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October 26, 2008
Week in Review #43 (2008-10-26)
Late in the afternoon on Friday, Cantor Fitzgerald’s CEO Howard Lutnick – a trader’s trader – gave another excellent interview for Bloomberg TV. He continues to be on the money.
Watch it on youtube if you can. It started about 3:20pm Friday the 24th. Howard said "there needs to be a big news story out there -- like banks are lending money -- that must be told to get traders interested to share risk". Obama will tell that story -- just like Bill Clinton did, and whether he's full of b.s. or not, people will believe it because they want to believe it.
Come to think of it; I do believe it. How in fact would it be possible for the banks to get funds and guarantees worth multi-billions from countries around the world, and not be flush? It’s just a matter of time before common sense becomes obvious.
As soon as the selling panic subsides, watch how quickly the stories change.
As I saw this reflation process being rolled out a month ago by Treasury Secretary Henry Paulson, I changed my mind-set from Bear to Bull. I have always said, ‘Don’t fight the Fed’ but now that the Fed is basically bankrupt, just like the FDIC, King Henry has come to the rescue – with OPM of course.
Anyway, it takes money to make money – even if the source happens to be your kids and their kids, some not even born yet.
The thrust of this WIR will be that, pretty soon, we’ll all be in the money, riding the Bull.
All that matters is that we choose the right Bull to ride. So let’s get into the material so we can make sense of the data.
Global Economics Review
Weekly International Economic Report .
I encourage everybody to read these reports and discuss them in the Discourse, but check the publishing date if you are looking for the latest data. The current issues, when posted, are good ones.
Here are the key US economic reports and the Econoday analysis from last week.
US Economic Calendar.At 10:00am ET last Monday, Federal Reserve Chairman Bernanke testified to the House Budget Committee in Washington on the plan for a US economic recovery. I thought he spoke with clarity and with more self-confidence than previously. He handled himself well. I thought the Committee also did a good job in showing the public that Congress is serious about gathering the evidence they need before they get into the process of making changes.
On Tuesday morning the Bank of Canada did cut its key lending rate by -25 basis points – not much, but as the former Goldman Sachs banker says, it’s all part of a continuing program.
I wrote in this space a week ago, “The Canadians will cut. That means that, in all likelihood, the Loonie will suffer between this Tuesday and the following Wednesday, and then start to recover after the FOMC announcement.” The Loonie closed Monday at 83.87 and by Friday had plunged to a close of 78.35. I proffered the word “suffer,” not “obliterate!”
Econoday reported: “The Bank of Canada cut its key interest rate by 25 basis points to 2.25 percent. Although there was little doubt that the Bank of Canada would reduce its key interest rate from 2.5 percent, opinion was split on whether it would be by 25 or 50 basis points. The Bank took part in the coordinated rate cut just two weeks ago on October 8 when the Federal Reserve, Bank of England and European Central Bank among others cut their key interest rates by 50 basis points in an attempt to staunch the credit crunch by increasing liquidity and shoring up confidence in the financial sector… In cutting its rate for the second time in two weeks, the Bank cited a slowing domestic economy along with a slower global economy. The Bank hinted that there could be more rate cuts to come. Falling commodity prices and the continuing global financial crisis are hurting the Canadian economy, which the Bank of Canada said is now projected to grow by just 0.6% this year and next, a sharp decline from July's projections, when the central bank forecast 1.0 percent GDP growth this year and 2.3 percent expansion in 2009. In its statement, the Bank said.”
US Existing home Sales for September. After the data release, Econoday reported, “The worst may be over for the housing sector, a possibility raised by improvement in pending home sales and now a solid gain in existing home sales. Sales of existing homes jumped 5.5 percent in September to an annual rate of 5.18 million -- the best rate since August last year. The month-on-month percentage jump is the best in more than five years while the year-on-year rate of +1.4 percent is the first positive rate in three years. Of course these gains are being made against easy comparisons, in fact against record lows. Gains were concentrated in the West which has been hardest hit during the downturn… The bad news in the report is a steep drop in prices. The median price plunged 5.7 percent in the month of September for a year-on-year decline of 9.0 percent. Price declines are certain to raise foreclosures and are definitely more bad news for financial firms. But supply on the market is down, at least a bit at 9.9 months supply vs. 10.6 months in August… Today's report is offering some good news for financial markets badly in need of good news. The dollar and Treasuries showed little reaction to the report though stocks appeared to get a lift. New home sales data will be released Monday.”
How is next week’s calendar looking?
US Economic Calendar.This Wednesday Oct 29 at 2:15pm, the US Fed will announce their decision. The belief is that the Fed has a 67% likelihood of cutting -50 basis points, and 33% of a -75bp cut. Either decision will take some pressure off the $USD moonshot, and may lead to a significant rally in $GOLD.
The problem is that global trade will stop if the $USD continues to soar. International currencies throughout the Americas and Europe and Asia-Pacific countries (ex-Japan which is rallying even faster than the $USD) are sinking like a rock in water. This imbalance is making it difficult for many countries to pay for necessary commodities like oil, chemicals, metals, food, and when they can pay the prices are distorted on the high side, which imports even more inflation. The people in these countries are scared stiff. Moreover, as they find they cannot pay for the imports they need, the demand drops and prices of the commodities spirals down. This is a death spiral that must be stopped asap.
US New Home Sales for September. On Friday, after the release of the Existing Homes Sales report, Econoday reported, “The worst may be over for the housing sector, a possibility raised by improvement in pending home sales and now a solid gain in existing home sales.” Prior to the release of this particular report on New Home Sales, Econoday reported, “New home sales plunged 11.5 percent in August to a 460,000 annual unit rate, a rate comparable to downturns in the early 1990s and early 1980. Sales were especially weak in the West and Northeast. The year-on-year decline stands at 34.5 percent. Supply at the current sales rate rose from 10.3 months in July to 10.9 months -- one of the very highest readings in nearly 50 years of data. Prices fell a very steep 5.5 percent on the month to a median $221,900. The year-on-year decline of 6.2 percent has been steeper during the ongoing downturn but is still one of the very steepest on record. The September new home sales consensus forecast is 450 thousand-unit annual rate.”US Durable Goods Orders for September. Prior to the data release, Econoday has reported: “Durable goods orders in August dropped sharply, pointing to contraction in manufacturing. Durable goods orders fell 4.9 percent in August, following a 0.7 percent boost in July. Excluding the transportation component, new orders declined 3.3 percent after no change in July. Weakness was led by aircraft and motor vehicles. Recent regional manufacturing surveys have been pointing to negative numbers for new orders. New orders for durable goods Consensus Forecast for September is -1.1 percent.”
US Q3 Advance Estimate of GDP. Even the President is saying that this report is likely to be a bad one. Econoday is saying, “GDP for the second quarter came in with a final estimate of 2.8 percent. On the inflation front, the GDP price index was an annualized 1.1 percent - an extremely low number due largely to a quirk in how surging imports (related to oil prices in the second quarter) are a negative for nominal GDP, the numerator for the GDP price index. Headline PCE inflation stood at an annualized 4.3 percent while core PCE inflation came in at 2.2 percent. But for the initial estimates for the third quarter, both real growth and PCE inflation are likely to be down from the second quarter and possibly even negative. Monthly real sector data have been negative while we have had very favorable CPI numbers due to lower energy prices… Real GDP Consensus Forecast for advance Q3 is -0.5 percent annual rate.”
US Weekly Jobless Claims. Unemployment is skyrocketing in the US, and this report is likely to focus traders on that issue. Econoday is saying, “Initial jobless claims rose 15,000 in the week ending October 18 week from 463,000 in the prior week. A minor positive, continuing claims fell back 6,000 for the October 11 week. Hurricanes were still inflating the numbers, adding 12,000 to the unadjusted initial claims total of 415,000. But overall, the trend is a slowly worsening labor market. Unfortunately, the weakness may be accelerating based on recent mass lay-off reports… Jobless Claims Consensus Forecast for 10/25/08: 475,000.”
US Employment Cost Index for Q3. With skyrocketing unemployment, most workers are more concerned with saving their jobs and benefits than making wage and salary demands. Maybe the Boeing machinist union will join in later this week? In any case, Econoday says about the situation, “The employment cost index for civilian workers has been relatively well behaved recently despite earlier higher inflation for key consumer staples of gasoline and food prices. The employment cost index for the second quarter rose 0.7 percent (not annualized) from the first quarter for a year-on-year rise of 3.1 percent, the latter down 2 tenths from the prior two quarters. Deceleration was centered in benefits where the 2.9 percent year-on-year pace is down from 3.5 percent in the first quarter. The quarter-to-quarter gain for this component held at 0.6 percent for a second straight quarter, down from 0.8 percent gains in the prior two quarters. This reflects, among other cutbacks, employers asking employees to pay higher medical deductibles. The wages & salaries component showed a 0.7 percent quarter-to-quarter gain, down from a string of 0.8 percent readings. The year-on-year rate is unchanged at 3.2 percent… Employment cost index Consensus Forecast for Q3 is +0.7 percent simple quarterly rate.”
US Personal Income and Outlays for September. After the August data release of this important report, Econoday reported, “The August personal income report looks good on the income side but is worrisome on the spending side. But as expected, we got good news on the inflation front. Personal income in August rebounded 0.5 percent, following a 0.6 percent drop in July. The August gain beat the consensus forecast for a 0.2 percent increase. Within personal income, the wages and salaries component posted a 0.4 percent increase in August, after advancing 0.3 percent the previous month… Spending was flat overall but there was large divergence by components. Personal consumption expenditures in August were unchanged, following a 0.1 percent uptick in July. The market had forecast a rise of 0.2 percent for personal spending. For the latest month, a spike in auto sales led to a 1.4 percent jump in durables PCEs. Weak gasoline sales pulled down nondurables, which fell 0.6 percent. Services rose a mere 0.1 percent. On the inflation front, the headline PCE price finally eased on lower energy costs. The overall index slowed to no change, following hefty gains in July and June of 0.6 percent and 0.8 percent, respectively. The core PCE price index eased to 0.2 percent from 0.3 percent in July. The market had projected a core increase of 0.2 percent for the latest month… Year on year, personal income growth rose to up 4.6 percent from up 4.5 percent in July. Headline PCE inflation slowed to up 4.5 percent from up 4.6 percent the month before. Core PCE inflation firmed to 2.6 percent from 2.5 percent in June. Both headline and core PCE price inflation remain above the Fed's implicit inflation target range of 1-1/2 to 2 percent annualized… The August personal income report points to weak third quarter GDP.”
Chicago Purchasing Managers Survey for October. After the September data release, which was very good for two consecutive months, Econoday reported, “The NAPM-Chicago purchasing managers' index has been an outlier compared to other regional surveys, posting a second month of healthy growth in September. The Chicago purchasers' index dipped 1.2 points in September to a still very solid 56.7. This reflected a big jump in production and significant improvement in employment. New and backlogs orders indexes, however, slowed to just over break even… NAPM-Chicago Consensus Forecast for October 08: 48.0.”
US Equity Markets Review
DJIA stockcharts.com chart
A week ago in this space, I wrote, “I try my best (to get people to see the values popping up all over), but there is an overwhelming sense of hopelessness that permeates the public. Too bad.” Now I will add, the market will soon see what I see.
The S&P 500, which is the measuring stick of the institutional investor dropped this week from 940.55 to 875.77. We are within striking distance of the absolute bottom.
Should the equity futures on Monday open locked limit down, we’ll be back at the July 2002 point of cycle bottom. The wealth created by the United States over the past six years will have been eliminated. How sad. How utterly destructive it is for those who went deeply into debt to take risks like buying a home, adding to pensions and building securities portfolios.
This wealth will return, in time. But time is the great leveler. In time, we will all pass from this earth. In the relatively brief time it takes the equity market to fully recover, maybe three years, many of us will no longer be vertical. How sad. How painful for the heirs.
But let me tell you right now, early on in this Week In Review: this is a time to rejoice. New money going into equities today will be the seeds that plant the fields. In time, the new wealth that for certain will be created will be harvested. The cycle of all things living will go on.
Those of you who have been financially devastated so much in the past year can take comfort in Ecclesiastes Chapter 3, my favorite biblical verse. It helped me with the passing of my parents in 2005.
Time Series AnalysisMarket prices are either rising or falling; the trend outlook is either good or it is bad. As a trader of securities, there is always a time when you have to make a decision and that should be the time when a price series reverses trend. Then there is a time when you ought to just let things ride.
The longer you study and participate in capital markets, the more you will be conscious of its rhythms. The more you will see clearly that the capital market is a natural phenomenon.
The Book of Ecclesiastes, Chapter 3, pretty much says it all to me:
"There is a time;
1 To every thing there is a season, and a time to every purpose under the heaven:
2 A time to be born, and a time to die; a time to plant, and a time to pluck up that which is planted;
3 A time to kill, and a time to heal; a time to break down, and a time to build up;
4 A time to weep, and a time to laugh; a time to mourn, and a time to dance;
5 A time to cast away stones, and a time to gather stones together; a time to embrace, and a time to refrain from embracing;
6 A time to get, and a time to lose; a time to keep, and a time to cast away;
7 A time to rend, and a time to sew; a time to keep silence, and a time to speak;
8 A time to love, and a time to hate; a time of war, and a time of peace...".There is always a time when things are low and a time when they are high. Ecclesiastes acknowledges this.
I now face this time dilemma in my personal life (1Q05). With the greatest sorrow, it is the time that both my parents are likely to die. Then, too, I have a brother whose offspring have brought four babies to life in the past two years. So, there is a time to be born, and a time to die;
From birth to death, from sowing seeds to harvesting the crop, we all have a cycle. So does the market.
The dance of life is about to begin. I hope you dance.
"I hope you never lose your sense of wonder
You get your fill to eat
But always keep that hunger
May you never take one single breath for granted
God forbid love ever leave you empty handed
I hope you still feel small
When you stand by the ocean
Whenever one door closes, I hope one more opens
Promise me you'll give faith a fighting chanceAnd when you get the choice to sit it out or dance
I hope you dance
I hope you danceI hope you never fear those mountains in the distance
Never settle for the path of least resistance
Living might mean taking chances
But they're worth taking
Lovin' might be a mistake
But it's worth making
Don't let some hell bent heart
Leave you bitter
When you come close to selling out
Reconsider
Give the heavens above
More than just a passing glanceAnd when you get the choice to sit it out or dance
I hope you dance
(Time is a real and constant motion always)
I hope you dance
(Rolling us along)
I hope you dance
(Tell me who)
I hope you dance
(Wants to look back on their youth and wonder)
(Where those years have gone)I hope you still feel small
When you stand by the ocean
Whenever one door closes, I hope one more opens
Promise me you'll give faith a fighting chanceAnd when you get the choice to sit it out or dance
Dance
I hope you dance
I hope you dance
(Time is a real and constant motion always)
I hope you dance
(Rolling us along)
I hope you dance
(Tell me who)
(Wants to look back on their youth and wonder)
I hope you dance
(Where those years have gone)(Tell me who)
I hope you dance
(Wants to look back on their youth and wonder)
(Where those years have gone)"
This LeAnn Womack video (sans commercial), like the lyrics, is my all-time favorite because it gives inspiration to all of us who get down at times, telling us that because life is a cycle the good times are near by. It inspires me; I hope you feel the same.
NASDAQ Composite ino.com chart
NASDAQ Composite stockcharts.com chart
The NASDAQ Composite dropped from 1721.29 to 1552.03 this week. The recent cycle high was 2473 in mid-August. A year ago the Bull market high was 2861.
If you get into the market now, I believe your stocks will almost double within three years. If you choose the right ones, they ought to double in three to six months.
I hope you dance.
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:
AAPL MSFT GOOG QCOM RIMM CSCO INTC ORCL GILD EBAY
If you find these stocks rallying hard on high volume next week, then I believe you will be watching the power of the Bull.
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
Sector ETF Summary for the US equity market
After a one-week rally the previous week, this week was a downer. Nine of ten sectors were down, and four of them were down over -11.75%: Consumer Discretionary (XLY -12.7%); Basic Materials (XLB -11.9%); Financial (XLF -11.8%); and Telecom (IYZ -11.8%).
As Mohammed Ali used to say, while leaning back on the ropes, “Hit me again. Are you getting tired?”
Not being in debt, and holding cash in reserve, I feel that way. Prices have come to me, finally dropping almost to the long-term cycle low of July 2002.
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 |
Crude Oil ($WTIC closed the week down -$7.98/bbl (-11.06%) to 64.15. That got the attention of OPEC, which will respond with production cut-backs in an effort to hold the line here, or possibly at about the 70-75 level.
For a second week, lower oil prices did not take the related stock prices down in this sector this week, relatively speaking. XLE (the Energy ETF) closed down -4.28% to 43.65, while the S&P closed down -6.78%.
Sine, a week ago, XLE closed up +5.07%, there actually has been a gain, from $43.40, over the past two weeks. Stock prices usually lead commodities.
Mind you, just three weeks earlier, XLE closed at 67.70, so the loss over four weeks is substantial. That’s what too many of you are focused on.
A week ago in this space, I wrote, “Exxon (XOM), which is a recent Buy pick of mine, dropped -43% in the previous two weeks, but was up +9.1% this W/W. I worked really hard last weekend to bring about that result. The big belt buckles in Irving TX ought to thank me. :-) The price a week ago was $62.36. Today it’s $68.04. What happened in the interim (other than falling oil prices)?”
This week XOM was up +1.5% to 69.04 and CVX was up +2.50% to 63.91. These are the two biggest cap US oil companies. Somebody is buying them! Keep your wits about you. You are looking at the makings of a stock rally, and I believe the Oils will be pumping.
About XOM a week ago in this space, I concluded, “Look what these low prices this week mean in comparison to those who traded XOM for the past several years. Then look at the Value Line data to see how much this company has strengthened over that period of time. There is no need to have a panic reaction when this stock dips. You should be waiting for buying opportunities like this.”
Canada’s EnCana (ECA +3.0%), which will be split into two public companies – one for oil and the other for gas – is another one I like.
The losers this week were: PTR (-21.1%), PBR (-19.7% to 21.05), CEO (-18.9%), and SU (-8.0% to 20.15). These are all good, but for the ones I really like, I noted the current price. I want to refer back here at some point for more proof of concept.
Monthly chart
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 Basic Materials:
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
Basic Materials (XLB -11.92% to 22.90) had a monster move to the downside, but note that the gain of +5.09% on the prior Friday was offset by a loss of -3.42% this Friday. From Thursday through Thursday, XLB was down less than the other sectors Friday through Friday (except Utilities XLU).
So, I am not rattled that XLB was down so much W/W. In fact, I am lining up my ducks here for the next rally.
One of the reasons for my interest is the action in $GOLD (+2.18%) and the Goldminers ($XAU +4.31%) on Friday, a day when the $USD and $XJY (Yen) were soaring (+1.4% and +3.1% respectively). That shouldn’t be. Maybe the same Big Belt Buckles were in buying the Golds on Friday as well as in the Oils earlier in the week.
Just to put a lid on Friday, which was the only good day for the Goldminers, on Friday Kinross (KGC +10.8%) and Goldcorp (GG +10.5%) were up sharply.
The rest of the week for the Goldminers was bad, and so it was for the Steelers, and Base Metal Miners: TCK -30.1% W/W to 9.58!, TS -28.9% (Argentina in trouble), PKX -27.7% (S. Korea in trouble), GGB (-26.1%), MT (-25.8%), and AA -20.3%) all plunged.
Is this the specter of a global depression or in reality the end of many hedge funds, and forced selling in many accounts, particularly in countries abroad where the currency is sinking? Is it the work of prudent pension fund managers who, being undecided, have pulled funds out of the market?
Is the US government going to fail to meet its obligations, as many of you fear?
Here’s what I think. A week or two from now, with the new found reflation money deposited in the Money Center Banks, the number of Ivy League economists screaming deflation and depression will number many fewer. Calmness will settle in the marketplace, with lower volatility at the NYSE and at NASDAQ.
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 -6.83% W/W) closed at 22.09. Most of the loss (-5.60%) happened on Friday. Traders did not like the opening limit down equity futures that suddenly popped up to spook the Street, and they offed the commodities and related equities (except for $GOLD and the Goldminers).
Two weeks ago in this space, I got into the need for traders to use stops and manage positions day to day: “... Does this not tell you that traders (i) need stops, and (ii) often have to day trade or else sit it out in cash?”
I added, “A week ago, I wrote in this space: Brazil’s aircraft maker, Embraer (ERJ) dropped -28.4% this week and -40.6% over two weeks. Ouch. This is a Cara 100, and I like it at $17.20. ERJ was more than double that a month ago. The M-W-D RSI-7 is now at 23.1/14.4/9.9… Boeing (BA), Bombardier (BBD.B on Toronto) or Embraer (ERJ) – take your pick. I assure you they will still be making planes next quarter, next year, and the year after that. And, probably be making solid profits too… You must have been listening because even though this sector was up just +0.72%, the result for the three plane makers W/W was: BA (+6.6%); BBD/B.TO (+4.31%); and ERJ (+11.9%). Name me one economist who gave you a trifecta that returned +7.6% this week.”
BA was up +4.3% Monday through Thursday this week, and late into the day on Friday, but did have a loss of -2.75% on Friday (note the last 8 minutes! … where BA plunged -$1.10 to close at $45.24).
I love to take note of moves like that. You see, Mohammed Ali taught me the Rope-a-dope. Shows me that somebody wants to put on a show Monday morning; either major losses in the opening futures or a sling-shot early morning, or both. In any case, I know that economists are not aware of what’s being set up here.
When Ali decides to come off the ropes to take control is hours or days away.
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 |
Consumer Discretionary (XLY -12.68% W/W) closed at 19.42. This was ugly.
For some reason, traders are not watching the trillions of dollars being fed to bankers. When the Treasury makes the final wire transfers -- any day now -- these banks will be flush. That means that retailers will be able to get all the loan money they need.
Next, the government will start talking up a Stimulus II package to put money into the hands of the consumer – the same one who this time will not have to spend that money at the fuel pump paying ridiculous prices to fill-up the family SUV. The consumers will once again be flush. Then the retailers’ cash registers will go $ka-ching, $ka-ching.
Some consumers might even buy cars and boats, and take cruiseship vacations to visit me in Bahamas… ha!
Brunswick Corp (BC) makes some of the best boats in the world for the price. The stock has totally tanked, plunging -43.0%, down -80.6% YTD. They need a new banker. Obviously they need some friends in Congress who ought to bail them out of the swamp before US boat production sails off to Taiwan.
In summary, there are many problems in this sector that a little money spread around by Henry Paulson would cure. Send him an unsinkable Boston Whaler as a retirement gift. I can just see him sailing one of those $100,000 babies back to his $60 million a year Wall Street job. Ya, right!
Anyway, the money is on the way. Hope floats.
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 -6.21% W/W to 22.80) was actually the fourth best sector performer.
A winner this week was KR (+4.6%); but WFMI (-23.2%) and ABV (-20.7%) crashed. Seems many people can no longer afford good food and drink. From the sounds coming from these economists, we’d have to think they were on a soup line back in the 1930’s, for Pete’s sake.
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 -4.16% to 51.60) fell to sector performer #2. But, just like Utilities (#1), both are solid winners over the past two weeks.
AMGN jumped +13.9% and BMY and WLP were also winners. The worst of the bunch was AET (-8.8%), which will turn on a dime… well maybe a few dollars will help.
Money is on the way. Don’t get too sick.
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 Financial sector (XLF -11.84% W/W to 13.55) was the 8th best performer of ten. Only XLY and XLB were bigger losers. IYZ was close behind.
A week ago I wrote, “Once the Lehman CDS crisis passes early in the week, Bernanke can part the waters, and permit the rally to continue. Paulson will be up all weekend to ensure it. The storyline has already been scripted: “Treasury, Fed and SEC team working effectively to (i) get Mom & Pop back to work, (ii) get banks to start lending to Mom & Pop again, and/or (iii) use only a small part of the $700 billion commitment from Congress to buy better-than-expected real estate backed loans that were syndicated by Fannie and Freddie”…In TV Land, this is called the warm-up act. The big show follows.”
With every day’s delay, the skeptics get louder. Nerves are frayed. Fewer traders are watching the data. More of them are listening to the crowd.
I can’t get caught up in that.
This week some good quality banks like RY (-7.3%), JPM (-9.9%) and GS (-12.2%) were taken down. Those were the relative strongest.
BBD (-25.7%), IBN (-22.8%), HBC (-20.5%), C (-18.4%) and DB (-18.1%) were crushed. The losses on Friday were horrific.
I believe that next week will be different, but maybe not. It could be that, except for the FOMC decision, the Treasury Secretary and the Fed Head won’t comment much or announce new programs in the week leading up to the elections.
In any event, I think the bankers need to speak up regarding recent decisions by the Treasury, Fed and FDIC. The people need to be told by bankers in the know just what’s happening. The fact they don’t speak up makes it look like a moral hazard issue again.
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 -8.95%) and Semi-conductors (SMH -6.62%) were mid-level performers. Some of these stocks were smashed after reporting fairly good results.
At least the chipmakers were flat on Friday. But, it was a tough week for Intel (INTC -7.9%).
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 -11.79% W/W) closed at 14.07.
A week ago, Verizon (VZ +1.6%) and AT&T (T +12.8%) were both up, and T was the 2nd best DJIA performer. This week T was 8th best performer (-2.4%), while VZ dropped -7.8%).
As I stated a month or more ago, “Like the most Financials, I think I’ll avoid the Telco sector when selecting companies whose stocks I want to buy for the next Bull market.”
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 +0.22% to 27.47) had a great week even though the gain was just 6 cents. That performance ranked XLU as 1st best performing sector.
A week ago XLU was 2nd best performer, up +6.4%, but the problem is that the week before that, XLU was down -19.83%.
The big winners a week ago were NGG +18.4% and EXC +15.0%. This week, however, NGG (-10.2%) and EXC (-10.9%) were the big losers.
The big winner this week was PCG (+11.9%), which is now up +16.0% over two weeks.
The volatility here is quite interesting. I have noted the same in other sectors. I think the SEC should investigate.
Here is the list of North American Utilities that I will be following more closely:
AEP D DUK ED EXC FE FPL NGG PCG PEG SO TRP
For study purposes, there is a good mix of electric (AEP, D, DUK, FE, FPL and SO), gas (NGG, TRP) and diversified (ED, EXC, PCG, PEG) utilities.
Table 12: US Utilities
Bonds & Yields Review
Table 10: US Treasury Yields
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 3 Month | 0.77 | 0.89 | 0.65 | 0.31 |
| 6 Month | 1.33 | 1.44 | 1.12 | 1.34 |
| 2 Year | 1.51 | 1.60 | 1.62 | 1.93 |
| 3 Year | 1.23 | 1.28 | 1.27 | 1.81 |
| 5 Year | 2.56 | 2.62 | 2.82 | 2.90 |
| 10 Year | 3.67 | 3.67 | 3.93 | 3.81 |
| 30 Year | 4.06 | 4.05 | 4.32 | 4.41 |
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 2yr AA | 2.91 | 2.89 | 3.50 | 2.50 |
| 2yr AAA | 2.60 | 2.52 | 3.01 | 2.41 |
| 2yr A | 3.22 | 3.38 | 3.76 | 2.64 |
| 5yr AAA | 3.52 | 3.59 | 3.81 | 3.03 |
| 5yr AA | 3.60 | 3.56 | 4.05 | 3.04 |
| 5yr A | 3.72 | 3.74 | 4.43 | 3.10 |
| 10yr AAA | 5.01 | 5.02 | 5.82 | 4.09 |
| 10yr AA | 4.27 | 4.34 | 5.46 | 3.98 |
| 10yr A | 5.61 | 5.63 | 4.95 | 4.04 |
| 20yr AAA | 5.20 | 5.22 | 5.71 | 5.53 |
| 20yr AA | 5.54 | 5.56 | 6.20 | 5.14 |
| 20yr A | 4.94 | 5.66 | 6.50 | 4.95 |
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 2yr AA | 6.12 | 6.05 | 6.09 | 4.64 |
| 2yr A | 7.41 | 7.84 | 9.76 | 8.77 |
| 5yr AAA | 5.79 | 5.42 | 5.50 | 5.21 |
| 5yr AA | 7.27 | 6.77 | 7.21 | 6.16 |
| 5yr A | 7.45 | 7.31 | 7.41 | 6.46 |
| 10yr AAA | 6.21 | 6.10 | 5.90 | 5.36 |
| 10yr AA | 7.17 | 7.02 | 7.23 | 6.50 |
| 10yr A | 7.11 | 7.11 | 7.35 | 6.43 |
| 20yr AAA | 6.34 | 6.12 | 6.41 | 7.19 |
| 20yr AA | 6.79 | 6.20 | 6.31 | 7.17 |
| 20yr A | 7.38 | 7.15 | 7.20 | 7.70 |
The 20-year Treasury ETF (TLT), which took a major hit a week ago (-2.17%), this week rallied (+3.05%) from 93.87 to 96.73.
This also looks to me as possible manipulation. The market appears to be acting under the influence of syndicates or maybe just programmed algorithms that have run amok. Through Thursday, Bonds were up over +4.1% on a flight to safe haven move, but on Friday after equity futures opened limit down, the TLT lost -1.06% on the day. So, where was the money going on Friday? Under mattresses?
One of my concerns is gaining traction. A week ago in this space, I wrote, “Blame (the mess) on Paulson and the US Congress. Every time they spend more money than comes in, it has to be printed. The government doesn’t do that; their banker the Fed does it. They can fudge the market only for so long and suddenly voila there is no capital available for corporations or consumers, and Paulson and Bernanke blame it on the banks. This is utter nonsense. We need an honest government, as kaimu says, in order to have honest money and fairness to the private sector. Ain’t happening.”
It could be that traders want to see the post-election results in Congress before deciding if there is or is not going to be the changes needed to clean up the mess laid at our feet by over-spenders and imprudent bankers and regulators.
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 |
The market has spoken re Fannie Mae (FNM) and Freddie Mac (FRE). A week ago I wrote that FNM and FRE “closed the week at $0.95 and $1.10, down from $1.08 and $1.16, respectively. Barney Frank says blame it on the economy or the banks. That’s because his committee is (was) the oversight for Fannie and Freddie until they dropped the ball. When will these people tell the truth about Fannie and Freddie? The truth is (i) F and F need to be 100% privatized, where proper management can be appointed by a shareholder elected Board, (ii) the bad loans most everybody accuses them of making were in fact syndicated by Humungous Bank & Broker (HB&B) and sold to Fannie and Freddie. F & F were then instructed by govt to buy that bad paper… I feel sorry for the employees of F & F; they can’t win for trying. Why not just end the charade and let the private sector do its job?.. But then of course, Barney Frank wouldn’t have much of a job, and the soon-to-be President-elect Obama would not have had the big retainer that kept him working in Washington, climbing the ladder for the past few years.”
This week, FNM and FRE dropped down to $0.6627 and $0.7397, respectively. At this rate, the NYSE will have to pass a special rule for F & F – call it the Barney Frank Bill – which says that, with the backing of Barney Frank’s committee, a penny stock trading under $1.00 for several weeks running may continue to be fully listed on the NYSE.
Things are so bad that when the FED adds a zero to the USD so that $1 becomes the new $10, Fannie and Freddie at $6.63 and $7.40 will still be under pressure, and will soon drop below the new $1 bill. Don’t bet against it.
Could we have an Amero in the making and is that why the Goldman Sachs guy was parachuted in the Bank of Canada governor's job recently?
One of my running/drinking club buddies said yesterday that he thinks that the US will try to strengthen Mexico and Canada, to form a singular trading block, like Europe, but not before the currencies are set. That could mean the coming of the Amero. If it does happen, the illegal immigration problem from Mexico could be better controlled.
But, what the world (and the US) needs now is for the Treasury to stick $100 billion (or more!) into the treasury of both F & F in return for redeemable, non-voting, floating rate preferred shares, and then put 100% into the private sector, restructured like the original AT&T, broken down into regional Fannie & Freddie babies. The old Fannie and Freddie have died. The chemistry of rigor mortis is obvious. Life must go on. Their children must now be permitted to do the job, free from the stupidities that go on in Washington.
The floating rate on the preferred shares by the way could be tied to the FED Rate.
Consumer Finance -USA -- Interactive Weekly Data Charts
Consumer Finance -USA -- Interactive Daily Data Charts
Commodities Review
The $CRB dropped a further -9.26% to 256.00. The only good news here would be for a General Agreement on G-20 currencies and the return to free-flow credit, directed to where in the private sector it’s in the national interests to do so. Of course we need independent and objective people to manage such a process.
Stable currency and access to credit are two pretty fundamental requirements of the private sector. Without it, all markets, including commodities, will continue to sink. My point is that governments have it in their power to solve this crisis.
In early July, the $CRB hit a high of 493.97. The drop since then is having a major impact on inflation data. The recent econ data shows that inflation is no longer problem #1, but deflation could soon be.
The 50-day MA for $CRB is 344.49 and the 200-day MA is 394.71.
As I wrote here for the past three weeks, “when bankers call in loans, the high-risk (and potentially high-reward) borrowers of commodities are getting hammered. But, had commodities that are purchased for use in the economy, such as energy, metals, food stuffs, etc, been priced for economic returns instead of speculative returns (ie, like housing earlier, based mostly on inflated and rising prices (ie, hot air), losses to this extent would not be happening.” A week ago I added, “It is an absolute truth that Bernanke’s Fed had the tools to regulate, and failed to use them. So, I don’t find the speculators at fault. Speculators are merely traders with an opportunistic strategy… A new regulatory system needs to put all regulation under the same offices, preferably under a judicial system, and separated to the extent possible from political interference. This is so basic that not doing so is destroying the empire.”
I should add that former Fed Head Alan Greenspan’s testimony this week was atrocious. He too had the tools at hand to solve the biggest problems, but he was not allowed to use them. He said he always wanted was a free market. Cut the nonsense Alan; you were told by your employers that there would never be a free market, and your strings were being pulled. The same is true with Bernanke.
These people should all be indicted for lying. But then it is the lawmakers who are pulling his strings and they too are liars. They have been sent to Washington by money interests and that’s who they serve. The vast majority of them anyway.
Interactive Chart of Weekly CRB Commodities Index:
Interactive Chart of Daily CRB Commodities Index:
Oil Review
$WTIC plunged -11.06% this week to close at 64.15. The previous three weekly losses were -7.51%, -16.93% and -12.17%.
I believe that oil-related funds are shutting down and there is forced selling in the market. I also think that credit to the hedge funds has been shut down.
The drop in Crude Oil prices -- US Light Sweet Crude called West Texas Intermediate as well as European Brent – is the major reason why the commodity index ($CRB) has tanked.
For $WTIC, the 50d MA is now 97.58, and the 200d MA is 111.00. The price in mid-July hit a record high of $149.90.
The good news is that the monster price cut is like a tax rebate to corporations and consumers alike.
Here is the e-miNY Dec-07 Crude Oil chart.
Interactive Chart of Weekly Crude Oil:
Interactive Chart of Daily Crude Oil:
Gold & Precious Metals Review
Four weeks ago I wrote, “$GOLD …dropped -3.60% on Friday to close at 864.70 in the spot market… This is a negative technical picture, but I have opined that too much Fed money will lead to higher gold prices.”
Yes, I still believe in that scenario despite the price of $GOLD falling -$57.40/oz this week and -$71.30/oz the previous week. The price is now 730.30, dropping below 700 once.
I believe the current storm is (i) margin call related and (ii) an attempt by the Fed/Treasury to kill the spirit of speculators and $USD hedgers.
As I wrote in this space three weeks ago, “what we can expect in the gold market, at some point soon, is the resultant impact of well over $1 trillion in new money being printed by the Treasury Secretary (and much more) and another $1 trillion (and much more) printed by the other G-20 monetary authorities. The price of gold must, in my view, shoot higher… The tell will be in the Euro/Dollar level.”
$GOLD is under pressure here because the Euro has collapsed from US$1.4624 at the end of September to 126.35 this Friday, Oct 26.
As I have written in this space, “The ECB head needs to drop his key lending rate a lot more if currency and gold markets are to stabilize.”
In any case, I do believe the Euro and $GOLD will rally as soon as the US credit market crisis is gotten under control, and traders stop repatriating $USD and $XJY (Yen) from abroad.
For $GOLD, the 50d MA is now 827.85, and the 200d MA is 894.15.
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 dropped just -0.04% W/W, closing at 9.30/oz, down just 4 cents. This action followed the losses of -11.93%, -6.40% and -16.13% over the three previous weeks.
Like gold, I believe silver represents good value here because it’s not possible to produce more of it if the price continues to drop. I also believe that the low leveraged companies, ie, little or no debt, and the ones operating in stable jurisdictions, are likely to have shares that perform well in the equity market.
For $SILVER, the 50d MA is now 11.95, and the 200d MA is 16.13.
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.
The data for $PLAT and $PALL has not been updated from Wednesday and Thursday at time of my writing this, so I’ll skip these sections.
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.
The data for $PLAT and $PALL has not been updated from Wednesday and Thursday at time of my writing this, so I’ll skip these sections.
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 closed at 183.35. Four weeks ago it was 307.45.
The 50-day MA for $COPPER is 288.33 and the 200-day MA is 347.57.
I cannot see either the base metals like copper or the precious metals soaring without some preliminary warming up in the Xstrata, Vale and Teck, which I use as a tell. These are the companies that understand forex and credit markets as well as anybody. Their goods are sold by Letters of Credit. It’s a tough time for them.
Interactive Chart of Weekly Copper EOD Continuous Contract Index:
Interactive Chart of Daily Copper EOD Continuous Contract Index:
Interactive chart of the Copper metal index.
Table 12: Senior gold equities
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
The Goldminer stocks ($XAU) have now been crucified for four consecutive weeks with losses of -17.46%, -14.63%, -10.29%, and -18.95%. The closing price for the index this week was 70.86. It was 153.84 on Sept 22, and 206.21 in mid-July.
Four weeks ago I said I was concerned. I wrote, “We’ll be watching closely. But, these are volatile markets, which require minute to minute monitoring, so they are not for the typical trader.” A week later, I added, “I cannot stress that point too much. Such volatility requires traders to hit the buy and sell button frequently. Sometimes these trades are stomach turning. It’s not a practice many traders enjoy. The money to be made or lost can be large.”
As I wrote previously in this space, “From the mail I receive, it is clear that too many traders ignored the lessons and warnings that I give. It is not “fun” to call a buy on a gold stock only to see it zoom +10% or +15% the next day. If I wanted to exploit the opportunities I wouldn’t go public with calls like that, I’d just do the trade. I’d much rather see the stocks lift slowly after a bullish call, and have people learn something… I don’t feel comfortable when people write that they made or lost money after one of my calls. That doesn’t show me a thing. It just makes me feel worse when inevitably the prices go in a different direction… I believe there are many good quality goldminers that presently have share prices that will yield solid returns over the next year, two or three… Unlike, the early 2000’s, I now think that the public has endorsed gold as a $USD hedge, and that is a good thing because it forces the Interventionists who say they are just trying to “stabilize” the USD actually be held accountable."
A week ago, I referenced Alamos Gold (AGI.TO) as a good one in the eyes of my associates and myself. AGI.TO was up +4.68% on Friday, lifting it to a gain of +0.71% on the week.
I don't have more to say than I believe the Goldminers represent good value here. The gold price cannot continue to drop without production shutting down. If this is the plan by the Interventionists before they seize control of all physical gold, like they did in the US previously, then traders will opt out of capital markets and invest in the gold bullion bars and coins where they can get it.
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
You cannot trade commodities that are priced in $USD without studying forex movement. The Forex market is a multi-trillion dollar marketplace every day, which dwarfs the size of the stock and bond markets. In this market, the Euro/USD is the highest volume trader. The $USD is a trade-weighted US Dollar index, we used to call the Morgan Dollar.
The current value of $USD is a mean value of rate fluctuations of six world currencies (Japanese yen, Euro, British pound, Canadian dollar, Swiss franc and Swedish krona) that each trade against the USD. I have discussed this in recent WIRs.
This week the $USD soared +4.88% W/W to close at 86.42.
“I continue to believe a huge drop may happen in the $USD at any time because the Treasury Secretary has embarked on a program of massive reflation in order to bail out the major US banks… Reflation, by the way, is different from inflation, which refers to the increased cost of goods and services. Reflation is money printing.”
The 50-day MA for the $USD is 79.45 and the 200-day MA is 74.99.
To reiterate, “My opinion is that the $USD has been rallying since the beginning of July because traders became cognizant of the economic slowdowns in Europe, Canada and Japan that were even worse than the US. In fact, recently the OECD increased its GDP forecast for the US and lowered it for the other countries, which then spiked the $USD. In time, however, the net effect of global reflation ought to be a weakening of the $USD, possibly headed for a test of the all-time low of 70.70… If so; precious metal prices will ultimately soar.”
Interactive Chart of Weekly U.S. Dollar Index:
Interactive Chart of Daily U.S. U.S. Dollar Index:
The Euro ($XEU) dropped -5.81% this week. The close was 126.35. There was a loss of -2.15% on Friday.
The Euro 50day MA is 1.4108 and the 200day MA is 1.5083.
Traders are watching the FOMC decision this Wednesday. If the $USD drops after the anticipated 50 or 75 basis point rate cut, then the Euro ought to strengthen a bit.
Interactive Chart of Weekly Euro Dollar Index, priced in USD:
Interactive Chart of Daily Euro Dollar Index, priced in USD:
The Pound plunged -7.84% this week to close at 1.5942. That’s a monster move.
The 50-day MA and 200-day MA are at 1.7802 and 1.9257.
That’s one way of stopping the Brits from buying cottages in Spain, forcing them to stay home in the rain.
Weekly British Pound Index:
Daily British Pound Index:
Weekly Japanese Yen Index:
The Japanese Yen ($XJY) soared +7.60%. That’s five of the past six weeks of what has been a series of monster rallies in the Yen.
The Japanese economy is very weak as well. A lower Yen helps exports. Toyota (TM) would benefit. But, as I say, the Yen had been on a bullish roll for over a month. Exporters are being smashed. The Nikkei 225 plunged this week from 8694 to 7649.
The Yen’s 50-day MA is 95.16 and the 200-day MA is 95.07.
Daily Japanese Yen Index:
The Loonie (Cdn Dollar) dropped -6.98% W/W, including -2.29% on Friday, to close at 78.35.
The Loonie traded as high as 110.17 in 3Q07, when I was advising snowbirds to buy property here in The Bahamas. Even in mid-July this year, the Loonie traded at over $1.00 American (or $1 Bahamian).
The 50-day MA and 200-day MA is at 91.64 and 97.10, respectively.
Weekly Canadian Dollar Index:
Daily Canadian Dollar Index:
Here is the China Yuan (CNY) chart.
International Equity Markets Review
Equity market prices this week were all down sharply. There is a global panic underway.
Jim Cramer is famous for saying there is always a Bull market somewhere.
UK FTSE dropped from 4063.0 to 3883.4German DAX dropped from 4781.3 to 4295.7
Aussie All-Ords dropped from 3944.8 to 3831.6
HK Hang Seng plunged from 14554.2 to 12618.4
India’s BSE 30 plunged from 9975.4 8701.1
Japan’s Nikkei 225 plunged from 8693.8 to 7649.1
I opined previously in this space:
As this table shows, traders in all countries are still hurting badly. The recent equity market sell-off is a global phenomenon, not just an American one… I think the equity market is working through a cycle bottom. There will be few believers until the coordinated action of the global monetary authorities, taken a week ago, starts to have an impact on moving the banks to start lending again. That is a matter of confidence – not ours, but between bankers… At the end of the day, prices will stabilize and large trading profits will be made by those who take measured risk at this point, I believe. But, I do acknowledge that taking risk is something that many accounts ought to avoid for now, particularly those that are close to the margin… I think I have a handle on the market today, but events are happening behind the scenes that are significant, and could shoot the market off in unexpected directions. So, caution is advised for the majority of you, at least until you see across the board RSI-7’s lift above the 30 level.”
There is no change. I’d like to see the Japanese, Hong Kong and Australian markets pick up though. And, while my table doesn’t include them, the important Singapore, Taiwan and South Korea equity markets have also been badly hammered.
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 in November.
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 |
The country market ETFs were smashed as well. Russia’s RSX plunged -21.17%; Brazil’s EWZ -20.2%; China’s GXC -18.05%; and Germany’s EWG -16.53. By selling or shorting these ETFs, an organized syndicate could force the sale of the underlyings in their home markets. I think the SEC needs to investigate.
What the world needs now is assurance from regulators that markets are being properly regulated. I’d like to see Chris Cox at the SEC do the crucially important job his mandate calls for. That would be a good thing before he leaves office in the next two months. He could be directed to do this by Congress, if necessary.
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 (-5.34% to 8378.98), S&P 500 (-6.78% to 876.77), NASDAQ Composite (-9.31% to 1552.03), and Russell 2000 small cap index (-10.51% to 471.12) were down badly, but not as much as the international equity markets.
The biggest gainers in the DJIA this week were: MMM +5.5%; AXP +3.1%; CVX +2.5%; BA +1.6%; and XOM +1.5%.
The worst losers were: AA -20.3%; C -18.4%; HPQ -18.3%; CAT -15.3%; and DD -13.2%. Those are Black Monday like numbers.
A week ago there were 27 of 30 DJIA stocks that were winners; this week there were just 5. The final 8 minutes of the session made sure of that.
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 AXP BA BAC C CAT CVX DD DIS GE GM HD HPQ IBM INTC JNJ JPM KFT 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 four DJIA components, none of which are Cara 100 companies: Alcoa (AA); Dupont (DD); Pfizer (PFE) and Merck (MRK).
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 Oct 24: next one is due Jan. 23)
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 Oct 24: next one is due Jan. 23)
United Technologies (UTX) is a Cara 100 company. When the $USD was so low, foreign sales were easy to come by. The vastly inflated value of some of the international currencies made it seem like United Technologies was giving away elevators and HVAC systems.
The stock has fallen like most others and does represent good value here, but even though it’s a Cara 100, I think there are better values in the sector. The Monthly-Weekly-Daily RSI-7 is 19.5+20.5+34.5. At $47.31, the stock is re-testing its low of $43.28 on Oct 10, but well down from the 52-week high of $79.30.
Perhaps the most attractive feature of the stock is that the PE (TTM) is under 10 (9.95). I don’t recall that happening. The balance sheet is very strong – Value Line rates the financial strength A++ -- and the payout ratio is just 28%, so it’s likely the dividend is secure. That dividend will be $1.345 this year and ~$1.60 to $1.62 next year. The order book seems solid and the lead-times to production are quite long – jet engines, helicopters, elevators, HVAC systems, etc., have a long lead time between orders and delivery. So, sales revenue and cash flow growth are expected to stay quite high through this recession.
I really like the company, especially during times of war, but I just can’t get it out of my mind that there are better stock prices out there in its sector, ie, better risk/reward ratio. General Electric (GE) and Boeing (BA) come to mind. Yes, the ones traders have been brain-washed to hate.
So, let’s move on to the other Industrial stock in the Dow 30 that Value Line analyzed this week. It’s also a better opportunity than UTX at present.
Caterpillar (CAT) was in a similar position to United Technologies with respect to the benefits of a depressed $USD for so long, but the company hasn’t quite reached Cara 100 status. The corporate metrics and consistency of its growth are not up to my standards. Close but no cigar.
But a company is not a stock. Remember that!
For the Cat, 2009 may look like the year it runs out of lives or at least is forced to slow down. I even think the Value Line growth estimates for next year are over-blown, as in too much hot air. I do agree that too many countries like Argentina, Malaysia, India, Hungary, and on and on, can no longer pony up the funds for large earth movers and tractors. Infrastructure projects are being put on hold. Mining and minerals exploration will take a hit because of low commodity prices. All those negatives do exist today.
Until the summer this year, it had been a terrific four years, operationally and market wise, for Caterpillar. The stock has rallied through the 2002-2007 Bull from a low of $16.90 to $87. But, it was time to move on from the stock in June 2007, after it became apparent that the investment banks were being forced to shut down hedge funds and private equity was not getting the funds they needed to do deals. No money on Wall Street meant no money would be available for infrastructure projects of the kind that are built using the CAT. The stock managed to hang in, however; protected with a fairly low PE through into this summer. Then the bottom fell out of the stock. The CAT crashed.
Now, the economists and analysts are warning you off this stock. In fact, Banc of America Securities downgraded the stock this week! UBS rated it a SELL this summer. No worry; you can smile and tell them that BC said they were paid well to do that. It’s time you paid yourself.
So now that the analysts telling you to off the stock, I’m going to tell you it’s a good time to consider buying it. You see; CAT has plunged from a high of 86 in the summer to just 33.30 today, with a Friday intra-day low of 31.95. The PE (TTM) is now just a shocking 5.4 and the dividend yield is up to 4.6%. How good is that!
This is a company with excellent management, a fairly strong balance sheet, and (drum roll please) a floundering global economy that needs to put people back to work building bridges, highways, and the like. That’s the story you haven’t heard yet.
Here’s how I think the scenario will play out. First the stock will rally. Nobody will tell you that there is major US Back To Work Legislation on the books, already agreed to by both Houses and the Senate, and that insiders are buying any stock that shakes free. Of course, the negative media and Wall Street research will help manage to free up plenty of stock. Then there will be the federal government announcement, and CAT will immediately take on a new life, like a kitten, leaping in joy. Just like Boeing after the machinist union comes to their senses.
Speaking of the Boeing union, at the meeting this week, if I were negotiating for the union, I’d be hammering out an agreement for share warrants at discounted prices to the already washed out stock. Why should Wall Street get all the action? How about some bonuses for the workers!
To close off my take on Caterpillar; there is a tremendous amount of technical price support here, going back to the 1990s. Nobody has bought the CAT at prices like this since the summer of 2003.
Also, some 30 strike put writes would lower your cost basis. The Jan 30 puts are $3.05 bid. If the stock is put to you, your $26.95 cost would match up ridiculously well to the $10.00 earnings I see in the next four quarters AND the $1.77 dividend that I project for the next year.
You’d have to be a brain-dead trader not to see value here.
So take the $3.05 premium on the short put and use it to knock down your cost base to ~$30 (with a possibility of having more stock put to you between now and mid-Jan at $30). Enjoy the $1.77 dividend for the next year and ~$2.00 the following year, realizing that will be a yield of +5.9% this coming year and +6.7% the following year.
Note the payout ratio is a low 25% and the balance sheet is strong so the dividend can be said to be safe. Yes, there is a lot of long-term debt on the books, but interest rates are being kept so low, that is a non-factor.
The kicker here: the Monthly-Weekly-Daily RSI-7 is 13.2+7.3+18.7. Add the three numbers up and they barely break 30.
Price and value wise, this stock is a steal here.
I believe the same with the broad market. I wouldn’t want to be short here.
The Dow 30 Company links in chronological order of next reports. I added the Google Finance links, which are superb.
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)
Kraft Foods [GICS 30, Dow 30]
(KFT: Google Finance file)
(KFT: Yahoo Finance file)
(KFT: StockChart chart)
(KFT: Billcara2 chart)
(KFT: ADVFN Financial Data)
(KFT: 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)
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 Aug. 29: next one is due Nov. 28)
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 Aug. 29: next one is due Nov. 28)
McDonalds [GICS 30, Dow 30, Cara 100]
(MCD: Google Finance file)
(MCD: Yahoo Finance file)
(MCD: StockChart chart)
(MCD: Billcara2 chart)
(MCD: ADVFN Financial Data)
(MCD: Value Line Report Sept. 5: next one is due Dec. 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 Sep. 13: next one is due Dec. 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 Sep. 13: next one is due Dec. 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 Sep. 19: next one is due Dec. 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 Sep. 26: next one is due Dec. 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 Sep. 26: next one is due Dec. 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 Oct. 3: next one is due Jan. 2)
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 Oct. 3: next one is due Jan. 2)
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 Oct. 10: next one is due Jan. 9)
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 Oct. 10: next one is due Jan. 9)
IBM [GICS 45, Dow 30, Cara 100]
(IBM: Google Finance file)
(IBM: Yahoo Finance file)
(IBM: StockChart chart)
(IBM: Billcara2 chart)
(IBM: ADVFN Financial Data)
(IBM: Value Line Report Oct. 10: next one is due Jan. 9)
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 Oct. 10: next one is due Jan. 9)
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 Oct. 17: next one is due Jan. 16)
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 Oct. 17: next one is due Jan. 16)
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 Oct. 17: next one is due Jan. 16)
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 Oct. 17: next one is due Jan. 16)
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 Oct 24: next one is due Jan. 23)
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 Oct 24: next one is due Jan. 23)
Wrap-up:
This week was a crusher to most people. I empathize. You know that. But if misery loves company, don’t go looking for it here.
Let’s look on the bright side of life. Besides still being vertical, there are many good things happening.
As you know, this blog will soon be moved from the proprietary MoveableType/SixApart/Typekey publishing platform to Drupal, which is an open source Content Management System.
Drupal features a sophisticated role-based permission system for controlling who can add content and perform administrative functions. As a Cara Community member, you will be able to easily post comments in the Discourse (without Typekey), rate comments, block a commenter, quickly search through the content, add your own content to certain pages, share files, help me build picture galleries, participate in polls, and even write your own blogs. A large developer community continues to build additional modules.
You will not notice much of a change at the beginning, I believe. We will start the process slowly in mid-November and let it evolve according to the needs and wishes of the community. By New Year’s Day, the improvements should be obvious.
Yesterday, as you may know, I attended the 18th Annual Wine and Art Festival at the Retreat (Bahamas National Trust) on Village Road in Nassau.
Both the weather and the wine were spectacular, and the hordes enjoyed themselves immensely. Yes, we talked the market, but we ate, drank and looked at some stunning art, as well. It was a good day. I’ve had better mornings.
Bristol Wines and Spirits, as they always do, offered a selection of wines from all over the world (except Canada for some reason that I’ll have to look into. After all, the C$ is now worth just B$0.8642!).
There were 56 wines (and champagne) in total: 12 from California, 8 from Oregon and Washington State, 4 from Italy, 8 from Australia and New Zealand, 4 from Chile, 4 from Argentina, 7 from France, 4 from Spain, 4 from South Africa and the White Star champagne of Moet & Chandon. It took a lot of drinking to get through them. At precisely 4:06pm ET, the champer corks were popped. People watched me holding two glasses. I hope they didn't see how many refills I had. Let's see 2x2x2. I tell you, that bottle I drank was worth the $58.55 I didn't pay.
The price range for the wine was from $10 to $70, with 13 wines priced under $15 and 15 over $35.It’s quite unfair to compare the wines in these different price ranges, but I discovered a couple chardonnays at $20 more to my liking than say the Mondavi Carneros 2004 at $35.50. One of my friends was extolling the virtues of the Antinori 2007 Pinot Grigio from North East Italy ($14.60) over the Cloudy Bay 2007 Sauvignon Blanc from Marlborough New Zealand ($50.55), but I was too intent on enjoying the Cloudy Bay.
One of the reds I liked was the Bodegas Protos 2004 Crianza from the Ribera Del Duero area of Spain (($46.85). I also very much liked the Belle Glos 2006 Pinot Noir from California’s Sonoma Coast ($45.90).
The prices shown are the ones listed in the Bristol stores. There is one on Blake Road nearby the Nassau airport, which offers a splendid choice. I recommend you stop in there on your departure. There are always “specials”. All the wines presented at the Wine & Art Festival, for example, are on sale at the price of 3 for 2 for the next week.
If, like me, you have a Bristol account, you receive an automatic 20% discount from most purchases. So, recently I was buying the popular Aussie Yellow Tail shiraz listed at $12.45, discounted 3 for 2, less 20% = $6.64. That price is not much more than Diet Coke in this country, so you can see why there are so many drinkers (with a running problem as they say in my running club). Yes, the Hash was out in full force yesterday – getting ready for today’s run, which I’ll have to skip because I’ll be too busy not drinking (or running).
This is a pretty laid back country – a lot like New Orleans – where the social lifestyle is obvious. With all the drinking, some refer to it as formidable. Did you know, for example, there is no law against drinking and driving? There is even a billboard in town that asks drivers who also drink to do so responsibly. I do, too.
Neighbors were telling me they saw the driver of a public bus with a six-pack of beer at his feet. I asked if it was Kalik or Sands.
You’d think there would be many accidents caused by drunk drivers, but an insurance man was telling me yesterday that the much greater problem is improper vehicular maintenance. Cars are driven into the ground here – even the new ones. I was told that at accident scenes there are instances where half the wheel nuts are missing or no brake fluid in the tank. Now that’s a problem. I do believe that drunk drivers who get into accidents have the book thrown at them. The mere thought of being sent to Fox Hill Prison is enough to keep you sober behind the wheel.
Anyway, the Wine & Art Festival is an important entry in the local social calendar. The cost is just $20. The people you meet are from all over the world. You ought to come next year. The art, by the way, is superb; displayed in tents throughout the park. One of my friends, John Paul, a well-known Bahamian artist, told me he sold many pieces during the day. His work is very good. I intend to link his work to the new website.
Another good friend is the musician Funky D who can be seen nightly at Breezes on Cable Beach. Here is a clip of my friend performing at the Bahamian Music & Heritage Festival. I think the camera man was drinking or dancing or both, but the video is a good one.
David, by the way, doesn’t drink. You can see how hard he performs on stage, but few people know that his real job 9 to 5 is in Treasury at the Bank of Bahamas.
I also plan to add a Funky D Bahamas page to the new website so people can purchase his music on-line. David writes it, sings it, produces the disks, packages them and sells them wherever he can.
I see that Funky D even made it on the list of “Who are famous Bahamians?” on Yahoo! Answers:
Lenny Kravitz, musician
Debbie Ferguson, Bahamian Olympian and sprint athlete.
Rick Fox, Actor, Former LA Laker
Myles Munroe, Televangelist
Al Roker, Weather man
T-Connection (Legendary musical funk group)
Roxie Roker, actress
Persia White, Bahamian actress, UPN's Girlfriends
Tonique Williams-Darling, (Athlete, Olmpic gold medalist)
Kimbo Slice, Mixed Martial Arts fighter
Tony McKay "Exuma the Obeah Man" Musician, Performer, Artist;
Yves Edwards (Mixed Martial Artist)
Shakira Ledard (Model)
Blind Blake (Musician)
Joseph Spence (Legendary Musician)
Wenty Ford (former Major League baseball player)
Jimmy Curry, Composer, Writer. Producer and Director
"King" Eric Gibson (Musician)
John "Chippie" Chipman, A local folk hero.
Mychal Thompson, former NBA player for Portland
Mark Knowles, Bahamian Professional tennis player
Cuca Gilber Comedian
Sir Sidney Poitier, Actor and Ambassador.
Joshua DelaRouse Basketball Player
Sir Randal Fawks
Sir Duward Knowles
Elisha Obed
Funky D (Musician)
I hope you join me someday -- passing through town, staying a week or two, or a lifetime. You’ll enjoy it as much as I do.
Before closing, I want to say that I try to blog on subjects that people ask me to do. I get a flood of mail asking about Bahamas, my lifestyle, the weather here, etc. If people were not so interested, I wouldn’t cover this material.
Have a good day. The weather here is spectacular again, 86 degrees and mostly sunny, so now I’m off with Kalik in hand to the ocean, sixty steps from my workstation.
I have to rest up from yesterday and prepare for tomorrow.
We will be busy on Monday taking on new accounts. Now, I’m good to go. It did take some time before I could get the SEC and US broker approvals, which I required partly because of the popularity of this blog and partly because I’m “offshore”.
Offshore-onshore, what difference does it make? The only service I provide is helping people make money in their accounts, wherever in the world those accounts may be resident. Canadian rules, however, will take me a couple months to satisfy because of the special ruling granted to my chosen broker. All my accounts set up their own brokerage accounts, but in the case of Interactive Brokers, Canadian addresses get dropped from the system in the US. I understand why, and I agree with the ruling. The other rules for people like me are flat-out silly, but in a way I agree with them. The regulators in Canada need to stamp out illegal trading advisory services, and have taken strong action. So, I will request discretionary relief because I have the industry standing that few others could match.
Anyway, now I can help put Bahamas on the world stage of active capital markets trading. At the very least I can try.
As for the state of the market and the resulting comments in the Discourse, I think we need to more clearly organize the Bulls and the Bears. Why not start your comment with Bull-Bear: 50:50 or 75% Bull or 25% Bull:75% Undecided, etc?
I personally am happy there are both sides represented. The market is made up of both. We need to study both. We need to make up our own mind. We need to improve our performance. It’s not easy.
Nothing worth doing is easy to do. But if we try hard, we can do pretty much anything.
Have a good day. There will be better ones ahead. From my home, looking across the ocean, I can see them! :-)
I think a politician beat me to that line.
Posted by Posted by Bill Cara on October 26, 2008 01:05:28 PM | Category: Cara Week in Review