The fact is that the growth rate of the global economy is rapidly slowing, with large pockets of recession, and the rate of producer and consumer inflation is far higher than the comfort level of any respectable central banker. The major financial services companies (banks, broker-dealers, insurance companies) are still to write down their so-called asset backed commercial paper holdings to market values, which is the reason these companies are illiquid and have limited funds to lend to producers and consumers. This credit crunch leads to a quandary for capital managers, producers and consumers alike. Where capital has been flowing has nothing to do with Bull markets or bullishness and everything to do with a desperate attempt to find safe havens.

Some capital managers are in denial; others are cranking out their excuses because they fear that the Other People whose Money they have been managing improperly are about to become an ugly crowd of litigants.

After the Financials (XLF) peaked on October 5, 2007 at 35.97, before plunging -53.4% to 16.77 on July 15, there were carefully crafted stories of oil shortages, refinery shortages, and the like, which served to move that capital from XLF to XLE (the energy sector). XLE then moved from a low of 62.97 on Jan 23 to a high of 91.42 on May 21. That move kept the major equity market indexes from outright collapse, even though the DJIA index did manage to fall -23.7% from a high of 14198 set on October 11 to a low of 10828 on July 15. The total capital transferred from Financials to Energy was in the mega trillions.

But, today, after a rally of +27.3% in the Financials from 16.77 (July 15) to 21.35, traders understand that the credit markets are still in a major crisis with extreme spreads getting worse, and more banks are failing every week. So they are not chasing the Financials higher, in fact the XLF peaked between late July and early August. That dinner’s been eaten.

Moreover, following the highs in XLE from May 21 through into July, traders now recognize that growth in the global economies cannot sustain crude oil prices in the 120-145 range, and so are knocking the price down, likely into the 80 range this Q4 and 1H09. So XLE dropped from a high of 90.16 on July 2 to a low of 68.35 on August 18. That was a drop of -24.2% in six weeks in what is the industry that has the world’s largest market value, which shows the power of these money flows. Now, just two weeks later, possibly because of fighting between the Russians and Georgians and possibly because of a major threat of Hurricane Gustav to the US oil fields in the Gulf of Mexico, the XLE has recovered +9.2%.

How much longer can money managers hang in behind XLE, knowing that (i) the global economy is in dire straits, (ii) the credit crunch cannot be terminated until the Financials complete their write-offs and restructure/raise more capital, and (iii) the political direction of America is decided following the removal of eight years of Texas oil people in the White House?

In that regard, I think the choice of oil lobbyist, gun-toting, right-to-lifer Alaska Gov. Palin for running mate on the Republican ticket is a clear indication of the GOP stance with respect to their biggest political supporters. That’s not to say I disagree with those positions, although I am surprised with the choice of a political unknown. America has this thing about the star system. I’m sure if Hollywood can make stars of people like Paris Hilton, Gov. Palin ought to be an easy Manolo Blahnik fitting.

Not to make jokes, but if they have already started from the likes of The Daily show and CNN’s lead news anchor Wolf Blitzer nonetheless, this is going to be a tough convention and campaign for the GOP.

Blitzer, soon after reporting that Palin had been chosen as the McCain running mate, was informed by the reporter who broke the story that his digging into her barely known past revealed that Gov. Palin had been an athlete on the high school volleyball team, where she had been known as ‘Sarah the Barracuda’. Said Wolf, in a mocking response, “Our little Sarah was quite the high schooler”.

I think she might be portrayed as a political Rodney Dangerfield by media leaders who are serious about the problems of the country and the steps being taken to turn around the situation. I’d like to say that I find it a bit unfair; but really is it? Texas Senator Kay Bailey Hutchison, one of the most prominent Republican women in the nation was startled at the announcement, while being interviewed at the time on CNN, and admitted she didn’t know Gov. Palin. Many of the CNN long-time reporters also said the same.

So, back to the market. Where are we, if as I say the Financial and Energy stocks, which are by far the two biggest industry sectors in the equity market are going nowhere? (I won’t even argue here that they are going south, although I could, but I just need to figure out what money managers are doing now and let the market move where it wants.)

After Energy and Finance, is capital flowing into Tech (XLK) maybe, since that’s the next biggest sector? No, not there either. In the past three months, XLK has dropped -9.7% and the Semi-conductor group (my leading indicator for Tech) is down -12.8% in that time, and -6.3% in the past two weeks alone while the S&P 500 is down just -1.1%.

Yes, where is the capital flowing? I say it’s going into safe haven places like US Treasuries -- from T-Bills to Bonds. The TLT (average 20-year term) is up +2.5% in the past four weeks, despite inflation data that is rocking and rolling.

Another pocket, although it may turn out to be full of holes, has been the small cap stocks. For instance the Russell 2000 index rallied from a July 15 level at 673.76 to a high of 764.38 on August 15, which was a one-month gain of almost +13.5%, and the current price is still at 739.50.

Driving T-Bill yields down well below short-term rates is not an effective long-term strategy for bullish traders. Some say, it’s nothing more than a panic move. But, really, what else are traders – particularly the ones who absolutely must pursue a long only strategy -- supposed to do other than go to cash?

Doesn’t this present situation go to show that the mutual fund model no longer works? I say that because I believe there are times that traders cannot afford to be 100% long, even with much larger than usual cash positions.

After the close Thursday, up +213 points in the DJIA index and +329 points over three straight days of gains, I opined early Friday that my 10000/2000 opinion (it’s not a forecast; it’s a guess) was still in place. The DJIA on Friday sold down -172 points, most of it in the late afternoon. Traders have not started a Bull market; they are not even bullish. They are scared.

Let’s take a closer look at what happened during the week.

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Global Economics Review

For a few weeks now, I have opined “With respect to the US economy that is in dire straits, note that the tone is improving”. So, (i) I am not surprised to be hearing Talking Heads blow as much smoke here as they can find, and (ii) I hope you don’t simply extrapolate higher stock prices ought to result from the present picture. For the latter point, I refer again to how well the Chinese economy was performing over the past year, while the Shanghai Composite Index plunged from a high of 6124 (October 2007) to its present level at 2397.

In any case, there has been a surprising upward revision to the Preliminary Estimate for US GDP. Econoday reported as follows re the data that came out on Aug 28:

Revisions to second quarter GDP blew away any claims of recession for spring. The Commerce Department's first revision to second quarter GDP boosted the quarter's growth rate sharply to 3.3 percent from the initial 1.9 percent. The revised estimate for second quarter GDP beat the consensus forecast for a 2.7 percent gain. The upward revision was primarily due to upward revisions to exports and durables consumption. The second quarter jump followed a modest 0.9 percent increase the prior quarter.

What we look for in these macro-economic reports is for data that could become possible drivers of capital market prices, ie, in stocks, bonds, currencies, commodities, and futures. The interpretation of the changes in the economic data helps us, as a trend-following exercise, to explain the changes in the price and volume data in the capital markets. In other words, we use the economic data, which is full of estimates and covers prior periods and so forth, to support our analysis of fundamental (ie, company related), quantitative (ie both company and market related) and technical (ie market related) data. But, frankly, the only decisions that smart traders make with this economic data is to trade against the reactions of others who happen to be believers in its importance. This is the primary reason that economists make lousy traders.

Do you recall what I wrote in my commentary of May 30 2007 about how the former Goldman Sachs chief economist William Dudley was recruited as head trader of the Fed in November 2006, not long after Hank Paulson the ex-Goldman CEO was made Treasury Secretary, reminding you what I wrote immediately after that hiring?

In November 2006, William Dudley, 10 years the chief US economist for Goldman Sachs was parachuted in to the Federal Reserve Bank to oversee all open market trading operations of the FOMC, a position that was confirmed by the Fed executive on Jan 30-31, 2007. In my article, “Non Trader is now America’s CTO, Nov 29, 2006”, I alerted readers that Mr Dudley was not a trader, and that he often joked about how bad a trader he is… But I suppose he takes instructions well from Hank Paulson.

Please re-read my Nov 29, 2006 blog.

Mainstream media did not want to see any of this stuff in the 2H06 because Humungous Bank & Broker had the Goldman Sachs thing going for them and advertising sales were humungous as the DJIA index was soaring. That was the conflict of interest issue in play.

And when I pointed out where all this was leading the public, I was attacked by other bloggers, including some jerk management consulting firm that is called cxo advisors or whatever that says I am 2nd worst trader of anybody they diligently follow. Being a commercially free blogger, I have been tolerant to this point; but, mark my words, if that crap persists after I commence work as a professional trader, I’ll take action. These cxo management consultants and economists are not only incompetent in the field of capital markets, they are quacks for advancing the notion they understand trading, nevertheless professing rating expertise and the ability to pass judgment on professional traders.

The mind boggles at the crap that masquerades as legitimate service providers in the marketplace today. If professional traders do not perform well, they find themselves out of work or out of capital—at least unless somebody behind the scenes is pulling their strings like a puppet.

Weekly International Economic Report . The weekly report from Econoday dated 8/22/08 was another excellent one by the way. You’ll note how badly off is the Japanese economy and why the BoJ cannot raise rates, which has been helping out the Carry Trade in the Western capital markets.

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 Existing Home Sales for July. Econoday reported: “Existing home sales posted their best headline since February, up 3.1% to a 5.0 million annual rate in July. But the rise didn't cut supply on the market, which remains severely bloated at 11.2 months and up from 11.1 months in June and 10.8 months in May. Bloated supply continues to pressure prices which fell 1.3 percent in the month to a median $212.4 million for a 7.1 percent year-on-year decline. Falling home prices, and related increases in foreclosures, arguably pose the greatest risk to the economy.”

US New Home Sales 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 Durable Goods Orders for July. Econoday reported: “Durable goods orders in July were surprisingly strong-even after discounting a surge in aircraft orders. And businesses are looking past current weakness in the economy, continuing to invest in the economy. Durable goods orders advanced 1.3 percent in July, matching the 1.3 percent surge in June. New orders in the latest month topped the market forecast for a 0.1 percent advance. Excluding the transportation component, new orders increased 0.7 percent, following a 2.4 percent jump in June. Strength was moderately widespread. July's gain was the largest since a 4.1 percent surge in December 2007. Apparently, exports are still providing support for the manufacturing sector along with moderate a uptrend in equipment investment in the U.S., despite a slowing in consumer spending... Strength in overall orders included primary metals, up 2.2 percent; machinery, up 4.6 percent; fabricated metals, up 0.4 percent; communications equipment, up 2.9 percent; and transportation equipment, up 3.1 percent... Weakness was in computers & electronics, down 1.3 percent, and electrical equipment, down 6.0 percent... Businesses are optimistic about a return in growth in demand, based on their willingness to sink dollars into capital goods. In July, nondefense capital goods orders jumped 6.3 percent, following a 2.6 percent drop in June. Even after excluding aircraft, nondefense capital goods orders rose 2.6 percent in July after a 1.3 percent gain in June... Turning to the key source data for business equipment in GDP, shipments of nondefense capital goods rose 1.6 percent in July after gaining 0.5 percent the previous month. Despite many economists seeing a near flat third quarter for GDP, the business equipment component is off to a good start... Year-on-year, new orders for durable goods declined to down 4.5 percent in July from down 0.7 percent the month before... But in recent months, exports are still providing support for the manufacturing sector along with a moderate uptrend in equipment investment in the U.S., despite a slowing in consumer spending. Today's numbers should nudge interest rates up and provide lift to equities. However, for rates, there is some damping movement from comments by Atlanta Fed President Lockhart, making dovish comments that inflation will be coming down due to lower oil prices and a slowing economy.”

US Personal Income and Outlays for July Econoday stated: “The July personal income report showed a drop off in income tax rebates pulling down overall income. Meanwhile, inflation is outstripping moderate gains in spending. Personal income in July fell 0.7 percent, following a 0.1 percent rise in June. The July number came in far worse than the consensus forecast for a 0.1 percent decline. Within personal income, the wages and salaries component posted a moderate 0.3 percent gain, following a 0.2 percent rise in June… Spending was moderated by a sharp dip in motor vehicle purchases. Personal consumption expenditures in July slowed to a 0.2 percent rise, after jumping 0.6 percent in June. The market had projected an increase of 0.2 percent for personal spending. Strength was in a 0.5 percent boost in services, followed by a 0.3 percent rise in nondurables. Durables fell 1.5 percent… Turning to inflation, the headline PCE price index remained quite hot with a 0.6 percent jump - only slightly down from June's red hot 0.7 percent surge. The core PCE price index held steady but at a pace unacceptable to the Fed, rising 0.3 percent in both July and June. The latest number matched consensus expectations… Year on year, personal income growth fell to up 4.2 percent from up 5.5 percent in June. Headline PCE inflation jumped to up 4.5 percent from up 4.0 percent the month before. Core PCE inflation rose to 2.4 percent from 2.3 percent in June… Today's report shows the consumer sector on increasingly shaky ground as inflation is eating away at income and spending even as rebate checks have fallen off. Real spending actually fell 0.4 percent in July, after dipping 0.1 percent in June. The July numbers take a lot of luster off yesterday's upward revision to GDP. While the news should be a negative for equities, it is unclear about the impact on bonds. The high inflation numbers are likely to have the larger impact, firming yields, but the weaker income and real spending data could send rates down.”

How is next week’s calendar looking? First off, the central banks of Canada, the UK and the ECB are reporting, and Friday is US Jobs Friday, so this will be an interesting week.

US Economic Calendar.

US ISM Manufacturing Index for August. 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. If there is good news it's that inventories remain thin, with the overall inventory index down more than 6 points to 45.0 and the customer inventory index, which asks respondents to assess inventories at their suppliers, down 8 points to 47.0. Perhaps because of thin inventories, manufacturers, at least in this survey, are adding employees with the employment index up more than 8 points to 51.9 for its best reading since April last year. But the reading contrasts with this morning's employment report where manufacturing extended two years of payroll contraction. Production is solid in the report at 52.9 vs. June's 51.5. The strength in employment and production helped keep the overall index steady at a dead-even 50.0 for the month.”

US ISM Non-Manufacturing Index for August. For July, Econoday reported: “U.S. purchasers are reporting declines in new orders, pointing to trouble for second-half growth and employment. The new orders index in ISM's non-manufacturing report fell nearly 1 point to 47.9, the lowest reading since January and the second lowest of the whole expansion. The new orders index in last week's ISM report on the manufacturing side fell nearly 5 points to 45.0 for the single lowest reading of the expansion.”

US Factory Orders for July. For June, Econoday reported: “Boosted by inflationary effects but also reflecting underlying strength, factory orders surged 1.7 percent in June. Factory orders for May were revised 3 tenths higher to a gain of 0.9 percent. Orders for non-durable goods, reflecting price gains for petroleum and coal, jumped 2.5 percent in June following a 1.7 percent gain in May and a 3.5 percent gain in April. These gains reflect the input cost inflation that is plaguing manufacturers who are struggling to pass through these costs to their customers.”

US Jobs Report for August. For July, Econoday stated: “The overall economy may not yet be in recession but 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. Revisions to overall payroll jobs in May and June were a net increase of 26,000.”

The US macro-economic data shows that there are pockets of improvement, but the conclusions may be faulty. The credit crunch continues, making it difficult for producers to raise prices (despite rising costs) or consumers to go out and buy houses and cars and other costly durables. In fact, traders today are more focused on the plight of the Financials than they are with macro-economic data, particularly after they saw the same lousy data being reported in the UK, Europe, and Japan.

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US Equity Markets Review

DJIA ino.com chart

DJIA stockcharts.com chart

The cracks in the bullish camp became more visible this week. While the stocks of solid DJIA component companies like General Electric (GE -3.5% W/W), Pfizer (PFE -3.2%), Intel (INTC -2.6%), Procter & Gamble (PG -2.6%) and IBM (IBM -2.6%) were trashed this week, look at what the Dogs of the market did: Freddie Mac (FRE +60.5%), Fannie Mae (FNM +36.8%), Merrill Lynch (MER +12.4%) and Lehman Brothers (LEH +11.7%)!!!

Meanwhile, the DJIA lost -0.72% to 11543.55 from 11628.06, and the S&P 500 -0.73% to 1282.83 from 1292.20. Friday was a killer.

On the week, there were 11 Dow components that were up and 19 down.

At the end of this week, there were 2 of 10 sectors that lifted in price. The winners – for now at least -- were the Financials (XLF +3.2%) and Telecom (IYZ +0.8%).

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NASDAQ Composite ino.com chart

NASDAQ Composite stockcharts.com chart

The NASDAQ Composite dropped -1.95% this week to 2367.52 from 2414.71, after dropping -1.54% the previous week. Tech is now out of favor.

Volume was lowest of any week this year.

One of the highlights, as I had indicated might be the case, were small cap stocks. The Russell 2000 index was up +0.3% on the week despite losing -1.1% on Friday. But even on Friday the losses in the other major market indexes were relatively much higher.

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

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The US equity market Sector ETF Summary

This week, there were 2 sectors up and 8 down. On Friday there were zero up.

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	21.35	0.00	0.00%	3.24%	0.23%	-1.57%	-24.72%	-14.67%	-17.50%	-36.48%
IYZ	23.92	-0.16	-0.66%	0.84%	-0.58%	4.05%	-18.00%	-10.98%	1.23%	-27.65%
XLI	35.22	-0.44	-1.23%	-0.20%	-1.18%	2.83%	-8.54%	-8.85%	-3.29%	-9.76%
XLB	39.60	-0.43	-1.07%	-0.25%	0.33%	0.61%	-4.12%	-10.41%	-3.37%	2.27%
XLU	37.72	-0.66	-1.72%	-0.34%	2.03%	2.17%	-10.38%	-9.06%	-0.03%	-3.06%
XLE	74.50	-0.63	-0.84%	-0.35%	5.12%	0.01%	-6.29%	-12.48%	-2.04%	8.28%
XLY	30.53	-0.29	-0.94%	-0.42%	-2.21%	7.50%	-5.19%	-6.06%	-2.02%	-17.04%
SPY	128.79	-1.40	-1.08%	-0.66%	-1.06%	2.13%	-11.14%	-8.01%	-3.72%	-12.12%
IYH	66.48	-0.69	-1.03%	-1.73%	-2.81%	2.86%	-5.16%	3.09%	1.25%	-2.49%
XLP	28.10	-0.33	-1.16%	-1.89%	-3.00%	2.74%	-1.02%	-1.13%	3.50%	4.15%
XLK	22.80	-0.47	-2.02%	-2.15%	-3.80%	2.93%	-12.71%	-9.70%	2.01%	-11.59%
SMH	28.50	-0.66	-2.26%	-2.23%	-6.25%	2.30%	-9.12%	-12.76%	-0.18%	-23.69%

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
CEO	155.76	1.18	0.76%	10.43%	15.90%	4.80%	-6.96%	-11.58%	-6.04%	30.41%
ECA	74.90	0.21	0.28%	3.65%	13.07%	3.41%	7.60%	-16.27%	-1.72%	27.71%
PTR	129.20	-1.46	-1.12%	0.54%	2.30%	-3.32%	-25.60%	-7.15%	-12.00%	-11.63%
STO	30.63	-0.14	-0.45%	0.16%	8.35%	1.32%	-1.95%	-19.61%	0.29%	9.94%
IMO	51.27	-0.66	-1.27%	0.08%	13.05%	3.01%	-6.65%	-10.30%	-9.40%	19.01%
PBR	52.74	-0.32	-0.60%	-0.17%	8.25%	-3.16%	-55.61%	-25.49%	-55.05%	-10.44%
TOT	71.88	-0.37	-0.51%	-0.24%	2.54%	-4.61%	-13.69%	-17.46%	-4.66%	-1.91%
XOM	80.01	-1.17	-1.44%	-0.36%	3.81%	0.36%	-14.44%	-10.45%	-8.05%	-6.12%
SU	56.84	-0.25	-0.44%	-1.03%	12.60%	4.29%	3.10%	-15.89%	10.16%	31.91%
RIG	127.20	-2.31	-1.78%	-1.96%	0.76%	-7.56%	-12.85%	-16.36%	-9.47%	22.48%
CVX	86.32	-0.86	-0.99%	-2.02%	2.46%	2.38%	-7.64%	-12.68%	-0.39%	-0.44%
SLB	94.22	-2.46	-2.54%	-3.13%	3.01%	-5.97%	-6.32%	-6.70%	8.99%	-1.57%

Crude Oil ($WTIC gained +$0.87/bbl (+0.76%) this week to 115.46, which was not enough to push the energy stocks higher. XLE lost -0.35% W/W to close at 74.50, losing -0.84% on Friday.

I surmise that there has been a release of Special Petroleum Reserves to control the price heading into what appears to be an emergency condition in the Gulf of Mexico this weekend, with Gustav being a potential Category 4 storm as it hits the oil fields.

Remember, it was just seven weeks ago that $WTIC was $145/bbl, and the economy was thought to be weaker then, and there were no Cat 4 hurricanes in the vicinity of the prime US oil fields and refineries.

This week, the only oil stock that fared well was China National Offshore Oil (CEO +10.4%), which has a two-week gain of +15.9%. SLB and CVX were weakest in my list.

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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
MT	78.62	0.64	0.82%	3.34%	5.94%	-6.68%	2.91%	-20.55%	3.42%	21.89%
TS	54.69	-0.44	-0.80%	2.90%	6.90%	-7.45%	23.20%	-9.41%	23.04%	15.48%
GGB	18.71	0.07	0.38%	2.52%	8.03%	-11.20%	-34.81%	-62.27%	-42.91%	-17.72%
NUE	52.50	-0.31	-0.59%	1.74%	4.15%	-2.38%	-9.44%	-27.98%	-18.69%	-0.53%
BHP	70.51	-1.49	-2.07%	1.39%	8.11%	0.37%	0.14%	-17.77%	-3.65%	12.96%
TCK	41.46	0.36	0.88%	0.83%	12.48%	-5.28%	14.40%	-13.48%	3.75%	0.75%
DOW	34.13	-0.51	-1.47%	0.03%	-2.43%	4.28%	-11.92%	-16.00%	-9.45%	-19.62%
RIO	26.55	-0.35	-1.30%	-0.30%	4.78%	-6.12%	-18.83%	-32.89%	-23.79%	-44.61%
RTP	379.72	-8.42	-2.17%	-0.40%	9.51%	-3.75%	-9.53%	-21.42%	-16.44%	42.23%
AA	32.13	-0.27	-0.83%	-0.46%	1.01%	-0.03%	-11.07%	-20.35%	-13.49%	-11.71%
VCP	21.12	-0.08	-0.38%	-0.47%	-2.81%	-11.15%	-28.89%	-37.05%	-32.87%	-6.75%
PKX	107.10	-1.65	-1.52%	-3.52%	-5.52%	-16.16%	-26.87%	-20.72%	-20.84%	-28.90%

Basic Materials (XLB -0.25% to 39.60) was pulled down by Friday’s loss of -1.1%.

Steel stocks like MT (+3.3%), TS (+2.9%) and GGB (+2.5%) were the leaders here but so was another steel stock PKX (-3.5%) the loser.

All in all, these stocks sidetracked.

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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
TXT	41.10	0.00	0.00%	6.75%	-2.91%	-4.55%	-38.48%	-33.38%	-24.13%	-27.63%
ABB	24.57	0.06	0.24%	4.29%	2.16%	-4.73%	-14.21%	-24.47%	-1.88%	1.53%
ERJ	33.95	0.22	0.65%	2.88%	3.92%	14.16%	-24.77%	-7.64%	-23.40%	-23.28%
FLR	80.13	-0.77	-0.95%	1.69%	12.29%	-0.36%	10.98%	-12.16%	15.08%	29.89%
UPS	64.12	-0.58	-0.90%	0.94%	-3.05%	2.99%	-7.29%	-10.45%	-8.71%	-15.72%
HON	50.17	-0.15	-0.30%	0.74%	-1.49%	-1.63%	-16.24%	-15.44%	-12.81%	-11.98%
CAT	70.73	-0.95	-1.33%	0.65%	0.54%	3.80%	0.14%	-14.56%	-2.21%	-5.74%
FDX	82.82	-1.11	-1.32%	0.17%	-5.73%	7.09%	-3.88%	-10.14%	-6.03%	-24.65%
BA	65.56	-0.78	-1.18%	0.02%	1.72%	5.72%	-24.31%	-20.16%	-20.81%	-32.34%
UTX	65.59	-1.13	-1.69%	-0.59%	-1.81%	3.19%	-12.79%	-6.61%	-6.98%	-11.78%
MMM	71.60	-0.90	-1.24%	-0.94%	-2.57%	2.07%	-13.43%	-7.92%	-8.67%	-19.33%
GE	28.10	-0.73	-2.53%	-3.50%	-5.70%	-0.39%	-23.56%	-8.29%	-15.21%	-27.41%

The Industrials (XLI -0.20% W/W) closed at 35.22, caused by Friday’s loss of -1.23%. Volume was very low, just like in the other sectors, so I wouldn’t make too much of any of this stuff.

Textron (TXT +6.8%) was the big winner; a week ago at -9.1%, it was the big loser.

I wouldn’t make too much of it. Most stocks were quiet. ABB gained +4.3% and GE lost -3.5%.

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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
BDK	63.25	0.91	1.46%	1.77%	-3.57%	6.68%	-9.55%	-1.17%	-8.03%	-25.97%
JCP	38.97	-0.07	-0.18%	1.70%	-2.43%	29.04%	-6.43%	-6.12%	-15.67%	-41.11%
TTM	9.860	0.070	0.72%	1.65%	-1.20%	3.57%	-49.31%	-28.81%	-43.72%	-39.99%
BBBY	30.66	-0.21	-0.68%	0.99%	2.30%	11.21%	8.11%	-4.40%	8.19%	-11.31%
TM	89.59	0.89	1.00%	0.82%	-1.45%	5.30%	-15.85%	-9.70%	-17.47%	-21.97%
TGT	53.02	-0.86	-1.60%	0.68%	3.15%	18.67%	7.09%	-1.36%	0.78%	-17.07%
DIS	32.35	-0.24	-0.74%	0.47%	-0.46%	7.55%	1.60%	-4.32%	-0.19%	-4.54%
WHR	81.36	-0.13	-0.16%	-0.06%	-3.18%	6.69%	1.85%	9.44%	-3.57%	-14.75%
EBAY	24.93	-0.47	-1.85%	-0.40%	-4.04%	1.42%	-23.27%	-16.37%	-5.42%	-25.47%
BC	13.79	0.03	0.22%	-0.43%	-5.74%	5.19%	-18.50%	-2.54%	-15.35%	-44.75%
CCL	37.06	-0.72	-1.91%	-0.54%	-6.11%	1.37%	-15.12%	-5.02%	-5.82%	-17.79%
NKE	60.61	-0.61	-1.00%	-0.82%	-2.70%	2.04%	-4.22%	-11.38%	0.68%	9.29%

Consumer Discretionary (XLY -0.42% W/W) closed down at 30.53. The loss on Friday, with very low volume, was -0.94%.

The big winners moved modestly: BDK +1.8% and JCP and TTM each up +1.7%. NKE was the big loser at -0.82%, which isn’t much.

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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
PDA	50.37	1.31	2.67%	1.06%	-1.35%	-8.33%	4.65%	-21.24%	5.38%	37.29%
DEO	74.40	0.62	0.84%	0.46%	0.01%	6.79%	-12.53%	-5.44%	-9.38%	-10.04%
ABV	61.89	-0.92	-1.46%	0.29%	0.63%	5.40%	-14.61%	-10.71%	-24.04%	-7.38%
BUD	67.86	-0.14	-0.21%	0.10%	-0.48%	0.13%	31.44%	20.00%	44.11%	40.41%
WAG	36.43	-0.09	-0.25%	-0.11%	-2.25%	7.37%	-2.44%	1.11%	-0.22%	-18.76%
WMT	59.07	-0.81	-1.35%	-0.62%	-0.51%	2.29%	25.95%	1.95%	19.12%	33.67%
WFMI	18.31	0.06	0.33%	-0.70%	-7.01%	-14.52%	-53.95%	-36.84%	-47.91%	-60.01%
PEP	68.48	-0.71	-1.03%	-2.03%	-2.45%	2.78%	-9.05%	-0.51%	-1.55%	0.43%
KR	27.62	-0.28	-1.00%	-2.09%	-8.09%	-1.43%	7.60%	-0.43%	13.90%	5.54%
PG	69.77	-1.24	-1.75%	-2.57%	-2.56%