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August 24, 2008
Week in Review #34 (2008-08-24)
Without appropriate checks and balances over the credit system, one’s assets are always in danger. In normal times, we can deal with that. But these are not normal times; we the people have been deceived by persons and organizations we have always trusted—our bankers. Nothing like this has ever happened before, and now the people are ready to revolt. The market senses it.
Is this not a lesson to hard-working Americans that bankers need to revert to being bankers, wealth managers to being wealth managers, and brokers to being brokers?
Conflict of interest is the source of our discontent, and, as we increasingly observe, the cause of market volatility. Yes, even those in control are losing it as they get torn between their different masters.
Extreme volatility in equity markets is usually a harbinger to what are called sea changes. Sea change; now that’s an interesting expression originating from Shakespeare's The Tempest, meaning a substantial -- but bewildering – transformation.
ARIEL [sings]:
Full fathom five thy father lies;
Of his bones are coral made;
Those are pearls that were his eyes:
Nothing of him that doth fade
But doth suffer a sea-change
Into something rich and strange.
The market is incomprehensible to some of us at the best of times, but these days it’s fair to say that most of us don’t get it. All we can do is day trade while we await the market’s revolution, whatever form that may take.
I feel that traders suspect that Humungous Bank & Broker is a ghost – dead but still moving, hoping for a taxpayer bailout of such massive proportions that would break the economy and possibly the spirit of America. What else are we to believe when we watch Fannie Mae (FNM) and Freddie Mac (FRE) plunge -93% and -96% over the past year, buying up bad mortgages from HB&B?
According to their website, “Fannie Mae is "the country's second largest corporation, in terms of assets, and the nation's largest source of financing for home mortgages. We are one of the largest financial services corporations in the world." "Freddie Mac is a stockholder-owned corporation chartered by Congress in 1970 to keep money flowing to mortgage lenders in support of homeownership and rental housing. Freddie Mac purchases single-family and multifamily residential mortgages and mortgage-related securities, which it finances primarily by issuing mortgage pass through securities and debt instruments in the capital markets. By doing so, we ultimately help homeowners and renters get lower housing costs and better access to home financing."
This week alone, FNM dropped -37% and FRE -52%! At this point, neither has access to capital markets to raise additional debt or equity capital. America is in crisis!
The people are just waiting for the US Congress to present a solution and to state the cost. The appropriate response will come from independent traders.
I have already called it a revolution in the making. Two years ago, I gave you the reason – I called it Paulson’s Pride, after the person I later started calling Mr. Moral Hazard, Henry Paulson, US Treasury Secretary.
Bill Cara: Saturday Report, 10/13/2007 6:45 AM ET
The past 15 months or so has been a period I refer to as Paulson's Pride. I suspect that over the next fifteen months or so, Henry Paulson will not be held ...Bill Cara: Cara’s Daily Commentary, Wed., July 4, 2007, 8:18 AM
That is what Paulson's Pride is all about. Power and theft...
I have been hearing stories that Paulson might be the designated solution in that he would take control of a new Fannie-Freddie Corp. A double wrong does not make a right.
What a way to start a revolution!
Today, let’s try, if we can, to make sense of what happened during the week.
Global Economics Review
With respect to the US economy that is in dire straits, note that the tone is improving.
Weekly International Economic Report . The weekly report from Econoday dated 8/15/08 was an excellent one by the way. I encourage everybody to read these reports and discuss them in the Discourse.
Here are the key US economic reports and the Econoday analysis from last week.
US Economic Calendar.US Home Builders Housing Market Index for August. The National Association of Home Builders produces a housing market index based on a survey in which respondents from this organization are asked to rate the general economy and housing market conditions. The housing market index is a weighted average of separate diffusion indexes: present sales of new homes, sale of new homes expected in the next six months, and traffic of prospective buyers in new homes… For August, Econoday reported: “The monthly homebuilders index held dead flat at record lows, at an overall reading of 16 though components for current sales and future sales did tick higher. Not ticking higher, however, was prospective buyer traffic which held at an extremely weak level of 12. The only good news in this report is that readings aren't getting even worse. The report noted that home-buyer tax credits, now passed by Congress, are likely to bring buyers back into the market. But the text of the report has been upbeat for the past year. The outlook for the sector, hit by a weakening jobs market and tight credit, remains negative. Markets showed no reaction to the data.”US Housing Starts for July. For July, Econoday reported: “Housing starts in July fell sharply as expected after an artificial boost in the multifamily component in June. Starts fell 11.0 percent, following a 10.4 percent surge in June. The July pace of 0.965 million units annualized was down 29.6 percent year-on-year and beat the consensus expectation for 0.950 million units. The drop in starts was led by a 23.6 percent monthly falloff in multifamily starts, following a 41.3 percent spike in June. Single-family starts continued its downward spiral, falling 2.9 percent in the latest month, after declining 3.2 percent in June. July's level in starts was a return to more normal conditions after a change in building code in New York City - taking effect July 1 - led to a run on both permits and starts to grandfather in the less restrictive code… By region, the drop in starts was led by a monthly 30.4 percent decline in the Northeast with the South and West also declining, both by 8.2 percent. The Midwest posted a 10.0 percent gain… Permits also fell in July - by 17.7 percent, following a 16.4 percent surge in June. July's 0.937 million unit pace for permits was down 32.4 percent year-on-year… Today's report shows housing continuing to decline but not as severely as suggested by July's monthly percentage. The point of focus should be the further gradual decline in the single-family component and residential construction has not hit bottom yet. The July numbers were close to expectations and should not have much impact on the markets.”
US Producer Price Index for July. After PPI had accelerated dramatically in June at the headline level but remained moderate at the core level, economists expected much lower headline numbers. They were surprised. For July, Econoday reported: “Producer price inflation in July remained red hot and even sharply accelerated at the core level. The overall PPI inflation rate barely slowed from June's torrid pace, posting a 1.2 percent increase, following a 1.8 percent surge in June. The price hike in July was far above the consensus forecast for a 0.5 percent gain in the overall PPI. The core PPI rate jumped 0.7 percent, surging beyond June's 0.2 percent increase and topping market expectations for a 0.2 percent boost. The headline number was led by energy but the core was boosted by a number of components. While some of the headline gain can be discounted due to recently lower oil prices, the leap upward in the core rate is disconcerting. But on the news, Treasury rates were little changed due to traders in flight to safety mode due to continuing worries over the health of Fannie Mae and Freddie Mac… Energy led headline inflation in July with a 3.1 percent boost after a 6.0 percent spike in June. Food price inflation moderated to 0.3 percent after a 1.5 percent spike in June… But the biggest surprise in the report is the 0.7 percent hike in core prices. Passenger cars and light trucks led the way with increases of 1.4 percent and 0.8 percent, respectively. But gains were widespread with notable strength seen in items such as pet food, pharmaceutical preparations, soaps, tires, newspapers, floor coverings, household appliances, sporting goods, jewelry, and the vast majority of capital equipment components. The point is that higher costs are boosting inflation at the producer level and may be nudging core consumer inflation in coming months… For the overall PPI, the year-on-year rate surged to up 9.8 percent from 9.1 percent in June (seasonally adjusted). The core rate rose to up 3.6 percent in July from up 3.1 percent the prior month… Today's report shows a rise in underlying inflation. Markets do not seem to be concerned due to the expected impact of lower oil prices. But the Fed certainly will be mulling the numbers over.”
US Philadelphia Fed Survey for Aug. For August, Econoday stated: “Regional manufacturing activity continues to contract in the Mid-Atlantic region. The Philadelphia Federal Reserve's manufacturing index came in at -12.7 for August, up from -16.3 in July but continuing an extended string of declines. New orders are especially on the decline, at -11.9 vs. July's -12.1 and signaling declining output in the months ahead. Unfilled orders are also contracting, at -8.7 with inventories understandably also on the decline at -6.6. There is some good news on input prices as prices paid eased back nearly 20 points to a still very elevated 57.5. Employment readings continue to decline.”
How is next week’s calendar looking?
US Economic Calendar.US Existing Home Sales for July. For June, Econoday reported: “Existing home sales continue to slide, unfortunately indicating that the long awaited bottoming in the housing sector remains elusive. The annual sales rate came in below expectations at 4.86 million, down 2.6 percent from May and down 15.5 percent from a year ago. The year ago decline has stabilized below 20 percent, but, remember, reflects ever-easing comparisons. The 4.86 million rate is the lowest in nine years of available data… Supply on the market remains severely bloated at 11.1 months at the current sales rate, up from 10.8 months in May. The median price did rise 3.5 percent in the month to $215,100 but the year-on-year rate remains very weak at -6.1 percent. Declining home values are pressuring marginal homeowners into foreclosures and have weakened overall consumer demand and specific demand for housing products. Still, prices have proved relatively inflexible though the level of unsold inventory relative to demand points squarely at lower prices ahead… Sales of single-family homes, which represent the bulk of the data, tumbled 3.2 percent in the month to a 4.270 million rate, offset only slightly by a 1.7 percent rise in condos to a 590,000 rate. Overall, sales fell in the Northeast, Midwest and South while the West showed a very slight increase… The stock market began to slip as did Treasury yields and the dollar in reaction to the report. Expectations for recovery in the housing market have been pushed back month after month over the last year-and-a-half and, despite all the declines, continue to be pushed back.”US New Home Sales for July. For June, Econoday reported: “The new home sales report is largely positive, in contrast to yesterday's very weak report on existing home sales and offering a reason for hope in the sector. Annual unit sales of new homes came in at a 530,000 rate for June, down 0.6 percent in the month but against a nicely upward revised 533,000 rate in May (512,000 originally reported). April was also revised upward (542,000 vs. an initial 525,000). Year-on-year contraction is still very steep but, reflecting steady levels and ever-easier comparisons, is now down at least in the low end of the 30 percent range at 33.2 percent. By regions, sales were strongest in the Northeast with the South and West both showing slight declines… There are fewer new homes sitting on the market, at 426,000 in June vs. 450,000 in May. Supply at the current sales rate fell to 10.0 months, still very bloated but down from 10.4 months in May and 10.3 months in April. Prices are another positive, rising 1.4 percent in the month to a median $230,900 and down only 2.0 percent year-on-year -- an improvement from the mid-single digit percentage declines of prior months… If the housing sector does begin to recover, we can look back at this report as the first signal of improvement.”
US Durable Goods Orders for July. For June, Econoday reported: “Durable goods orders in June were surprisingly strong, indicating that the manufacturing sector is showing more resilience than many believed. Durable goods orders jumped 0.8 percent in June, following a 0.1 percent rise in May. New orders for June were much better than expected as the consensus called for a 0.4 percent dip for the month. Excluding the transportation component, new orders rebounded a sharp 2.0 percent, following a 0.5 percent decline in May. For the latest month, strength was broad based… Strength in overall orders included primary metals, up 5.1 percent; electrical equipment, up 5.0 percent; machinery, up 2.3 percent; fabricated metals, up 1.7 percent, and "other," up 1.1 percent… Weakness was seen in communication equipment, down 4.4 percent; transportation, down 2.6 percent; and computers & electronics, down 0.5 percent.”
US Personal Income and Outlays for July For June, Econoday stated: “Personal income growth in June decelerated after a sharp boost in May-primarily due to a drop off in income tax rebates. Inflation, however, worsened - even at the core level. Personal income in June edged up 0.1 percent, following a 1.8 percent surge in May. The modest gain in June was better than the market forecast for a 0.2 percent decrease. Within personal income, the wages and salaries component eased to a 0.2 percent gain, following a 0.3 percent boost in May… On the spending side, personal consumption in June remained on the high side with a 0.6 increase after surging 0.8 percent in May. The consensus had forecast an increase of 0.5 percent for personal spending. Spending was led by a 1.3 percent boost in nondurables which includes gasoline. Essentially June's gain was due to a spike in gasoline prices as overall real spending slipped 0.2 percent, following a 0.3 percent rise in May… Year on year, personal income growth eased back to up 5.7 percent from up 6.0 percent in May. Headline PCE inflation jumped to up 4.1 percent from up 3.5 percent in May. Core PCE inflation nudged up to 2.3 percent from up 2.2 percent in May… Overall, the income and spending numbers continued to be affected by the income tax rebates and higher gasoline prices. We will likely see some unwinding of these effects in the next few months as rebate income drops off and gasoline prices have slipped. But wages and salaries income has slowed due to a weak labor market and that is likely to persist. We can expect consumers to become increasingly cautious about spending and that points to sluggish economic growth ahead. Although it is very early to be putting together third quarter numbers, the 0.2 percent dip in real personal consumption bodes ill for a good third quarter GDP.”
During periods of extreme volatility in equity markets, I find it productive use of time to delve deeper into the macro-economic data, which is to say to spend a bit less time guessing why day to day prices are acting as they are.
US Equity Markets Review
DJIA stockcharts.com chart
A week ago I wrote here that “The Monthly, Weekly and Daily RSI and Stochastics indicators are on the rise for the major market indexes, which followed up last week’s outstanding rally with higher prices this week except for the prices of the Dow 30 Financials AIG (AIG -7.6%), JP Morgan Chase (JPM -7.3%), Bank of America (BAC -4.8%) and Citigroup (C -4.3%) which pulled the DJIA index to a small loss W/W….
The RSI and Stochastic Dailies are further elevated, although not yet to extreme levels, which shows me that the short-term rally will run into resistance any time Crude Oil rallies or possibly even fails to decline from here.”
The DJIA lost -0.27% to 11628.06 from 11659.90, and the S&P 500 -0.46% to 1292.20 from 1296.32. Note that the DJIA and S&P 500 gained +1.73% and +1.13% on Friday, so the rest of the week was a real loser.
On the week, there were 10 Dow components that were up and 20 down.
At the end of this week, there were 3 of 10 sectors that lifted in price. The losers were the Financials again. A week ago, they were losers too, and I remarked, “... especially Financials where the problems have merely been swept under the table for now.”
NASDAQ Composite ino.com chart
NASDAQ Composite stockcharts.com chart
The NASDAQ Composite dropped -1.54% this week to 2414.71 from 2452.52, and back to where the index was two Friday’s ago (2414.10).
Volume was down a lot.
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
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
The US equity market Sector ETF Summary
This week, there were 3 sectors up and 7 down. On Friday there were 8 of 10 up. Friday’s losers (XLE and XLB) were winners on the week. All the losers on the week were winners on Friday as the market did an about face.
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.
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
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.
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)
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
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
After Crude Oil ($WTIC) gained +$1.65/bbl on Tuesday, and +$1.02/bbl on Wednesday, followed by a record move of up +$5.62/bbl on Thursday, traders decided to sell it down by a record move of -$6.59/bbl on Friday. I am sure that Humungous Bank & Broker knows who made those trades, and I’m sure the Fed does too, and so too the Treasury Secretary. But I don’t think the public will ever find out the answer to this critically important question.
That my friends is why we don’t have a level playing field. They know what we’re doing, but we don’t know what they are doing. In fact, we don’t even know who “they” are! This is ridiculous.
What the market needs is a Commissioner, an independent ombudsman, not part of the authoritarian group who control the market, serving, as they say, the public! Ha! These people must be laughing at us for being so stupid to put up with this rigged casino they call a capital market.
A capital market is supposed to be the value discovery place where buyers and sellers come together to meet their objectives. But, without transparency, the interventionists have taken control through exotic derivatives, and now a pipeline to the public treasury to save themselves from fatal mistakes in judgment.
Anyway, we have to deal with it. By the end of the week, Crude Oil gained just +$0.57/bbl to close at 114.59. The low this week was 111.66. How many people noted that the 40-week Moving Average is now at 111.65? The 50-day and 200-day MA is 129.04 and 110.61.
Remember, it was just six weeks ago that $WTIC was $145/bbl.
Last week I warned “I noted that the 200-day Moving Average is 110.10, so the technically important support level is close by.” Trust me; the oil lobby is aware of this. If the market for oil breaks 110, I feel it will break 100, and then fall to 80. If that were to happen, there would be a completely different complexion to this market environment.
Yes, initially, there would be a boom to Financials and Consumer Discretionary – at least until traders figured that consumers all over the world are doing the same thing, which is to tighten their belts. They are wondering how to pay their bills. Like the banks selling off important assets, the people are selling their homes, and foregoing automobiles and other products and services they absolutely don’t need. They are driving less, and when they buy new cars, their purchases are now usually more fuel efficient ones. Rather than ‘peak oil’, we ought to be talking about ‘peak oil industry’ because that’s what happened. I told you so just before one company, Exxon Mobil (XOM), lost one-eighth of a trillion dollars in market cap.
I think the oil industry is scared. Production is down, but they were only able to make it appear good by squeezing the oil price higher through lack of investment in refineries and of course by buying back their shares and paying more dividends. Some now are giving you a glimpse of their future, which is alternative energy. But that’s a very long time looking forward.
In the interim, I’m wondering how those big belt-buckles in Texas that run the oil loaded funds are doing. I can’t imagine many can survive $100 oil, nevertheless $80 oil. I wonder what their bankers are thinking.
A week ago, I wrote in this space, “Will support hold for the $WTIC? … This coming week we get to see whether the oil speculators are any different than the precious metal speculators. Recall too that last week’s oil inventory numbers were probably estimated far too low so that if they are on the high side this Wednesday, watch for the $WTIC to drop below the 200d MA during Wednesday.”
What happened when the latest oil inventory number was “corrected” – a record increase and humungous “surprise” for the inventory data? Why, of course, the Talking Heads were paid to read the oil lobby script: “Folks, ignore the oil number, which was a surprise and will be adjusted next week; it’s the gasoline inventory figure you ought to be looking at.” Pardon me? American drivers, without an iota of doubt in my mind, have just set a recent record low in miles driven for July and August, and the automobiles used are at record fuel efficiencies. So, where did that gasoline data come from?
Let’s start breaking myths here. And re-focusing on market prices.
This week, the Energy sector ETF (XLE) gained +5.49% W/W to close at 74.76. The rest of the story is that XLE plunged -2.06% on Friday, a day the DJIA index gained +1.73%. Pray tell, what might have happened to XLE if the DJIA on Friday wasn’t pumped full of hot gas?
On Friday, all my monitored oil stocks were down except PetroChina. But earlier in the week, traders who followed my recommendations re Canada’s oil sands players Suncor, Imperial Oil and EnCana, had big gains: SU +13.8%, IMO +13.0% and ECA +9.1%, which also included the losses each suffered on Friday.
That friends, is called a blow-off. And who were the take-out guys? Remember, the oil lobby is the biggest in the world… yes, in mid-week; those wildcatters Bill Gates and Warren Buffett flew up to personally examine the Western Canadian oil sands. Then there is a record price increase and then a record collapse in the price of oil on Thursday and Friday. Who needs Hollywood when we can be entertained with stuff like this!
Anyway, watch the technical support. As one country after another is disclosing recessionary numbers, traders are not that stupid, I hope, to be buying the shares of the oil stocks. Soon, but not quite yet! I have been telling you that wily traders will likely use option put writes to drop their cost basis for XOM into the 60’s. I say 68 just to put a number on it, for entertainment purposes.
Oil & Gas Exploration & Production -Canada
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:
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
Basic Materials (XLB +0.58% to 39.70) was 3rd place winner this week [behind Utilities, which are also driven by Energy stocks].
To show you how small the gold stocks are in importance in the Basic Materials, many of the largest goldminers were up this week over +10% (AEM +15.5%, GG +13.6%, KGC +11.2%... ), and the goldminers index was up +8.3%, but XLB gained just +0.58%. In fact the world’s leading base metal miners like BHP, Rio Tinto, Vale and Teck were up +6.6%, +10.0%, +5.1% and +11.6% respectively, but that also didn’t help. Why? Well, this is hot money… in today, gone tomorrow. In fact, the goldminers index ($XAU) dropped -3.21% on Friday. Stocks like DOW (-2.5%), VCP (-2.4%) and PKX (-2.1%), of companies which don’t control their markets, and which are more reliant on economic growth for their good fortune, were mostly down this week.
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:
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
The Industrials (XLI -0.98% W/W) closed at 35.29, despite the gain of +1.96% on Friday.
Fluor (FLR +10.4%) were the big winner here, but the stock is still down -1.3% over 4 weeks, and -16% over the past quarter (ie, 13 weeks).
Textron (TXT -9.1%) was the big loser on my monitor for the Industrials.
I also noted that Fedex (FDX -5.9%) and UPS (UPS -4.0%) were also big losers this week. But in the US when a significant Manufacturing Index is down and the Producer Price Index is up, large in both cases, things must be rough for shippers. I see no help coming from the economies in Europe or Japan or Canada, either.
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
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
I have been writing about JC Penny (JCP) a lot recently because it has become an oil hedge play. As oil prices fall, JCP has risen. Two weeks ago, JCP was up +18.4%, and one week ago, it was up a further +11.7%. I added, “… including a hideous +8.4% (gain) on Friday. This is a company with a market cap of $8.9 billion with crummy results lately. So what if oil prices are falling; show me the beef at JCP (other than cost control) and I’ll cut them some slack.”
This week, while oil gained +6.0%, from Monday through Thursday, JCP lost -8.3%. Then when Crude Oil dropped -5.4% on Friday, JCP gained +4.2%. I think the hedge funds have still got this stock plugged in. I am guessing the game will be over once the public catches on.
I saw a lot of Financial Entertainment TV hype for Target (TGT) on Friday. The stock dropped -0.7% Monday through Friday, but gained +3.1% on Friday. I think this had more to do with the oil price and the way hedge funds are playing these stocks.
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
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
Consumer Staples (XLP -1.14% W/W to 28.64) was a loser this week.
The extreme winners from a week ago, like SBUX and WFMI, and even KR to a lesser extent, were losers this week, dropping -6.4%, -3.9% and -6.1% respectively. I suppose consumers are tightening their belts, whether they have big wallets or not.
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
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
The Healthcare sector (IYH) lost -1.10% W/W to close at 67.65.
The healthcare provider and insurer United Health (UNH) up +6.5% a week ago was down -7.3% this week.
Medtronics (MDT +4.5%) has been on a tear since mid-May, from under 47, hit a high of 56.97 Friday. The Monthly-Weekly-Daily RSI-7 is 69.2/78.8/75.9. If I held the stock, which I don’t, I’d be gone this coming week.
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
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
The Financials (XLF -2.91% to 20.68) stumbled again.
Last week in this space I wrote, “A week ago I opined, “Financials managed a modest gain this week after a moonshot last week. Traders know the problems there have been fixed. Not!” This week they were all down… Merrill Lynch (MER -2.2%) was best off because the news here is just too bad to be believable. No further comment. Let’s dwell on reality: First there is Lehman Bros (LEH -13.2% W/W to $16.17). Need I say more?”
This week MER lost -4.1% and LEH plunged -10.9%. LEH is now down -75.4% over the past 52-weeks, while MER is down -67.0%. These firms must be tough to work for these days. How about Citi (C -62.5%), and UBS (UBS -60.0%)? Remember, a year ago, I rated all of these companies in the Cara 100 (Well not Merrill, never Merrill!). Then we discovered a series of problems!
A week ago, I wrote: “Fannie and Freddie, of course, continue on Death Watch. Fannie Mae (FNM) dropped a further -12.6% (including -3.9%) to $7.91. Pretty soon Fannie won’t qualify for margin. Freddie on the other hand lost just -0.85% this week, closing at $5.85. Maybe traders gave it the mercy rule after last week’s loss of more than -26%? But then again, Fannie lost -23.4% a week ago. Maybe there’s no mercy on Wall Street?... just friends in high places for use as the last resort.”
This week, FNM plunged -36.8% to $5.00 and FRE -52.0% to $2.81. At what point do these stocks fail to qualify as investment grade for any of the banks that hold their common and preferred and debt? Isn’t there something called the Prudent Man Rule?
Do you know why most banks still own FNM and FRE in their portfolios? The truth is that if they sell them, a major capital loss would need to be taken and most of these banks would lose so much capital their remaining reserves would be underwater. Those banks would be kaput. Toast.
You remember these are the same banks that participated in the Liar Loans they syndicated and sold to Fannie and Freddie, taking back their stock. So, let’s start calling these the Habitual Liar Banks when they refuse to write off their investment in Fannie and Freddie.
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
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
Tech (XLK -1.69% to 23.30 and Semi-conductors (SMH -4.11% to 29.15) were dumped this week.
A week ago I wrote here, “(XLK and SMH) were not in full-out rally mode this week like the previous week, but they were good for the Bulls or the future shorts or whatever.” Thank you. You knew what I meant.
Google (GOOG -3.8%) and Research In Motion (RIMM +2.1%) were headed in opposite directions.
Among the chip makers, Intel (INTC -3.2%) and SanDisk (SNDK -14.9%) were no longer the subject of rumors this week! Back to reality; the global economy is slowing, and the chips are a leading indicator. YTD, INTC is down -7.3% and SNDK -54.7%. SanDisk makes more chips for consumer products.
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 -1.41% W/W) closed at 23.72.
Verizon (VZ +0.9%) and AT&T (T -1.6%) were quiet.
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 +2.38% W/W) closed at 37.85. On the coattails of XLE!
As soon as I can get around to it, I’m going to set up new tables for the Dow Utilities and the major Telecom companies.
I’m also thinking of setting up tables of say ten key stocks on all the Exchanges covered by ADVFN.com, which continues to grow its service.
Bonds & Yields Review
Table 10: US Treasury Yields
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 3 Month | 1.64 | 1.65 | 1.78 | 1.49 |
| 6 Month | 1.90 | 1.88 | 1.92 | 1.82 |
| 2 Year | 2.40 | 2.30 | 2.38 | 2.73 |
| 3 Year | 2.26 | 2.16 | 2.24 | 2.66 |
| 5 Year | 3.13 | 3.06 | 3.10 | 3.49 |
| 10 Year | 3.87 | 3.83 | 3.84 | 4.12 |
| 30 Year | 4.46 | 4.46 | 4.47 | 4.67 |
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 2yr AA | 2.20 | 2.15 | 2.10 | 2.35 |
| 2yr AAA | 2.08 | 2.03 | 2.02 | 2.24 |
| 2yr A | 2.27 | 2.24 | 2.48 | 2.73 |
| 5yr AAA | 2.71 | 2.67 | 2.82 | 3.07 |
| 5yr AA | 2.85 | 2.78 | 2.86 | 3.05 |
| 5yr A | 3.00 | 3.00 | 3.05 | 3.24 |
| 10yr AAA | 3.53 | 3.52 | 3.61 | 3.78 |
| 10yr AA | 3.51 | 3.50 | 3.60 | 3.72 |
| 10yr A | 3.61 | 3.58 | 3.65 | 3.79 |
| 20yr AAA | 4.52 | 4.51 | 4.57 | 4.77 |
| 20yr AA | 4.58 | 4.57 | 4.63 | 4.85 |
| 20yr A | 4.76 | 4.74 | 4.87 | 4.85 |
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 2yr AA | 4.20 | 4.15 | 4.11 | 4.63 |
| 2yr A | 4.72 | 4.85 | 4.79 | 5.11 |
| 5yr AAA | 4.91 | 4.85 | 4.85 | 5.21 |
| 5yr AA | 5.39 | 5.31 | 5.44 | 5.68 |
| 5yr A | 5.60 | 5.59 | 5.39 | 6.33 |
| 10yr AAA | 4.57 | 4.54 | 4.78 | 5.51 |
| 10yr AA | 5.87 | 5.88 | 6.07 | 6.20 |
| 10yr A | 6.20 | 6.18 | 6.03 | 6.28 |
| 20yr AAA | 5.96 | 6.04 | 5.99 | 6.48 |
| 20yr AA | 5.76 | 5.84 | 5.79 | 6.27 |
| 20yr A | 6.21 | 6.30 | 6.25 | 6.73 |
Bond prices were almost stationary this week, which is a surprise since commodity prices and inflation data were flying all over. I suspect that bond traders, being the supposed smart people in our midst did the wise thing and went on holiday this week.
For the week, the yields for the US Treasury 2-year, 5-year ($FVX), 10-year ($TNX) and 30-year ($TYX) were +2 bp, +3 bp, +3 bp, and -1 bp respectively, to 2.40, 3.13, 3.87 and 4.46, causing a flat line to bond portfolios this week.
The 20-year TLT closed the week up +0.04% to 93.08. The TIP didn’t do much this week either, gaining +0.19% to 106.28.
A week ago, I opined, “… that might mean a narrower trading range for bonds than we’ve seen for a few years. I think it’s still too early to sell bonds and buy gold though. Probably soon though. It looks like I’ll be buying the gold before selling the bonds though. But, remember that deflation in the economy can also kill bond prices if the economy stays stagnant and rates lift as banks seek to raise increasing amounts of capital to replace their lost reserves.”
Here is the $USB 30-year Treasury Bond chart.
Interest rates and bond yields.
Interactive Daily data charts:
Interactive Chart of Interest rates and bond yields.
US Bond Funds -- Interactive Monthly Data Charts
SHY Monthly data series chart:
IEF Monthly data series chart:
TLT Monthly data series chart:
AGG Monthly data series chart:
LQD Monthly data series chart:
TIP Monthly data series chart:
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:
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
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
This week, Fannie and Freddie were crushed even more. FNM dropped -36.8% and FRE -52.0% W/W. Over the course of just ten sessions, the losses were -44.8% and -52.4% respectively.
FNM and FRE shares have fallen -92.8% and -95.7% respectively over 52-weeks. Isn’t it time to put them out of their misery – or is it the case that the Treasury Secretary (Mr Moral Hazard) can’t for fear their bondholders and shareholders, which happen to be most of America’s banks, would be put out of business.
So the Prudent Man Rule will go ignored – at least until some State or Fund takes this to the Supreme Court. Now that should be a CNBC Special!
You don’t think that with trillions of dollars being lost by the owners of capital that HB&B is going to get a free Get Out of Jail card do you? If they do, then let’s just say in advance that the US Supreme Court is not there to protect the people, which even at this point I am not ready to accept.
The point, however, is that there is or there is not a Prudent Man Rule in place by HB&B to protect the owner of capital who entrusts that capital to a fiduciary agent. We the people have a need to know.
Consumer Finance -USA -- Interactive Weekly Data Charts
Consumer Finance -USA -- Interactive Daily Data Charts
Commodities Review
The $CRB gained +12.50 (+3.27%) to 394.80 this week. Until Friday, Crude Oil had driven it up more. But on Friday, as $WTIC crashed, the $CRB dropped -2.74% on the day.
Interactive Chart of Weekly CRB Commodities Index:
Interactive Chart of Daily CRB Commodities Index:
Oil Review
$WTIC (US Light Sweet Crude called West Texas Intermediate) gained +$0.65/bbl (+0.57%) to 114.59. But it was not a quiet week.
The price of oil lifted a record +$5.62/bbl on Thursday and fell a record -$6.59/bbl on Friday. The casino has taken over the global energy market.
The 50d MA for $WTIC is now at 129.04, and the 200d MA is 110.61. The latter is quite close to the weekly low price, which for the time being is serving as technical support.
Five weeks ago in this space, I wrote, “I feel the market price (then at 129.47) will hit the 200-day MA price (then at 106.58) sometime in the next couple months.” We’re there now.
A week ago I wrote in this space, “The question is how much has the oil price been affected by ‘hot money’ speculators, how much by the $USD, how much by demand destruction in the economy, and so forth. There isn’t an easy answer. We just have to watch the trends and cycles in the data.”
I have to say that the trading on Thursday and Friday appears to be proof that speculators are in control. But, the public needs to know who was behind that move. If (and I say if) Humungous Bank & Broker were involved, then I think the public has every right to pull all their capital out of the banks and invest it elsewhere in the Financial sector and in other sectors. In other words, it’s time these banks fail. If the Treasury Secretary was involved, then he should be impeached by Congress. The credibility of the US capital market is at stake.
Yes, we have a need to know.
Here is the e-miNY Dec-07 Crude Oil chart.
Interactive Chart of Weekly Crude Oil:
Interactive Chart of Daily Crude Oil:
Gold & Precious Metals Review
$GOLD lifted +$41.40/oz (+5.23%) this week.
For $GOLD, the 50d MA is now 901.16, and the 200d MA is 892.56. The current price (833.50) is quite Bearish.
A week ago I wrote in this space, “… my earlier target for a low in $GOLD was around 760 and this week it hit 777.70. A few months ago, with the unrelenting push that kept the gold price above 950 for so many weeks, I started to doubt whether we would ever see 800 gold again. Now we have, but the Gold Bugs, while mad, did not die. They’ll be back. I will be watching to see if they continue to buy the dips here, setting up a new base for higher prices. I don’t think it will take long to find out.”
The gold bugs were saved this week by the reversal in the price of oil, which pulled the $USD down and permitted the gold bugs to average down and made the shorts want to cover. But that was a Monday through Thursday event. On Friday, $GOLD dropped -0.66% and the major Goldminer stock index ($XAU), which had been up over +11.5% through Thursday, went down -3.2% on the day.
So, it’s back to watching oil and the $USD.
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.
Spot silver chart for the week
$SILVER gained +$0.66 (+5.10%) this week to close at 13.59. The week earlier, it had plunged -$2.40/oz -15.66%, and it was $19.55 about five weeks ago, so, no, I don’t see hos the Silver Crazies can be happy. Besides, $SILVER dropped -1.83% on Friday.
Was the Monday through Thursday move expected? Well, I wrote here a week ago, in what looked like a death spiral, “Yes, the Silver Crazies are whipped, and that’s usually a good time to be a buyer.”
For $SILVER, the 50d MA is now 16.85, and the 200d MA is 16.79.
Also, last week I wrote: “I don’t want to say more at this point. But when the US oil inventories come out on Wednesday, you might have already considered a straddle on key silver stocks…” Had you put on that straddle, and legged out Thursday afternoon from the one side and Friday afternoon on the other, you would have made a killing. So, I was right on that one, but frankly who could have forecasted the record move up and then the record move down the next day in oil – unless of course you were in the room doing the deal!
Anyway, in the spirit of what this market has turned out to be, I advised playing Black 11 and this time it worked out. We are all getting tired of this game, don’t you agree?
Yes, the day traders love it; but so does an addict love cocaine. At some point, the next move becomes the final one. The point is; this is not trading. We want to trade fair markets as a prudent man would. Somebody, and I think we know its HB&B, is stealing that right from we the people.
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.
$PLATINUM gained +$53.00/oz (+3.82%) to 1441.20. The problem is that (i) a week earlier it was down -$171.40/oz (-10.99%), and (ii) on Friday it lost -1.21%.
The 50-day MA for $PLAT is 1819.94 and the 200-day MA is 1825.72.
A week ago in this space I asked, “How badly off are the Platinum Bulls? The current price of 1388.20 against the 50d and 200d MA’s says all you need to know—unless you are a day-trader who is thinking it’s over-sold and, like $SILVER etc, ready for a rebound.”
Monday through Thursday was quite a rebound.
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.
$PALLADIUM gained +$5.05 (+1.76%) to close at 291.85. The problem is that a week earlier it lost -46.20/oz, and at the beginning of summer, it was a high of $484.90. That’s quite a plunge, and a very small recovery bounce. The 50-day MA is now 403.70 and the 200-day MA is 422.46.
Dead cat bounce; aided and abetted by the oil lobby.
A week ago I wrote in this space, “With the exception of a couple days in the interim, the current price is all the way back to 1Q06. There is no technical indication whatsoever that the falling price will stop here either. But I think it will, any time soon… That’s not to say, the new $PALL Bull or precious metals Bull starts or re-starts here, but only that I think the plunge has been taken and now the cycle bottom work will take over.”
So let me explain further. This bounce in the precious metals was occasioned (is that a good word?) by a rally in the oil price and a pull-back in the $USD. But oil and the Dollar have reversed course, with oil prices set to fall soon and the $USD to rally further. So that will not help the precious metals. What was set this week was only the top of what will become the cycle bottom range. We have still to experience the actual bottom. Prices will now, I believe, zig zag in a sideways pattern until interest rates start to rise and the Gold:Dollar link disappears.
Why? Because the US economy is not going to crash as much as Europe’s or Japan’s or Canada’s. I now have my money on the US and the $USD. It may not be great (if it was, I would not be backing a rosy future for gold); but it’s a matter of alternatives. I don’t like the Yen; I don’t like the Euro; I don’t like the Pound; and I might be looney, but I don’t like the Loonie.
What I am saying is that as bad as my ill will for segments of America, overall it’s the best there is in this world. Listening to the Obama-Biden speeches this weekend, and I am sure the ones to come from McCain-???, I can’t believe there will not be major changes in store for DC this winter. Let’s see: (i) a resolution to the HB&B problems and light shining on the ending of the credit crunch, (ii) a new Fanny-Freddie, (iii) a new regulatory regime, (iv) soldiers coming home and being put to work on needed infrastructure jobs that will make America more efficient, (v) advancements in alternative energy, and lower oil and gas prices, (vi) a rash of smaller, more fuel efficient cars, (vii) more federal help for students and teachers, (viii) a return of American capital from foreign direct investment that has gone awry in riskier markets, (ix) a new equity Bull market, and (x) gee I wanted to get to 10, but I’m getting too excited. I best move on.
Btw, I did write last weekend that it was time to switch from precious metals bullion to the stocks, right? Well, using $GOLD and $XAU as proxies, the bullion was up +5.23% and the Goldminers zoomed +8.33%. Some of you will find that more believable than the previous paragraph maybe, but mark my words; I’d rather be investing in the USSA than the USSR or Europe, the UK or Japan. Well, as for Canada, if the US starts to crank up all 4 to 6 cylinders (note it will not be 8 or 12 any more), then Canada will get pulled along in the trailer, which ain’t a bad place to be.
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.
$COPPER contracts gained +$14.50 (+4.37%) to 345.95. The gains of the past two weeks have almost made up from the loss of -6.86% two weeks ago.
The 50-day MA for $COPPER is now 362.62 and the 200-day MA is 353.69.
A week ago I wrote, “The big metal miners were not down as much as the goldminers or the Steelmakers this week.” I told you that was one of my indicators for a turnaround on Monday. How long this goes, however, is anybody’s guess – unless you happen to be sitting at the bosses desk in Zug with the Metal Men.
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
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
The Goldminer stock group indexes lifted this week across the board: $XAU +8.33%, GDX +8.41% and XGD +6.83%.
For the most part this was a Dead Cat Bounce, and the start of a cycle bottom process where the final bottom will be found over the next three months I believe.
The 50-day MA for $XAU is 171.85 and the 200-day MA is 178.96.
A week ago I wrote in this space, “This week, the $USD had another one of its most bullish weeks in recent memory, up +1.7% to go along with the gain of +1.8% on the previous Friday, for a total move of over +3.5% in just six days. As I wrote last week, Gold traders simply cannot sacrifice their capital under such circumstances. But, I am also looking for the speculators to jump back in, and for potentially the gold price and the $USD to start moving in sync. For the latter to happen, I think interest rates will have to start rising though and that may take some time because the lower oil/commodity prices are taking the pressure off the Fed to move in that direction, and the banks do not want to see it if it would further damage the housing market… However, at some point in the future, there will, I expect, be an uncoupling in the Gold/$USD hedge with the growing prospect of deflation. Traders will also be watching the plight of all economies hit the skids and the value of all fiat money be destroyed. In a global deflation, traders and long-term investors will move into gold.”
It’s too early to be talking deflation, but not to early to be thinking about it, and watching for evidence. Bank failures are good examples.
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
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 Weekly U.S. Goldminers Index:
Interactive Chart of Daily 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 Weekly data:
GDX Daily 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 Weekly data:
Interactive Chart of XGD Daily data:
Forex Review
This week the $USD lost -0.34% to close at $0.7681, or if you are looking at the futures market at 76.81.
The price had been bullish for five straight weeks and was in need of a pull-back to test the market forces.
The 50-day MA for the $USD is 73.71 and the 200-day MA is 74.19.
As economies in Europe, UK and Japan slow down at a quicker rate than the US, and may go recessive for longer, the $USD will likely continue to rally with higher highs and higher lows. That’s the definition of a Bull phase.
Interactive Chart of Weekly U.S. Dollar Index:
Interactive Chart of Daily U.S. U.S. Dollar Index:
The Euro ($XEU) gained +0.65% W/W, closing at 1.4781.
The Euro 50day MA is 1.5488 and the 200day MA is 1.5221.
The Germans will soon be wishing for the return of the D-Mark as I believe that Friday’s loss of -0.81% in the Euro to the USD is more typical of the future than was Monday through Thursday’s trading.
Interactive Chart of Weekly Euro Dollar Index, priced in USD:
Interactive Chart of Daily Euro Dollar Index, priced in USD:
The Pound lost -0.70% W/W, closing at 1.8521. As I wrote, “The UK economy is in difficulty.” Even when the $USD took a nose-dive this week, the Pound was in worse shape because there were so many negatives in the domestic economic data.
The 50-day MA and 200-day MA are at 1.9575 and 1.9829.
Btw, I found the dress and body language of the Mayor of London at the Closing Ceremonies of the Beijing Games to be dreadful. He looks like he got smacked by a Taekwondo expert. Maybe he was just thinking that China is a tough act to follow. Whatever; he didn’t look too good.
Let’s just say that the next Summer Games will be different. London is my favorite city in the world, bar none. London doesn’t have to invite the best of the world there; the best of the world is already there. No other city can match it.
Weekly British Pound Index:
Daily British Pound Index:
Weekly Japanese Yen Index:
The Japanese Yen ($XJY) gained +0.43% this week to 90.88.
The Yen’s 50-day MA is 92.75 and the 200-day MA is 93.82. The Japanese economy is in poor shape, so I don’t expect to see a strong Yen to the USD in the months ahead.
Daily Japanese Yen Index:
The Loonie (Cdn Dollar) gained +1.14% to 95.47 US this week. There was a further gain of +0.41% on the prior Friday, so that is a major move higher. But it was down -0.44% on Friday this week, and I anticipate it will drop lower next week.
The 50-day MA and 200-day MA is at 97.38 and 99.23 respectively.
Weekly Canadian Dollar Index:
Daily Canadian Dollar Index:
Here is the China Yuan (CNY) chart.
International Equity Markets Review
There were mostly lower prices this week in the global equity markets. The good thing for the Bulls is that volume was weak as holidays took over.
UK FTSE moved up from 5454.8 to 5505.6
German DAX moved down from 6446.0 to 6342.42
Aussie All-Ords moved little from 5038.9 to 5010.2
Shanghai Composite moved down from 2450.6 to 2405.2
HK Heng Seng moved down from 21160.6 to 20392.1
India’s BSE 30 moved down from 14724.2 to 14383.4
Japan’s Nikkei 225 moved down from 13019.4 to 12666.0
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.”
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
Here is the latest session data for the Toronto Stock Exchange composite index.
Toronto 300 stockcharts.com chart
Toronto CDNX stockcharts.com chart
Europe
Here is the latest session data for the bourses of Europe.
Here is the latest session data for the London stock exchange FTSE.
FTSE 100 stockcharts.com chart
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.
Italian Milan Index stockcharts.com chart
Here is the latest session data for the Swiss market index.
Swiss Market Index stockcharts.com chart
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.
Tokyo Nikkei 225 Index stockcharts.com chart
Here is the latest chart for the Singapore index .
Singapore Straits Times Index stockcharts.com chart
Here is the latest chart for the Shanghai Composite index .
Shanghai Composite Index stockcharts.com chart
Here is the latest chart for the Hong Kong Hang Seng index .
Hong Kong Hang Seng stockcharts.com chart
Here is the latest chart for the India BSE 30 index .
Mumbai BSE 30 Sensex Index stockcharts.com chart
Here is the latest chart for the Australian All Ordinaries index .
Sydney All Ordinaries Index stockcharts.com chart
Russia (RTS) stockcharts.com chart
Table 13: International equities via an ETF perspective (in $USD)
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
There were some strong rallies W/W in some of the country ETFs. Brazil (EWZ +4.8%), Canada (EWC +3.9%), and China (GXC +1.54%) were up, but some also were very weak, such as India (IFN -5.6%), Russia (RSX -5.4%) and Hong Kong (EWH -2.7%).
Japanese equity market ETF: EWJ
Here is the Japanese (EWJ) equity market ETF Monthly, Weekly and Daily data charts:
U.K. equity market ETF
Here is the United Kingdom (EWU) equity market ETF Monthly, Weekly and Daily data charts:
EWU Daily data:
Canada’s equity market
Here is the Canadian (EWC) equity market ETF Monthly, Weekly and Daily data charts:
US Equity Markets Review
The DJIA (-0.27%), S&P 500 (-0.46%), NASDAQ Composite (-1.54%), and Russell 2000 small cap (-2.09%) were all negative, despite a huge rally on Friday.
The big movers in the DJIA holding it back were AIG (-13.6%) and GM (-6.6%), while the winners were the oil stocks, CVX (+4.6%) and XOM (+4.2%).
On Friday, all four of these stocks had a 180 degree course direction.
As I have been saying, these are the dog days of summer, but do not dismiss the heavy money flows out of the Financials.
A dozen NASDAQ stocks to watch.
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.
Table 14: Dow 30 List
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
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 BAC C CAT CVX DD DIS GE GM HD 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)
Value Line Report(s) this past Friday
This week, Value Line reported on six DJIA components this week. Five of them are banks or near bank in the case of American Express (AXP), and one of them has all the money, Microsoft (MSFT). None are Cara 100 companies, but Microsoft probably should be.
As I opined in the Friday blog, there is nothing I want to write about these banks. I find the Wall Street analysts who write about them at a historical time like today when almost all banks are in such dire shape is simply bizarre. It must be a heck of a career challenge for an expert analyst to avoid stating the obvious because it might bring the wrath of the master string-pullers and to also guess at earnings/losses/write-downs as if there is some science to an Ouija board.
I won’t waste my time or yours.
If you absolutely must buy one of the stocks, the only one would be American Express (AXP), as I think the Value Line analysts would agree. But, we’re talking risk management here; not seeking high Total Returns.
As for Microsoft (MSFT), I love the margins, returns, financial strength, and so forth. I do have a love-hate relationship with their products, but they are essential for people like me. As a trader, the problem I have with Microsoft is that they face Google (GOOG) in the marketplace, and so far it’s fair to say that all the billions one should need to win that competition have been in hand and haven’t been used properly. Moreover, this negotiating nonsense with Yahoo (YHOO) is just beyond belief.
In any case, if there is one stock to own out of these six DJIA components, it is definitely MSFT.
Since 1991, except for one year (2002), where cash flow per share dropped by two cents only, every important metric like Cash flow, Earnings, and Dividends per share has increased Y/Y. I think the Value Line analyst has it right though: on July 4 this year, he lowered the ratings for Timeliness from 2 to 3, and for Technical from 3 to 4. He now ranks MSFT “to be only an average performer in the next six to 12 months.”
Given that there is likely more downside headed for the broad market and that the next Windows/Office suite is projected to come in 2010, I don’t see any reason to buy the stock here. But before this Bear is finished, I believe Microsoft will be added to the Cara 100. My crystal ballmer is telling me that management will buy a lot more MSFT off the market and also raise the dividend a lot more than the Value Line analyst is projecting. I can actually see this stock hitting an all-time record high of 64 in 2010, which some would say is just ten years later than they expected.
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 Aug. 22: next one is due Nov. 21)
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 Aug. 22: next one is due Nov. 21)
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 Aug. 22: next one is due Nov. 21)
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 Aug. 22: next one is due Nov. 21)
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 Aug. 22: next one is due Nov. 21)
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 Aug. 22: next one is due Nov. 21)
Microsoft
The Dow 30 Company links in chronological order of next reports. I added the Google Finance links, which are superb.
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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)
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 Aug. 8: next one is due Nov. 7)
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 Aug. 15: next one is due Nov. 14)
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 Aug. 15: next one is due Nov. 14)
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 Aug. 22: next one is due Nov. 21)
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 Aug. 22: next one is due Nov. 21)
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 Aug. 22: next one is due Nov. 21)
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 Aug. 22: next one is due Nov. 21)
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 Aug. 22: next one is due Nov. 21)
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 Aug. 22: next one is due Nov. 21)
Wrap-up:
In addition to family and a couple TV things, I was slowed down today by a computer virus attack (when searching a dictionary nonetheless), which I think was thwarted, and also by a bit of heat stroke. I am not used to sitting outdoors in the hot and humid Toronto weather. :-)
But, albeit later than usual, I managed. I had no time for edit checking though, so this is what it is.
Have a good day.
Posted by Posted by Bill Cara on August 24, 2008 10:11:57 PM | Category: Cara Week in Review