Shorts are being covered and new positions are being taken in the consumer segment (discretionary spending, staples and healthcare). Volumes have increased, both on the upside and downside.

Yesterday, the DJIA (+135.16 +1.18% to 11602.5), S&P 500 (+17.0 +1.35% to 1277.0) and NASDAQ Composite (+24.4 +1.07% to 2303.96) closed much higher on a broad rally that climbed the wall of falling oil prices.

Crude Oil ($WTIC dropped -$3.40/bbl to 128.42. Along with the squeeze on commodity prices, $GOLD dropped -$15.20/oz to 948.50. Both are looking lower this morning.

With the lower commodity prices, the Toronto Composite index lost -46 -0.34% to 13643.9 and the Toronto Venture board dropped –24 -1.05% to 2263.66.

In NY, Banks ($BKX +8.9%) and Broker-Dealers ($XBD +8.4%) continued their 5-day super-rally as short-sellers continue to protect earlier gains. XLF (+8.4%) was the leading sector ETF, and is now up over +25% in the past week, despite huge losses and an incredibly challenging operating environment, which continues. The three consumer sectors (XLY, XLP and XLV) were up +2.7%, +1.8% and +1.4% respectively at the close.

The big industry mover was Airlines ($XAL +22.2%), which moved because of the plunging fuel costs as well as by further extreme re-organization measures taken by UAL.

Cara 100 stocks on the move higher were the Indian banks (IBN and HDB =13.1% and +9.8% respectively, Carnival Cruiseline CCL +12.2% on the lower fuel costs, and SWK +7.5%, SBUX +7.4%, OXPS +7.1% and GOL +6.8%. The extreme losers were SNDK -24.0%, MICC -22.6%, TEF -6.1% and GG -5.8%.

Today, traders will be reviewing the earnings reports of three DJIA components, BA, T and PFE, as well as PEP. Spinmasters will be looking closely at the Beige Book.

The 30-year US Bond ($USB) lost -0.34% to 114.16 as yields lifted when the equity rally consumer cash. The US T-Bill yield popped +8.7% to 1.50 for that reason.

Earlier today, the Asia-Pacific markets were strong. Tokyo (+0.97% to 13312.9), India (+5.94% to 14942.3), Australia (+1.69% to 5161.6), Hong Kong (+2.69% to 23134.6) were strong, while Shanghai dropped -0.29% to 2837.9.

In Europe this morning at 7:43am, there is a broad rally based on continued downward pressure on commodity contracts. The UK FTSE is up +1.12% to 5424, the French CAC +1.59% to 4396, and the German DAX +1.07% to 6512.

Crude Oil futures are down -$2.11/bbl to 126.31.

At 7:38am ET, Gold, palladium, platinum and silver spot prices are all down, presently at: 937.15 (up from 932.2 at 7am), 389, 1775, and 17.67 (up from 17.53 at 7am). These are well down from yesterday’s 974.38, 417.5, 1874, and 18.61 respectively at about the same time in the morning.

The Euro is at 1.5713 and the $USD at 0.72785 at 7:15am, whereas 30 min ago, the numbers were 1.5689 and 0.72835, so there is a bit of strengthening to the Euro, and gold/silver has recovered slightly.

DJIA futures are presently up +59 to 11621.

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Comments & Outlook

The public has been getting an earful from the gold bug and silver crazy crowd in the past month and I’m getting sick of it. Look at the 1-month charts for gold and silver and you will clearly see the trend.

The rally in equities is based squarely on falling commodity prices, particularly oil. That is firming the $USD and putting downward pressure on precious metals. This scenario was painted in advance by me, and I alerted broad market short-sellers two weeks ago that they ought to consider taking profits ahead of the summer rally that I figured would be commodity-price based. I warned that the changes to commodity exchange margin requirements would have an impact. I also warned that with the HB&B earnings reports there would be a lot of smoke being blown by desperate executives, which has been the case.

I think you get the picture.

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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
WMT	59.06	82.22	60.20	67.51
COST	72.00	79.92	55.59	52.84
TT	46.49	76.65	65.62	56.92
GG	43.46	70.91	52.68	37.20	Sell alert (trig. 6 days ago [on 2008-07-15 at $47.99, -9.44% chg], after a 2 day DZ)
DNA	93.55	70.48	87.99	86.92	Distribution Zone (for 2 days)
NTES	22.87	60.91	56.96	70.79
GSK	48.55	56.87	72.38	69.30
HBC	82.30	52.38	56.79	77.41
CCL	39.73	45.87	58.55	75.82	Buy alert (trig. 6 days ago [on 2008-07-15 at $30.25, +31.34% chg], after a 2 day AZ)
HDB	85.97	41.41	48.84	78.02
PAYX	33.69	41.08	52.99	72.90
GRMN	48.70	37.26	53.22	71.73
WHR	68.15	34.97	47.25	70.10
IBN	33.89	33.93	47.98	75.09	Buy alert (trig. 5 days ago [on 2008-07-16 at $26.51, +27.84% chg], after a 1 day AZ)
ERJ	30.74	27.85	40.67	70.35
DB	93.00	27.28	42.96	70.40	Buy alert (trig. 5 days ago [on 2008-07-16 at $84.60, +9.93% chg], after a 2 day AZ)
TTM	10.51	20.87	33.98	71.03

At least one RSI value <30:

Ticker	Last	RSI-7M	RSI-7W	RSI-7D	Zone
SBUX	15.13	14.91	40.96	57.96	Buy alert (trig. 5 days ago [on 2008-07-16 at $14.34, +5.51% chg], after a 5 day AZ)
WFMI	22.15	16.61	27.36	48.38	Buy alert (trig. 5 days ago [on 2008-07-16 at $21.89, +1.19% chg], after a 5 day AZ)
GOL	9.71	17.79	28.29	54.76	Buy alert (trig. 5 days ago [on 2008-07-16 at $9.19, +5.66% chg], after a 13 day AZ)
JCP	31.49	18.94	34.65	43.76	Buy alert (trig. 4 days ago [on 2008-07-17 at $32.05, -1.75% chg], after a 5 day AZ)
BC	12.03	19.61	41.97	66.52	Buy alert (trig. 6 days ago [on 2008-07-15 at $10.02, +20.06% chg], after a 1 day AZ)
UBS	22.42	20.87	41.18	68.63	Buy alert (trig. 5 days ago [on 2008-07-16 at $19.83, +13.06% chg], after a 1 day AZ)
TTM	10.51	20.87	33.98	71.03
SNDK	13.62	23.50	15.44	20.30	Accumulation Zone (for 1 days)
KSS	42.91	23.55	48.86	59.09
BDK	58.96	25.45	44.55	61.51	Buy alert (trig. 5 days ago [on 2008-07-16 at $55.16, +6.89% chg], after a 2 day AZ)
DB	93.00	27.28	42.96	70.40	Buy alert (trig. 5 days ago [on 2008-07-16 at $84.60, +9.93% chg], after a 2 day AZ)
ERJ	30.74	27.85	40.67	70.35
TGT	45.96	28.31	37.88	46.29	Buy alert (trig. 5 days ago [on 2008-07-16 at $46.18, -0.48% chg], after a 4 day AZ)
AET	36.16	29.05	25.26	47.23	Buy alert (trig. 1 days ago [on 2008-07-22 at $36.16, +0.00% chg], after a 1 day AZ)
BA	69.26	29.65	39.63	68.41	Buy alert (trig. 6 days ago [on 2008-07-15 at $63.88, +8.42% chg], after a 2 day AZ)
TGP	24.73	32.37	26.08	42.49	Buy alert (trig. 5 days ago [on 2008-07-16 at $24.47, +1.06% chg], after a 1 day AZ)
KO	51.35	36.12	21.41	52.55
MICC	75.48	37.08	18.68	15.12
CTSH	27.79	39.70	32.63	24.88
GOOG	477.11	40.31	33.27	27.69
TEF	76.83	43.65	29.96	24.06
VCP	25.36	44.78	26.38	35.58
NUE	60.11	45.49	27.95	36.54
RIO	29.23	46.82	25.51	28.63
IMO	49.38	47.39	28.32	38.46
CVX	85.63	48.20	24.01	24.36
QCOM	44.10	54.85	43.41	28.96
PBR	57.73	55.75	34.77	28.11
ATVI	30.07	64.63	40.47	24.46

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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
BAC	32.35	3.79	13.27%	74.68%	37.43%	25.00%	-20.24%	-12.57%	-13.53%	-33.04%
GM	14.32	1.23	9.40%	45.53%	32.84%	10.92%	-41.34%	-30.18%	-39.48%	-58.99%
C	20.89	1.20	6.09%	43.48%	20.13%	12.61%	-27.77%	-16.84%	-14.42%	-58.82%
AIG	28.14	1.61	6.07%	36.34%	2.70%	-7.13%	-50.02%	-37.84%	-46.36%	-59.24%
JPM	40.86	2.21	5.72%	31.72%	14.23%	10.82%	-3.11%	-10.49%	-0.05%	-14.09%
CAT	74.98	1.75	2.39%	11.84%	7.87%	-6.27%	6.16%	-8.57%	17.39%	-9.88%
HD	23.95	0.83	3.59%	11.60%	3.95%	-4.43%	-8.27%	-16.02%	-15.16%	-39.20%
DD	45.21	1.16	2.63%	9.84%	7.93%	-0.57%	3.36%	-9.87%	6.23%	-14.08%
UTX	65.27	1.22	1.90%	8.64%	5.67%	-5.16%	-13.22%	-8.64%	-3.09%	-14.15%
BA	69.26	1.02	1.49%	8.42%	5.07%	-8.37%	-20.04%	-11.84%	-10.67%	-33.31%
GE	28.50	0.81	2.93%	6.94%	1.57%	4.01%	-22.47%	-11.85%	-16.37%	-28.96%
INTC	22.09	0.00	0.00%	6.66%	5.59%	-1.21%	-12.86%	0.45%	18.57%	-10.02%
IBM	130.00	1.34	1.04%	5.52%	4.94%	5.30%	24.18%	5.12%	28.41%	13.23%
WMT	59.06	1.75	3.05%	5.01%	3.78%	4.98%	25.93%	4.44%	20.04%	22.89%
HPQ	43.53	0.18	0.42%	4.51%	0.18%	-4.35%	-12.61%	-9.63%	2.02%	-10.32%
PFE	18.35	0.26	1.44%	4.38%	0.88%	5.58%	-19.90%	-7.28%	-17.49%	-26.31%
MMM	70.30	1.57	2.28%	3.86%	-1.03%	-3.65%	-15.00%	-13.40%	-6.48%	-22.07%
DIS	30.41	-0.08	-0.26%	3.33%	1.54%	-6.11%	-4.49%	-2.81%	8.22%	-11.44%
MCD	60.12	0.37	0.62%	2.66%	2.73%	5.46%	3.48%	3.03%	14.62%	15.42%
AXP	37.99	-2.91	-7.11%	2.62%	-8.57%	-7.07%	-25.57%	-13.60%	-12.49%	-41.11%
XOM	82.86	-0.12	-0.14%	0.82%	-3.58%	-5.52%	-11.39%	-12.22%	0.50%	-9.88%
JNJ	67.99	0.88	1.31%	0.43%	2.69%	5.76%	3.16%	1.49%	4.10%	10.03%
PG	64.10	0.46	0.72%	-0.39%	0.69%	1.86%	-11.35%