The July ADP numbers show a 9,000 job increase in private nonfarm employment versus the anticipated 60,000 decline. Then the Fed extended the Primary Dealer Credit Facility and President Bush signed the Housing & Economic Recovery Bill. The SEC also extended its temporary restriction on naked short selling, which has been supporting Fannie (FNM) and Freddie (FRE) since that plan was announced.

The oil price increase of almost +$5.00/bbl was inspired by the much larger than expected decline in EIA gasoline inventory for last week. But, these estimates could be reversed next week, so traders reverted to the other crutches and their confidence lifted markets to close near the highs of the day.

At the close, the DJIA (+186.13 +1.63% to 11583.69), S&P 500 (+21.06 +1.67% to 1284.26), and the NASDAQ Composite (+10.10 +0.44% to 2329.72) carried on the rally a second day.

The Energy Sector (XLE +6.0%) was by far the strongest. Basic Materials (XLB +2.4%) was next in line. Consumer Discretionary (XLY -0.1%) and Healthcare (XLV very small loss) held the market rally in check.

The Oil Services ($OSX +6.1%) and Integrated Oils ($XOI +5.8%) were the strongest industry groups, while Airlines industry ($XAL -4.9%) was the obvious big loser.

In extreme Cara 100 trading, the natural resource players were strong, including TCK (+13.7%), SU (+8.7%), RIO (+8.2%) and GGB (+7.9%). A huge loser was Garmin (GRMN -21.9%), which failed to inspire with its quarterly report and disappointing forward guidance. ERTS (-6.6%), BC (-6.0%) and TTM (-4.7%) were also weak

The bond market was very quiet ($USB -0.05% to 114.83) and so too was the forex market where $USD gained +0.05% to $0.7333 and the Euro dropped -0.08% to 1.5577. Earlier this morning the USD was at $0.73395 and the Euro at 1.5578, almost unchanged.

Overnight, the markets in Asia-Pacific were moderately stronger, except Shanghai again: Australia up +0.88% to 5052.6; Shanghai down -2.15% to 2775.72; Hong Kong up +0.18% to 22731; India’s Sensex 30 up +0.48% to 14355.75; and Japan’s Nikkei 225 up +0.07% to 13376.8.

In Europe at 7:51am ET (1251 GMT), the French CAC was up+0.66% to 4429; the German DAX up +1.00% to 6524.5; and the UK FTSE up +0.53% to 5449.

Precious metals, which had been collapsing, rallied hard for a couple hours after the 10:00am ET gasoline inventory report in the US. While during the day, the gold futures dropped as low as 902.70, at the close $GOLD was down -14.10/oz to 912.30.

Spot prices at about 7:53am ET are for gold, palladium, platinum and silver per oz (vs the prices in the past three mornings): 910.80 (902.36, 925.31 and 930.05), 374 (377, 386 and 383), 1751 (1740, 1763 and 1752) and 17.53 (17.02, 17.41 and 17.42). The $USD is trading at $0.7340 (a bit weaker) and the Euro at US$1.5576 (a bit stronger).

Crude Oil futures this morning are softer at 125.99, down about -$0.78/bbl, while the DJIA futures are up about +10 to 11590, and both have been consistent through the past few hours.

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Comments & Outlook

Lots of earnings reports out today. Should be interesting. I am particularly keen to look at the unit sales volume at Exxon (XOM).

Also on the oil industry front, yesterday Goldman Sachs forecast a $145 oil price at the end of the year. I think that is a reasonable call. Between now and then, however, the price is likely to spike down to $100 or thereabouts.

Most on my mind today is the massive shorting and short-covering that is going on in the market these days. Yesterday, there sure was immediate short-covering after a strange and surprising gasoline inventory report was issued.

I got to thinking that maybe the SEC will rule against the ‘temporary’ short-selling in oil and silver (LOL) or is that the job of the CFTC (another LOL)?

Immediately following the 10:00am ET publishing of the surprising decline in US gasoline inventory for the prior week, traders who were short oil and precious metals contracts rushed to cover. Prices spiked for a couple hours. Crude Oil contracts rocketed from just under 121 to just over 127. Silver contracts shot from 16.85 to 17.59 in what could be described as a silver moon shot. Gold jumped from just under 895 to 910. All in a few minutes. Almost all of it short-covering.

So what happens if and when next week’s oil inventory estimate is a ‘surprising’ increase? Obviously, the short-sellers will return, and the prices will dive.

The market has become a casino. How else can one describe it? The house (Wall Street and Washington) is doing all it can to attract the high-rollers. Why? Because they are in trouble. Not the high-rollers, but the house. It has become a house of cards in many ways.

Regrettably, traders either become day traders or they stay away or they turn to money managers. If silver can rocket +4.4% in a matter of minutes based entirely on a dubious government agency estimate of the amount of gasoline inventory in storage tanks across America, then obviously the doctor, lawyer, business person, factory worker, construction worker, farmer and the rest of the hard working Americans will miss out. They are unable to day trade because they are out working to create real wealth for themselves and for America.

So, who really wins at this market game that at the best of times is one that plays people? The answer could be ‘It’s Wall Street, Stupid’ but I don’t want to offend anybody—at least nobody other than the prop traders working for HB&B who trade against the public order flow, which is like shooting fish in a barrel since they know everything about the client—the orders, the thinking, the assets and liabilities, the margin debt, the milliseconds longer it takes even the fastest of them to hit Buy or Sell market order buttons to execute a trade. These people have every advantage.

If you doubt what I say, ask a prop desk trader at Goldman Sachs or Morgan Stanley how much profit they cleared yesterday. Ask the ones at Lehman, Citi and Merrill Lynch how badly they think their firms depend on them to stay afloat.

Yes, they have every advantage, and when they are desperate, they use it. Yesterday, they took every bit we gave them. Is it any wonder why trading has become so difficult for the average person—even the average hedge fund or mutual fund desk trader.

What we need is a level playing field, one where banks and dealers (ie, the sell side) and the public alike use independent brokers whose only function is to execute orders. We need an independent depository for our assets—one that is debt free and clear of any credit issues. The SEC (and an international body of securities administrators) should be the supreme regulator of the trading, brokerage and asset depository functions of the market. If traders want to go into debt, that should be a different system, one regulated by the Fed (and its international counterparts) because that’s what banks do, or ought to do, which is lend money.

I have said this for years, even presented it formally to the highest securities regulators in Canada. Politics and well-connected big money stop this from happening. Some day, however, the buy-side will come up with a solution that is in their best interests. Surely, the sell-side will fight it tooth and nail. They’ll tell the public you already have a level playing field (LOL).

I am eagerly awaiting a flood of new books being written by some of the 100,000-odd workers cut loose by HB&B. I expect they’ll tell it like it is, unlike the pabulums we get fed every day by Financial Entertainment Television (FETV). By FETV, I think you know the network I refer to.

Yesterday, I must confess that I almost puked at the FETV push for Disney (DIS). Now Disney is a Cara 100 Global Best Company, so, in my case, the talking heads were preaching to the converted, if you will. But it was so obvious to me that they were the take-out facility, setting up the buy-side for a post-closing hit, after the promoters had offed their stock. Yes, DIS lifted right into the close, then reported, and then, with no support, the shares collapsed.

DIS had closed at $30.92 on Tuesday. With all the pre-market hype on FETV, DIS opened yesterday at $31.94, lifted to $31.77 early in the session, then sold down to $30.89 as FETV was grinding out their rosy stories, then a late session rally on more hype from FETV, closing at $31.67. Then, boom; fiscal Q3 earnings were so-so, and the after-hours trading sank the price back to $30.90, a bit lower than where it had closed on Tuesday.

Today, Disney will be all but forgotten by FETV, used like a whore and forgotten until the next time somebody feels the need.

So who won? The people who paid the people at FETV to hype the stock all day are the people who won.

The market is a rugged place, but then it’s not a level playing field. Is it?

Have a good one. I know I will. You see; I don’t let the game play me. I know the ground I walk on.

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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