Tell me we didn’t see this coming.

At the bell yesterday, the DJIA (+276.74 +2.52% to 11239.28), the S&P 500 (+30.45 +2.51% to 1245.36) and the NASDAQ Composite (+69.14 +3.12% to 2284.85) rallied strongly.

The winning sectors were Financials (XLF +13.1%) and Consumer discretionary (XLY +4.0%). In the Financials, the Banks ($BKX +17.3%) and Broker-Dealers ($XBD +13.2%) were exceeded only by the Airlines ($XAL +18.1%). For industry groups (containing good companies and bad) to be up so much is a reflection of (mostly) short-covering. Also strong on the day were REITs ($DJR +6.6%) and Retailers ($RLX +5.5%). These dogs have been running together.

The losing sectors, reflecting the commodity price pull-back in oils, were Energy (XLE -2.6%) and Utilities (XLU -2.0%).

The Energy stocks sell-off was led once again by NatGas ($XNG -2.2%) and Oils ($XOI -2.1%). The Goldminers ($XAU -2.6%) were hurt as $GOLD sold down -$16.00 per oz to 962.70. The Crude Oil contracts ($WTIC) sold off -$4.05/bbl to 135.32.

The winning Cara 100 stocks were OXPS +10.4%, CCL +9.8%, GS +9.5%, GOL +8.9% and ERJ +8.7%. The losers were SYT -5.8%, CCJ -4.4%, SLW -3.7% and CVX -3.4%.

Equity markets in the Asia-Pacific region were higher except for Shanghai: Australia (+0.60% to 4977.4), Shanghai (-0.78% to 2684.8), Hong Kong (+2.41% to 21734.7), India (+4.26% to 13111.9), and Japan (+1.00% to 12888.0). Traders decided to support the banks in keeping with the rally in the US.

At this point in the session (8:07am ET, 1307 GMT), the European bourses are rallying with buying and short-covering in the Banks. The UK FTSE is up +2.62% to 5286; French CAC +2.71% to 4225 and the German DAX +2.31% to 6297. As I noted yesterday morning, Europe’s turn seems to be occurring as prices are strengthening based on the Wells Fargo and State Street bank reports.

The $USD was stronger yesterday: $USD +0.37% to 0.7236; Euro -0.52% to 1.5822; Yen -0.48% to 95.11; Pound -0.29% to 1.9987; and Loonie -0.06% to 0.9979.

Crude Oil futures closed at 135.32, down -$4.05/bbl, which followed the previous day’s loss of -$6.41/bbl. This morning they are at 134.47, down a bit.

$GOLD yesterday lost -$16.00/oz to close at 962.70.

Precious metal prices (spot) at 8:13am ET for gold, palladium, platinum and silver are (compared to the prior two day’s morning prices): 959.65 (970.81, 984.43); 424 (432, 447); 1942 (1946, 2008); and 18.72 (18.74, 19.355), respectively.

The $USD and Euro/USD futures are presently (compared to yesterday morning) at the rates of 0.72245 (0.7192) and 1.5798 (1.5854), a little stronger for the $USD.

The DJIA futures at 8:14am ET are at 11299 +93. Looks like more short-covering in the Banks and Brokers.

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Comments & Outlook

Yesterday, I pointed you to Suncor, saying that at the cycle bottom for the broad market that I feel will come in the next couple months, traders should be accumulating shares of Canadian oil sands companies, like SU. My reasoning is simple: The US needs oil independency, which can only be done with supplies that are close by and in a solidly pro-American country. Mega-billions are being spent on pipelines that will transport the oil to US refineries along the Gulf coast.

So, please keep on top of this situation. SU has dropped about -8.0% in the past two days, closing at 56.55, hitting a low of 54.06. Write some Dec-08 50 and 47.50 puts, now and over the next month or two. As I see it, the stock is not going back to 45, unless Crude Oil goes back to 80, and your put premiums protect you down to that level.

Unlike Canada, Russia is not so friendly to US political interests, but it too is a massive and rapidly growing market that, with a heavy dose of country risk, is attracting much foreign investment.

Interesting to me that Blackrock, Mackenzie Financial, Van Eck Funds and BGF Emerging Europe and others are buying heavily into Russia's biggest oil producer, OAO Rosneft (ROSN.GB). The stock price zoomed from US$6.68 to $12 in three months recently, later setting a high of $12.33, and is still hanging in at very high prices, with heavy volume.

Rosneft is a vertically-integrated Russian oil and gas company headquartered in Moscow, with upstream and downstream operations in each of Russia’s oil-producing regions. Rosneft operates ten oil and gas producing enterprises across Russia and is involved in over ten world-class exploration projects. The market cap is apparently $114 billion (see www.adr.com). The stock may be hard to buy for retail accounts, and so I will not write about it further.

I note that the Russian Federal Anti-Monopoly Service has brought lawsuits this week against LUKoil, Gazprom Neft, TNK-BP Holding, Rosneft, and Surgutneftegas over alleged monopoly abuse, which pushed up wholesale prices for jet and diesel fuel in Russia.

Everybody is screaming about the high price of energy, but it is coming down now to facilitate a summer rally in the global equity market. This is the time for traders to be watching the Accumulation Zone stocks for Buy Alerts. A couple days ago, my Cara 100 tables started popping up such items, and yesterday the prices started to zoom.

Day traders and short-term oriented swing traders will play this rally. Last week, if you recall, I noted that the markets were way over-sold, which was a warning/alert to those holding short positions. You had the opportunity to cover.

You also had the opportunity to switch out of the Energy and Basic Materials sectors when they were strong and I was recommending selling into strength. Exxon for instance was one I repeatedly discussed as a candidate to sell in the 94-95 level and buy in the 70’s. You had that chance in April and again in May. Well XOM closed at 80.81 after hitting a low of 79.41.

As to XOM, long-term oriented traders ought to wait for the Crude Oil price to settle back to the 200-day MA price level, which will pull XOM down into the mid-70’s in a couple months. That would be the time I would pay particular attention to the Cara Accumulation Zone/Buy Alert methodology.

From the XLE chart, it appears that XOM is ahead of the curve. Caraistas must be taking action? This likely means that the smaller-weighted shares of energy company components of XLE could be in for a relatively tougher time (than XOM) in the months ahead.

Without falling oil prices, there can’t be a summer rally in the broad market, which must then be led by Financials and Tech.

All the Banks and Broker-Dealers will get a lift in the rising tide of a rally. That doesn’t mean the worst of the problems in these financial services companies is over. Yesterday, the Wells Fargo Bank CFO, talking heads and HB&B supporters, seemed overjoyed at the fact the WFC earnings vs a year ago only dropped a certain (large) percent. Don’t get caught up in that hype stuff. A lot of the trading volume is short-covering and day trading. We’re not looking at a new Bull market in Financials.

In fact, what is happening with HB&B is much like a Sadie Hawkins dance where all the ladies have joined the hunt for Mr. Right. HB&B today is all about M&A tomorrow. It’s all part of life.

Finally, I have a very long report called: “TAX HAVEN BANKS AND U. S. TAX COMPLIANCE -- STAFF REPORT, PERMANENT SUBCOMMITTEE ON INVESTIGATIONS, UNITED STATES SENATE” that was tabled this morning. For all traders who have set up accounts in Switzerland and other so-called “tax havens”, you ought to pay attention. If you are serious about this subject, send me a confidential e-mail (hit the side-bar link) and I’ll forward you a copy later today.

Btw, if a sovereign country like The Commonwealth of The Bahamas has decided to operate its fiscal and monetary system with zero tax on all persons and corporations, foreign and domestic, and peg the currency to 100% the USD, why is there an inference by countries, such as those in the G-8, that the Bahamas is doing something illegal or improper? This presumption by the US authorities (our way or the highway) is flat wrong.

Now that I’m pissed, let me tell you that yesterday the US authorities arrested a 1200-passenger cruise ship in the NYC harbor, claiming 60 deficiencies. I see nothing wrong in protecting people. That’s important. But why is it that politics and US economic interests have to come into play? Was it Hill & Knowlton once again who wrote the media kit for DC? I refer to the “news” carried by the major media that this cruise ship was “out of Bahamas”. Not one mention of the owners or the cruiseline or the prior licensing and scrutiny of permits by US authorities – just “this is Bahamas”. My response is simple: “No to the jerks who wrote that stuff and who aired it on command, this is the Ugly American at work. I resent it. I don’t think the American public realizes yet how much they are led by nose rings.” Quote me.

I’ll be out for much of the day in meetings.

Have a good one. I will.

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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:

At least one RSI value <30:

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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

You can do this table yourself by entering the following string into the Summaries window at www.billcara2.com and then clicking on the link for Performance.

AA AIG AXP BA C CAT DD DIS GE GM HD HON HPQ IBM INTC JNJ JPM KO MCD MMM MO MRK MSFT PFE PG T UTX VZ WMT XOM

Here are the links to interactive Dow charts from Billcara2.com that I broke into groups of ten, which you can add technical indicators for as well. (list one) (list two) (list three)

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The Americas

Here is the latest session data for the exchanges of the Americas.

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Here is the latest chart for the Brazilian Bovespa stock exchange in Sao Paulo.

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

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Sector ETF Summary for the US equity market

The tables I show in this section are for ten (GICS) Sector Index Funds (ETF's) only, but they cover the full spectrum of the US equity market.

Table 1: Cara ETF List

You can do this table yourself by entering the following string into the Summary window at Billcara2.com and then clicking on the link for Performance. XLE XLB XLI XLY XLP IYH XLF SMH IYZ XLU XLK SPY . You can also add more ETF’s – up to 30 in total.

For a list of components to any ETF, go to the AMEX.com web site, and click on ETF's.

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10 (energy: XLE)

Table 2: Senior oil & gas equities

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15 (basic materials: XLB)

Table 3: Senior metals and steel equities

Table 12: Senior gold equities

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20 (industrial: XLI)

Table 4: Senior capital goods makers and transportation

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25 (consumer discretionary: XLY)

Table 5: Senior consumer discretionary equities

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30 (consumer staples: XLP)

Table 6: Senior consumer staples equities

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35 (healthcare: IYH)

Table 7: Senior healthcare equities

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40 (financial: XLF)

Table 8: Senior financial company equities

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45 (technology, semiconductor: SMH)

Table 9: Senior technology equities

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50 (telecom: IYZ)

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55 (utilities: XLU)

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International Equity Market USD-denominated ETF Review

Table 13: International equities perspective

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Japanese equity market ETF: EWJ

Here is the Japanese (EWJ) equity market ETF Daily data charts:

Interactive EWJ Daily data:

Interactive EWJ Weekly data:

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U.K. equity market ETF

Here is the United Kingdom (EWU) equity market ETF Daily data charts:

Interactive EWU Daily data:

EWU Daily data:

Interactive EWU Weekly data:

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Canada's equity market

Here is the Canadian (EWC) equity market ETF Daily data charts:

Interactive EWC Daily data:

Interactive EWC Weekly data:

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Bonds & Yields Review

Table 10: Yahoo Finance U.S. Treasury Debt, Municipal and Corporate Bond Yields

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Here is the $USB 30-year Treasury Bond 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

Consumer Finance -USA -- Interactive Daily Data Charts

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Commodities Review

$CRB Index

Open Futures Contracts

Interactive Chart of Daily CRB Commodities Index:

Interactive Chart of Weekly CRB Commodities Index:

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Oil Review

Here is the e-miNY Mar-08 Crude Oil chart.

Interactive Chart of Daily Crude Oil:

Interactive Chart of Weekly Crude Oil:

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Gold & Precious Metals Review

Spot gold chart for the week

Interactive Chart of Daily Gold EOD Continuous Contract Index:

Interactive Chart of Weekly Gold EOD Continuous Contract Index:

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Spot silver chart for the week

Interactive daily data

Interactive Chart of Daily Silver EOD Continuous Contract Index:

Interactive chart of the Silver Bullion index.

Interactive Chart of Weekly Silver EOD Continuous Contract Index:

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Spot platinum chart for the past three days

Interactive Chart of Daily Platinum EOD Continuous Contract Index:

Interactive Chart of Weekly Platinum EOD Continuous Contract Index:

Interactive chart of the Platinum metal index.

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Spot palladium chart for the week

Interactive Chart of Daily Palladium EOD Continuous Contract Index:

Interactive Chart of Weekly Palladium EOD Continuous Contract Index:

Interactive chart of the Palladium metal index.

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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

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

CBJ 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:

Interactive Chart of Daily U.S. Goldminers Index:

Weekly U.S. Goldminers Index:

Interactive Chart of Weekly 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 Daily data:

GDX Weekly 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 Daily data:

Interactive Chart of XGD Weekly data:

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Forex Review

Here is the chart of the week's trading in the $USD.

Interactive Chart of Daily U.S. Dollar Index:

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

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Daily British Pound Index:

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Daily Japanese Yen Index:

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Daily Canadian Dollar Index:

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Wrap-up