Yes, it’s true; traders are ahead of the curve. We have to be to stay alive. Well, in the past couple years, I wrote about Stagflation about 175 times. I know you didn’t miss the point. If I used the expression “Stagflation is a market killer” once, I did it maybe 150 times.

Bill Cara: Wednesday, January 5, 2005 09:29:51 The absolute killer to the bull market in equity prices, and residential real estate prices for that matter, is a concept called Stagflation. ... www.billcara.com/archives/2005/01/wednesday_janua_1.html

Bill Cara: Inflation is rattling the markets, Wed., Oct. 12, 2005 ...
That situation is called stagflation, and it is evident today. ... As it happens, this stagflation is not just happening in America at this point in time. ...
www.billcara.com/archives/2005/10/inflation_is_ra.html

Bill Cara: GDP Deflator shows inflation is growing, Thurs., Mar. 30, 2006
Let me remind you; that situation is called Stagflation. And, Stagflation is a killer for stocks and bonds. That's what is happening today. ...
www.billcara.com/archives/2006/03/gdp_deflator_sh.html

Bill Cara: Stagflation worries are growing, Tues., 6/20/2006 8:27 AM
If the numbers are bad, the talk this morning will be of Stagflation. Nothing kills capital market prices like stagflation. Choose your poison. ...
www.billcara.com/archives/2006/06/stagflation_wor.html

Bill Cara: U.S. econ data shows striking stagflation, Wed., Aug ...
U.S. econ data shows striking stagflation, Wed., Aug. 16, 2006, 8:40 AM. The consumer inflation and housing starts data is out. Let the spin begin. ...
www.billcara.com/archives/2006/08/us_econ_data_sh.html

Bill Cara: U.S. Jobs Report focuses the issue, Fri., Oct. 6, 2006 ...
We " the buy-side and sell-side together -- have to confront the problem, which is stagflation " a condition of the economic and capital market cycles that has not been with us since the 1970’s.
www.billcara.com/archives/2006/10/us_jobs_report_focuses_the_iss.html

Bill Cara: Cara’s Bull Board, Thurs., Apr. 12, 2007, 7:08 AM
12 Apr 2007 ... When the issue is domestic Stagflation, it’s a killer for stock and bond prices. The place to be long is commodities and the currencies of ...
www.billcara.com/archives/2007/04/caras_bull_board_thurs_apr_12.html

Bill Cara: Week in Review #28 (2007-07-14)
And as you know from reading this blog, stagflation is a killer of financial assets (like ... Obviously, stagflation has not held back the stock prices, ...
www.billcara.com/archives/2007/07/week_in_review_27_20070714_pre.html

Bill Cara: Daily Report for Mon, Dec 17, 2007
The current economic situation is called Stagflation, last seen in the 1970's. Stagflation is a killer of stock and bond markets. ...
www.billcara.com/archives/2007/12/daily_report_for_mon_dec_17_20.html

Bill Cara: Daily Report for Sat, Jan 19, 2008
There is no theme in the market today except Stagflation (ie, economic slowing along with rising inflation), and, as I have often written, stagflation is a market killer.
www.billcara.com/archives/2008/01/daily_report_for_sat_jan_19_20.html

Bill Cara: Week in Review #15 (2008-04-13)
The already dangerous element of stagflation is now compounded by illiquid credit markets. ... His program only wins if Stagflation continues. ...
billcara.com/archives/2008/04/week_in_review_15_20080413.html

I am particularly proud of the WIR #28 (July 14, 2007)—the one I wrote from the docks of the Nassau Harbour Club, a Kalik in hand and the laptop in my lap. Beautiful day, clear thinking, the water, the boats… btw, the NHC is now closed, to be re-opened as the onshore terminus of the Rose Island resort being developed by Ritz-Carlton.

Yes, the mark of a professional is consistency. I suppose you also have to be consistently accurate, unlike the CNBC clowns, Kudlow and Cramer, who have it the other way.

The highlight of my week was watching the old YouTube video of CNBC’s Rick Santelli calling out Jim Cramer. So, not everybody on CNBC is a clown—certainly Santelli is not!

With Rick Santelli, any time I watch him—which is infrequently because I can’t stand that network—all I can think of is the expression “When you are up to your ass in alligators, you need to drain the swamp.” I really don’t know why he stays there.

Kudlow and Cramer should be paired again on TV for the Comedy Hour.

Rick Santelli: http://www.youtube.com/watch?v=SGkrNJ19DSU

[Bill Cara note: We all agree that Rick Santelli is the best thing that CNBC has going for it. After CNBC scooped Erin Burnett from Bloomberg, I was surprised Bloomberg didn't reciprocate and hire Santelli. There are plenty of Burnett's around, but only one Santelli.]

Posted by: Aurator at August 1, 2008 1:58 PM

Well, here we are in the dog days of summer when we should all be on vacation, and many are. Volumes are well down. Let’s see what happened—even if it won’t show us much this week.

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Global Economics Review

Weekly International Economic Report .

Econoday summed up the week thusly: “Economic data swamped investors on Thursday and Friday as they looked for guidance to their investment’s future. And one needed to be two-handed to determine which way the U.S. and overseas economies were going. While second quarter U.S. growth was lower than anticipated, the Chicago purchasing managers survey edged above the breakeven point. On the other hand, jobless claims soared thanks to technical issues that will take some time to iron out. And in Europe, the flash harmonized index of consumer prices edged up to a record 4.1 percent on the year virtually ruling out any near term interest rate cut while unemployment was unchanged from the previous month. In Australia, a surprise trade surplus offset weaker than expected retail sales. And then it was Friday — and it was employment Friday! While U.S. employment dropped less than expected, the unemployment rate rose more than expected. But virtually all the purchasing managers’ indexes worldwide — including those in China, Japan, Australia, EMU and UK — continued to decline. As one would expect, equities were mixed on the potpourri of data.”

This is an excellent report by the way. I encourage everybody to read it and discuss it in the Discourse.

Here are the key US economic reports and the Econoday analysis from last week.

US Economic Calendar.

US Jobs Report for July. Econoday reported: “…the July jobs report shows the labor sector in recession with the seventh consecutive decline in payroll jobs and a rise in the unemployment rate. Nonfarm payroll employment in July declined 51,000, following an equal drop of 51,000 in June and a fall of 47,000 in May… The latest decrease was led by declines in manufacturing and construction with losses of 35,000 and 22,000, respectively. Goods-producing jobs decreased 46,000 as natural resources & mining rose 11,000 in July. Service-providing jobs actually slipped 5,000 after rising 26,000 in June… On the inflation front, average hourly earnings posted a 0.3 percent gain in July... Within service-producing industries, strength was in government which was up 25,000 for July. Private payrolls declined 76,000 with weakness led by a 24,000 drop in professional & business services. Notable decreases were also seen in retail trade and wholesale trade - each down 17,000 for the latest month. Also confirming a deterioration in the labor sector was slippage in the workweek. Average weekly hours slipped to 33.6 hours in July from 33.7 hours in June. On a year-on-year basis, nonfarm payroll employment was unchanged at no change (zero percent) in June...”

The US requires a net gain of about +180,000 jobs per month to be able to grow a healthy economy. Instead, over the past four months there has been a total loss of over -200,000 jobs, net of all the gains in the government sector and the gains caused by the mega-billions distributed in so-called “emergency tax-rebates” intended to boost spending, and hence employment.

US ISM Manufacturing report for July. Econoday reported: “Production and employment popped higher in the ISM's manufacturing report for July but, in an ominous reading, new orders fell nearly 5 points to 45.0 for the lowest reading since the 2001 recession. Backlog orders also declined, down 4-1/2 points to 43.0 for its lowest reading since early 2003.”

How is next week’s calendar looking? The big events will be the FOMC announcement of US monetary policy at 2:15pm ET on Tuesday, followed by announcements of the Bank of England at 7:00am ET on Thursday and by the European Central Bank 45 minutes later.

US Economic Calendar.

US Personal Income and Outlays Report for June. For May, Econoday reported: “Personal income got another huge spike from income tax rebate checks and a sizeable portion of those checks appears to be going into spending - even if for higher priced gasoline. Headline inflation has heated up more but core inflation is staying cool. Personal income in May jumped 1.9 percent, following a 0.3 percent rise in April… On the spending side, personal consumption soared 0.8 percent in May after rising 0.4 percent in April… But spending was led by a 1.2 percent boost in nondurables which includes gasoline. Durables slipped 0.2 percent while services posted a 0.7 percent gain.” We’ll be watching the wages and salaries component for anything good here.

US ISM Non-Manufacturing report for July. For June, Econoday reported: “Prices soared on the manufacturing side and are soaring as well on the non-manufacturing side as the Institute For Supply Management's prices paid index hit a record high 84.5 in June, up 7.5 points from May. There are now indications that these pressures are slowing growth, reflected in a sub-50 reading for the non-manufacturing composite headline index which fell to 48.2 vs. May's much better reading of 51.7… Unfortunately weakness is centered in new orders, down nearly 5 points in the month to 48.6. New order readings have been below 50 before this year but there's something more ominous about this decline. Also ominous is the employment reading, down nearly 5 points to a record low 43.8. The employment report for June of course was released earlier this morning, showing labor market conditions to be on the edge of recession and this reading confirms the trouble.”

US Pending Home Sales index for June. For May, Econoday reported: “Stability unfortunately in the housing market is still uncertain, the latest indication from the pending home sales index which fell 4.7 percent in May to 84.7. But on the positive side, the dip follows a nice 7.1 percent spike in April with the current year-on-year rate roughly stable at -14.0 percent, a bit softer than April but still much better than a long string of prior declines in the 20 percent range. Details show roughly equal declines across regions.”

US Productivity and Costs Estimate for Q2. In June, reporting on the Q1 revisions, Econoday stated: “First quarter productivity was revised up to an annualized 2.6 percent from the initial estimate of 2.2 percent and slightly beat market expectations of 2.5 percent. Inflation pressures from labor costs are unchanged as unit labor costs for the first quarter were unrevised at an annualized 2.2, but came in higher than the consensus projection for a 1.9 percent rise. The bottom line is that companies are keeping a rein on labor costs and are still investing in cost cutting technology and both factors are helping to support profits in a tough economy… Year-on-year, productivity was up 3.3 percent in the first quarter, compared to up 2.9 percent the previous quarter. Year-on-year, unit labor costs in the first quarter stood at up 0.7 percent, down from up 1.4 percent in the fourth quarter. Year-on-year, compensation per hour in the first quarter was up 4.0 percent, compared to up 4.4 percent in the fourth quarter.” Rising unemployment is a factor in keeping productivity up and inflation down; but at some point people will start demanding more pay for the increased productivity and their booming cost of living. So far, the US (and other countries) has been hit with raw materials and goods and services inflation; the next to come is wage inflation.

US Wholesale Trade data for June. For May, Econoday reported: “Whole inventories rose 0.8 percent in May, well under a 1.6 percent rise in sales at the wholesale level and pushing down the stock-to-sales ratio 1 tenth to a record low of 1.08. Inventory build between durables and non-durables was roughly even, a contrast to sales where durables were down but with non-durables, reflecting price inflation, way up at 3.2 percent in the month. Petroleum inventories remain unusually low, down 1.0 percent in May vs. a 7.5 percent monthly rise in sales. The stocks-to-sales ratio for petroleum is at a record low of 0.24 -- a low that does not reflect high demand which in fact is on a year-on-year decline due to high prices. Low stocks of petroleum products, reflecting soft refinery production, are part of the reason that oil prices are so high… Inventories will be an important factor for second-quarter GDP but the verdict is still out. Inventories at the nation's factories in May have already been reported, showing a 0.5 percent rise. Retail inventories will be released next week. Businesses have been cautious in keeping inventories down should economic growth slow, but mild accumulation appears to be necessary to meet demand.” Economists are mixed in their views as to whether the US is in recession. One of the factors is inventories, so, even if it’s old data, this is an important report.

I don’t see how interest rates in the US, UK or Europe can fall from here unless the fix is in for $200 oil. And with inflation on the rise, bond traders ought to be wary. The money that has been flowing into US Treasuries is hot money, and the yields are going under the level of inflation, so capital committed to these bonds is not seeking fixed income, but merely standing aside the slide in equity prices.

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US Equity Markets Review

DJIA ino.com chart

DJIA stockcharts.com chart

There was a lot of disbelief in the US equity market this week. If not, there ought to be. Bank of America (BAC +12.7%) and JP Morgan (JPM +3.1%) were the top two performers in the DJIA index.

At the end of the week though, there were 4 of 10 sectors that lifted in price and 1 was flat. There were 14 of 30 Dow components that were up. So, the damage wasn’t all that much. In fact, while the DJIA was driven lower (-0.4%) by General Motors (GM -14.0%), the S&P 500 index actually gained (+0.2%).

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NASDAQ Composite ino.com chart

NASDAQ Composite stockcharts.com chart

The NASDAQ Composite was flat this week (2310.96 vs 2310.53).

Here is the list of the ten highest-weighted non-financial stocks in the NASDAQ Composite. Put them in a watchlist (see Google Finance Portfolio) and watch them like a hawk. If you want, add a couple like SNDK and ADBE:
AAPL MSFT GOOG QCOM RIMM CSCO INTC ORCL GILD EBAY

What has been happening recently is that the market is led upwards by the NASDAQ, but down by the DJIA. The DJIA is more heavily weighted by Financials. That may not continue as the Financials appear to have reached a temporary plateau, and traders are hammering the tech companies that miss consensus earnings or that issue any kind of negative guidance.

Daily RSI-7 for the Nasdaq 100 Big-10

Weekly RSI-7 for the Nasdaq 100 Big-10

Monthly RSI-7 for the Nasdaq 100 Big-10

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The US equity market Sector ETF Summary

This week, there were 4 sectors up and 5 down, with 1 flat. On Friday there were just 2 of the 10 sectors that lifted.

A week ago I opined, “Traders seem to be undecided whether the Summer Rally can continue. If it is to rally, they want to see lower commodity prices but not so much of the lower Energy stock prices as happened this week.” This week, the Crude Oil price actually lifted, and so did the XLE (+0.65%).

Here’s the SPY Monthly, Weekly and Daily data charts:

SPY Monthly data:

SPY Weekly data:

SPY Daily data:

The tables I now show are for eleven GICS Sector Index Funds (ETF’s), including two for Technology (XLK and SMH), for a total of ten GICS sectors. They cover the full spectrum of the US equity market.

Table 1: Cara ETF List is sorted by price performance Week over Week (W/W), i.e. 1W%N.

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
XLF	21.69	0.09	0.42%	4.28%	5.04%	8.78%	-23.52%	-21.30%	-26.62%	-35.10%
SMH	27.86	-0.04	-0.14%	1.27%	-6.26%	-2.93%	-11.16%	-11.92%	-7.87%	-26.53%
XLP	27.35	-0.05	-0.18%	0.89%	1.86%	2.55%	-3.66%	-2.84%	-0.44%	2.78%
XLE	74.49	0.02	0.03%	0.65%	-2.92%	-12.26%	-6.30%	-6.84%	4.40%	8.19%
XLB	39.36	-0.94	-2.33%	0.51%	-0.56%	-0.23%	-4.70%	-6.31%	-3.81%	-0.30%
SPY	126.10	-0.73	-0.58%	0.49%	0.10%	-0.17%	-12.99%	-10.64%	-9.66%	-13.90%
XLY	28.40	-0.02	-0.07%	0.00%	-0.87%	1.25%	-11.80%	-14.61%	-13.41%	-23.24%
XLI	34.25	-0.23	-0.67%	-0.64%	-0.15%	2.51%	-11.06%	-11.61%	-9.51%	-13.73%
IYH	64.63	-0.55	-0.84%	-0.69%	0.75%	4.58%	-7.80%	0.29%	-4.79%	-4.14%
XLK	22.15	-0.15	-0.67%	-0.94%	-1.56%	-0.89%	-15.20%	-10.76%	-5.74%	-13.95%
XLU	36.92	-1.16	-3.05%	-1.86%	-4.72%	-8.57%	-12.28%	-8.82%	-8.25%	-5.16%
IYZ	22.99	-0.36	-1.54%	-2.09%	-1.33%	-0.26%	-21.19%	-12.42%	-13.44%	-31.41%

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. SPY XLE XLB XLI XLY XLP IYH XLF XLK SMH IYZ XLU . You can also add more ETF’s – up to 30 in total.

For a list of components to many ETFs, go to the AMEX.com web site, and click on ETF’s.

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10 (energy: XLE)

15 (basic materials: XLB)

20 (industrial: XLI)

25 (consumer discretionary: XLY)

30 (consumer staples: XLP)

35 (healthcare: IYH)

40 (financial: XLF)

45 (technology, semiconductor: SMH)

50 (telecom: IYZ)

55 (utilities: XLU)

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Individual Sector ETF Review

Sector 10 (energy: XLE, IYE, VDE, OIH, PBW and IXC)

Here’s the XLE Monthly, Weekly and Daily data charts:

XLE Monthly data:

XLE Weekly data:

XLE Daily data:

Table 2: Senior oil & gas equities

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
RIG	137.61	1.58	1.16%	3.45%	-4.45%	-3.71%	-5.71%	-5.59%	9.70%	30.40%
PBR	54.46	-1.45	-2.59%	2.56%	-6.20%	-17.13%	-54.16%	-55.34%	-51.83%	-14.63%
CEO	148.63	1.25	0.85%	2.54%	-3.52%	-13.08%	-11.22%	-17.40%	-3.00%	29.50%
CVX	84.31	-0.25	-0.30%	2.12%	-2.02%	-14.52%	-9.79%	-11.20%	2.21%	-1.01%
IMO	49.77	0.53	1.08%	1.51%	2.83%	-5.97%	-9.38%	-12.93%	-0.99%	6.26%
SLB	100.20	-1.40	-1.38%	1.25%	-0.35%	-1.65%	-0.38%	1.88%	28.00%	5.90%
PTR	133.64	0.18	0.13%	1.23%	2.43%	7.87%	-23.04%	-12.57%	-10.76%	-7.16%
SU	54.50	0.00	0.00%	1.11%	-0.22%	-5.02%	-1.14%	0.26%	14.88%	20.95%
TOT	75.35	-1.15	-1.50%	-0.32%	-0.30%	-6.59%	-9.52%	-9.36%	1.80%	-4.34%
ECA	72.43	0.24	0.33%	-1.99%	-7.35%	-18.54%	4.05%	-6.83%	6.86%	17.54%
XOM	79.72	-0.71	-0.88%	-2.42%	-2.23%	-9.69%	-14.75%	-11.13%	-7.25%	-7.13%
STO	30.23	-2.15	-6.64%	-2.89%	-3.14%	-15.91%	-3.23%	-15.11%	11.67%	3.42%

Crude Oil ($WTIC +$1.84/bbl +1.49% to 125.10) consolidated after falling from $145 just three weeks ago.

The Energy sector ETF (XLE) gained +0.65% to close at 74.49.

PetroBrazil (PBR +2.6%) was a winner after losing -8.5% a week ago. The other winners were CEO and RIG.

Exxon (XOM), which disappointed re production levels last quarter, dropped -2.4% after reporting a Q2 profit rise of “just” +14%. Statoil (STO) dropped -2.9% W/W after plunging -6.6% on Friday, following its disappointing earnings report where profit just happened to rise +36%.

I will re-state from a week ago, and the week before that: “… this is a solid sector for the future Bull, which means you need to start looking at the potential winners, and XOM, SU and PTR are ones I like at a price. The bigger the account (presumably longer term oriented), the more that it’s advisable to write puts on market pull-back days. But don’t chase them. Let them come to you.”

XOM closed at $79.72, but hit a low of $79.45 on Friday. The mid-70’s is my target. You can write the Jan-09 75 puts for $4.00 and the 70 puts for about $2.35. I think that’s money in the bank even if the stock is put to you. With a basis in the 60’s (say 68), and 2008 earnings projected at $8.72 (with $4.28 already in the bank), that would be a PE of just 7.8x. The average annual PE is going to be running ~12.0x, so I would feel good at writing those puts, particularly on very weak days in the market, and for XOM. In fact, I think the cash flow/share will be about $12.00 for 2009, so if I could buy the stock in a terrible Bear market at 6x cash flow (say mid-70’s or better), I’d be a happy trader. That’s because the Value Line chart shows the price tracking at 9x cfps since mid-2002, and I think we’ll see that again in 2010 (when cash flow/share is likely to exceed $13) with a price let’s say about $120. Besides, over the next two years, I’d expect to take in $3.00 in dividends.

XOM goes ex-dividend on Aug 11.

The point is that (i) you have to pick sound companies, and (ii) buy and sell their shares at attractive prices so that your dividends to basis is always rising. Don’t lose sight of the fact that when you trade, you are in the money business.

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Integrated Oil & Gas - Canada

Oil & Gas Exploration & Production -Canada

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Sector 15 (basic materials: IYM, XLB, IGE and VAW)

Here’s the XLB Monthly, Weekly and Daily data charts:

XLB Monthly data:

XLB Weekly data:

XLB Daily data:

Table 3: Senior metals and steel equities:

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
TCK	43.77	-2.20	-4.79%	11.60%	9.37%	-1.49%	20.78%	2.63%	24.42%	0.57%
GGB	21.07	-0.70	-3.22%	8.22%	0.14%	-1.59%	-26.59%	-46.90%	-21.15%	-16.69%
MT	84.25	-3.17	-3.63%	7.99%	7.71%	0.54%	10.27%	-3.82%	17.91%	29.00%
RIO	28.28	-1.75	-5.83%	1.80%	-2.92%	-11.85%	-13.54%	-26.10%	-10.59%	-41.68%
PKX	127.75	-4.90	-3.69%	1.14%	6.10%	9.91%	-12.77%	3.40%	-6.76%	-8.09%
AA	32.14	-1.61	-4.77%	1.04%	-4.94%	-1.95%	-11.04%	-7.43%	-6.24%	-15.31%
RTP	394.52	-23.08	-5.53%	0.01%	-1.74%	-8.95%	-6.00%	-14.97%	-10.54%	41.89%
TS	59.09	-1.16	-1.93%	-0.56%	-2.30%	-11.92%	33.12%	10.04%	44.33%	22.92%
VCP	23.77	-0.45	-1.86%	-0.75%	-8.22%	-8.75%	-19.97%	-25.81%	-21.42%	0.72%
DOW	32.73	-0.58	-1.74%	-0.82%	-3.59%	-4.02%	-15.54%	-18.99%	-17.95%	-25.88%
BHP	70.25	-4.41	-5.91%	-0.92%	-2.24%	-9.11%	-0.23%	-12.19%	-4.71%	12.44%
NUE	53.78	-3.44	-6.01%	-4.12%	-8.15%	-14.01%	-7.23%	-27.15%	-9.73%	6.31%

Basic Materials (XLB +0.51% to 39.36) was up.

Teck (TCK +11.6%) was up strongly following a good deal to buy Fording Canadian Coal Trust, but the stock dropped -4.8% on Friday as almost all the metals and precious metal stocks got hammered.

On Friday, for example, Nucor (NUE) was down -6.0%, taking the price down -4.1% for the week.

The Monday morning opening ought to be an interesting one for the metals and precious metals. Later I’ll show how I warned that the charts were looking weak, which then really disappointed me when one of the people in the Discourse asked if I was buying gold.

Btw, the Goldminer share index ($XAU) plunged -6.33% this week. The goldbugs and letter writers were telling the public that the majors were shorting the juniors to buy them cheap (ha!). No, what was happening is that the relatively weak juniors (ie, cash flow wise) were losing bids as traders were getting more nervous about their speculation efforts. The weak die first.

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Sector 20 (industrial: IYJ, XLI, VIS, and IYT)

Here’s the XLI Monthly, Weekly and Daily data charts:

XLI Monthly data:

XLI Weekly data:

XLI Daily data:

Table 4: Senior capital goods makers and transportation:

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
FLR	80.42	-0.93	-1.14%	0.76%	-4.55%	-10.60%	11.39%	6.62%	27.49%	40.08%
TXT	43.06	-0.41	-0.94%	0.58%	3.51%	-9.99%	-35.55%	-30.24%	-24.80%	-25.02%
HON	51.00	0.16	0.31%	0.31%	0.67%	1.37%	-14.86%	-15.94%	-15.30%	-10.76%
UPS	62.26	-0.82	-1.30%	-0.46%	2.38%	4.69%	-9.98%	-15.38%	-15.61%	-19.07%
ABB	25.79	-0.43	-1.64%	-0.85%	-8.77%	-5.77%	-9.95%	-16.91%	-0.81%	8.36%
MMM	70.15	-0.24	-0.34%	-1.13%	1.76%	0.99%	-15.19%	-9.88%	-13.62%	-21.24%
ERJ	29.74	-0.82	-2.68%	-1.72%	4.64%	21.79%	-34.10%	-31.09%	-33.32%	-31.68%
GE	28.21	-0.08	-0.28%	-1.74%	0.75%	4.83%	-23.26%	-14.82%	-21.99%	-27.57%
UTX	63.56	-0.42	-0.66%	-2.56%	-0.83%	4.11%	-15.49%	-14.68%	-14.25%	-14.86%
FDX	77.34	-1.50	-1.90%	-2.70%	-2.74%	3.16%	-10.24%	-21.60%	-17.21%	-30.41%
BA	62.01	0.90	1.47%	-2.85%	-9.00%	-3.82%	-28.41%	-27.40%	-25.07%	-40.68%
CAT	68.14	-1.38	-1.99%	-3.32%	-3.88%	-3.09%	-3.53%	-17.26%	-5.04%	-14.96%

The Industrials (XLI -0.64% W/W) had a losing week caused by Friday’s loss of -0.67%, closing the week at 35.25.

FLR gained +0.8% and CAT dropped -3.3%.

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Sector 25 (consumer discretionary: XLY, IYC and VCR)

Here’s the XLY Monthly, Weekly and Daily data charts:

XLY Monthly data:

XLY Weekly data:

XLY Daily data:

Table 5: Senior consumer discretionary equities

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
WHR	76.26	0.56	0.74%	4.31%	11.33%	25.30%	-4.53%	1.71%	-11.04%	-24.01%
BDK	59.29	-0.73	-1.22%	4.15%	3.11%	4.88%	-15.22%	-11.68%	-18.88%	-31.51%
BC	13.11	0.21	1.63%	4.05%	9.62%	29.16%	-22.52%	-22.65%	-32.00%	-53.54%
NKE	59.40	0.72	1.23%	2.11%	2.06%	1.50%	-6.13%	-12.40%	-4.98%	4.39%
TGT	44.68	-0.55	-1.22%	0.25%	-4.67%	-4.73%	-9.76%	-17.63%	-21.68%	-26.20%
BBBY	27.57	-0.26	-0.93%	-1.57%	-5.87%	-2.99%	-2.79%	-18.12%	-14.85%	-22.10%
JCP	30.20	-0.63	-2.04%	-2.20%	-4.76%	-17.69%	-27.49%	-31.27%	-37.73%	-56.05%
EBAY	24.58	-0.59	-2.34%	-3.23%	2.50%	-8.28%	-24.35%	-22.66%	-14.68%	-25.02%
DIS	30.08	-0.27	-0.89%	-3.28%	-2.65%	-2.65%	-5.53%	-9.67%	-1.89%	-11.08%
CCL	36.56	-0.38	-1.03%	-3.56%	-0.22%	14.64%	-16.26%	-12.01%	-18.36%	-18.39%
TTM	9.520	0.170	1.82%	-5.74%	-4.99%	6.97%	-51.05%	-43.97%	-51.80%	-43.90%
TM	85.08	-0.97	-1.13%	-7.34%	-4.71%	-7.52%	-20.08%	-17.45%	-22.51%	-28.61%

Consumer Cyclicals (XLY) was flat W/W and lost -0.07% on Friday, closing at 28.40.

There were some winners like Whirlpool (WHR +4.3%), Black & Decker (BDK +4.2%) and Brunswick Corp (BC +4.1%).

Ok, so we jumped about the Brunswick boats while the Crude Oil price sank, but a 4-week gain of +29.2% is enough. Successful traders don’t get greedy.

Toyota (TM) dropped -7.3% because even the world’s best auto maker has difficulties in recessive economic conditions. Note also that BMW and Nissan also had their troubles. The GM, Ford and Chrysler, we’ve come to expect that. For the worker’s sake though, I hope the worst is over or nearly so.

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Sector 30 (consumer staples: XLP, VDC, RTH and IYK)

Here's the XLP Monthly, Weekly and Daily data charts:

XLP Monthly data:

XLP Weekly data:

XLP Daily data:

Table 6: Senior consumer staples equities

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
KR	28.02	-0.26	-0.92%	3.74%	-0.36%	-4.86%	9.15%	0.72%	7.85%	3.78%
KO	53.14	1.64	3.18%	2.07%	6.22%	3.22%	-13.01%	-10.07%	-10.33%	-0.24%
PDA	54.95	-0.23	-0.42%	1.70%	2.65%	13.63%	14.17%	-1.52%	18.43%	41.08%
WMT	57.75	-0.87	-1.48%	1.62%	-0.29%	2.21%	23.13%	-0.55%	12.84%	24.95%
ABV	58.72	-0.50	-0.84%	1.49%	-3.80%	-1.77%	-18.98%	-23.79%	-22.46%	-13.12%
WAG	33.93	-0.41	-1.19%	1.10%	-0.73%	8.09%	-9.13%	-4.93%	-6.58%	-24.14%
PG	64.95	-0.53	-0.81%	0.76%	2.01%	2.01%	-10.18%	-3.10%	-1.67%	2.83%
BUD	67.77	0.01	0.01%	0.28%	0.98%	9.89%	31.26%	36.39%	41.01%	36.06%
SBUX	14.42	-0.27	-1.84%	0.00%	0.56%	-7.33%	-25.32%	-13.39%	-24.97%	-46.99%
PEP	66.63	0.07	0.11%	-0.88%	1.87%	-0.21%	-11.50%	-2.73%	-3.20%	0.30%
DEO	69.67	-0.71	-1.01%	-1.98%	-5.29%	-2.55%	-18.09%	-15.86%	-15.05%	-14.86%
WFMI	21.42	-0.75	-3.38%	-4.88%	0.19%	-5.68%	-46.13%	-38.41%	-47.45%	-45.80%

Consumer Staples (XLP +0.89% W/W to 27.35) was third best mover W/W after being second best a week ago.

Whole Foods (WFMI -4.9% (after dropping -3.4% on Friday) reversed the prior week’s gain of +5.3%. Coca Cola (KO +2.1 % was up again after the gain a week ago (+4.1%). Kroger (KR +3.7%) was also up.

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Sector 35 (healthcare: IYH, XLV, VHT, IXJ, and IBB)

Here’s the IYH Monthly, Weekly and Daily data charts:

IYH Monthly data:

IYH Weekly data:

IYH Daily data:

Table 7: Senior healthcare equities

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
AMGN	62.78	0.15	0.24%	16.43%	19.44%	23.49%	34.72%	45.22%	32.56%	20.52%
NVO	64.74	1.23	1.94%	4.40%	4.45%	1.95%	1.47%	-5.78%	3.80%	-38.86%
UNH	28.13	0.05	0.18%	2.48%	17.70%	22.52%	-50.36%	-14.50%	-43.85%	-41.38%
AET	39.96	-1.05	-2.56%	1.89%	13.46%	7.59%	-29.45%	-7.41%	-24.92%	-18.23%
NVS	59.30	-0.05	-0.08%	0.61%	3.74%	4.94%	8.67%	17.61%	17.59%	9.90%
DNA	95.35	0.10	0.10%	-0.68%	16.54%	22.34%	41.47%	39.50%	34.66%	28.16%
JNJ	68.10	-0.37	-0.54%	-1.35%	0.41%	4.58%	3.32%	0.43%	7.48%	11.71%
GSK	46.34	-0.22	-0.47%	-1.49%	-3.03%	-0.92%	-7.63%	3.16%	-1.43%	-10.21%
PFE	18.60	-0.07	-0.37%	-1.54%	1.53%	4.79%	-18.81%	-9.00%	-21.15%	-21.29%
WLP	51.57	-0.88	-1.68%	-2.51%	11.50%	9.37%	-40.72%	1.24%	-34.66%	-30.73%
MDT	52.18	-0.65	-1.23%	-2.63%	-2.34%	2.19%	5.41%	4.65%	9.05%	-0.46%
BMY	21.11	-0.01	-0.05%	-4.65%	-5.04%	1.59%	-19.21%	-7.98%	-11.89%	-26.37%

The Healthcare sector (IYH) lost -0.69% to close at 64.63.

Many stocks were down (eg, BMY -4.7%), but Amgen (AMGN +16.4%) was up sharply on some good news on the licensing front.

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Sector 40 (financial: IYG, IYF, XLF, VFH, IXG, VNQ, RWR, IYR, and ICF)

Here’s the XLF Monthly, Weekly and Daily data charts:

XLF Monthly data:

XLF Weekly data:

XLF Daily data:

Table 8: Senior financial company equities

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
MS	41.11	1.63	4.13%	11.86%	6.59%	14.48%	-19.31%	-18.32%	-14.80%	-36.14%
LEH	18.65	1.31	7.55%	9.38%	-2.41%	-18.38%	-70.01%	-60.26%	-71.74%	-69.34%
JPM	40.76	0.13	0.32%	3.14%	1.85%	15.43%	-3.34%	-17.24%	-15.52%	-8.16%
CS	50.04	0.16	0.32%	2.44%	12.63%	13.42%	-16.15%	-9.20%	-14.21%	-21.25%
GS	182.00	-2.04	-1.11%	1.87%	-0.46%	1.74%	-12.33%	-8.57%	-12.41%	-3.70%
HBC	83.00	0.49	0.59%	1.03%	5.13%	9.27%	0.68%	-5.20%	7.55%	-10.73%
BBD	20.85	-0.38	-1.79%	0.97%	-4.66%	3.42%	-31.48%	-14.58%	-21.73%	-20.36%
C	18.87	0.18	0.96%	0.11%	-2.48%	12.19%	-34.75%	-27.40%	-36.44%	-59.72%
DB	91.53	-0.65	-0.71%	-1.37%	2.65%	5.06%	-29.08%	-25.07%	-20.99%	-33.14%
MER	26.85	0.20	0.75%	-2.43%	-13.13%	-13.72%	-49.11%	-48.75%	-54.02%	-63.24%
IBN	30.40	0.79	2.67%	-5.27%	1.33%	12.05%	-51.09%	-33.55%	-51.17%	-32.04%
UBS	19.39	0.08	0.41%	-6.60%	-9.73%	-4.58%	-57.65%	-44.10%	-53.88%	-64.13%

The Financials (XLF +4.28% to 21.69) managed to be the top sector performer this week.
A week ago, I noted that there was a gain of +0.73% in XLF, “(however) that’s not to say the problems there have been fixed. They have not. But after a 10-week losing skid, many of these stocks have enjoyed a relief rally. Some cannot, probably because they are toast: MER -11.0% and LEH -10.8% are examples.”

Well, LEH did gain +9.4% this week and MS jumped +11.9%. UBS dropped -6.6%.

There will be another panic attack in the Banks and Broker-Dealers sometime soon, even if the Fed, Treasury and FDIC have all their digits plugging the holes in the dikes. A key indicator I watch is the 3-month Treasury Bill yield. When it sinks rapidly, that too me is a signal that insiders believe a large bank is about to fail, and I don’t think it’s a good time to be long the Financials.

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Sector 45 (technology: IGM, IGV, IGW, XLK, VGT, IYW, IGN, IXN, MTK and SMH)

Here’s the SMH Monthly, Weekly and Daily data charts:

SMH Monthly data:

SMH Weekly data:

SMH Daily data:

Here’s the XLK Monthly, Weekly and Daily data charts:

XLK Monthly data:

XLK Weekly data:

XLK Daily data:

Table 9: Senior technology equities

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
CTSH	29.36	1.29	4.60%	8.46%	4.52%	-7.67%	-8.90%	-8.88%	-1.61%	-27.33%
SAP	57.88	0.07	0.12%	7.17%	4.40%	11.22%	14.09%	14.14%	20.21%	6.40%
INFY	40.45	1.06	2.69%	5.61%	5.28%	-5.05%	-8.96%	-8.57%	-7.01%	-17.75%
SNDK	14.36	0.26	1.84%	5.12%	-18.27%	-22.08%	-56.71%	-50.53%	-47.88%	-73.00%
ORCL	21.50	-0.03	-0.14%	2.63%	1.51%	3.71%	-4.40%	-1.47%	3.97%	8.64%
RIMM	120.15	-2.67	-2.17%	2.32%	6.47%	4.44%	5.66%	-6.13%	30.26%	67.34%
QCOM	55.47	0.13	0.23%	1.87%	22.75%	23.13%	44.49%	25.05%	31.45%	34.02%
INTC	22.35	0.16	0.72%	1.54%	1.18%	8.18%	-11.83%	-4.04%	2.66%	-6.09%
ADBE	41.22	-0.13	-0.31%	0.78%	-1.81%	2.05%	-1.17%	5.67%	19.55%	4.14%
CSCO	21.99	0.00	0.00%	-1.96%	1.52%	-4.89%	-17.14%	-17.55%	-11.83%	-26.13%
AAPL	156.66	-2.29	-1.44%	-3.37%	-5.14%	-7.91%	-19.60%	-12.97%	17.13%	16.04%
GOOG	467.86	-5.89	-1.24%	-4.90%	-2.80%	-12.88%	-31.72%	-21.11%	-9.31%	-8.79%

Tech (XLK -0.94% to 22.15, including -0.67% on Friday) and Semi-conductors (SMH +1.27% to 27.86, with a recovery rally in the SNDK, showed mixed results this week.

CTSH +8.5% and SAP +7.2% were very strong, while GOOG dropped -4.9%.

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Sector 50 (telecom: IYZ, VOX and IXP)

Here’s the IYZ Monthly, Weekly and Daily data charts:

IYZ Monthly data:

IYZ Weekly data:

IYZ Daily data:

Telecom (IYZ -2.09% W/W) closed at 22.99, which wiped out the gain of over +2.0% in the previous two weeks.

Verizon (VZ -1.3%) and AT&T (T -3.1%) were both losers. T had also been down -2.2% the prior week.

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Sector 55 (utilities: IDU, XLU, and VPU)

Here’s the XLU Monthly, Weekly and Daily data charts:

XLU Monthly data:

XLU Weekly data:

XLU Daily data:

Utilities (XLU -1.86% W/W) closing at 36.92, followed two weeks where it lost -2.92% and -4.27%, so the XLU is in a nose dive. It also lost -0.78% on the Friday prior to that, so that’s over -11.0% in sixteen sessions.

That doesn’t help your Total Return if you happen to be one of those traders who go seeking TR in the Utilities sector.

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Bonds & Yields Review

Table 10: US Treasury Yields

US Treasury Bonds

Maturity	Yield	Yesterday	Last Week	Last Month
3 Month	1.59	1.61	1.64	1.73
6 Month	1.81	1.80	1.86	2.02
2 Year	2.48	2.51	2.70	2.57
3 Year	2.33	2.36	2.58	2.49
5 Year	3.21	3.23	3.43	3.30
10 Year	3.93	3.95	4.10	3.96
30 Year	4.56	4.58	4.68	4.50

Municipal Bonds

Maturity	Yield	Yesterday	Last Week	Last Month
2yr AA	2.30	2.30	2.30	2.51
2yr AAA	2.15	2.11	2.26	2.39
2yr A	2.43	2.55	2.72	2.67
5yr AAA	3.06	3.14	3.04	3.02
5yr AA	3.08	3.06	3.11	3.10
5yr A	3.28	3.22	3.14	3.21
10yr AAA	3.76	3.79	3.79	3.82
10yr AA	3.70	3.72	3.74	3.75
10yr A	3.81	3.82	3.81	3.81
20yr AAA	4.87	4.87	4.74	4.70
20yr AA	5.10	5.06	4.94	4.65
20yr A	5.07	4.81	4.84	4.76

Corporate Bonds

Maturity	Yield	Yesterday	Last Week	Last Month
2yr AA	4.20	4.23	4.53	4.27
2yr A	5.05	4.78	4.95	4.69
5yr AAA	5.05	5.02	5.22	5.14
5yr AA	5.45	5.40	5.63	5.39
5yr A	5.79	5.91	6.22	5.78
10yr AAA	5.33	5.37	5.53	5.73
10yr AA	6.16	6.02	6.35	6.06
10yr A	6.13	6.15	6.33	5.97
20yr AAA	6.07	6.05	6.25	6.45
20yr AA	5.87	5.85	6.05	6.85
20yr A	6.33	6.31	6.51	6.70

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Bond prices rallied this week. Yields dropped.

For the week, the yields for the US Treasury 2-year, 5-year ($FVX), 10-year ($TNX) and 30-year ($TYX) lost -22 basis points, -22 bp, -17 bp and -12 bp respectively, causing some wins in bond portfolios. But as I have been saying, as inflation is worsening, this is not the bond fundamentals talking to traders, but merely a safe-haven play to hot money traders who are trying to avoid the next big drop in equity markets.

Same thing happened in reverse a week ago when I wrote: “The yield on T-Bills gained +23 bp as traders moved out of cash and into riskier NASDAQ and Small Cap stocks this week. This is just hot money, and that doesn’t mean too much.” I added: “The T-Bill yield moved up to 1.64 from 1.41, as bankers tried to make belief that credit market issues are under control.” This week the yield dropped -5 basis points to 1.59 on the T-Bills.

The 20-year TLT closed the week up +1.51% to 91.54, even though Friday was a loser as Crude Oil was the winning play.

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

Interest rates and bond yields.

Interactive Daily data charts:

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Interactive Chart of Interest rates and bond yields.

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US Bond Funds -- Interactive Monthly Data Charts

SHY Monthly data series chart:

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IEF Monthly data series chart:

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TLT Monthly data series chart:

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AGG Monthly data series chart:

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LQD Monthly data series chart:

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TIP Monthly data series chart:

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US Bond Funds -- Interactive Weekly Data Charts

SHY Weekly data series chart:

IEF Weekly data series chart:

TLT Weekly data series chart:

AGG Weekly data series chart:

LQD Weekly data series chart:

TIP Weekly data series 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

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
NLY	15.38	0.31	2.06%	3.92%	2.26%	-1.41%	-15.03%	-11.25%	-23.06%	4.41%
AVB	99.27	-0.44	-0.44%	3.37%	6.38%	14.14%	8.67%	-4.55%	0.07%	-12.57%
EQR	44.12	0.95	2.20%	3.28%	6.83%	16.63%	21.11%	2.63%	13.86%	10.05%
FNM	11.82	0.32	2.78%	2.34%	-11.79%	-37.06%	-68.45%	-60.27%	-66.61%	-80.04%
DRE	24.96	0.23	0.93%	1.59%	5.94%	10.44%	-2.58%	1.22%	2.30%	-24.75%
TLT	91.54	-0.13	-0.14%	1.51%	1.21%	-0.58%	-3.01%	-1.34%	-3.87%	5.01%
IEF	88.08	-0.21	-0.24%	0.99%	0.99%	0.42%	0.51%	-0.83%	-2.07%	7.28%
TIP	105.95	-0.52	-0.49%	0.44%	-0.61%	-1.99%	-0.65%	-0.60%	-2.87%	6.01%
AGG	99.89	-0.52	-0.52%	0.43%	0.92%	0.31%	-1.73%	-2.19%	-3.01%	1.59%
SHY	82.78	-0.25	-0.30%	0.05%	0.11%	-0.02%	0.53%	-0.33%	-0.72%	3.23%
FRE	7.980	-0.190	-2.33%	-3.51%	-13.07%	-44.97%	-75.63%	-70.19%	-75.41%	-85.98%

This week, Fannie and Freddie headed off on different directions. FNM gained +2.3% and FRE dropped -3.5%.

Just thinking about the links between these two and their Washington lobbyists makes me ill. Let them fail. The only losers will be the shareholders and bondholders who are only hanging on because they don’t expect to see free capital markets. In the interest of free markets, let them fail. Chapter 7 will simply see a new owner the next day. Not a whit will change in the mortgage market except maybe the new owner will inject the cash needed to rebuild confidence, and America will be free to breathe again.

It makes me ill that the people who scream out that we have free markets are the very ones who count on the fact we don’t, and make every effort to ensure the status quo. The American taxpayer gets hit with the bills, and to make matters worse, at least one-third of the capital interests being protected are foreign.

There is an economic principle that says that if you have a good product and it’s fairly priced, you are in business. If you run that business badly there will be someone come along to take it over. The world of finance will not stop if half the US banks and S&L’s have to declare bankruptcy.

This bitching and moaning to Congress by Mr. Moral Hazard and the Bearded Professor is getting old. I’m happy that the majority of Americans now agree. At least the ones who are paying taxes and have their credit under control do!

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Consumer Finance -USA -- Interactive Weekly Data Charts

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Consumer Finance -USA -- Interactive Daily Data Charts

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Commodities Review

The $CRB gained +3.80 (+0.92%) to 416.02 this week, which held the line at a couple losing weeks.

I suppose the HB&B firms have cleaned out the accounts of traders who were heavily margined.

After the loss of -3.50% a week ago, I opined, “Going forward, there may be a bounce off the 200-day MA of 392.62.” I was looking for a brief rally, which did occur, but the price dropped only as low as 407.97.

$CRB Index

Open Futures Contracts

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Interactive Chart of Weekly CRB Commodities Index:

Interactive Chart of Daily CRB Commodities Index:

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Oil Review

$WTIC (US Light Sweet Crude called West Texas Intermediate) rallied +$1.84/bbl (+1.49%) to 125.10.

The 50d MA for $WTIC is now at 133.27, and the 200d MA is 108.74.

Two weeks ago in this space, I wrote, “Although I don’t have a sense of it yet, I do feel the market price will hit the 200-day MA price (now $108.74) sometime in the next couple months.” We’re getting closer. The low this week was $120.42.

Top oil analyst Charlie Maxwell started chirping about his Peak Oil theory, and Goldman Sachs chimed in with their $145/bbl forecast by the end of this year. That helped. So too did all the CIA talk re Iran and the fact the Iranian government said “No!” to the open-nuke demands of various countries.

Gee, you wonder why the price lifted only $1.84/bbl. Maybe the slowing global economy has something to do with that? Do you think?

Here is the e-miNY Dec-07 Crude Oil chart.

Interactive Chart of Weekly Crude Oil:

Interactive Chart of Daily Crude Oil:

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Gold & Precious Metals Review

Two weeks ago, I gave you a heads-up re $GOLD. I wrote, “For the past four weeks, $GOLD gained +27.00/oz, +2.30/oz, +27.60/oz and +30.60/oz. This week, there was a loss of -$2.60/oz, but I think, what with the oil prices coming off, and the likelihood of the $USD strengthening in the short-run, that $GOLD will start to fall off faster and deeper. That belief, however, is not shared by the gold bugs, who daily are yapping about rocketing prices to come.”

A week ago here, I added: “This week, $GOLD dropped -$21.10/oz (-2.20%) to 936.90. I think it’s going lower… The 50-day MA for $GOLD is now 915.28, and the 200d MA is 884.55. The falling price this week did bounce and rally off the 50-day MA. The gain on Friday was +1.6%, which means that the loss from Monday through Thursday was really severe. I don’t think Friday’s move means much (other than it serves to turn the crank of the gold die-hards). The short-term trend is still down… In the market this week, $XAU, GDX and XGD lost -7.66%, -6.78% and -6.52%. A week earlier the losses (in these goldminer share indexes) were -3.60%, -2.44% and -3.88%, respectively. So the precious metal Bulls are getting smashed. I did point out the likelihood of this happening, and the ridiculousness of listening to the usual newsletter writers/marketers.”

So, then some idiot writes, “So Bill, are you buying gold?” Is it any wonder, knowing that it takes me about 10 hours to write this free WIR that some people get to me, and I react?

You will also see in the items below this one where I pointed out how the charts have been breaking down in July. Anyway, $GOLD this week dropped -$19.40/oz (-2.07%) to 917.50 and the 50d MA is now at 916.92 and the 200d MA at 888.65.

The three major goldminer stock indexes ($XAU, GDX and XGD) dropped -6.33%, -4.38% and -5.18% respectively. This week. That’s -$40.50/oz since I gave you the alert two weeks ago—the one that came in the midst of the cheerleading rally by all the well-known gold bugs.

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Spot gold chart for the week

Interactive Chart of Weekly Gold EOD Continuous Contract Index:

Interactive Chart of Daily Gold EOD Continuous Contract Index:

Interactive chart of recent trading for the Gold Bullion index.

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Spot silver chart for the week

Interactive daily data

This week, $SILVER gained +0.15/oz (+0.83%) to 17.52. I am shocked (LOL). Actually, I call them the Silver Crazies because in the late 70’s and early ‘80’s I watched with disbelief that this network of promoters (i) actually believed a couple brothers could control the world’s silver, and (ii) then refused to sell all the way down from the 40’s to $4.00. About the name, I think I have a point.

I love silver too, but I am not crazy over it. It’s not like an outstanding bottle of red wine for instance. Or my children. $SILVER is only a price. Three years ago it was priced below $6.00/oz. Then it went to a high of $21.44 in March this year before falling off to an intermediate cycle low of 16.06. I think there is a chance the 16.06 could be surpassed on the downside before the next Bull phase takes the price eventually to over $25.

For $SILVER, the 50d MA is now 17.58, and the 200d MA is 16.76.

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Interactive Chart of Weekly Silver EOD Continuous Contract Index:

Interactive Chart of Daily Silver EOD Continuous Contract Index:

Interactive chart of the Silver Bullion index.

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$PLATINUM is crashing. A week ago I wrote, “The writing has been on the wall for the losses that $PLAT has been taking. $PLAT sank -$141.50/oz (-7.63%) to 1713.80 this week. A week ago the loss was -$191.90/oz (-9.37%). Traders who are heavily margined are getting wiped out… (Three) weeks ago, I warned in this space: “A week ago, amid the precious metals rally, I wrote: This week $PLAT lost -32.00/oz to close at 2030.40… (Then) the falling price did stop at the 200d MA for a couple days, but there really was no fight in this dog… The loss a week earlier was -6.50/oz. Over four weeks, there have been big losses in Platinum… As long as Crude Oil is sinking, so too will these precious metals sink. The reason is simple; extreme speculation put them at such high prices. The market needs to find a balance before a new run can be taken at previous record highs.”

A new equilibrium will be found soon. This week $PLAT plunged again by -$58.50 (-3.41%), closing at 1655.30. The loss on Friday alone was -6.05%.

The 50-day MA is 1995.69, which itself is crashing, and the 200-day MA is 1822.64. The Point & Figure chart at StockCharts looks absolutely dreadful. And check the price charts three weeks ago to see the capital losses taken by the Platinum Bulls.

Spot platinum chart for the week

Interactive Chart of Weekly Platinum EOD Continuous Contract Index:

Interactive Chart of Daily Platinum EOD Continuous Contract Index:

Interactive chart of the Platinum metal index.

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Two weeks ago I wrote here, which I repeated in the previous WIR, “There was a warning in $PALL too. I wrote in this space in the last WIR, that “a week ago, $PALLADIUM lost -4.65/oz to close at 466.55/oz. The prior week’s loss was -8.00/oz. This week, there was a loss of -5.15/oz (-1.10%) to close at 461.40. Not all precious metals are in rally mode.” I added, “$PALL dropped -$33.60/oz (-8.00%) this week to close at 386.30. The loss the week before that was -$41.50/oz (-8.99%). This is an example of how the leverage of margin wipes out trading accounts. The point is you can make +100% and you know where you stand, but you cannot come back after losing -100%... A week ago I wrote, “Note how the current price has sunk below the 200-day MA as well as the 50-d MA. That smells like Bear country… There was no fight at all when $PALL dropped to the 200d MA... The market is that much deeper into it this week.”

The 50-day MA is now 440.39 and the 200-day MA is 427.03.

So this coming week, we need to watch the gold and silver (and $USD) to see if they are going to fall quickly to catch up to the plat and pall.

I wonder if the Chinese are dropping the price so they can buy up all the precious metals they’ll need for their Olympic Games athletes. (LOL) Do you think? Why after watching the nonsense with so-called tax rebates from Washington, I wouldn’t be surprised if Beijing decided to destroy the gold price in order to buy enough gold for real replica medals –one for every Chinese family. That would just about eliminate their $USD reserves, which would likely be acceptable to the Chinese govt since I don’t think they’ll be using that money any time soon to buy automobiles from Detroit. Maybe they’ll propose to buy Detroit instead? Do you think?

Anyway, $PALL is now $374.50, and hit a low this week of 367.00. In mid-June it was at a high of 484.90 and near the end of February it hit a record high of 600.00. It’s been a tough year for the PALL-bearers. I think they’d rather have died. Their burden would be less. (LOL)

A good hedge might be to buy the plat and pall and sell the silver and gold, but I don’t trade that way. No recommendation.

Spot palladium chart for the week

Interactive Chart of Weekly Palladium EOD Continuous Contract Index:

Interactive Chart of Daily Palladium EOD Continuous Contract Index:

Interactive chart of the Palladium metal index.

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$COPPER contracts lost -$2.65 (-0.74%), closing at 357.85.

The 50-day MA for $COPPER is now 369.74 and the 200-day MA is 354.18.

As I (continue to) say, “Not working for Glencore and the Marc Rich Metal Men in Zug Switzerland, I don’t have a clue as to how this market will play out.” I just figure that the big metal miners give us a tell. This week they were down again.

I have been saying, as you know: “Even though the current price is well above the 50-day MA, I still think the 200d-MA is going to be a battleground for copper traders.” Two weeks ago, I added, “Guess what? The price is now sitting right on the 50-day MA.”

This week the price is sitting right on the 200d MA. My target was reached. But don’t ask anyone outside ZUG, what’s happening next.

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

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
EGO	8.480	0.410	5.08%	7.61%	7.21%	6.53%	36.77%	25.26%	32.09%	91.42%
HMY	10.28	-0.53	-4.90%	-2.19%	-12.21%	-14.19%	-4.37%	-10.30%	5.22%	-24.58%
AUY	12.32	-0.05	-0.40%	-3.45%	-11.81%	-22.52%	-11.18%	-4.50%	-22.47%	13.97%
NEM	47.27	-0.69	-1.44%	-3.92%	-2.01%	-5.74%	-9.77%	9.35%	-11.20%	13.66%
KGC	17.91	-0.24	-1.32%	-3.97%	-21.00%	-21.72%	-11.12%	-3.81%	-18.44%	41.69%
AU	32.07	-0.90	-2.73%	-4.95%	-10.09%	-4.35%	-30.07%	-4.07%	-21.28%	-22.22%
ABX	40.58	-1.77	-4.18%	-7.50%	-14.21%	-10.00%	-11.82%	8.62%	-20.28%	24.10%
GG	36.46	-0.89	-2.38%	-9.48%	-20.04%	-19.44%	-0.49%	3.85%	-0.79%	46.96%
AEM	53.16	-1.49	-2.73%	-9.53%	-23.98%	-26.57%	-5.94%	-12.92%	-14.42%	27.30%
LIHR	24.50	-1.58	-6.06%	-12.25%	-17.43%	-18.90%	-26.14%	-12.15%	-25.10%	-3.39%
GFI	10.25	-1.56	-13.21%	-14.87%	-20.54%	-16.87%	-33.44%	-21.76%	-27.20%	-36.22%
BVN	25.78	-1.13	-4.20%	-16.70%	-21.69%	-17.35%	-15.31%	-14.04%	-21.35%	30.73%

The Goldminer stock group indexes dropped this week across the board: $XAU -6.33%, GDX -4.38% and XGD -5.18%. A week ago the losses were: $XAU -3.60%, GDX -2.44% and XGD -3.88%. Two weeks ago, the losses were: $XAU -7.66%, GDX -6.78% and XGD -6.52%.

Ouch, if you happen to be a Gold Bull.

The 50-day MA for $XAU is 182.45 and the 200-day MA is 181.56, and the current price is 162.54. As I pointed out a couple weeks ago, “So, the technical support is no longer there. As I pointed out a week ago in this space, “Any significant strength in the $USD (or weakness in the Euro) could see these stock indexes fall into Bear country.” Well, this week the $USD gained +0.88% and the Euro lost -0.90%. Bingo. There was no fight at all at the 200d MA, just like most of the rest of these precious metals related charts. The whole package caved in… There was a bump Friday, despite more selling in the oil contracts, which I am sure heartened the gold bugs. But the gains in the three goldminer indexes I follow were from just +0.7% to +0.9%, and while the Euro and Pound really zoomed against the Dollar, the trade-weighted $USD lost just -0.01% as the crack in the Yen and Loonie on Friday kept it strong. But how is it that the Loonie can lose -0.50% on a day that gold is up +1.6%. It dropped because of oil prices getting hammered, which should have helped the USD more. I think there was some extra selling of bonds on Friday and buying of the Euro. But, more tough talk from Bernanke will put a stop to that, I think.”

The gold bugs are at the mercy of Bernanke and his peers in the central banks of England and the EU on Tuesday and Thursday. With all the inflation data flying about, I hardly think the Dynamic Duo are going be getting on their knees to pray. Tough talk is what I expect to hear. Whether traders believe this any more, I doubt. But traders tend to go with the flow and right now the $USD is flowing north.

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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

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:

Weekly U.S. Goldminers Index:

Interactive Chart of Weekly U.S. Goldminers Index:

Interactive Chart of Daily 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 Weekly data:

GDX Daily 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 Weekly data:

Interactive Chart of XGD Daily data:

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Forex Review

This week the $USD gained +0.82% to 73.44. A week earlier the gain was +0.88% to 72.85.

The 50-day MA for the $USD is 72.82 and the 200-day MA is 74.28.

Interesting that the recent intermediate-term cycle high is 74.31, and the short-term cycle high is 73.54, which was set Wednesday. Could it be that next week a new short-term high is reached and the battle will be for the $USD Bulls to challenge the 200d MA?

Interactive Chart of Weekly U.S. Dollar Index:

Interactive Chart of Daily U.S. U.S. Dollar Index:

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The Euro ($XEU) lost -0.93% W/W, closing at 1.5557.

The Euro 50day MA is 1.5665 and the 200day MA is 1.5173.

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

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

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The Pound lost -0.79% W/W, closing at 1.97.56.

The 50-day MA and 200-day MA are at 1.9787 and 1.9951.

Weekly British Pound Index:

Daily British Pound Index:

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Weekly Japanese Yen Index:

The Japanese Yen ($XJY) gained +0.17% to close at 92.87.

The Yen’s 50-day MA is 93.83 and the 200-day MA is 93.51.

Daily Japanese Yen Index:

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The Loonie (Cdn Dollar) lost -0.80% W/W, closing at 97.35.

The 50-day MA and 200-day MA is at 98.80 and 99.97 respectively. As the Loonie weaked, I wrote here last week, “… the current price (99.14) is at an important level that could see it go bearish. With more falling prices of crude oil and metals/precious metals, I think the Loonie will go bearish for a while.” The price today is below both the 50d MA and 200d MA. Oil and precious metal prices are seemingly on the downswing.

Weekly Canadian Dollar Index:

Daily Canadian Dollar Index:

Here is the China Yuan (CNY) chart.

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International Equity Markets Review

There were mostly ups this week in the global equity markets, although the UK and Canadian markets had small losses.

UK FTSE basically flat, moving from 5352.6 to 5354.7
German DAX down -0.6% from 6436.7 to 6396.5
Aussie All-Ords down -1.0% from 5031.0 to 4978.0
Shanghai Composite down -2.2% from 2865.1 to 2801.8
HK Heng Seng up +0.5% from 22740.7 to 22862.6
India’s BSE 30 up +2.7% from 14274.9 to 14656.7
Japan’s Nikkei 225 down -1.8% from 13334.8 to 13094.6.

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There are 16 country index charts from StockCharts.com (with their formal approval btw) because I think it is important to be watching these markets move through a trend juncture together, and in relation to currency and commodity strength or weakness.

I also made some additions to the country-based ETF tables as I intend to focus more on ETF’s in 2008. In time, I will also set up tables and track the domestic market prices. This will come after we switch to the Drupal platform this month.

As I say, “the world is now a very small one in capital markets and international business. No longer are corporations just American, British, French, German, Italian, Canadian or Japanese. Most do business internationally. We need to observe their businesses and capital market prices on a global basis.”

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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.

Brazilian Bovespa stockcharts.com chart

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

Toronto 300 stockcharts.com chart

Toronto CDNX stockcharts.com chart

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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.

FTSE 100 stockcharts.com chart

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Here is the latest session data for the German DAX.

DAX stockcharts.com chart

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

CAC 40 stockcharts.com chart

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

Italian Milan Index stockcharts.com chart

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

Swiss Market Index stockcharts.com chart

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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.

Tokyo Nikkei 225 Index stockcharts.com chart

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Here is the latest chart for the Singapore index .

Singapore Straits Times Index stockcharts.com chart

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Here is the latest chart for the Shanghai Composite index .

Shanghai Composite Index stockcharts.com chart

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

Hong Kong Hang Seng stockcharts.com chart

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

Mumbai BSE 30 Sensex Index stockcharts.com chart

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

Sydney All Ordinaries Index stockcharts.com chart

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Russia (RTS) stockcharts.com chart

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Table 13: International equities via an ETF perspective (in $USD)

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
EWZ	79.08	-2.17	-2.67%	2.17%	-2.27%	-4.79%	-2.31%	-13.96%	1.45%	25.66%
IFN	39.04	1.74	4.66%	0.03%	9.91%	12.31%	-36.93%	-23.90%	-27.86%	-14.67%
RSX	44.74	-0.48	-1.06%	0.02%	-10.54%	-12.58%	-14.88%	-11.58%	-3.99%	7.91%
EWC	30.80	-0.55	-1.75%	-0.19%	-2.59%	-4.64%	-4.94%	-4.82%	-0.39%	4.09%
GXC	68.96	0.73	1.07%	-0.63%	-0.32%	6.44%	-22.43%	-16.76%	-10.82%	-4.09%
EWU	19.73	-0.17	-0.85%	-0.80%	-1.50%	-2.18%	-17.38%	-14.22%	-12.15%	-20.19%
EWG	28.75	-0.43	-1.47%	-1.47%	-2.18%	-0.83%	-18.76%	-13.27%	-8.59%	-10.30%
EWH	16.73	0.03	0.18%	-1.76%	0.97%	2.45%	-23.22%	-15.51%	-16.77%	-6.12%
EWQ	31.09	-0.53	-1.68%	-2.42%	-1.80%	-1.58%	-18.05%	-15.49%	-10.17%	-15.65%
EWJ	11.83	-0.19	-1.58%	-2.63%	-1.74%	-3.74%	-10.58%	-11.72%	-7.94%	-17.21%
EWA	24.19	-0.69	-2.77%	-5.88%	-5.10%	-5.32%	-15.95%	-13.48%	-14.91%	-12.16%

Other than Brazil (EWZ +2.17% W/W to 79.08), the International ETF’s that trade in NY (denominated in USD) were soft.

Canada’s EWC dropped -0.19% to 30.80 (that’s just 6 cents). The UK, French and German ETF’s (EWU, EWQ and EWG) dropped -0.80%, -2.42% and -1.47% respectively.

India’s IFN, which was flat W/W, had a terrific day Friday (+4.66% to 39.04).

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Japanese equity market ETF: EWJ

Here is the Japanese (EWJ) equity market ETF Monthly, Weekly and Daily data charts:

Interactive EWJ Monthly data:

Interactive EWJ Weekly data:

Interactive EWJ Daily data:

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U.K. equity market ETF

Here is the United Kingdom (EWU) equity market ETF Monthly, Weekly and Daily data charts:

Interactive EWU Monthly data:

Interactive EWU Weekly data:

Interactive EWU Daily data:

EWU Daily data:

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Canada’s equity market

Here is the Canadian (EWC) equity market ETF Monthly, Weekly and Daily data charts:

Interactive EWC Monthly data:

Interactive EWC Weekly data:

Interactive EWC Daily data:

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US Equity Markets Review

The DJIA (-0.40%) and the S&P 500 (+0.20%) were mixed. The NASDAQ Composite (+0.02%) was flat, while the Russell 2000 Small Cap index (+0.82%) saw higher prices.

The big movers were Bank of America (BAC +12.7%) and General Motors (GM -14.0%).

Volume was very low for most stocks.

A dozen NASDAQ stocks to watch.

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Here is the Monthly data chart of the Interactive Chart of Nasdaq Composite, S&P 500, Dow30, and Russell 2000 (small cap) indexes.

Here is the Weekly data chart of the Interactive Chart of Nasdaq Composite, S&P 500, Dow30, and Russell 2000 (small cap) indexes.

Here is the Daily data chart of the Interactive Chart of Nasdaq Composite, S&P 500, Dow30, and Russell 2000 (small cap) indexes.

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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	33.33	0.43	1.31%	12.68%	21.24%	48.79%	-17.83%	-15.38%	-25.98%	-30.02%
JPM	40.76	0.13	0.32%	3.14%	1.85%	15.43%	-3.34%	-17.24%	-15.52%	-8.16%
CVX	84.31	-0.25	-0.30%	2.12%	-2.02%	-14.52%	-9.79%	-11.20%	2.21%	-1.01%
KO	53.14	1.64	3.18%	2.07%	6.22%	3.22%	-13.01%	-10.07%	-10.33%	-0.24%
MCD	59.77	-0.02	-0.03%	1.91%	-1.11%	4.51%	2.87%	-1.89%	10.24%	23.82%
MRK	33.26	0.36	1.09%	1.77%	-11.73%	-13.50%	-42.03%	-14.61%	-27.66%	-34.81%
WMT	57.75	-0.87	-1.48%	1.62%	-0.29%	2.21%	23.13%	-0.55%	12.84%	24.95%
AXP	37.19	0.07	0.19%	1.56%	-11.85%	-7.58%	-27.14%	-27.55%	-25.02%	-37.63%
INTC	22.35	0.16	0.72%	1.54%	1.18%	8.18%	-11.83%	-4.04%	2.66%	-6.09%
AA	32.14	-1.61	-4.77%	1.04%	-4.94%	-1.95%	-11.04%	-7.43%	-6.24%	-15.31%
PG	64.95	-0.53	-0.81%	0.76%	2.01%	2.01%	-10.18%	-3.10%	-1.67%	2.83%
HPQ	43.96	-0.84	-1.88%	0.57%	1.24%	1.20%	-11.74%	-8.47%	-1.04%	-5.93%
HD	23.90	0.07	0.29%	0.42%	1.96%	6.03%	-8.46%	-19.99%	-21.51%	-36.72%
C	18.87	0.18	0.96%	0.11%	-2.48%	12.19%	-34.75%	-27.40%	-36.44%	-59.72%
MMM	70.15	-0.24	-0.34%	-1.13%	1.76%	0.99%	-15.19%	-9.88%	-13.62%	-21.24%
DD	43.31	-0.50	-1.14%	-1.14%	-2.01%	3.61%	-0.98%	-11.50%	-5.75%	-8.49%
VZ	34.00	-0.04	-0.12%	-1.31%	-4.09%	-4.57%	-21.31%	-13.53%	-12.26%	-21.37%
JNJ	68.10	-0.37	-0.54%	-1.35%	0.41%	4.58%	3.32%	0.43%	7.48%	11.71%
IBM	126.64	-1.34	-1.05%	-1.47%	-2.50%	5.94%	20.97%	2.45%	16.10%	13.03%
PFE	18.60	-0.07	-0.37%	-1.54%	1.53%	4.79%	-18.81%	-9.00%	-21.15%	-21.29%
AIG	26.79	0.74	2.84%	-1.65%	6.86%	2.10%	-52.42%	-44.36%	-51.93%	-58.51%
GE	28.21	-0.08	-0.28%	-1.74%	0.75%	4.83%	-23.26%	-14.82%	-21.99%	-27.57%
XOM	79.72	-0.71	-0.88%	-2.42%	-2.23%	-9.69%	-14.75%	-11.13%	-7.25%	-7.13%
UTX	63.56	-0.42	-0.66%	-2.56%	-0.83%	4.11%	-15.49%	-14.68%	-14.25%	-14.86%
MSFT	25.44	-0.28	-1.09%	-2.75%	-1.62%	-2.08%	-27.77%	-13.47%	-16.45%	-13.17%
BA	62.01	0.90	1.47%	-2.85%	-9.00%	-3.82%	-28.41%	-27.40%	-25.07%	-40.68%
T	30.44	-0.37	-1.20%	-3.06%	-5.23%	-6.57%	-25.76%	-23.79%	-20.48%	-24.34%
DIS	30.08	-0.27	-0.89%	-3.28%	-2.65%	-2.65%	-5.53%	-9.67%	-1.89%	-11.08%
CAT	68.14	-1.38	-1.99%	-3.32%	-3.88%	-3.09%	-3.53%	-17.26%	-5.04%	-14.96%
GM	10.23	-0.84	-7.59%	-14.03%	-22.38%	1.09%	-58.09%	-55.89%	-64.70%	-68.74%

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 CHV DD DIS GE GM HD HON HPQ IBM INTC JNJ JPM KO MCD MMM 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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Value Line Report(s) this past Friday

This week, Value Line reported on one DJIA component, Coca-Cola (KO).

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Coca Cola [GICS 30, Dow 30]
(KO: Google Finance file)
(KO: Yahoo Finance file)
(KO: StockChart chart)
(KO: Billcara2 chart)
(KO: ADVFN Financial Data)
(KO: Value Line Report Aug 1: next one is due Oct. 31)

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Coca-Cola is a company traders love to hold when the $USD is sinking because ~74% of sales and ~77% of earnings are generated outside the US. Besides it’s financially sound and always pays a higher dividend each year.

Through June 30, the Total Return (dividends and capital growth) over the past three years, however, is just +34.8%, and the 1 year TR is only +1.8%. Neither number is good. So why then did Value Line take until June 20 and 27 respectively to lower their “Timeliness” rating from 2 to 3 and “Technical” rating from 3 to 4, respectively? And why does the analyst figure on a high-low range of +17% to +13% for the Annual TR?

The problem here is PE. During the 1990’s and through 2002, when inflation was well under control, the KO price-to-earnings ratio averaged about 30x. But inflation is not under control anywhere in the world, and in most countries where the consumer has money to buy Coca-Cola’s, the economy is stagnating and consumers are being squeezed. So the PE is going to fall.

Even though earnings for 2008 will likely jump +16.7% to ~$3.00/share from $2.57, the price YTD is down -13.0%, and over the past three months, KO has dropped -10.1%. That’s despite a safe +3.0% dividend yield. Traders are recognizing that business conditions for Coca-Cola are growing tougher.

Stagflation drops the PE of most companies, but with rising costs and inelastic demand, I feel the average PE on KO may drop lower than the Value Line analyst has forecasted. I do agree with that analyst in that the 3- to 5-year capital appreciation potential is not appealing.

Although the operating margins and capital returns are satisfactory, the cash flow, earnings and dividends grow nicely each year, I love their advertising, and I even drink the product, Coca-Cola is not a Cara 100 company. In fact I drink so much Diet Coke that some people say my DNA is disintegrating. Seriously, maybe I have always been concerned that brand name is becoming less important as the quality of knock-off products improves. Lately, too, it is obvious that consumers are finding it harder to get to the end of the week without being a dollar short. In a rising inflation environment, many consumers are wary of paying top dollar for anything.

On July 17, the company reported Q2 earnings per share of $0.61, a decrease of 24% versus the prior year on a reported basis, and $1.01 after considering items impacting comparability. Not so hot.

In any case, Coca-Cola delivers a good product (LOL at the case thing), but I wouldn’t consider KO for a core holding. I don’t even have a strategy for Bulls or Bears. Sorry.

Maybe you took notice that SunTrust Bank of Atlanta, home of Coca-Cola, had to sell their multi-million dollar holding of KO recently. The bank has held those shares since the company went public, so to some people the stock sale must felt like orange crush (ha!).

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The Dow 30 Company links in chronological order of next reports. I added the Google Finance links, which are superb.

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Wal-Mart [GICS 30, Dow 30, Cara 100]
(WMT: Google Finance file)
(WMT: Yahoo Finance file)
(WMT: StockChart chart)
(WMT: Billcara2 chart)
(WMT: ADVFN Financial Data)
(WMT: Value Line Report May 9: next one is due Aug. 8)

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Disney [GICS 25, Dow 30, Cara 100]
(DIS: Google Finance file)
(DIS: Yahoo Finance file)
(DIS: StockChart chart)
(DIS: Billcara2 chart)
(DIS: ADVFN Financial Data)
(DIS: Value Line Report May 16: next one is due Aug. 15)

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3M Company [GICS 20, Dow 30, Cara US 100 June 25-06]
(MMM: Google Finance file)
(MMM: Yahoo Finance file)
(MMM: StockChart chart)
(MMM: Billcara2 chart)
(MMM: ADVFN Financial Data)
(MMM: Value Line Report May 16: next one is due Aug. 15)

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American International Group [GICS 40, Dow 30]
(AIG: Google Finance file)
(AIG: Yahoo Finance file)
(AIG: StockChart chart)
(AIG: Billcara2 chart)
(AIG: ADVFN Financial Data)
(AIG: Value Line Report May 23: next one is due Aug. 22)

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American Express [GICS 40, Dow 30]
(AXP: Google Finance file)
(AXP: Yahoo Finance file)
(AXP: StockChart chart)
(AXP: Billcara2 chart)
(AXP: ADVFN Financial Data)
(AXP: Value Line Report May 23: next one is due Aug. 22)

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Bank of America [GICS 40, Dow 30]
(BAC: Google Finance file)
(BAC: Yahoo Finance file)
(BAC: StockChart chart)
(BAC: Billcara2 chart)
(BAC: ADVFN Financial Data)
(BAC: Value Line Report May 23: next one is due Aug. 22)

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Citigroup [GICS 40, Dow 30]
(C: Google Finance file)
(C: Yahoo Finance file)
(C: StockChart chart)
(C: Billcara2 chart)
(C: ADVFN Financial Data)
(C: Value Line Report May 23: next one is due Aug. 22)

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JP Morgan [GICS 40, Dow 30]
(JPM: Google Finance file)
(JPM: Yahoo Finance file)
(JPM: StockChart chart)
(JPM: Billcara2 chart)
(JPM: ADVFN Financial Data)
(JPM: Value Line Report May 23: next one is due Aug. 22)

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Microsoft [GICS 45, Dow 30]
(MSFT: Google Finance file)
(MSFT: Yahoo Finance file)
(MSFT: StockChart chart)
(MSFT: Billcara2 chart)
(MSFT: ADVFN Financial Data)
(MSFT: Value Line Report May 23: next one is due Aug. 22)

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General Motors [GICS 25, Dow 30]
(GM: Google Finance file)
(GM: Yahoo Finance file)
(GM: StockChart chart)
(GM: Billcara2 chart)
(GM: ADVFN Financial Data)
(GM: Value Line Report May 30: next one is due Aug. 29)

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Johnson & Johnson [GICS 35, Dow 30, Cara 100]
(JNJ: Google Finance file)
(JNJ: Yahoo Finance fle)
(JNJ: StockChart chart)
(JNJ: Billcara2 chart)
(JNJ: ADVFN Financial Data)
(JNJ: Value Line Report May 30: next one is due Aug. 29)

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McDonalds [GICS 30, Dow 30]
(MCD: Google Finance file)
(MCD: Yahoo Finance file)
(MCD: StockChart chart)
(MCD: Billcara2 chart)
(MCD: ADVFN Financial Data)
(MCD: Value Line Report Jun. 6: next one is due Sept. 5)

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Chevron Corp [GICS 10, Dow 30]
(CVX: Google Finance file)
(CVX: Yahoo Finance file)
(CVX: StockChart chart)
(CVX: Billcara2 chart)
(CVX: ADVFN Financial Data)
(CVX: Value Line Report Jun. 13: next one is due Sep. 12)

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ExxonMobil [GICS 10, Dow 30, Cara 100]
(XOM: Google Finance file)
(XOM: Yahoo Finance file)
(XOM: StockChart chart)
(XOM: Billcara2 chart)
(XOM: ADVFN Financial Data)
(XOM: Value Line Report Jun. 13: next one is due Sep. 12)

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Boeing Co [GICS 20, Dow 30. Cara 100]
(BA: Google Finance file)
(BA: Yahoo Finance file)
(BA: StockChart chart)
(BA: Billcara2 chart)
(BA: ADVFN Financial Data)
(BA: Value Line Report Jun. 20: next one is due Sep. 19)

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AT&T [GICS 50, Dow 30]
(T: Google Finance file)
(T: Yahoo Finance file)
(T: StockChart chart)
(T: Billcara2 chart)
(T: ADVFN Financial Data)
(T: Value Line Report Jun. 27: next one is due Sep. 26)

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Verizon [GICS 50, Dow 30]
(VZ: Google Finance file)
(VZ: Yahoo Finance file)
(VZ: StockChart chart)
(VZ: Billcara2 chart)
(VZ: ADVFN Financial Data)
(VZ: Value Line Report Jun. 27: next one is due Sep. 26)

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Procter & Gamble Co. [GICS 30, Dow 30, Cara 100]
(PG: Google Finance file)
(PG: Yahoo Finance file)
(PG: StockChart chart)
(PG: Billcara2 chart)
(PG: ADVFN Financial Data)
(PG: Value Line Report Jul. 4: next one is due Oct. 3)

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Home Depot [GICS 25, Dow 30]
(HD: Google Finance file)
(HD: Yahoo Finance file)
(HD: StockChart chart)
(HD: Billcara2 chart)
(HD: ADVFN Financial Data)
(HD: Value Line Report Jul. 4: next one is due Oct. 3)

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General Electric [GICS 20, Dow 30, Cara 100]
(GE: Google Finance file)
(GE: Yahoo Finance file)
(GE: StockChart chart)
(GE: Billcara2 chart)
(GE: ADVFN Financial Data)
(GE: Value Line Report Jul. 11: next one is due Oct. 10)

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Hewlett-Packard [GICS 45, Dow 30]
(HPQ: Google Finance file)
(HPQ: Yahoo Finance file)
(HPQ: StockChart chart)
(HPQ: Billcara2 chart)
(HPQ: ADVFN Financial Data)
(HPQ: Value Line Report Jul. 11: next one is due Oct. 10)

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IBM [GICS 45, Dow 30]
(IBM: Google Finance file)
(IBM: Yahoo Finance file)
(IBM: StockChart chart)
(IBM: Billcara2 chart)
(IBM: ADVFN Financial Data)
(IBM: Value Line Report Jul. 11: next one is due Oct. 10)

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Intel [GICS 45, Dow 30, Cara 100]
(INTC: Google Finance file)
(INTC: Yahoo Finance file)
(INTC: StockChart chart)
(INTC: Billcara2 chart)
(INTC: ADVFN Financial Data)
(INTC: Value Line Report Jul. 11: next one is due Oct. 10)

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Alcoa [GICS 15, Dow 30]
(AA: Google Finance file)
(AA: Yahoo Finance file)
(AA: StockChart chart)
(AA: Billcara2 chart)
(AA: ADVFN Financial Data)
(AA: Value Line Report Jul. 18: next one is due Oct. 17)

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Dupont [GICS 15, Dow 30]
(DD: Google Finance file)
(DD: Yahoo Finance file)
(DD: StockChart chart)
(DD: Billcara2 chart)
(DD: ADVFN Financial Data)
(DD: Value Line Report Jul. 18: next one is due Oct. 17)

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Merck [GICS 35, Dow 30]
(MRK: Google Finance file)
(MRK: Yahoo Finance file)
(MRK: StockChart chart)
(MRK: Billcara2 chart)
(MRK: ADVFN Financial Data)
(MRK: Value Line Report Jul. 18: next one is due Oct. 17)

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Pfizer [GICS 35, Dow 30]
(PFE: Google Finance file)
(PFE: Yahoo Finance file)
(PFE: StockChart chart)
(PFE: Billcara2 chart)
(PFE: ADVFN Financial Data)
(PFE: Value Line Report Jul. 18: next one is due Oct. 17)

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United Technologies [GICS 20, Dow 30, Cara 100]
(UTX: Google Finance file)
(UTX: Yahoo Finance file)
(UTX: StockChart chart)
(UTX: Billcara2 chart)
(UTX: ADVFN Financial Data)
(UTX: Value Line Report Jul. 25: next one is due Oct. 24)

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Caterpillar [GICS 20, Dow 30]
(CAT: Google Finance file)
(CAT: Yahoo Finance file)
(CAT: StockChart chart)
(CAT: Billcara2 chart)
(CAT: ADVFN Financial Data)
(CAT: Value Line Report Jul. 25: next one is due Oct. 24)

Coca Cola [GICS 30, Dow 30]
(KO: Google Finance file)
(KO: Yahoo Finance file)
(KO: StockChart chart)
(KO: Billcara2 chart)
(KO: ADVFN Financial Data)
(KO: Value Line Report Aug 1: next one is due Oct. 31)

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Wrap up:

This morning, Ferrari Formula-1 racer Philippe Massa looked like a sure winner with three laps to go at the Hungaroring. But, in racing there is never a sure thing. In the end, because of a failed technology, he would have been beaten by a horse and buggy.

Same thing happens in trading on occasion. Just ask Goldman Sachs! The most money, the best people, the fastest computers, all the insider information that money can buy, and they still end up losing money now and then when trading capital markets.

Nothing is easy. At the very least, nothing is as easy as it seems.

Writing this WIR was not easy. I suspect that because I am coming out of retirement, after almost 8 years, to follow up on a successful blog, I am on the cusp of having more idiots take gratuitous shots at me.

Harry Callahan: I know what you're thinking. "Did he fire six shots or only five?" Well, to tell you the truth, in all this excitement I kind of lost track myself. But being as this is a .44 Magnum, the most powerful handgun in the world, and would blow your head clean off, you've got to ask yourself one question: Do I feel lucky? Well, do ya, punk?

There’s a good side to Harry, and then there’s Dirty Harry. No-name cheap shots simply means I fight back.

Just call me Harry. I have a lot of fun writing this blog, but when I do business, I am all business.

So, “Get out of the way, Hammerhead.”

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