American Express (AXP), which had plummeted in June from a high of $47.47 to a low of $37.61 on the last day of H1, started the second half with a gain of +5.2% to $40.02. Other banks rallied, and this morning there has been a continuation of the banking industry share price rally in Europe.

The S&P 500 (+4.91 +0.38% to 1284.91) and NASDAQ Composite (+11.99 +0.52% to 2304.97) also firmed up at the close yesterday, and this morning’s equity futures are looking stronger at +57 at 11436 for the DJIA. The Toronto Exchange was closed.

In New York, the leading sectors were Utilities (XLU +0.52%) and Energy (XLE +0.42%). Financials (XLF) were up +0.30%. The Biotech industry group ($BTK) was up +1.5%.

The worst three sectors were Basic Materials (XLB -1.9%), Consumer Discretionary (XLY -1.3%) and Telecom (IYZ -1.0%). Papers (-2.5%) led the Basic Materials down again, while the Airlines ($XAL -3.0%) led the Consumer Discretionary stocks down.

For the extreme Cara 100 stocks, the winners were: RIMM (+5.4%), GG (+4.3% to 48.16), DNA (+3.5% after the prior day’s gain of +4.4%) and COST (+3.4%). The losers were: GOL (-8.1%), VIP (-5.9% on large volume), SNDK (-5.8%), and IBN (-4.6%).

Starbucks, which had dropped -3.7% on Monday, reported the closings of 600 US stores. SBUX then closed down -0.76% at $15.62.

On the corporate front, Initial Public Offerings have fallen to a 5-year low. According to Bloomberg, there were 162 companies that postponed or withdrew share offerings in H1.

S&P ratings group downgraded broker Legg Mason, while apparently Moody's might do the same.

US vehicle sales have been a disaster. SUV and truck sales have been smashed by the high fuel prices. Ford F-150 sales, for instance, have dropped -41% Y/Y. The whole company did -28% less sales than a year ago (vs -19% anticipated by analysts). Even Toyota was down -11.5% company wide and the high-end Lexus brand was down -21%. The GM results were another bad one although for a while the media was generating stories that the losses were not as bad as most had expected.

The US long bond ($USB) was off a bit (-0.07%) to 115.52, whereas yields generally were flat, except that the T-Bill yield gained a further +7.0% (after Monday’s +4.6% move) to 1.825. Apparently the market is saying that the banks credit market problems have been alleviated, for now.

The US Dollar index ($USD) lost -0.18% to 72.39, while the Euro ($XEU) gained +0.29% to 1.5794), during trading above 1.58. $GOLD jumped +$16.20 to 944.50. The pressure on this trading is coming from expectations that the European Central Bank will raise rates at its meeting tomorrow, which will leave the $USD even weaker. Of course, other factors may come into play.

On the weaker US Dollar, Crude Oil ($WTIC) gained +$0.97/bbl to 140.97. This morning the Crude Oil futures are trading at $141.425.

Earlier today, the Asia-Pacific equity markets were mostly weak except India where the Sensex 30 gained +5.56% to 13682. The Australia All-Ords dropped -0.94% to 5211.6; Hong Kong’s Hang Seng -1.80% to 21704.5 and Tokyo’s Nikkei Dow -1.31% to 13286.4. The Shanghai Composite closed flat at 2651.7. The South Korean KOSPI index lost -2.6% for its 5th consecutive losing day.

European stocks are stronger: UK FTSE +123 at 5547, French CAC +0.72% to 4372, and German DAX +1.08% to 6384 at about 6:30am ET. The strength is in the banks.

Spot prices at 6:20am ET for gold, palladium, platinum, and silver (along with earlier highs in today’s session): 933.12 (942.40), 462 (470), 2062 (2084) and 17.95 (18.18).

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Comments & Outlook

In the past couple days, the gold bug marketing force has been out in full force, recommending last opportunity purchases of gold. Harry Shultz and James Sinclair are two of them. The precious metals have rallied.

What is happening here, and is the rally likely to persist?

I believe that since most analysts are looking for a rate increase from the ECB on Thursday and no effective response from the Fed that the $USD is header lower, and that commodity prices should lift. This is speculation, mostly.

I believe the $USD has bottomed for now and will start to gain strength against the Euro on the grounds that the US economy, while weak, is stronger than Europe’s. Besides, there are other policy moves that the Fed can make that will help the $USD, for now.

The market may have been set up for a summer rally, which, if it happens, would likely be led by short-covering in the Financials and Consumer Discretionary sectors, while I believe that the Energy and Basic Materials sectors will be pulled down or kept lagging due to lower commodity prices as the $USD moves a bit higher.

Food for thought.

But, trust me; I tune out the newsletter writers. Just like Wall St analysts, they are paid to give extreme views. If they can’t move your emotions, they don’t sell newsletters. It’s why they run in a pack, attending the same “investment” forums and all. One scratches the back of another and vice versa. When their train pulls out of the station, each has a separate car (for supporters) hooked up. As one-off voices, most of them would be lost in the wilderness.

Occasionally, there will be a lone analyst/writer, like a James Dines, who is a master craftsman who I listen too, and of course Marc Faber who seems to sound a clarion call to the other newsletter writers. But, independent traders have to take all this marketing stuff with a grain of salt. To the extent you stay clear of the noise, and watch closely the prices of a select group of stocks, you will probably outperform the newsletter writers.

One other thought today: why is Bloomberg running the same TV commercials repeatedly ad nauseum? Note that they are all for not-for-profit organizations. Do they not have any for-profit clients any more?

I think there is something behind this.

Finally, here is the weekly India market report from Deepak Lalwani.

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Links & Charts

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International Economics Review

US Economic Calendar.

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Knobias Cara100 Tables

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Cara 100 Daily RSI-7 Charts

At least one RSI value >70:

Ticker	Last	RSI-7M	RSI-7W	RSI-7D	Zone
SYT	63.99	93.69	62.78	53.36
ECA	91.63	89.36	62.21	55.92
TS	72.95	81.84	88.33	74.50	Distribution Zone (for 5 days)
PBR	70.24	81.64	62.59	62.05
GGB	24.10	80.98	63.49	50.76
ATVI	34.11	80.73	64.92	40.87	Sell alert (trig. 8 days ago [on 2008-06-20 at $35.85, -4.85% chg], after a 1 day DZ)
EXC	90.35	80.20	67.42	57.90
WMT	57.03	76.86	55.29	47.10
TT	46.49	76.65	65.62	56.92
GG	48.16	74.57	76.28	86.71	Distribution Zone (for 1 days)
CVX	99.08	72.24	63.78	53.62
COST	72.55	70.89	63.82	65.57
ABX	46.36	60.66	69.51	84.47
CCJ	42.08	54.83	62.92	71.23
DNA	78.56	54.77	65.55	77.58
SLW	15.08	54.35	55.54	75.01
GFI	12.63	29.70	46.48	75.23	Buy alert (trig. 8 days ago [on 2008-06-20 at $11.15, +13.27% chg], after a 2 day AZ)

At least one RSI value <30:

Ticker	Last	RSI-7M	RSI-7W	RSI-7D	Zone
UBS	20.35	14.65	19.64	29.39	Accumulation Zone (for 1 days)
BC	10.90	16.47	16.16	30.16	Buy alert (trig. 1 days ago [on 2008-07-01 at $10.90, +0.00% chg], after a 2 day AZ)
WFMI	23.67	19.20	19.27	18.67	Accumulation Zone (for 4 days)
ERJ	26.10	20.97	9.96	8.47	Accumulation Zone (for 21 days)
BDK	56.10	21.52	19.54	27.47	Accumulation Zone (for 1 days)
SBUX	15.62	21.72	32.38	27.55
JCP	36.06	22.00	30.09	36.88
DB	83.60	22.28	13.81	15.37	Accumulation Zone (for 4 days)
GOL	10.37	22.49	21.14	17.30	Accumulation Zone (for 4 days)
CCL	32.30	22.82	19.37	26.85	Accumulation Zone (for 1 days)
KSS	41.01	23.17	33.11	41.49
SNDK	17.62	24.21	20.73	9.45	Accumulation Zone (for 8 days)
WHR	61.07	24.54	15.96	23.10	Accumulation Zone (for 2 days)
TM	93.66	24.55	33.73	22.91
NOK	24.21	27.01	20.76	38.24
WAG	32.43	27.16	23.85	15.53	Accumulation Zone (for 1 days)
GE	27.12	27.55	17.28	40.33	Buy alert (trig. 2 days ago [on 2008-06-30 at $26.69, +1.61% chg], after a 2 day AZ)
BA	65.45	27.82	21.43	13.24	Accumulation Zone (for 2 days)
BMY	20.83	29.17	42.13	63.03	Buy alert (trig. 7 days ago [on 2008-06-23 at $19.70, +5.74% chg], after a 1 day AZ)
TGT	47.53	29.60	30.20	35.57	Buy alert (trig. 1 days ago [on 2008-07-01 at $47.53, +0.00% chg], after a 1 day AZ)
GFI	12.63	29.70	46.48	75.23	Buy alert (trig. 8 days ago [on 2008-06-20 at $11.15, +13.27% chg], after a 2 day AZ)
UTX	60.68	30.29	20.10	15.72	Buy alert (trig. 1 days ago [on 2008-07-01 at $60.68, +0.00% chg], after a 1 day AZ)
AET	39.92	30.30	23.99	26.57
IBN	27.43	30.54	25.19	16.43	Buy alert (trig. 1 days ago [on 2008-07-01 at $27.43, +0.00% chg], after a 1 day AZ)
SWK	44.20	30.81	28.97	27.48
DEO	72.38	31.29	16.88	34.82
DOW	35.17	31.51	26.26	24.20
HDB	69.17	32.71	22.33	15.24
TGP	26.52	32.73	27.45	28.15
WBK	91.30	33.02	24.17	21.22
KO	51.00	33.46	24.11	22.05
CSCO	23.15	33.49	28.97	18.03
MFC	34.33	35.16	28.38	23.49
YHOO	20.20	35.97	24.43	12.53
RY	44.60	36.08	29.97	25.69
PAYX	31.75	36.61	27.52	40.07
CHA	53.89	37.36	24.37	28.87
HBC	75.69	38.56	23.91	15.29
ABV	61.52	38.89	26.58	22.25
PG	61.98	39.29	26.82	38.20
DIS	31.05	41.24	34.75	24.89
VCP	26.42	43.49	26.36	16.03
CHL	66.38	44.18	27.43	34.60
CTSH	31.94	44.45	46.93	27.35
NKE	58.99	44.82	28.20	17.13
VIP	27.93	46.98	30.98	25.21
MBT	75.06	48.67	36.76	24.89
CHRW	54.35	49.32	30.74	21.65
MICC	99.65	50.51	36.29	16.13
BBD	20.10	51.82	38.91	24.34
ABB	27.97	55.59	37.09	25.68
SU	57.22	57.14	40.05	25.87
PDA	52.97	57.62	42.89	26.18
IBKR	31.91	59.04	50.79	29.62

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International Equity Markets Review

Europe

Here is the latest session data for the bourses of Europe.

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Here is the latest session data for the London stock exchange FTSE.

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Here is the latest session data for the German DAX.

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

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

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

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Asia-Pacific

Here is the latest session data for the Asia-Pacific stock exchanges.

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Here is the latest chart for the Japanese Nikkei 225 index.

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Here is the latest chart for the Singapore index .

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Here is the latest chart for the Shanghai Composite index .

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

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

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

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US Equity Markets Review

DJIA (interactive) chart

NASDAQ Composite (interactive) chart

Table 14: Dow 30 List

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
MRK	38.36	0.67	1.78%	3.59%	10.61%	0.03%	-33.14%	0.10%	-33.99%	-22.97%
XOM	88.35	0.22	0.25%	1.65%	-0.30%	3.08%	-5.52%	1.53%	-5.70%	5.33%
MCD	57.29	1.07	1.90%	0.47%	-3.24%	-0.47%	-1.39%	0.67%	-2.75%	12.86%
CVX	99.08	-0.05	-0.05%	0.45%	-1.29%	1.25%	6.01%	14.23%	6.16%	17.62%
VZ	35.53	0.13	0.37%	0.34%	-1.00%	-4.90%	-17.77%	-5.98%	-18.68%	-13.70%
PFE	17.73	0.26	1.49%	0.23%	0.06%	-6.73%	-22.61%	-17.07%	-22.00%	-30.66%
JNJ	64.69	0.35	0.54%	-0.05%	-1.37%	-3.10%	-1.85%	-1.79%	-3.01%	4.98%
WMT	57.03	0.83	1.48%	-0.51%	-2.83%	-1.28%	21.60%	5.45%	19.99%	18.54%
PG	61.98	1.17	1.92%	-1.40%	-5.81%	-5.24%	-14.29%	-12.88%	-15.58%	1.29%
GE	27.12	0.43	1.61%	-1.70%	-6.03%	-10.97%	-26.22%	-29.43%	-26.84%	-29.15%
HPQ	44.00	-0.21	-0.48%	-2.31%	-7.06%	-4.84%	-11.66%	-7.54%	-12.84%	-1.39%
T	33.30	-0.39	-1.16%	-2.83%	-6.70%	-14.13%	-18.78%	-15.65%	-19.87%	-19.76%
DD	42.64	-0.25