%	-64.22%	-42.52%	-65.30%	-70.80%
MER	32.70	-0.35	-1.06%	-9.04%	-13.95%	-25.55%	-38.02%	-21.96%	-38.53%	-62.09%
C	17.25	-0.42	-2.38%	-10.62%	-15.77%	-21.20%	-40.35%	-20.84%	-41.64%	-66.71%
IBN	29.66	-1.33	-4.29%	-11.57%	-19.07%	-21.39%	-52.28%	-24.85%	-50.29%	-39.46%

A week ago, XLF plunged -6.12%. This week XLF dropped -6.15% to 20.60. Eleven month ago, the XLF hit a high of $37.05. Morgan Stanley even reported the worst was over. Maybe, but the source is far too conflicted for me to pay the least bit of attention.

This week the losers were IBN -11.6% (for a two-week loss of over -20%), C -10.6% (-5.8% a week ago), MER -9.0%, LEH -8.1% (-6.2% a week ago), and JPM -7.4%.

A year ago, traders would not believe losses like this in the banks were possible. Now they know what I have been saying since the crisis began; some of these banks are toast and will be split up or merged into other banks.

“The market will see much more blood on Wall Street (in this sector) before this Bear gets tired… These bankers still have not come clean about the garbage that sits on their books at phony prices, and apparently their auditors are frightened enough to not take action. I can imagine the lawyers working 7x24 to cover everybody’s backside… The problems, however, will simply be made to go away after a forthcoming round of mergers and acquisitions, following which management will take massive write-offs, and then massive pre-retirement bonuses (to the decision-makers) before exiting stage right.”

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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:

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

XLK Monthly data:

XLK Weekly data:

XLK Daily data:

Table 9: Senior technology equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
SAP	52.80	0.66	1.27%	2.13%	-0.75%	-3.30%	4.08%	8.20%	2.62%	2.82%
ADBE	39.80	-1.03	-2.52%	-1.85%	-6.81%	-9.67%	-4.58%	11.55%	-6.00%	-1.66%
INFY	43.03	0.42	0.99%	-2.89%	-9.07%	-12.38%	-3.15%	18.51%	-5.68%	-15.36%
AAPL	170.09	1.83	1.09%	-2.96%	-1.32%	-9.89%	-12.70%	21.28%	-14.34%	39.54%
ORCL	21.29	-0.13	-0.61%	-3.67%	-5.92%	-6.79%	-5.34%	9.57%	-7.60%	8.13%
INTC	21.49	-0.10	-0.46%	-3.93%	-5.16%	-7.29%	-15.23%	1.90%	-19.90%	-9.67%
CSCO	23.61	-0.21	-0.88%	-4.18%	-10.47%	-11.64%	-11.04%	-2.36%	-15.04%	-13.42%
QCOM	45.65	0.54	1.20%	-5.93%	-8.68%	-5.95%	18.91%	14.93%	15.05%	5.14%
CTSH	32.89	0.38	1.17%	-5.95%	-8.00%	-6.77%	2.05%	11.53%	-4.56%	-13.49%
ADSK	34.03	-0.74	-2.13%	-7.73%	-11.70%	-17.32%	-29.46%	8.27%	-31.74%	-28.69%
SNDK	19.23	-0.70	-3.51%	-9.12%	-19.94%	-32.07%	-42.03%	-11.05%	-43.19%	-60.36%
RIMM	120.98	-2.48	-2.01%	-16.31%	-9.01%	-12.88%	6.39%	7.87%	3.08%	122.06%

Tech (XLK -2.58% W/W closing at 23.04) was a weak performer again this week, but Friday’s loss was just -0.17%.

Research In Motion (RIMM -16.3) encountered a difficult post-report selling wave. Leading up to it, the gains were extreme, which likely set up new shorts that have now profited in a major way.

The Semi-conductors (SMH -3.89% W/W) were bigger losers, largely due to SanDisk (SNDK -9.1%). Intel (INTC -3.9%) was also weak.

SNDK lost less than the previous two weeks (-11.9% and -13.0%), but the selling has been extreme, probably setting up some put writes and call purchases, with offsetting premiums.

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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:

Telecom (IYZ -3.31% W/W, closing at 23.68) had another tough week among several bad ones in a row. Verizon (VZ) -3.1% W/W and AT&T (T) -4.9% W/W were both hammered again. Since Value Line reported on these two this week, I have more to say in that part of this report.

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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:

Utilities (XLU -2.16% W/W), closing at 39.84 has been a relatively strong performer, but the loss over four weeks, from 41.31, is still serious.

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Bonds & Yields Review

Table 10: US Treasury Yields

US Treasury Bonds

Maturity	Yield	Yesterday	Last Week	Last Month
3 Month	1.58	1.65	1.79	1.82
6 Month	2.03	2.08	2.16	1.93
2 Year	2.62	2.65	2.88	2.61
3 Year	2.55	2.59	2.88	2.58
5 Year	3.34	3.39	3.59	3.34
10 Year	3.96	4.03	4.17	4.00
30 Year	4.52	4.60	4.72	4.69

Municipal Bonds

Maturity	Yield	Yesterday	Last Week	Last Month
2yr AA	2.70	2.69	2.57	2.29
2yr AAA	2.57	2.46	2.45	2.26
2yr A	2.86	2.78	2.86	2.58
5yr AAA	3.27	3.29	3.29	2.88
5yr AA	3.39	3.37	3.32	2.93
5yr A	3.37	3.46	3.37	3.36
10yr AAA	3.98	4.01	3.90	3.58
10yr AA	3.91	3.94	3.89	3.55
10yr A	3.89	3.98	3.98	3.65
20yr AAA	4.72	4.80	4.70	4.40
20yr AA	4.78	4.92	4.69	4.45
20yr A	4.89	4.95	4.54	4.37

Corporate Bonds

Maturity	Yield	Yesterday	Last Week	Last Month
2yr AA	4.27	4.22	4.39	4.19
2yr A	4.72	4.70	4.60	4.14
5yr AAA	5.01	5.06	5.11	4.40
5yr AA	5.31	5.32	5.45	5.08
5yr A	5.77	5.70	5.74	5.14
10yr AAA	5.61	5.63	5.76	5.21
10yr AA	6.44	6.48	6.33	5.93
10yr A	6.15	6.12	6.04	5.67
20yr AAA	6.37	6.29	6.33	6.25
20yr AA	6.34	6.26	6.31	6.25
20yr A	6.62	6.54	6.59	6.50

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Bond prices made big gains this week as part of a safe-haven move from equities to bonds. Yields for the US Treasury 2-year, 5-year ($FVX), 10-year ($TNX) and 30-year ($TYX) dropped by -26 basis points, -25bp, -21bp, and -20bp, respectively. These yields are now, respectively, at 2.62, 3.34, 3.96 and 4.52.

Two weeks ago, the yield on the 10-year bond had risen to 4.25% and I said “concerns here.” Rates have been falling since, but if they were to rise again, and the 10-year yield moves up to 4.25%-4.50%, under the present economic conditions, I don’t think either the fixed income market or the equity market could stand it.

After a huge safe-haven move into bonds on Friday especially, the 20-year TLT closed up +2.79% to 92.32 and the TIP gained +2.04% to 107.75. Over two weeks, this has been a major move in bonds as traders are shunning the equity market.

Traders are more concerned now with assured cash flow rather than the ill effects of inflation on fixed income securities.

Here is the $USB 30-year Treasury Bond chart.

Interest rates and bond yields.

Interactive Daily data charts:

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Interactive Chart of Interest rates and bond yields.

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US Bond Funds -- Interactive Monthly Data Charts

SHY Monthly data series chart:

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IEF Monthly data series chart:

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TLT Monthly data series chart:

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AGG Monthly data series chart:

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LQD Monthly data series chart:

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TIP Monthly data series chart:

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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:

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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:

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Table 11: Interest-sensitive securities

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
TLT	92.32	1.08	1.18%	2.79%	3.88%	2.26%	-2.18%	-2.53%	1.38%	9.49%
TIP	107.75	0.53	0.49%	2.04%	2.82%	0.91%	1.04%	-0.99%	3.13%	9.34%
IEF	87.94	0.43	0.49%	1.54%	2.33%	0.72%	0.35%	-3.54%	2.35%	8.94%
AGG	100.35	0.24	0.24%	0.49%	1.16%	-0.62%	-1.28%	-2.18%	-0.25%	2.15%
SHY	82.84	0.05	0.06%	0.49%	0.83%	-0.08%	0.61%	-1.58%	1.07%	3.52%
DRE	22.36	-0.02	-0.09%	-1.93%	-5.97%	-12.93%	-12.72%	-1.58%	-15.05%	-37.42%
NLY	15.55	0.00	0.00%	-4.31%	-3.60%	-12.69%	-14.09%	-2.81%	-12.59%	8.14%
AVB	88.21	-0.39	-0.44%	-4.83%	-10.41%	-12.84%	-3.44%	-10.28%	-6.07%	-27.33%
EQR	38.25	-0.13	-0.34%	-5.20%	-10.23%	-9.55%	5.00%	-6.73%	4.48%	-17.49%
CFC	4.4200	0.0000	0.00%	-6.55%	-8.68%	-15.97%	-50.89%	-24.83%	-51.11%	-87.86%
FNM	20.80	-0.24	-1.14%	-12.64%	-16.03%	-23.02%	-44.47%	-25.63%	-47.49%	-68.67%
FRE	17.85	-0.68	-3.67%	-18.19%	-22.43%	-29.78%	-45.48%	-34.08%	-47.03%	-70.98%

A week ago I wrote, “The big three of the mortgage suppliers, CFC, FNM and FRE, were hammered yet again this week, down -2.27%, -3.88% and -5.17% respectively to 4.73, 23.81, and 21.82. To repeat, do you recall: “Not even with your ten-foot pole would I touch these stocks”? Aren’t you glad I stayed away from them at much, much higher prices? Basically, these companies are toast, particularly so if the mortgage costs rise and the US economy sinks to levels forecast by some analysts.”

This week, CFC, FNM and FRE fell, respectively, -6.55% to $4.42 (nice mega-billions purchase by ), -12.64% to $20.80, and -18.19% to $17.85. The 52-week losses are -87.9%, -68.7% and -71.0%, respectively.

Btw, did you note the mega-million dollar compensation packages the managers received? Shocking!

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Consumer Finance -USA -- Interactive Weekly Data Charts

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Consumer Finance -USA -- Interactive Daily Data Charts

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Commodities Review

The $CRB gained +1.98% W/W to close at 464.40.

Gold is up +111% in three years. But in half that time, Crude Oil is up +175%.

$CRB Index

Open Futures Contracts

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Interactive Chart of Weekly CRB Commodities Index:

Interactive Chart of Daily CRB Commodities Index:

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Oil Review

$WTIC (US Light Sweet Crude called West Texas Intermediate) gained +$4.85/bbl to close this week at 140.21, which is an all-time record weekly close.

“How many remember $51/bbl in January 2007?”

The 50d MA for $WTIC is now at 127.27 (amazing!!), and the 200d MA is 102.46!

Imagine; it was just a short time ago that I thought we’d never see the current price at 102.46, nevertheless the 200-day Moving average price!

I believe next week’s close will be less than $102.46, but the tea cup is old and the leaves have been used too often. (LOL) The price will go down when it goes down—or when Boone Pickens buys enough puts.

Here is the e-miNY Dec-07 Crude Oil chart.

Interactive Chart of Weekly Crude Oil:

Interactive Chart of Daily Crude Oil:

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Gold & Precious Metals Review

A week ago $GOLD gained +30.60 (+3.50%) to 903.70; this week the gain is +27.60/oz (+3.05%) to 931.30. The phones at the gold bug offices (are) jammed.

Don’t you love ol’ Pat Boone selling real gold coins to grandchildren on Bloomberg TV?

Let me remind you that (i) two weeks ago, I opined that if the FOMC did nothing and say nothing about inflation, the yellow brick road would be extended, and (ii) the European Central Bank is meeting early next Thursday (US time) and a lift in rates will take the $GOLD contracts higher.

But—there is always a ‘but’—five weeks ago (WIR #21 May 24), the price of gold closed at $925.80 and the price today is $931.30. The only traders who have made any serious money are at JP Morgan (and that’s for obvious reasons).

The 50-day MA for $GOLD is now 891.88, down from 895.31, down from 906.35 four weeks ago, and the 200d MA is 864.79.

The goldminer stocks did have a massive +9% and +10% move in the indexes this week, which may be a confirmation of the recent hike in the bullion and futures contracts for the metal. Or, it could be that traders are getting to believe that oil prices can hang in at $140-plus and the $USD will continue to fall.

The leading goldminer index ($XAU) was up this week (+8.90% to 194.49), but had a close of 188.10 just five weeks ago, so the net gain is not significant.

To change my strategy, I need to see (i) the $USD collapse, (ii) the $XAU continue to power north with the gains spread across the penny gold stocks as well, and (iii) the Fed admit that the inflation fight is not going as well as hoped. The latter could be a case of waiting for the impossible.

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Spot gold chart for the week

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.

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Spot silver chart for the week

Interactive daily data

This week, $SILVER gained +0.31/oz or +1.80%, closing at 17.71.

Long term, I think $SILVER will trade well above $21.44, which is the cycle high. As I say, “But not right away. For now, we are in a mini-deflation for speculative prices (ie, non economic prices) because the banks have no money and are seeking $USD from anybody, including from silver crazies.”

For $SILVER, the 50d MA is now 17.07, which is down yet again, and the 200d MA is 16.22.

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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.

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This week $PLAT actually lost -6.50/oz (-0.31%) to close at 2062.30. Over three weeks, there have been big losses in Platinum.

The 50-day MA is 2043.28 and the 200-day MA is 1761.93.

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.

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$PALLADIUM was on a two-week roll—at least until this week. This week, $PALL lost -8.00/oz (-1.67%) to 471.20.

The 50-day MA is now 449.15 and the 200-day MA is 418.67.

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.

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This week, $COPPER gained +4.75 (+1.24%), closing at 387.80.

The 50-day MA for $COPPER is now 374.71 and the 200-day MA is 353.01.

Like most of these metals, the 50-day MA is still on the decline. That’s not a good sign for the metal Bulls.

I still think the 200d MA is the new battleground for copper traders.

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.

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Table 12: Senior gold equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
KGC	23.32	0.98	4.39%	18.92%	28.91%	16.78%	15.73%	2.37%	30.35%	100.69%
AEM	73.96	2.97	4.18%	13.89%	16.91%	4.63%	30.86%	5.60%	43.81%	110.71%
GG	46.36	2.02	4.56%	13.35%	20.54%	15.50%	26.53%	15.50%	38.51%	96.03%
AUY	16.57	0.96	6.15%	12.57%	18.36%	8.44%	19.47%	7.81%	30.88%	36.49%
GFI	12.54	0.62	5.20%	12.47%	12.67%	-3.02%	-18.57%	-13.40%	-13.10%	-20.28%
ABX	45.00	1.96	4.55%	11.30%	16.73%	12.30%	-2.22%	-0.18%	11.72%	56.96%
HMY	12.30	1.01	8.95%	10.81%	10.71%	3.36%	14.42%	-0.97%	15.82%	-14.23%
AU	33.08	1.00	3.12%	10.41%	3.50%	-4.92%	-27.87%	0.39%	-22.69%	-13.04%
EGO	8.530	0.500	6.23%	9.92%	5.83%	5.44%	37.58%	28.85%	46.06%	48.35%
LIHR	31.87	1.43	4.70%	9.22%	16.40%	11.05%	-3.92%	-1.82%	4.59%	28.15%
NEM	52.68	0.50	0.96%	7.62%	12.06%	10.84%	0.55%	13.02%	9.86%	36.09%
BVN	64.44	2.67	4.32%	4.97%	3.89%	-2.07%	5.85%	-12.51%	13.81%	77.47%

The $XAU Goldminers index gained +15.89 (+8.90%) to 194.49. The GDX (+10.49%) and XGD (+10.28%) were even stronger.

Very impressive moves, but I’d like to see the gains extended to the penny stocks in this industry. With just a two-day rocket launch of the major stocks in this group, I think this is an end-of-quarter hedge fund play.

The 50d MA for $XAU is 180.21, and the 200d MA is 179.82.

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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

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Here are the key Silver miners and the SLV ETF:

SLV SIL CDE HL PAAS SSRI SLW MGN

Interactive Daily data
Interactive Weekly data

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Here are the Weekly and Daily Data charts of the indexes:

Weekly U.S. Goldminers Index:

Interactive Chart of Weekly U.S. Goldminers Index:

Interactive Chart of Daily U.S. Goldminers Index:

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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:

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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:

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Forex Review

The $USD lost -1.04% W/W to 72.29, which was another week of profit taking after “one of the strongest weekly moves we’ve seen for a while.”

The 50-day MA is 72.91 and the 200-day MA is 75.00, so the current price is below both.

Interactive Chart of Weekly U.S. Dollar Index:

Interactive Chart of Daily U.S. U.S. Dollar Index:

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The Euro ($XEU) gained +1.19% W/W, closing at 1.5790.

Two weeks ago, following a huge loss in the Euro, I asked: “The question is how far will the ECB head stay with the program, ie, a strong $USD policy? I’m suggesting not that long.” Since then, the Euro has been on a tear, and with this Thursday’s ECB meeting with a possible rate hike, it could stay that way. We’ll have to see. Right now, I’m just rushing to get to watch the Euro Cup soccer championship match starting at 2:30pm ET.

I have 18 minutes and a quarter of the report to go!

The Euro 50day MA is 1.5590 (and falling) and the 200day MA is 1.4973.

Interactive Chart of Weekly Euro Dollar Index, priced in USD:

Interactive Chart of Daily Euro Dollar Index, priced in USD:

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The Pound gained +0.91% W/W, closing at 1.9950.

The 50-day MA and 200-day MA are at 1.9691 and 1.9997.

Weekly British Pound Index:

Daily British Pound Index:

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Weekly Japanese Yen Index:

The Japanese Yen ($XJY) gained +1.13%, closing at 94.30. There have been some tough days for the Yen Bulls.

The Yen’s 50-day MA is 95.02 and the 200-day MA is 92.64. The current price is sitting above the 200-day MA.

Daily Japanese Yen Index:

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The Loonie (Cdn Dollar) gained +0.23% W/W, closing at 98.90.

The 50-day MA and 200-day MA is at 99.16 and 100.14 respectively, which means the current price (98.90) is still bearish, ie, below both.

Weekly Canadian Dollar Index:

Daily Canadian Dollar Index:

Here is the China Yuan (CNY) chart.

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International Equity Markets Review

Except for the small gains made this week at Hong Kong, Singapore and Philippines, the international equities were all weak again. India was down -4.1% and the FTSE -3.1%, while the CAC dropped -3.7%.

UK FTSE down from 5620.8 to 5529.90
German DAX down from 6578.44 to 6421.91
Aussie All-Ords down from 5411.8 to 5349.4
Shanghai Composite down from 2831.7 to 2748.4
HK Heng Seng down from 22745.6 to 22042.4
India’s BSE 30 down from 14571.3 to 13802.2
Japan’s Nikkei 225 down from 13942.1 to 13544.4

It’s a Bear market everywhere.

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I added 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 also made some additions to the country-based ETF tables as I intend to focus more on ETF’s in 2008. In time, I will also set up tables and track the domestic market prices. This will come after we switch to the Drupal platform and get away from MT and TypeKey, which drives me nuts.

As I say, “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.” So this week, I am harping on the fact that international regulators will not easily accept the notion that the Fed is the top level global regulator of banks and brokers, which is a silly notion being promoted by US Treasury Secretary Henry Paulson while he still works at the White House.

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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

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Here is the latest session data for the Toronto Stock Exchange composite index.

Toronto 300 stockcharts.com chart

Toronto CDNX stockcharts.com chart

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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.

FTSE 100 stockcharts.com chart

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Here is the latest session data for the German DAX.

DAX stockcharts.com chart

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

CAC 40 stockcharts.com chart

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

Italian Milan Index stockcharts.com chart

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

Swiss Market Index stockcharts.com chart

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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.

Tokyo Nikkei 225 Index stockcharts.com chart

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Here is the latest chart for the Singapore index .

Singapore Straits Times Index stockcharts.com chart

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Here is the latest chart for the Shanghai Composite index .

Shanghai Composite Index stockcharts.com chart

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

Hong Kong Hang Seng stockcharts.com chart

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

Mumbai BSE 30 Sensex Index stockcharts.com chart

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

Sydney All Ordinaries Index stockcharts.com chart

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Russia (RTS) stockcharts.com chart

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Table 13: International equities via an ETF perspective (in $USD)

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
EWA	26.90	0.36	1.36%	1.01%	-0.70%	-8.10%	-6.53%	4.06%	-6.73%	-3.93%
EWZ	88.62	0.18	0.20%	-0.54%	-2.42%	-10.70%	9.47%	14.01%	7.93%	45.66%
EWS	12.42	0.16	1.31%	-0.96%	-2.89%	-9.61%	-7.93%	-2.59%	-7.80%	-8.88%
EWJ	12.45	0.07	0.57%	-1.03%	-4.08%	-8.05%	-5.90%	0.24%	-5.03%	-13.54%
EWC	33.24	0.14	0.42%	-1.69%	-2.15%	-5.06%	2.59%	8.98%	3.23%	12.95%
EWH	16.88	-0.05	-0.30%	-4.25%	-7.20%	-13.03%	-22.53%	-5.38%	-21.52%	-1.40%
TRF	57.84	0.06	0.10%	-4.51%	-5.41%	-11.42%	-21.30%	-0.02%	-17.67%	-13.53%
EWG	29.62	0.02	0.07%	-4.97%	-6.30%	-11.66%	-16.30%	-5.55%	-16.23%	-9.34%
EWQ	32.07	-0.10	-0.31%	-5.15%	-7.58%	-14.48%	-15.47%	-7.39%	-15.49%	-15.47%
EWU	19.82	-0.62	-3.03%	-7.08%	-8.75%	-13.03%	-17.00%	-7.94%	-18.60%	-22.09%
IFN	36.61	-0.89	-2.37%	-8.79%	-13.29%	-20.38%	-40.86%	-19.80%	-38.85%	-13.96%

International ETF’s, except for Australia, had a bad week. The worst was again India (IFN), which dropped -8.79% to 36.61.

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Japanese equity market ETF: EWJ

Here is the Japanese (EWJ) equity market ETF Monthly, Weekly and Daily data charts:

Interactive EWJ Monthly data:

Interactive EWJ Weekly data:

Interactive EWJ Daily data:

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U.K. equity market ETF

Here is the United Kingdom (EWU) equity market ETF Monthly, Weekly and Daily data charts:

Interactive EWU Monthly data:

Interactive EWU Weekly data:

Interactive EWU Daily data:

EWU Daily data:

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Canada’s equity market

Here is the Canadian (EWC) equity market ETF Monthly, Weekly and Daily data charts:

Interactive EWC Monthly data:

Interactive EWC Weekly data:

Interactive EWC Daily data:

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US Equity Markets Review

A week ago I wrote, “The DJIA (-3.4%), the S&P 500 (-2.8%), and the NASDAQ Composite (-1.7%) all had bad weeks, but particularly due to Friday’s sell-off.” The sell-off continued, particularly so for three of the past four days. This week, the DJIA (-3.8%), the S&P 500 (-3.1%), and the NASDAQ Composite (-2.0%) were big losers as capital is being removed from the market. Volume was up too, which is not a good sign in a sliding market if you are a perma-bull, like a mutual fund for instance.

The question we should be asking is why is General Motors still in the Dow 30? It ought to be renamed Private Motors. If the company wasn’t a gazillion dollars in debt, it could probably raise the $6.5 billion or thereabouts needed to buy out the shareholders.

The next smallest market cap in the DJIA btw is Caterpillar (CAT) at $25.2 billion.

Maybe it’s time to replace GM with Google (GOOG)? With my suspicions, however, the gatekeeper of the Dow Jones indexes (is that Rupert Murdoch and the Fox financial network now?) would first like to see the GOOG hammered to $200, then make the switch to the Dow 30, whereupon Google could pop back to 600 or more and lead the DJIA to 15000.

A dozen NASDAQ stocks to watch.

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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.

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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
MRK	36.98	0.78	2.15%	5.27%	4.08%	-5.08%	-35.54%	-17.42%	-36.86%	-26.52%
XOM	86.55	0.14	0.16%	1.93%	-2.05%	-2.49%	-7.44%	0.41%	-7.60%	3.68%
CVX	97.80	0.39	0.40%	1.22%	-1.61%	-1.36%	4.64%	15.88%	4.32%	16.58%
WMT	56.30	-0.53	-0.93%	0.07%	-4.87%	-2.49%	20.04%	7.50%	17.86%	16.18%
PFE	17.28	0.11	0.64%	-0.29%	-3.95%	-10.74%	-24.57%	-15.95%	-24.61%	-32.53%
JNJ	63.57	-0.69	-1.07%	-0.76%	-4.07%	-4.75%	-3.55%	-1.62%	-5.58%	3.45%
DIS	31.57	0.04	0.13%	-1.16%	-6.96%	-6.04%	-0.85%	0.61%	-2.65%	-7.88%
MCD	56.50	0.05	0.09%	-1.57%	-5.75%	-4.75%	-2.75%	1.89%	-4.54%	10.05%
MSFT	27.63	-0.12	-0.43%	-2.13%	-4.95%	-2.44%	-21.55%	-1.50%	-23.19%	-7.50%
IBM	120.05	-1.08	-0.89%	-2.19%	-4.84%	-7.24%	14.67%	3.92%	9.53%	13.87%
HPQ	44.58	-0.09	-0.20%	-2.32%	-6.05%	-5.27%	-10.50%	-4.42%	-13.62%	-1.35%
VZ	34.28	-0.03	-0.09%	-3.11%	-8.17%	-10.89%	-20.67%	-4.67%	-22.76%	-16.23%
KO	51.84	-1.38	-2.59%	-3.39%	-6.46%	-9.47%	-15.14%	-15.45%	-16.79%	-1.14%
INTC	21.49	-0.10	-0.46%	-3.93%	-5.16%	-7.29%	-15.23%	1.90%	-19.90%	-9.67%
GE	26.26	-0.27	-1.02%	-4.09%	-9.91%	-14.52%	-28.56%	-28.70%	-29.39%	-31.00%
PG	60.49	-1.76	-2.83%	-4.23%	-8.97%	-8.42%	-16.35%	-12.85%	-18.14%	-1.53%
MMM	69.51	-0.75	-1.07%	-4.81%	-8.68%	-10.38%	-15.96%	-10.72%	-18.61%	-20.22%
T	32.76	-0.71	-2.12%	-4.85%	-10.69%	-17.89%	-20.10%	-13.01%	-22.04%	-18.06%
AA	35.38	0.08	0.23%	-5.25%	-10.34%	-12.84%	-2.08%	0.00%	-4.35%	-9.21%
CAT	73.75	-0.53	-0.71%	-6.74%	-9.51%	-10.76%	4.42%	-4.26%	1.40%	-7.24%
JPM	35.05	-1.27	-3.50%	-7.42%	-11.45%	-18.49%	-16.88%	-18.22%	-19.68%	-28.82%
AXP	38.04	-0.85	-2.19%	-7.63%	-14.82%	-17.93%	-25.47%	-15.15%	-25.56%	-38.18%
DD	42.69	-0.13	-0.30%	-7.66%	-9.56%	-10.90%	-2.40%	-8.00%	-3.85%	-16.59%
HD	24.02	-0.64	-2.60%	-8.50%	-12.75%	-12.21%	-8.00%	-13.57%	-10.27%	-39.59%
BAC	24.59	-0.22	-0.89%	-9.26%	-17.43%	-27.70%	-39.37%	-36.36%	-40.69%	-50.01%
C	17.25	-0.42	-2.38%	-10.62%	-15.77%	-21.20%	-40.35%	-20.84%	-41.64%	-66.71%
UTX	61.15	-1.64	-2.61%	-11.12%	-10.81%	-13.92%	-18.69%	-11.90%	-20.42%	-14.48%
BA	66.92	-1.29	-1.89%	-11.75%	-10.92%	-19.15%	-22.74%	-9.84%	-24.71%	-29.30%
AIG	27.75	-0.34	-1.21%	-13.55%	-18.81%	-23.51%	-50.71%	-36.15%	-52.16%	-60.69%
GM	11.55	0.12	1.05%	-16.24%	-29.79%	-32.46%	-52.68%	-40.03%	-55.68%	-69.13%

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 CHV DD DIS GE GM HD HON HPQ IBM INTC JNJ JPM KO MCD MMM 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)

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Value Line Report(s) this past Friday

This week, Value Line reported on the two big telecommunications service companies in America, AT&T and Verizon.

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AT&T [GICS 50, Dow 30]
(T: Value Line Report Jun. 27: next one is due Sep. 26)

Verizon [GICS 50, Dow 30]
(VZ: Value Line Report Jun. 27: next one is due Sep. 26)

There is not much to choose between these companies on a fundamental basis. They are relatively safe, and each pay a dividend that is almost yielding 5%. The rapidly growing dividends and share buy-back programs will keep the metrics looking good.

As to the stock price, the RSI studies show that T is ready to start accumulating as the Monthly RSI-7 (35.2) is likely to poke down below 30 in a week or two, and the Weekly (26.8) and Daily (12.3) are already there.

Comparing T and VZ charts, here are the:
Daily

Weekly

Monthly

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Value Line likes the prospects of Annual Total Return (dividends and capital growth) of T (27%/22% for the annual high and low projections going out five years) vs VZ (19%/15%). Besides the net profit retained after dividends is much better for T than VZ, so the dividend is safer. Moreover, VZ recently acquired All-Tel for some $28.1 billion of which about $5.9 billion would be in cash, so the VZ cash position may not be so good for a couple years, which could possibly threaten that dividend.

However, as I say, both companies are very even in my books despite my small bias (and that of Value Line) in favor of T.

At a current $32.76 for T, I’m not so sure there is much downside for the moment, and this could be a DJIA leader if, as and when a summer rally ensues. So the stock may be good for a short-term trade or the start of a long-term accumulation program for the major accounts.

A decision here depends on your resources and aversion to risk plus your assessment of the direction of the broad market and interest rates. For example if rates rise and bond prices fall that would make these two dividend paying stocks more attractive.

I might be interested as part of an income generating program writing the T August 30 puts for $0.61 or the Oct 27.50 puts for the same price. By doing that I get to earn $1.22 if the stock doesn’t drop below 30. If the first put but not the second is exercised, then my basis would be $28.78. If both are put to me, then the basis would be 28.14. With an almost certain to be paid dividend of $1.60 for 2008 and maybe $1.74 in 2009, my yield to cost base for 2008 would be 5.56% or 5.69% depending if the one or both puts were exercised, and about 6.05% or 6.18% for 2009. I like those numbers for high quality companies. Also, as these dividends are likely to grow like that for a few years yet, the yield to cost base is likely to increase. If and when you get yourself into a position where your yield to cost base is greater than 8%, it’s a better proposition than holding cash flow real estate in the normal years because these shares always have a liquid market.

At the end of the day, you ought to be managing your portfolio in the manner intended by classic investors Graham and Dodd, and this example shows how it ought to be approached. Now, if you are more of a short-term trader, with a penchant for higher risk, higher reward possibilities, then buying an August call with a strike of $32.50 at a cost of $1.50 (break-even at $34.00), currently $32.76, is about as far out a risk as I’d even consider. Expiry is August 15, and that means if there is no summer rally or correction to the recent selling wave in either this stock or the broad market, you could lose 100% of your capital. But if the stock popped back to 37 (a 50% retracement of the recent pull-back), and your strike is 32.50, that could be a gross win of 4.50 per contract less the $1.50/contract paid in premium. A $3.00 net win on a $1.50 risk within a month and a half would be a considerable reward. This is where the good traders earn their living. They know they will lose on many, but go where the odds favor the reward over the risk so that they win most of them. I don’t advise this for new options traders, but if you take a very small position, it is extreme trading like this where you get to learn fastest. You tend to focus on prices more and ignore the market noise from Talking Heads.

Now one of the reasons I even gave you this example (the August 15 expiry on a June 30 contract) is that the next series (October) makes no sense. This is a Bear market, and time decay will eat away your potential rewards and put you into a losing proposition very quickly. I think there will be very serious market losses taken between now and mid-Oct, so it would make no sense for me to be buying calls now on a stock like T for that duration. I would be betting against my own beliefs. But as the price of T has taken a recent hit in four weeks from over 40 to under 33, and there is a prospect of a summer rally, it could make sense. Of course, I’d never put my order in before watching at least the pre-open in the stock and the broad market, including indications from European trading early Monday.

In conclusion, I’m not much interested in the US Telco group, but T and VZ would clearly appeal to some traders (for instance income and options traders), so I looked at them from this perspective today in the limited time I have available.

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The Dow 30 Company links in chronological order of next reports

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 Jul. 4: next one is due Oct. 3)

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Home Depot [GICS 25, Dow 30]
(HD: Yahoo Finance file)
(HD: StockChart chart)
(HD: Billcara2 chart)
(HD: ADVFN Financial Data)
(HD: Value Line Report Jul. 4: next one is due Oct. 3)

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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 Apr. 11: next one is due Jul. 11)

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Hewlett-Packard [GICS 45, Dow 30]
(HPQ: Yahoo Finance file)
(HPQ: StockChart chart)
(HPQ: Billcara2 chart)
(HPQ: ADVFN Financial Data)
(HPQ: Value Line Report Apr. 11: next one is due Jul. 11)

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IBM [GICS 45, Dow 30]
(IBM: Yahoo Finance file)
(IBM: StockChart chart)
(IBM: Billcara2 chart)
(IBM: ADVFN Financial Data)
(IBM: Value Line Report Apr. 11: next one is due Jul. 11)

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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 Apr. 11: next one is due Jul. 11)

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Alcoa [GICS 15, Dow 30]
(AA: Yahoo Finance file)
(AA: StockChart chart)
(AA: Billcara2 chart)
(AA: ADVFN Financial Data)
(AA: Value Line Report Apr. 18: next one is due Jul. 18)

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Dupont [GICS 15, Dow 30]
(DD: Yahoo Finance file)
(DD: StockChart chart)
(DD: Billcara2 chart)
(DD: ADVFN Financial Data)
(DD: Value Line Report Apr. 18: next one is due Jul. 18)

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Merck [GICS 35, Dow 30]
(MRK: Yahoo Finance file)
(MRK: StockChart chart)
(MRK: Billcara2 chart)
(MRK: ADVFN Financial Data)
(MRK: Value Line Report Apr. 18: next one is due Jul. 18)

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Pfizer [GICS 35, Dow 30]
(PFE: Yahoo Finance file)
(PFE: StockChart chart)
(PFE: Billcara2 chart)
(PFE: ADVFN Financial Data)
(PFE: Value Line Report Apr. 18: next one is due Jul. 18)

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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 Apr. 25: next one is due Jul. 25)

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Caterpillar [GICS 20, Dow 30]
(CAT: Yahoo Finance file)
(CAT: StockChart chart)
(CAT: Billcara2 chart)
(CAT: ADVFN Financial Data)
(CAT: Value Line Report Apr. 25: next one is due Jul. 25)

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Coca Cola [GICS 30, Dow 30]
(KO: Yahoo Finance file)
(KO: StockChart chart)
(KO: Billcara2 chart)
(KO: ADVFN Financial Data)
(KO: Value Line Report May 2: next one is due Aug. 1)

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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 May 9: next one is due Aug. 8)

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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 May 16: next one is due Aug. 15)

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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 May 16: next one is due Aug. 15)

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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 May 23: next one is due Aug. 22)

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American Express [GICS 40, Dow 30]
(AXP: Yahoo Finance file)
(AXP: StockChart chart)
(AXP: Billcara2 chart)
(AXP: ADVFN Financial Data)
(AXP: Value Line Report May 23: next one is due Aug. 22)

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Bank of America [GICS 40, Dow 30]
(BAC: Yahoo Finance file)
(BAC: StockChart chart)
(BAC: Billcara2 chart)
(BAC: ADVFN Financial Data)
(BAC: Value Line Report May 23: next one is due Aug. 22)

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Citigroup [GICS 40, Dow 30]
(C: Yahoo Finance file)
(C: StockChart chart)
(C: Billcara2 chart)
(C: ADVFN Financial Data)
(C: Value Line Report May 23: next one is due Aug. 22)

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JP Morgan [GICS 40, Dow 30]
(JPM: Yahoo Finance file)
(JPM: StockChart chart)
(JPM: Billcara2 chart)
(JPM: ADVFN Financial Data)
(JPM: Value Line Report May 23: next one is due Aug. 22)

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Microsoft [GICS 45, Dow 30]
(MSFT: Yahoo Finance file)
(MSFT: StockChart chart)
(MSFT: Billcara2 chart)
(MSFT: ADVFN Financial Data)
(MSFT: Value Line Report May 23: next one is due Aug. 22)

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General Motors [GICS 25, Dow 30]
(GM: Yahoo Finance file)
(GM: StockChart chart)
(GM: Billcara2 chart)
(GM: ADVFN Financial Data)
(GM: Value Line Report May 30: next one is due Aug. 29)

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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 May 30: next one is due Aug. 29)

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McDonalds [GICS 30, Dow 30]
(MCD: Yahoo Finance file)
(MCD: StockChart chart)
(MCD: Billcara2 chart)
(MCD: ADVFN Financial Data)
(MCD: Value Line Report Jun. 6: next one is due Sept. 5)

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Chevron Corp [GICS 10, Dow 30]
(CVX: Yahoo Finance file)
(CVX: StockChart chart)
(CVX: Billcara2 chart)
(CVX: ADVFN Financial Data)
(CVX: Value Line Report Jun. 13: next one is due Sep. 12)

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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 Jun. 13: next one is due Sep. 12)

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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 Jun. 20: next one is due Sep. 19)

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AT&T [GICS 50, Dow 30]
(T: Yahoo Finance file)
(T: StockChart chart)
(T: Billcara2 chart)
(T: ADVFN Financial Data)
(T: Value Line Report Jun. 27: next one is due Sep. 26)

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Verizon [GICS 50, Dow 30]
(VZ: Yahoo Finance file)
(VZ: StockChart chart)
(VZ: Billcara2 chart)
(VZ: ADVFN Financial Data)
(VZ: Value Line Report Jun. 27: next one is due Sep. 26)

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Wrap up:

I have to conclude with a single point that I hope you take away from my writing today, which is that inflation can and will be beaten by the collective efforts of the central bankers of the world’s major economies. It always is. There will be a huge price to pay in bankruptcies, foreclosures, corporate closures and takeovers, lost jobs, high unemployment, and so forth. But, monetary authorities have to decide that when all the giveaways and incentives from central bankers and governments have proven to no longer be effective in rebuilding an economy that can take care of inflation through the building of real wealth, something drastic must be done to beat that inflation.

That is the bottom line, and I think we’re close to crossing it. If the European central bankers raise rates at their upcoming meetings, as I believe they will, the economy will be a new ball game. It will be worse for workers and consumers, I fear, than a massive famine on the Serengeti. People will struggle mightily.

Our economic conditions are quite similar to the latter 1970’s where, by the end of that decade, stagflation had killed many weak companies, making them takeover targets, similar to what we are seeing today. I recall that in 1981 and early 1982, traders had even begun to ask themselves why anybody would ever invest in the US again, but the major players had used the recession and period of high inflation to their advantage and had lined up their ducks by the summer of 1982. A round of takeovers set the stage for the 1982 Bull market.

I think much the same is happening now--in the airlines, banks, miners, and so forth. In fact I think there could possibly be one final major sell-off in Sept-Oct with an ensuing pre-US election rally that could be the start of the next Bull.

I do not subscribe to the theory that the banks, housing industry, retailers are so broken that fixing them will take years. The amount of capital on the sidelines is immense and when rates start to rise, it will look to do something, I think. That could be the start of a round of mergers and acquisitions, which will generate profits for the financial services industry and is likely to boost share prices all around.

Traders today have very few months, I believe, to be studying the best candidates for leadership in the next Bull market. That timing, perhaps October, will be when I will move out of bonds and cash, back into gold and equities, particularly the Cara 100 stocks that many of you know are getting hammered today.

Yes, I think at that point the economy will still stink, unemployment will be high, credit tight, and so forth, but the silver lining is that a new Bull will be born.

It will be a period where some traders will come to the realization that share prices and bad economic data often go in different directions. For proof that such conditions do exist, all one has to do now is to look at what’s happened to the Shanghai equity market for the past nine months. A Bear market was born amid a rapidly growing, vibrant economy. So, don’t laugh when I say that I expect the opposite to happen for the US and Europe in the next year.

Btw, Jeff (“korvus”) has been working on consolidating the four servers I use to one or two to produce this website and the others, and system updating usually takes a day or two for the Internet to catch up. Some of your ISP’s are slow to catch on, but don’t despair; they will.

Have a good weekend, or what’s left of it. Hopefully you aren’t rushing like Bill the madman, trying to catch the open of the Euro Cup at 2:30pm.

I’m sure this European soccer championship today will be watched by many of you. My money is on Spain, the favorite. I was hoping to see them play Croatia. Alas, Germany is a worthy opponent and the match itself will be superb.

Have a good one. Meanwhile I’m having a Heineken Beck's, just to pay homage to the eventual losers. (LOL)

2:27pm! Mission accomplished. With typos of course.

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And the truth is I did reach for a Beck's, which I prefer, but had run out, so I settled on Heineken. Just so the Dutch are not offended, I will say that one of my family is off to Rotterdam this week to see the official floating of the new Holland America ship, Eurodam. The Dutch may not make the world's best beer, but they do float the finest cruise ships (even if the Italians make them), as I see it.

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