A panel of Canadian appellate court judges ruled unanimously that despite the massive $32 billion fraud perpetrated by the banks in Canada, the buyers of the phony paper must accept the work-out plan and cannot sue the banks. Wow, what’s next for Humungous Bank & Broker to be permitted to evade—murder? No wonder traders don’t want to hold the shares of these Financials (XLF -3.8%)!

Yesterday, the DJIA (-180.51 -1.55% to 11479.39), S&P 500 (-19.60 -1.51% to 1278.60), and NASDAQ Composite (-35.54 -1.45% to 2416.98) all tanked. The mood among traders is that if they are not on vacation they ought to be because this is a very negative market, perhaps about to get much worse.

In Canada, the Toronto Exchange Composite managed a small gain (+0.17% to 13119), but the Venture Board dropped -0.71% to 1923.64.

Yesterday the $GOLD rallied +$13.60 to 805.70 before the metal started selling off after the futures market closed. Crude Oil ($WTIC) dropped -$1.05/bbl to 112.89 after traders saw that the path of Fay would likely be north through the middle of Florida, where condos and not oilfields would be hit.

Of the extreme Cara 100 stocks, the big gainers were commodity plays, led by the Goldminers: SLW +4.0% (a silver royalty company), GG +2.8% and ABX +2.6%. The big loser was SanDisk (SNDK -10.2%) and Indian companies IBN -4.0% and TTM -3.8%. I guess the rumor-spreaders on the SNDK backed off.

The long bond ($USB) gained +0.37% as yields dropped, likely causd by the safe-haven move from equities to bonds. The Banks ($BKX -3.9%) and Broker-Dealers ($XBD -3.0%) tanked on fears that maybe some of them might not be around after the next series of write-downs. Lehman (LEH) dropped -7.1% to $15.03. Goldman Sachs fared better (GS -1.92% to 160.04) but is sitting perilously close to trend line support, which if broken could take the stock down to about 50% of its 52-week high of $250.70 set on Oct 31, 2007.

The $USD futures closed down -0.07% to 77.10 and the Euro up +0.12% to 147.03, which wasn’t much of a change. The Loonie took a hit of –0.48% to 93.94.

Earlier today, the Asia-Pacific equity markets were down a lot except for China, which seems to be a hedge play for some large hedge funds: Australia’s All Ords index (down 2.24% to 4930.4); Shanghai (+1.06% to 2344.5); Hong Kong (-2.13% to 20484.37); India’s Sensex (-0.70% to 14543.73); and Japan’s Nikkei (-2.28% to 12865.05). That is a significant loss for the Nikkei Dow, which is reeling under bad economic news in Japan, which is also taking the Yen down as well.

This morning, the $USD (77.29) and Euro/USD (1.4662) shows a stronger USD. Crude Oil futures have dropped to 112.16 (-0.73/bbl).

The DJIA futures at 8:25am ET are at 11435, down -64. This confirms the weakening markets in Europe in the past hour.

On the corporate earnings front today, Home Depot (HD) reported earnings of $1.2 billion ($0.71/share) vs $1.59 billion ($0.81/share) a year earlier. Net revenue fell -5.4% to $20.99 billion. Same-store sales dropped -7.2% on a comparable-week basis. Analysts had expected worse. The stock was up +4.4% last week, which was the 2nd best performer among 30 DJIA stocks, so this result was anticipated even though the analysts say they were “surprised”.

At about 8:29am ET in Europe, markets are soft: the French CAC is down -1.79%; the German DAX is down -1.79%; and the UK FTSE is down -1.91% from yesterday’s close.

Spot gold, palladium, platinum and silver at 8:27am ET were a tad weaker than at the same time yesterday (price then in brackets): 789.85 (791.40), 272 (278), 1323 (1373), and 12.865 (13.06). So the rally in the precious metals that took place yesterday morning into the afternoon did not persist.

---

Comments & Outlook

The Physical Platinum Exchange Traded Commodity (ETC) [LSE:PHPT] fell -30% in the week to Aug 17. This data may be of interest.

Stephen Jen, currency specialist at Morgan Stanley has issued an excellent report (“My Thoughts on Currencies”) dated Aug-18. Here is the summary, making many points I am in agreement with:

Bottom line: The rally in the dollar in the past two weeks,
though sharper than I had expected, makes a lot of sense
to me. (Apologies for the radio silence during this time as
I was on vacation.) I believe that the dollar has
established a genuine medium-term floor. The path
forward will likely be marked by a two-steps-forward,
one-step-back pattern; but this path will be up for the USD,
for at least the remainder of the year. The ‘Dollar Smile’
that I proposed at the end of last year is finally working
more visibly against a broader range of currencies; it
already began to work against the Asian currencies in
early May. The global economy is likely to slow further in
the months ahead, with several large economies flirting
with outright recessions. But global weakness is
precisely the key ingredient for the ‘Dollar Smile’ to work,
which wasn’t present in 1H this year. (1) The stars were
aligned 2-3 weeks back for the dollar to rally. (2) The AXJ
currencies will likely dictate and lead the general trend of
the dollar. I see them weakening further in the months
ahead, as cross-border (as opposed to cross-asset)
risk-reduction gains momentum. The INR, KRW and
other AXJ currencies will continue to weaken against the
dollar. (3) Though I don’t believe that China will slow
dramatically in the period ahead, investors are likely to be
excitable in the post-Olympics period and inclined to be
bearish on China. Such bearishness and caution will set
the tone for the rest of Asia. (4) The US and the world’s
Phillips Curve should remain relatively stable, i.e., if the
world falls into a recession, inflation will decline; the spike
in oil prices may have disturbed this relationship. (5)
What real money investors do with their hedging
strategies will be the single-most important determinant
for the dollar, in my view. Hedge funds and model
accounts are important in the short run, but US real
money accounts, which haven’t hedged much of their
overseas exposures, may start to elevate their hedge
ratios. This is a sea change for the dollar, in my view. (6)
The strong dollar is a positive development for the world,
as it encourages virtuous circles through lower
commodity prices. Also, there will be virtuous circles
through general sentiment regarding the US, as an
economy and as a society, that – in turn – will be positive
for USD assets, including the dollar itself.

On the weekend in the WIR, I opined that the $USD was in a new Bull phase, which when recognized a few weeks ago pulled the precious metal prices down. After weeks of virtual free-fall in the metals, when the $USD powered north, this weekend I advanced the notion that very long-term oriented traders as well as day traders may find it to their benefit to buy the depressed shares of the gold companies.

In the case of the long-term oriented traders, that would be the start of an averaging down strategy. For the day-traders it would be done to try to capture a +4% to +8% move in share prices.

What happened yesterday, on a day when the huge majority of share prices plunged, was that the goldminers group rallied, as I said I expected they would. That’s cutting it pretty fine.

The DJIA dropped over -180 points and the major market indexes fell by an average -1.5%, but the Goldminers ($XAU) lifted +1.5% and $GOLD lifted +$13.50/oz on the day. My monitor showed some very good gains:

AMEX:
GSS Golden Eagle Res +3.5%
MFN Minefinders +5.3%
NG Novagold +2.2%
NASDAQ:
PAAS Pan American silver +5.0%
RGLD Royal Gold +3.6%
SSRI Silver Standard +1.1%
NYSE:
ABX Barrick +2.6%
AEM Agnico-Eagle +6.5%
AUY Yamana Gold +2.0%
GG Goldcorp +2.8%
HL Hecla +2.3%
IAG Iamgold +1.9%
KGC Kinross Gold +3.1%
NEM Newmont Mining +1.3%
SLW Silver Wheaton +4.0%
Toronto:
ARU Aurelian +3.6%
GEA Gold Eagle Mines +2.3%
KRY Crystallex Intl +4.3%
LMA La Mancha Res +3.2%
UXG US Gold Corp +2.6%
WGI Western Goldfields +3.6%

But please don’t misconstrue my words. I am not calling for the start of a renewed Bull phase for precious metals or goldminer shares. At least not yet.

There has been a lot of technical damage done that must be repaired, which simply means a new cycle bottom must be constructed where the Bulls and the Bears come into balance, for a while. That period may cover a week or a month; we’ll have to wait to see.

Now is the proper time to study the quality of the goldminers and explorers to assess their future prospects. Don’t waste it. More to the point; don’t waste your precious time reading the back and forth nonsense from the newsletters and chat boards. The only thing important to you is found in the market price and volume data and in the fundamentals and quant data contained in the research reports from Wall Street and Bay Street.

---

Links & Charts

---

International Economics Review

US Economic Calendar.

---

Knobias Cara100 Tables

---

Cara 100 Daily RSI-7 Charts

At least one RSI value >70:

At least one RSI value <30:

---

International Equity Markets Review

Europe

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

---

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

---

Here is the latest session data for the German DAX.

---

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

---

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

---

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

---

Asia-Pacific

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

---

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

---

Here is the latest chart for the Singapore index .

---

Here is the latest chart for the Shanghai Composite index .

---

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

---

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

---

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

---

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)

---

The Americas

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.

---

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

---

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.

---

10 (energy: XLE)

Table 2: Senior oil & gas equities

---

15 (basic materials: XLB)

Table 3: Senior metals and steel equities

Table 12: Senior gold equities

---

20 (industrial: XLI)

Table 4: Senior capital goods makers and transportation

---

25 (consumer discretionary: XLY)

Table 5: Senior consumer discretionary equities

---

30 (consumer staples: XLP)

Table 6: Senior consumer staples equities

---

35 (healthcare: IYH)

Table 7: Senior healthcare equities

---

40 (financial: XLF)

Table 8: Senior financial company equities

---

45 (technology, semiconductor: SMH)

Table 9: Senior technology equities

---

50 (telecom: IYZ)

---

55 (utilities: XLU)

---

International Equity Market USD-denominated ETF Review

Table 13: International equities perspective

---

Japanese equity market ETF: EWJ

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

Interactive EWJ Daily data:

Interactive EWJ Weekly data:

---

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:

---

Canada's equity market

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

Interactive EWC Daily data:

Interactive EWC Weekly data:

---

Bonds & Yields Review

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

---

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

---

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:

---

Table 11: Interest-sensitive securities

Consumer Finance -USA -- Interactive Daily Data Charts

---

Commodities Review

$CRB Index

Open Futures Contracts

Interactive Chart of Daily CRB Commodities Index:

Interactive Chart of Weekly CRB Commodities Index:

---

Oil Review

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

Interactive Chart of Daily Crude Oil:

Interactive Chart of Weekly Crude Oil:

---

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:

---

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:

---

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.

---

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.

---

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.

---

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

---

Here are the key Silver miners and the SLV ETF:

SLV SIL CDE HL PAAS SSRI SLW MGN

Interactive Daily data
Interactive Weekly data

---

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:

---

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:

---

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:

---

Forex Review

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

Interactive Chart of Daily U.S. Dollar Index:

---

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

---

Daily British Pound Index:

---

Daily Japanese Yen Index:

---

Daily Canadian Dollar Index:

---

Wrap-up