What you are seeking is value-add. If so, you have come to the right place because I try very hard not to waste people’s time restating the known, trying to keep my name in lights as others do. I don’t take kindly to wearing a clown suit.

I am a trader, and there are only two factors in the study of market prices that interest me: (i) how do I manage risk so that the wealth I have stays mine, and (ii) how do I build wealth quickly because if I’m building it, I’m not losing it.

Rather than calling me a person with insights into the workings of markets, let’s just say that I am an observer. I take notes. Most of them I share with you. Some of them mean something to you, and some more meaningful to the next person. It’s a big world.

I believe the key to the global equity market lies in the trend and cycle analysis of the US retailer industry group. The linkage is to the damage and eventual recovery of the credit market system. If you recall, it was back in June 2007 when I reported that the US retailer stocks had hit the wall, and the problem then, as we only later saw, was not spending, but credit tightening.

So, today I will be spending more time looking into this industry. My notes will be found in the Consumer Discretionary sector.

Before I get started, however, let me quickly review for those who joined the blog recently, how the equity market is structured into segments, sectors, industries, and industry groups, which is called the Global Industry Classification System (GICS). There are a couple other classification systems, like the one from Dow Jones for instance (which Yahoo! Finance uses), but the GICS is the one most frequently used by professional traders.

Using GICS, I can show you how I work myself down to the US Retailers ($RLX) index and to individual companies in it and then to peer companies.

Why I do the latter is to look for the highest quality among peers, which I assess (subjectively as well as objectively) from factors such as business model, management, balance sheet strength, safety and growth of dividends, cash flow and earnings growth, operating margins, and returns on shareholder equity, mostly. If the data is organized for you, spotting the differences and deciding on quality is fairly quick and easy.

Since you are not buying the company (ie, investing), and you are only trading its shares, which may be for days, weeks or months depending on your approach to portfolio management and the market environment, you don’t need to have a business valuator’s expert working knowledge of the company. Besides there is so little to choose between many companies, the choice often comes down to beauty in the eyes of the beholder or personal knowledge or involvement (eg, the company is your employer, or in your hometown, etc).

To make this easy, I am going to put the market into the context of the local food supermarket, where presumably you’ve been a few times and recognize the signs over aisles and shelves, etc. Without this organization, you’d be lost; same thing in the equity market.

A supermarket is divided into areas or segments: dairy, meat, packaged goods. The equity market is divided into interest-sensitive, consumer, and industrial/commodity-related segments. You expect to find the Retailers in the consumer segment, which is broken into staples, discretionary and healthcare.

When you go looking for a Retailer, it might be in the aisles for staples (Wal-Mart, for example), or discretionary (General Motors, for example – no wisecracks please), or healthcare (Walgreens, for example).

So once we get into the consumer segment, we look for more specific signs.

2510 Automobile & Components
2520 Consumer Durables & Apparel
2530 Hotels, Restaurants & Leisure
2540 Media
2550 Retailing

Not being overly organized, since the market is rather unlike the army stores, the retailing is put into the 25 section, which is the discretionary spending, and the 30 section, which is the staples, including some health-related, rather than healthcare goods and services (35). But you get the point, and you move down to those sections.

It’s a big supermarket, so you look at the smaller signs to get you closer to what you need.

251010 Auto Components
251020 Automobiles
252010 Household Durables
252020 Leisure Equipment & Products
252030 Textiles, Apparel & Luxury Goods
253010 Hotels, Restaurants & Leisure
254010 Media
255010 Distributors
255020 Internet & Catalog Retail
255030 Multi-line Retail
255040 Specialty Retail

Now you see so many aisles, each one long and with two sides, and shelves up and down, so you look at the even smaller signs to guide you.

25101010 Auto Parts & Equipment
25101020 Tires & Rubber
25102010 Automobile Manufacturers
25102020 Motorcycle Manufacturers
25201010 Consumer Electronics
25201020 Home Furnishings
25201030 Homebuilding
25201040 Household Appliances
25201050 Housewares & Specialties
25202010 Leisure Products
25202020 Photographic Products
25203010 Apparel, Accessories & Luxury Goods
25203020 Footwear
25203030 Textiles
25301010 Casinos & Gaming
25301020 Hotels, Resorts & Cruise Lines
25301030 Leisure Facilities
25301040 Restaurants
25401010 Advertising
25401020 Broadcasting & Cable TV
25401030 Movies & Entertainment
25401040 Publishing
25501010 Distributors
25502010 Catalog Retail
25502020 Internet Retail
25503010 Department Stores
25503020 General Merchandise Stores
25504010 Apparel Retail
25504020 Computer & Electronics Retail
25504030 Home Improvement Retail
25504040 Specialty Stores

Now, if you are a boater, you’ll say this is a pretty good navigational system. But nothing’s perfect, so you’ll find the Food and Drug Retailers in the 30 section, and you may wonder why the Drug (Pharma) Retailers are in the Staples section until you realize that in those stores the dispensary is just a small part of the store, and the rest are many staples, even if they are health related.

30101010 Drug Retail
30101020 Food Distributors
30101030 Food Retail
30101040 Hypermarkets & Super Centers
30201010 Brewers
30201020 Distillers & Vintners
30201030 Soft Drinks
30202010 Agricultural Products
30202030 Packaged Foods & Meats
30203010 Tobacco
30301010 Household Products
30302010 Personal Products

Today, because I think the Retailers are the key to the market, which is to say the US consumer either has money to spend or not. If they have it, of course, they’ll spend it. Then the broad economy will pick up and the recession will be let behind.

I’ll look at the 56 retailers that dominate the US scene, studying the heaviest capitalized 30. Here is the list of the 30, which you can cut and paste into the charting system at billcara2.com:

wmt cvs hd low tgt wag cost kr amzn ebay bby swy tjx kss gps sbux bbby shld jcp fdo dltr rost m ltd urbn jwn tif bj anf wfmi

I don’t have the time to look and publish this data, but every stock has an eight-digit GICS code. Bed, Bath & Beyond (BBBY), for example is 25504040 (Specialty Stores). Black & Decker (BDK) is 25201040 (Household Appliances).

If you want to look at the Black & Decker (BDK) peers, you look for the companies/stocks coded 25201040. You will also find Stanley Works (SWK), Whirlpool (WHR) and Makita Corp (MKTAY). Then if you go to Yahoo Finance or Google Finance and look for direct competitors, where you will see that Japan’s Makita is closest. At Google Finance for BDK you can tick the chart comparison to MKTAY (or vice versa) and see the price tracks overlaid.

You can then see how these price series data move up and down together. If you consider that consumers are out buying the same products at the same time, and other operating factors, like business conditions, etc, are quite similar, you’ll understand why. Then if you have ever been a money manager in one of the bigger firms, like I have with Dominion Securities Investment Management, you will know that every week there are visits by the institutional sales people who have theme stories to peddle. They work with the research analysts and derive these stories and peddle them to people on the buy side. That generates commissions which is how the sell-side works. So, the buy side plays follow the leader and prices follow – up and later down. It’s up to you and I – not being in the “investment” meeting room with the sell-side and buy-side – to figure out later what stories were sold and bought, and to try to even beat these people to the punch.

But, going back to the price charts, you can as well in some computer services overlay the trend and cycle smoothed data for several stocks, like RSI-7 for example.

Next I am about to tell you the most important thing I have ever written. I learned this use of the Trend & Cycle System and its application to the GICS system from my associate and mentor the late Ian Notley. Dominion Securities hired me to work with Notley and subsequently changed their mind during the Bear market of 1981, where the costs of moving me to NY City would have been prohibitive during the time of cut-backs. So, rather than lose me (because they knew I would quit as they had reneged), they put me into Investment Management and gave me access to my own Notley Machine. When the staff departed the office after the close Friday at 4pm, I stayed. I would get so overwhelmed at the knowledge I was getting from the overlays of just the trend/cycle smoothing data – I had no time for price or volume or interest in cluttering the computer screen – that I could not leave it. I would not sleep. On weekends, I would work through the night, and Saturday and through the Saturday night non-stop, going home exhausted on Sunday to rest up for Monday morning. But by Monday morning, I could make decisions, with almost 100% confidence, like sell the Household Appliances and buy the NatGas stocks for example. I learned that the market breathed like any human. I saw that the market was just people acting like people, and similar companies fighting the same elements in business to get successful or to stay alive. I pushed myself to incredible levels of intensity in focusing on market prices and their inter-relationships, working probably as hard or harder at this than any virtuoso performer in classical dance or music. I saw the art and the science, and I was truly inspired.

People today ask me how I can have such a feel for the market. Oh, you cannot imagine the sacrifices.

Because money is involved, nothing’s easy. The sell-side noise, the deceitful practices, the too frequent intervention by so-called ‘authorities’, the many silly rules and regulations, the lazy media, the constant competition from truly brilliant, well-funded opponents, and the rest – it all adds up to a mine field. If you do not understand the basic principles of strategy and tactics, of command and control, of navigation, and so forth, and have incredible patience and stamina, you have little hope of winning.

But, you can. That’s why I decided to blog. It was over two years later that I was asked to consider writing a book, which I did. Then another light went on; why not stop the retirement and return to the war theater. The time was right, I felt, because the opaque glass walls around capital markets were shattering for all the reasons I left the industry. The ubiquitous conflict of interest issues are now front and center, and can no longer be ignored. The same ex-editor of Fortune Magazine and fund of funds manager who dueled with my ideas for regulation of hedge funds in a June 2, 2006 feature story of the Wall Street Journal sniffed at the notion I had advanced for a total restructuring of the financial services industry and regulation of capital markets. His nose is stuck in smelly stuff now. Many major banks that I said would be “toast” are now bankrupt. The G-20 this weekend says the system must be rebuilt. Whether or not the new system is built right or not is not my call – I don’t expect the movers and shakers to do anything but to serve their own interests – but I now have the passion to get back into the game as a professional. Thanks to you – well over 100,000 of you – I have no doubts to the ultimate success of my venture. I couldn’t have picked a better time or circumstance to start.

In wrapping up the opening here, I will say that trading is different than writing about trading. I will have to take precautions to check myself from discussing with the general public serious matters that would possibly impact, positively or negatively, on any single person’s decisions. I am not here to fish for you. All I can do is show you ways to teach yourself. The actual fishing on your part is strictly up to you.

Think about this: when I write something at 9:00am that indicates I am buying say Goldcorp (GG) at $20, I write with honesty, but it may be that at 10:00am I am selling. It may be that at 9:00am I was writing puts or buying calls or using straddles, strangles or whatever. I may be taking on new clients that are totally loaded in GG, and my traders are paring the positions to create the balanced portfolio that the client’s risk profile called for. The truth is that you cannot take a matter of immeasurable complexity and make it simple. I try, as you know, to make things look simple, but believe me; nothing’s simple when it comes to money and the market.

As I move forward as a professional trader and a free blogger, please appreciate the job I try to do to keep the two roles free of the basic conflicts that I see others get caught up in. In my case, should it happen; I assure you it’s an honest mistake.

Let’s look at the week that has everybody in the world who trades in capital markets in awe. Before we do, however, let’s consider one fact. The US equity market this week was open for trading 32.5 hours. During that time the closely followed DJIA index dropped -5.00%. But, in just one hour – the final hour of the week the DJIA plunged from 8917 to 8497, which is a loss of -4.71%.

The question is, was the final hour the beginning of Financial Armageddon or not. I’m going to say, no, the extreme movement of prices up and down as traders panicked out, and then in and then out of the US equity market on Wednesday through Friday was caused by people being out of control. It was analogous to the terrible California fires this week, a matter of which direction the wind was blowing as to which communities would be torched.

If you are a long-term trader, who fancies yourself as an investor, you are probably demoralized by the constant volatility. If you are a professional trader who can make decisions minute to minute, with excellent information and tools at hand, then you are a most happy camper.

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Global Economics Review

Weekly International Economic Report .

I encourage everybody to read these reports from Econoday 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.

US International trade report for September. Econoday reported, “The U.S. trade deficit in September continued to shrink but the nonoil disturbingly widened on a drop in exports. The overall U.S. trade gap shrank further to $56.5 billion from a revised $59.1 billion deficit in August and came in narrower than the consensus forecast for a $57.0 billion shortfall. In September, exports fell 1.7 percent while the larger imports component declined 2.2 percent. The overall improvement was largely seen in a smaller oil deficit which narrowed--to $32.1 billion from $35.6 billion in August. However, the nonoil goods deficit widened on the drop in exports-to $35.6 billion from $33.7 billion in August. While the drop in imports from lower oil prices is good, the sharp fall in exports is disconcerting… The September decline in exports of goods was seen in all major end-use categories but was led by a $4.2 billion fall in capital goods and a $4.1 billion drop in industrial supplies… Once again, lower oil prices had a key role in shrinking the oil deficit. The average price of imported oil declined to $107.58 per barrel in September, declining from $119.99 per barrel in August… Year-on-year, overall exports were down 6.0 percent in September while imports were down 5.6 percent… Normally, a narrower trade gap is very positive news for the economy. However, the drop in exports as negative news offsets part of the good news from cheaper oil. Yes, the report is favorable for helping consumer budgets and business costs, but manufacturing took a hard blow. This is another sign that the fourth quarter will be quite negative.”

US Import and Export Prices for October. Econoday reported: “Prices are swinging around in line with the swing lower in global economic growth. Import prices fell 4.7 percent in October with export prices down 1.9 percent, both records and records by a long shot. Year-on-year rates have slowed sharply, at +6.7 percent for import prices, down from a record peak of +21.5 percent in July, and at +4.2 percent for export prices vs. a record 10.3 percent peak also set in July. This series, which goes back 25 years, is pointing to a significant easing in inflation, or disinflation as policy makers say… Inflation hit its peak in July, also the peak for oil prices that neared $150. Economic growth, boosted by mid-year tax rebates, was still solid in July. But since, both import and export prices have fallen steeply for three straight months. The focus of economic risk, with the onset of the banking crisis, has shifted toward growth, a concern underscored dramatically by retail sales data which were released alongside this report.”

Please note that it was disinflation that set the table for the period of greatest stock price growth in US markets from 1981 through 1999.

US Retail Sales Report for October. Econoday reported, “Retail sales in October showed the consumer continuing to retreat. Weakness was led by gasoline and autos but declines were widespread. Overall retail sales dropped another 2.8 percent in October, following a 1.3 percent fall in September. The latest decline is the worst on record since this series began in 1992. The headline sales figure was worse than the consensus expectation for a 1.9 percent decline. Excluding motor vehicles, retail sales fell 2.2 percent in October, after a 0.5 percent decrease the prior month. The October ex-auto number came in weaker than the market forecast for a 1.0 percent drop. Excluding motor vehicles and gasoline, retail sales fell 0.5 percent, after declining 0.6 percent in September… Declines were widespread. The largest drop was for gasoline sales-which fell 12.7 percent on lower prices and lower demand. Motor vehicles also dropped a sizeable 5.5 percent. Declines were also seen in furniture, down 2.5 percent; electronics & appliances, down 2.3 percent; building materials & garden equipment, down 0.4 percent; clothing, down, 1.4 percent; sporting goods, down 1.6 percent; general merchandise, down 0.4 percent; and nonstore retailers, down 1.8 percent… Gains were hard to find. Miscellaneous store retailer sales rose 0.7 percent while food services & drinking places posted a 0.3 percent rise. Food & beverage store sales were flat… Overall retail sales on a year-on-year basis in October were down 4.1 percent - compared to down 1.1 percent in September. Excluding motor vehicles, the year-on-year pace came in at up 1.1 percent while excluding motor vehicles and gasoline, the year-ago change stood at up 1.0 percent… The credit crunch, job losses, and fears of further layoffs are causing consumers to hang on to their cash. If October is a sign, the consumer sector does not appear likely to be doing much to spur economic growth in coming months. This report is only modestly worse than already expected but still should have negative effects on equities and lift bond prices.”

Without the auto industry anchor, retail sales are otherwise growing. The Obama government is right to allocate funds to solving this problem, although I’m not so sure that executive management will do the right thing. They’ll end up like Paulson in Treasury, which is to do their own thing.

As I opined previously, I’d give them $2 billion to start-up a new Formula One Team Detroit and tell them not to come back for bail-outs unless and until they have victories in hand over Team Mercedes, Team BMW, Team Toyota, Team Honda, etc. Beyond that, I’d make the money available to Detroit, but only by way of market rated preferred shares, which would mean that the present movers and shakers would mostly be cut out, and that would be a good start. Detroit needs one company – where plant efficiencies, engineering, engines, tires, etc, can be standardized. Engineering quality and cost control is the key and cutting out the pensions of the retired workers who built those companies is not a solution.

US Business Inventory Report for September. Econoday reported, “Business inventories edged 0.2 percent lower in September, a decline that nevertheless, relative to a 2.0 drop in sales, points to inventory accumulation. These data are for September, and data for October, including the record drop in retail sales posted this morning, point to accelerating declines in sales. The mismatch between inventories and sales drove the stock-to-sales ratio 2 tenths higher to 1.29… Inventories at retailers backed up 0.2 percent in the month. Auto dealers, helped by cutbacks in vehicle output, were fortune enough to trim 0.3 percent from their inventories, excluding which retail inventories jumped 0.4 percent in the month. Inventories rose in all other retail components especially general merchandise… Inventories at manufacturers and wholesalers, both previously released, offset the rise at retailers, down 0.7 percent and 0.1 percent. Successful inventory management, keeping stocks low and minimizing the degree of cutbacks in output and job cuts, will prove a key element for the recovery.”

US Consumer Sentiment for November. Econoday reported, “Consumer sentiment didn't get much of a lift from the election, holding near a record low of 57.9 in the preliminary November reading vs. 57.6 for October. There was no significant movement in the two components: current conditions slightly higher at 61.4 and expectations slightly lower at 55.7. The expectations reading, which often leads the overall index, is not pointing to any improvement. But one-year inflation expectations are improving and dramatically, falling 1 full percentage point to 2.9 percent. Stocks appeared to move higher on the report which was weak but a little less weak than the 56.0 reading that was expected.”

How is next week’s calendar looking?

US Economic Calendar.

US Industrial Production for October. After the release of the September data, Econoday reported, “Industrial production in September was down extremely sharply but special factors did play a role. Overall industrial production dropped an unexpectedly sharp 2.8 percent in September, following a 1.0 percent decline in August. The Federal Reserve specifically noted that the decline was due in part to the impact of hurricanes Gustav and Ike and the Boeing strike. Also, the Fed stated that the hurricane effect was about 2-1/4 percentage points and the Boeing strike effect was about 1/2 percentage point… The September decrease was far below the consensus forecast for a 0.5 percent drop and even exceeded the consensus low end forecast of minus 1.7 percent… The manufacturing component fell 2.6 percent after a 0.9 percent fall in August. Meanwhile, utilities output rose 2.2 percent in September while mining output dropped a dramatic 7.8 percent (reflecting oil rig shutdowns in the Gulf of Mexico)… On a year-on-year basis, industrial production in September dropped to down 4.5 percent from down 1.4 percent in August… Overall capacity utilization in September fell to 76.4 percent from 78.7percent in August and compared to the consensus forecast for 78.4 percent… Today's report shows industrial production is about flat after discounting special factors. But outside of the industries affected by the special factors, there were widespread declines with automotive being about the only positive exception. Although the sharp decline for September is not the true trend for industrial production, a weakening economy and negative growth abroad indicate that manufacturing likely is on a moderate downtrend. Discounting special factors since they eventually smooth out, the latest industry detail suggests that manufacturing is in recession and likely is helping to tug the overall economy into at least a brief contraction if not longer if credit markets do not improve.”

US Producer Price Inflation Index for October. After the September data was released, Econoday reported: “Producer price inflation at the headline level continued downward due another drop in energy costs. Core inflation, however, rebounded. The overall PPI fell 0.4 percent, following a 0.9 percent fall in August. The September decline was greater than the consensus projection for a 0.4 percent drop in the overall PPI. In contrast, the core PPI rate rose to 0.4 percent, following a more moderate 0.2 percent gain in August. The September core topped the market forecast for a 0.2 percent increase. The core was led by a rebound in prices for cars and trucks but other components also showed a firming in price pressure… As in August, energy pulled headline inflation down in September with a 2.9 percent drop after a 4.6 percent drop the prior month. Food price inflation eased to 0.2 percent from 0.3 percent in August… Motor vehicles reversed their impact on the core in August. The core rebounded in large part due to the end of discounting by auto dealers. Passenger cars jumped 0.5 percent while light trucks spiked 1.0 percent… For the overall PPI, the year-on-year rate dropped to up 8.7 percent in September from up 9.7 percent the month before (seasonally adjusted). The core rate jumped to up 4.1 percent from up 3.7 percent in August… Today's PPI report is mixed toward equities and bonds as the core is still showing the effects of earlier cost hikes from energy and commodity prices. But looking forward, lower oil prices and a weak economy will help all components soften. Markets are more likely focusing today, however, on poor earnings, a negative retail sales report, and a down Empire State manufacturing down.”

US Consumer Price Inflation Index for October. After the September data was released, Econoday reported, “Consumer price inflation in September came in quite tame - thanks to lower energy and motor vehicle prices. The headline CPI was unchanged, following a 0.1 percent dip the month before. The September headline number matched the consensus forecast for no change. The core rate softened to a 0.1 percent gain in September and came in lower than the consensus forecast for a 0.2 percent rise. As for August, a drop in energy costs - down 1.9 percent for September was the main factor behind flat headline inflation. Also declining were new & used vehicles and apparel. Housing declined but that was due to the energy subcomponent. In contrast, food costs are still seeing the impact of a higher cost structure as food inflation was unchanged at a high 0.6 percent… The recent decline in crude oil prices is clearly impacting the CPI favorably. Behind the 1.9 percent drop in energy were a 5.8 percent fall in heating oil, a 3.2 percent decline in piped gas & electricity, and a 0.8 percent decrease in motor fuel (minus 0.6 for gasoline)… The slowing in the core was led by decreases for new vehicles, down 0.7 percent; used cars & trucks, down 1.8 percent; public transportation, down 1.0 percent (includes air fares); and apparel, down 0.1 percent… Year-on-year, the overall CPI dropped to up 4.9 percent (seasonally adjusted) in September from 5.4 percent in August. The core rate was unchanged from a 2.5 percent year-ago boost in August… The bottom line is that inflation is slowing due to lower energy costs and a flat economy and the good news on inflation is giving the Fed room to keep rates low and keep pumping liquidity.”

US Housing starts data for October. After the September data was released, Econoday reported, “Housing starts in September continued to plummet, adding to recession worries. Starts declined 6.3 percent, following an 8.1 percent fall in August. The September pace of 0.817 million units annualized was down 31.1 percent year-on-year and was below of the consensus projection for 0.880 million units. The drop in starts was led by single-family starts, which fell 12.0 percent, after a 4.0 percent decline in August. Multifamily starts rebounded 7.5, after dropping 16.7 percent in August… By region, the fall in starts was led by a monthly 20.9 percent decline in the Northeast. Starts in the West also dropped - by 16.8 percent in September. The Midwest and South posted gains of 5.6 percent and 0.5 percent, respectively… Permits also declined in September, falling 8.3 percent, following a 8.5 percent decrease in August. The September 0.786 million unit pace for permits was down 38.4 percent year-on-year… Today's report indicates that homebuilders have cut back sharply on construction. This reduction in needed to work on unsold inventories of unsold homes on the market. The permits and starts numbers indicate that housing has a long way to go to recover. This is another sign glaringly pointing to recession.”

Volatility is the key to this market and I believe it will take time to settle down to where a new Bull can result from the current cycle bottoming process. Personally, I don't have any particular sense of this timing because the panic in and panic out seems to be non-stop. But the industry group key to me is the US Retailer, which represents the consumer, and they are all in trouble -- so I agree it's going to take some more time for bail-out programs to work into the system.

The broad results will not likely be seen in the macro-economic data until the summer of 2009, but traders tend to be early on the basis of more finite data studies, eg, book to bill ratios and the like, which can be found here if you follow this data closely.

To hazard a guess as to when the Bull breaks out of the cycle bottom trading range so that long-term traders can benefit as much as the day traders, I’d have to pinpoint the time to be about a month after the January 20 inauguration of President Obama. That would put it around late February. You can send me a Valentine Card in hopes that wish comes true.
:-)

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US Equity Markets Review

DJIA ino.com chart

DJIA stockcharts.com chart

NASDAQ Composite ino.com chart

NASDAQ Composite stockcharts.com chart

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

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

In the wild closing hour of Friday, the DJIA, S&P 500 and NASDAQ Composite plunged -4.71%, -4.77% and -4.50% respectively. The Russell 2000 small cap index was worse. By the end of the day, the DJIA (-337.94 -3.82% to 8497.31), the S&P 500 (-38.00 -4.17% to 873.29) and NASDAQ Composite (-79.85 -5.00% to 1516.85) were down sharply. Yet at 3:00pm these markets had been higher.

For the $RUT, Friday was down -7.07% and the week closed down -9.74%. Anything with the least perception of risk was sold. The top 5 losers in the DJIA index this week were: GM -31.0%. AXP -21.0%, BAC -19.9%, C -19.5%, and GE -15.1%. With GM and GE, the biggest negatives are the financial components of the company. With GM, there was a double whammy since October vehicle sales were, like the competitors, crushed. The industry can take a couple more months only of similar sales before having to declare bankruptcy. Sounds like the US airline industry?

You wonder why these companies are not well managed. One of the biggest problems is due to the capital intensiveness and long lead times to ramp up resources. Then along comes the most extreme volatility in oil costs in our history, and long-term oriented management simply gets overwhelmed.

Now I’m no fan of some of these managers, but let’s be fair; can anybody be expected to cope with oil prices that start out January 2006 at $51, then soar to $148 within 18 months and then plummet to under $60 in the following 5 months? The cost of jet fuel and of gasoline for vehicles went crazy, and the people who manage the automobile manufacturers and airlines could not cope.

So, when I’m critical, it’s not for such reasons as the recent operating conditions. With respect to the airline and automobile companies, I don’t think the suits have treated the workers properly in most cases. A long time ago I railed at the handling of pensions as being quite unacceptable, particularly for the retirees who obviously could not fight back. I strenuously disapproved of the humungous executive compensation packages. The lack of competitiveness in the global auto industry is mind-boggling.

Unless you like to gamble, why would people put capital at risk in these industries, and I ask that question with the long-term view, not just since the start of 2006.

If, as and when I see these companies being managed like a Wal-Mart, IBM or Procter & Gamble, I have zero interest following them other than using the price series data that helps my assessment of the market interrelationships I study.

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Sector ETF Summary for the US equity market

As I wrote a week ago, “The extreme volatility in the market this week caused me to show you a glimpse of how I trade as a professional. My preference is keep the community blog, including my opinions, totally separate from my personal trading activities. But I felt the need to show something of our risk management practices. For instance, the US equity market was up and down like a roller-coaster. I cannot afford the time to keep a real-time commentary… We are all being forced to be day-traders.”

When you see the extent of the damage, recovery and then damage over the past three days of this week, you must agree.

Take the Australia ETF (EWA) as an example. A week ago Friday, EWA gained +4.43% on the day. This week EWA plummeted -14.05%, including -7.99% on Friday. This happens to be an ETF that is supposed to reflect the value of equities across the board for an entire country. Not happening.

How about Hong Kong, which a week ago on the Friday rallied +9.99%, and then this week plunged -13.17%, including a loss on Friday of -9.04%? How about the UK market, which a week ago on the Friday rallied +6.67%, and then this week plunged -10.59%, including a drop of -5.33% on Friday? Like Australia, these are well-regulated markets and highly stable economies.

People all over the world are out of control because they have been put in that situation. Pathetic isn’t it that the most offensive parties, the leaders of the Humungous Bank & Broker (HB&B) group, including the former head honcho himself, Henry Paulson, have now been put in control of the people’s treasury. And then Paulson and his cronies sniff back at the media for doing their job asking why a $700 billion program was changed without the Congress being informed. The arrogance of the man to answer that question with a remark that people should be kissing his ring for the job he is doing. No wonder the people are so wild.

That remark by Henry Paulson ought to go down in the annals of modern history as the low point in government relations with the people. If this were the time of the French Revolution (c. 1789–1799), there would be a beheading.

What resulted from that revolution was the Declaration of the Rights of Man and of the Citizen. Paulson would do well to study it before going any further. He will not have a Presidential Order to protect him. President Obama’s transition team has already indicated they would overturn such attempts that might be seen by the public as perverting justice.

This situation is why I think it will take a month beyond the January 20 Inauguration Day of President-elect Obama to work out these issues and calm the people.

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

SPY Monthly data:

SPY Weekly data:

SPY Daily data:

The tables I 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
XLU	28.80	-0.70	-2.37%	-0.93%	-1.61%	5.07%	-31.58%	-21.76%	-29.24%	-30.72%
XLP	23.48	-0.72	-2.98%	-3.18%	-2.81%	-3.41%	-17.29%	-18.07%	-16.62%	-17.50%
IYH	51.59	-1.88	-3.52%	-3.61%	-5.32%	-4.18%	-26.41%	-24.05%	-18.99%	-27.16%
IYZ	15.45	-0.69	-4.28%	-4.16%	-4.57%	-3.13%	-47.03%	-34.89%	-41.39%	-47.87%
XLE	47.77	-2.07	-4.15%	-4.17%	-6.79%	4.76%	-39.91%	-33.91%	-43.60%	-34.56%
XLI	22.40	-0.99	-4.23%	-6.00%	-11.01%	-5.53%	-41.83%	-36.72%	-42.78%	-43.07%
XLK	14.81	-0.71	-4.57%	-6.50%	-10.24%	-10.46%	-43.30%	-37.30%	-40.64%	-43.65%
SPY	86.62	-4.55	-4.99%	-7.71%	-10.54%	-7.07%	-40.23%	-33.17%	-38.47%	-41.34%
XLB	22.72	-1.47	-6.08%	-8.90%	-12.35%	-12.62%	-44.99%	-42.34%	-48.91%	-44.77%
XLY	19.18	-0.98	-4.86%	-9.10%	-17.08%	-13.76%	-40.43%	-37.91%	-42.39%	-44.02%
SMH	17.10	-1.65	-8.80%	-9.28%	-17.59%	-12.98%	-45.47%	-43.84%	-47.35%	-48.04%
XLF	12.73	-0.68	-5.07%	-10.48%	-17.87%	-17.18%	-55.11%	-39.84%	-51.41%	-59.89%

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
XOM	73.68	-1.73	-2.29%	-0.37%	-0.59%	8.29%	-21.21%	-4.87%	-18.05%	-14.63%
PTR	73.58	-4.70	-6.00%	-0.97%	-1.34%	-7.84%	-57.63%	-43.29%	-47.56%	-63.04%
CVX	72.68	-3.03	-4.00%	-1.06%	-2.57%	16.57%	-22.23%	-16.05%	-25.62%	-15.64%
CEO	76.05	-5.30	-6.52%	-2.50%	-6.90%	-1.02%	-54.58%	-46.28%	-59.51%	-55.87%
TOT	51.75	-2.09	-3.88%	-3.60%	-6.66%	6.05%	-37.86%	-26.92%	-38.97%	-34.24%
SLB	48.76	-2.94	-5.69%	-5.10%	-5.60%	-2.46%	-51.52%	-48.16%	-52.69%	-47.73%
IMO	29.85	-0.65	-2.13%	-7.30%	-15.77%	-2.51%	-45.65%	-35.18%	-47.96%	-44.78%
RIG	70.89	-4.29	-5.71%	-8.07%	-13.90%	0.90%	-51.43%	-45.13%	-51.84%	-40.45%
ECA	44.46	-2.57	-5.46%	-9.27%	-12.67%	7.11%	-36.13%	-35.37%	-50.88%	-35.75%
SU	18.88	-1.20	-5.98%	-11.94%	-21.07%	-13.79%	-65.75%	-64.16%	-70.02%	-63.20%
STO	16.57	-1.09	-6.17%	-16.23%	-17.56%	-4.11%	-46.96%	-42.22%	-56.31%	-47.61%
PBR	21.45	-2.51	-10.48%	-19.87%	-20.23%	-18.16%	-81.95%	-57.68%	-67.63%	-79.22%

Crude Oil ($WTIC) closed the week down -$3.44/bbl (-5.64%) to 57.60.

OPEC is talking production cut-backs, but the immediate squeeze in the banking system is what is driving commodity prices down.

As to the long term, I believe that most countries can live with the oil price at 60-75.

The Energy sector (XLE) lost -4.17% W/W to 47.77. The loss on Friday, mostly the last hour, was -4.15%, which says all you need to know. Panic down; panic up.

Exxon (XOM) lost only -0.2% the previous week before lifting +6.3% that Friday. This week, XOM was down just -0.4% W/W, including the loss of -2.3% on Friday. This one looks ready to lift back higher into the trading range.

PetroChina dropped -1.0% W/W, including -6.0%, mostly in the last hour.

There were some huge weekly losses though: PBR -19.9% and STO -16.3%.

As I stated a week ago, I like the energy sector here, and I like XOM. I am not a believer that the economic recession and the future emphasis to be placed by the Administration on alt energy is going to break the business model. I love the financial strength, cash flow, earnings and dividends.

Monthly chart

Weekly chart

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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 Basic Materials:

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
TS	22.07	-1.41	-6.01%	3.52%	7.19%	-8.00%	-50.28%	-57.91%	-60.92%	-53.30%
AA	10.84	-0.36	-3.21%	-3.13%	-5.74%	-8.14%	-70.00%	-65.98%	-74.19%	-70.59%
MT	21.31	-1.37	-6.04%	-4.44%	-18.82%	-28.03%	-72.11%	-72.34%	-78.03%	-70.69%
GGB	6.070	-0.590	-8.86%	-5.60%	-5.30%	-5.75%	-78.85%	-66.05%	-86.30%	-79.70%
NUE	32.73	-2.31	-6.59%	-5.92%	-19.21%	-2.47%	-43.54%	-35.65%	-59.08%	-38.41%
RIO	11.47	-1.20	-9.47%	-10.04%	-12.58%	-6.60%	-64.93%	-55.75%	-71.68%	-67.90%
RTP	149.80	-16.82	-10.09%	-10.49%	-19.41%	-3.51%	-64.31%	-57.56%	-71.49%	-67.30%
DOW	21.15	-1.09	-4.90%	-12.71%	-20.73%	-11.73%	-45.42%	-39.38%	-50.15%	-48.99%
PKX	53.31	-6.49	-10.85%	-13.46%	-20.66%	-10.12%	-63.60%	-53.86%	-59.61%	-67.36%
BHP	32.64	-3.26	-9.08%	-14.24%	-16.05%	-6.93%	-53.64%	-50.84%	-63.82%	-56.96%
VCP	7.480	-0.520	-6.50%	-19.14%	-25.87%	-11.58%	-74.81%	-66.00%	-77.21%	-77.48%
TCK	5.250	-0.570	-9.79%	-45.43%	-46.48%	-61.71%	-85.51%	-86.08%	-89.32%	-88.21%

Basic Materials (XLB -8.90% to 22.72) was hit by Friday’s loss of -6.08%. Most of that was done in the past 90 minutes, which was after the commodity futures had closed.

Tenaris (TS) of Argentina gained +3.5% as the best of the lot, but the loss on Friday was -6.0%.

The Friday afternoon sell-off took the biggest of the miners (RIO, RTP and BHP) down by over -10% W/W. But the worst hit were Teck Corp (TCK -45.4%), which I am buying. VCP (Brazil) was hammered -19.1%. These stocks have been the most volatile.

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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
UPS	53.14	-1.95	-3.54%	2.35%	0.68%	5.14%	-23.16%	-18.98%	-25.78%	-27.53%
FDX	64.37	-2.77	-4.13%	-0.33%	-1.53%	2.91%	-25.29%	-25.98%	-29.32%	-36.42%
MMM	63.06	-1.37	-2.13%	-2.73%	-1.93%	11.63%	-23.76%	-13.66%	-18.87%	-21.38%
UTX	50.23	-2.05	-3.92%	-3.05%	-8.61%	-0.95%	-33.21%	-24.03%	-33.17%	-32.96%
CAT	36.96	-2.45	-6.22%	-3.88%	-3.25%	-6.00%	-47.67%	-47.42%	-55.34%	-47.22%
HON	27.35	-1.44	-5.00%	-6.85%	-10.18%	-6.88%	-54.34%	-46.15%	-55.88%	-53.26%
ABB	10.87	-0.70	-6.05%	-7.25%	-17.34%	-27.29%	-62.05%	-54.84%	-66.18%	-62.24%
TXT	14.73	-0.57	-3.73%	-9.07%	-16.78%	-22.96%	-77.95%	-65.37%	-76.59%	-77.85%
BA	41.04	-2.12	-4.91%	-11.89%	-21.71%	-7.88%	-52.62%	-36.64%	-52.11%	-55.77%
FLR	35.73	-2.29	-6.02%	-12.92%	-10.52%	-10.54%	-50.51%	-51.73%	-61.47%	-47.87%
GE	16.02	-0.84	-4.98%	-15.06%	-17.89%	-18.39%	-56.42%	-45.73%	-50.72%	-58.93%
ERJ	14.00	-0.69	-4.70%	-18.41%	-33.08%	-27.27%	-68.98%	-56.72%	-66.08%	-70.72%

Industrials (XLI -6.00%) closed at 22.40, hurt by the loss of -4.23% on Friday.

This is a sector I like for the 2008-2011 Bull market. You must be selective, but the G-20 economic stimulus packages will clearly help some of these companies.

Here is an excellent paper done by Citigroup economists and researchers in July 2008 that focused my thinking and may help you as well.

If I were Obama, I’d use this paper as a roadmap as to how to put America back on track. I’d stop that Paulson Folly and stop being dictated to by bankers. Let the weakest fail; the strongest will pick up the pieces. At the end of the day, the banks will be stronger for this.

The taxpayers money is best put back into the private sector that will hire people to build the infrastructure needed to make for a more efficient economy and employ more people in high paying jobs at the same time. I’d bring the soldiers home and put as many as possible to work in the private sector that would be bidding on the government infrastructure building contracts. I’d let out those contracts on the basis of employment of those soldiers who have paid so dearly for the nation’s well-being.

As for Paulson and his cronies, I’d put them all under investigation. I’d ask them questions in grand juries they’d have to plead the 5th to avoid. Then I’d expose the chicanery these people have been up to and are still up to. I’d go back to the G-20 and tell them that the World Bank can hook up with the central banks of the world and separate themselves from government. No longer would I permit a Minister of Finance to sit as equals with a banker. Bankers do not represent the people; their mandate is to serve their own organizations. So I’d cut the nonsense that’s been going on for years. I’d not ever again allow Congress to interview at the same table the Treasury Secretary, Fed chairman and SEC chairman. These people operate in conflict, and the essence of my Administration would be to rip to shreds the conflicts of interest that the politics-banking merger has facilitated. Without a separation of duties and functions, there will never be the checks and balances the people need in order to have their confidence in the system restored.

As the Citi white paper discloses, the needs are huge.

The American Society of Civil Engineers (“ASCE”) estimates that it would cost over $1.6 trillion over the next five years to bring U.S. infrastructure up to a satisfactory standard. The World Bank estimates that middle and high income countries will require over $740 billion per annum to be invested in infrastructure (excluding ports, airports and canals) through 2010. The Organization for Economic Cooperation and Development (“OECD”) estimates a worldwide investment need of about $1.8 trillion per year.

It's time for government to make this investment, and put an end to government by bankers.

Of short term impact, a decision by DHL to depart the US market and let Fedex and UPS take the whole pie was big for the shares of FDX (-0.3%) and UPS (+2.4%) this week, which were stronger than otherwise expected. In a broad market turn, I think FDX might pop.

The sector losers were Embraer (ERJ -18.4%) and General Electric (GE -15.1%). Jeff Immelt would be wise to spin out GE Capital to the shareholders. Jeff has done a terrific job in restructuring the company, but the GE Capital thing is an albatross that might cut his career short. That would be a shame.

Embraer just closed a $200 million order with a Middle East customer.

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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
NKE	46.53	-2.33	-4.77%	-5.83%	-19.26%	-19.05%	-26.47%	-24.95%	-31.01%	-26.40%
TM	63.68	-4.06	-5.99%	-7.06%	-16.31%	-5.10%	-40.18%	-28.93%	-36.81%	-42.69%
TTM	4.0200	-0.2300	-5.41%	-9.05%	-31.28%	-28.09%	-79.33%	-59.60%	-74.94%	-77.08%
TGT	33.03	-2.30	-6.51%	-9.56%	-17.67%	-16.10%	-33.29%	-33.47%	-38.66%	-42.84%
DIS	21.08	-0.57	-2.63%	-9.76%	-18.64%	-14.83%	-33.79%	-34.80%	-39.43%	-33.84%
BBBY	20.60	-1.60	-7.21%	-10.36%	-20.06%	-18.06%	-27.36%	-29.33%	-38.89%	-35.00%
WHR	39.09	-2.47	-5.94%	-12.00%	-16.21%	-36.73%	-51.06%	-52.98%	-49.03%	-51.23%
EBAY	12.36	-1.41	-10.24%	-12.90%	-19.06%	-19.48%	-61.96%	-52.55%	-60.41%	-62.13%
BDK	39.48	-2.56	-6.09%	-13.21%	-22.01%	-23.78%	-43.54%	-39.50%	-41.52%	-53.97%
CCL	18.97	-1.09	-5.43%	-13.89%	-25.31%	-35.89%	-56.55%	-51.71%	-52.12%	-57.75%
JCP	17.27	-2.01	-10.43%	-22.90%	-27.80%	-18.11%	-58.54%	-53.11%	-60.97%	-63.04%
BC	2.4400	-0.2600	-9.63%	-30.29%	-29.68%	-57.71%	-85.58%	-83.22%	-85.33%	-88.58%

Consumer Discretionary (XLY -8.78% W/W) closed at 21.10, but it was up +19.10% a week earlier.

The Broadcasting and TV Media group [GICS 25401020] contains three companies I follow: Disney (DIS) plus two from Canada, Rogers Communications (RCI.B.TO) and Shaw Communications (SJR.B.TO). The consumer economy is hurting them, but I like them all.

Speaking of TV, we watched a lot of it and advertising revenues of the US networks that covered the Presidential campaigns took in more gross than at any time in their history. NBC as you know is owned by General Electric (GE), which also owns and is being dragged down by GE Capital, as well as CNBC, both of which need to be sold.

But during this political year my favorite new show has to be the Rachel Maddow show on MSNBC. From the first couple minutes of watching, I thought, wow, this woman is impressive. Her intellect and humor won me over immediately despite the fact her politics were clearly not the same as mine. But who is she I wondered. To my surprise, I see this woman is also clearly on the other team, but, no matter, the only issue to me is whether or not she represents meaningful television, and I can see that this is one person who never had to wear a clown suit to grab attention. You may disagree, but to me Rachel Maddow represents the best of broadcast media.

Also in this sector, the US Retailers should be the key (to the whole market) for traders to watch.

As I stated off the top, I’m looking constantly at the 56 retailers that dominate the US scene, particularly the heaviest capitalized 30. Here is the list of the 30, which you can cut and paste into the charting system at billcara2.com:

wmt cvs hd low tgt wag cost kr amzn ebay bby swy tjx kss gps sbux bbby shld jcp fdo dltr rost m ltd urbn jwn tif bj anf wfmi

You can do RSI technical studies and the like. I’m hoping to get the real-time data (or at least the 15 and 20 minute delayed online data) returned.

The whole list of 56 I keep in a Finance Google portfolio, which is a quick study every day.

To set up what I have, just go to Finance Google and set up a portfolio with the following string

NYSE:GPS NYSE:ANF NASDAQ:URBN NYSE:ANN NYSE:LTD NASDAQ:BEBE NASDAQ:CACH NASDAQ:DBRN NYSE:IBI NYSE:TLB NASDAQ:CWTR NYSE:GES NYSE:BKE NASDAQ:PSUN NYSE:TWB NASDAQ:HOTT NYSE:KSS NYSE:DDS NYSE:JCP NASDAQ:SHLD NYSE:JWN NYSE:SKS NYSE:WMT NYSE:TGT NYSE:FDO NASDAQ:ROST NYSE:TJX NASDAQ:FRED NYSE:BJ NASDAQ:COST NYSE:HD NYSE:LOW NYSE:ETH NYSE:PIR NYSE:WSM NASDAQ:BBBY NYSE:CVS NYSE:WAG NYSE:RAD NYSE:KR NYSE:SWY NASDAQ:WFMI NYSE:BBY OTC:CCTYQ NYSE:RSH NYSE:PSS NASDAQ:AMZN NYSE:BKS NASDAQ:EBAY NASDAQ:SBUX NYSE:TIF NASDAQ:WMAR NASDAQ:DLTR NYSE:NDN NYSE:M NASDAQ:BONT

If you are really serious, you’ll drop this list down into an excel spreadsheet and insert the GICS 8-digit codes, and sort. Then go back to billcara2.com and study them in blocks.

Enjoy.

You’ll be able to better play the Brunswick’s (BC -30.3% W/W) and JC Penny’s (JCP -22.9%). Btw, I am convinced that Wall Street traders have modeled stocks like JCP and BC and are day trading against the public. I’ll bet you they are cleaning up.

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

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

XLP Monthly data:

XLP Weekly data:

XLP Daily data:

Table 6: Senior consumer staples equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
KR	28.02	0.07	0.25%	1.82%	2.04%	11.06%	9.15%	-7.59%	1.97%	0.04%
ABV	46.59	-3.85	-7.63%	-1.85%	9.62%	1.26%	-35.72%	-25.12%	-39.75%	-37.86%
WAG	23.43	-1.12	-4.56%	-1.88%	-7.97%	0.56%	-37.25%	-36.95%	-35.10%	-41.06%
PG	63.11	-1.94	-2.98%	-2.14%	-2.22%	2.22%	-12.72%	-9.47%	-3.65%	-11.78%
KO	45.02	-1.26	-2.72%	-2.66%	2.18%	1.86%	-26.31%	-18.18%	-20.37%	-26.63%
WMT	52.71	-2.22	-4.04%	-3.09%	-5.55%	-1.97%	12.39%	-9.28%	-8.25%	13.33%
PEP	53.52	-2.07	-3.72%	-3.32%	-6.12%	-0.67%	-28.91%	-23.48%	-20.24%	-27.73%
KFT	27.44	-0.67	-2.38%	-3.69%	-5.96%	-4.12%	-14.38%	-16.06%	-13.47%	-16.80%
WFMI	9.380	0.210	2.29%	-6.67%	-12.50%	-32.90%	-76.41%	-50.99%	-67.61%	-79.87%
DEO	54.51	-1.71	-3.04%	-7.39%	-12.35%	-7.70%	-35.92%	-25.90%	-31.72%	-39.05%
PDA	29.35	-2.99	-9.25%	-14.43%	0.34%	2.73%	-39.02%	-45.87%	-48.68%	-41.31%
SBUX	8.610	-0.700	-7.52%	-18.39%	-34.42%	-17.61%	-55.41%	-49.11%	-45.92%	-64.49%

Consumer Staples (XLP -3.18% W/W to 23.48) was hurt by the loss of -2.98% on Friday.

The hot money continued to hammer SBUX (-18.4% W/W) which was down -19.7% the prior week as well.

No celebration with Cappuccinos at Starbucks. McDonald’s maybe. MCD was one of just two DJIA 30 components that was higher W/W. MCD lifted +1.19%. The coffee’s not bad there, but the place would not be my favorite hang-out! I like the décor, music, food and internet at Starbucks. But, I guess you have to have $$$ to go there and many people have been reduced to $$ or even $.

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

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

IYH Monthly data:

IYH Weekly data:

IYH Daily data:

Table 7: Senior healthcare equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
JNJ	60.05	-2.85	-4.53%	-0.28%	-2.10%	-4.15%	-8.89%	-15.65%	-10.12%	-10.23%
AET	23.33	0.02	0.09%	-0.64%	-6.19%	-24.69%	-58.81%	-45.54%	-46.29%	-57.52%
AMGN	58.23	-1.37	-2.30%	-1.09%	-2.77%	16.02%	24.96%	-9.31%	37.99%	8.58%
NVS	48.94	-1.78	-3.51%	-1.37%	-4.02%	-3.93%	-10.32%	-13.67%	-2.37%	-7.38%
DNA	81.59	-0.73	-0.89%	-2.24%	-1.63%	-2.32%	21.05%	-17.43%	17.80%	9.94%
PFE	16.28	-0.45	-2.69%	-3.44%	-8.07%	-3.73%	-28.94%	-17.69%	-18.84%	-31.05%
NVO	50.52	-1.05	-2.04%	-3.77%	-5.59%	1.63%	-20.82%	-17.67%	-23.21%	-59.41%
BMY	19.58	-0.41	-2.05%	-4.72%	-4.72%	11.63%	-25.07%	-10.51%	-9.35%	-30.35%
GSK	36.25	-0.98	-2.63%	-5.67%	-6.33%	-6.91%	-27.75%	-24.13%	-16.88%	-27.49%
MDT	37.45	-2.48	-6.21%	-5.93%	-7.14%	-3.73%	-24.34%	-30.25%	-21.49%	-19.74%
WLP	35.24	-0.26	-0.73%	-8.96%	-9.34%	-12.56%	-59.49%	-37.18%	-30.82%	-56.81%
UNH	20.02	-0.82	-3.93%	-10.74%	-15.63%	-17.92%	-64.67%	-37.22%	-37.48%	-62.25%

The Healthcare sector (IYH -3.61% W/W to 51.59) was hurt by the Friday loss of -3.52%. Same old, same old. But the 3 to 4pm plunge was truly the story of the week.

Johnson & Johnson (JNJ) was gentle on the trader’s bum, losing just -0.3%. United Health (UNH -10.7%) was hammered.

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

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

XLF Monthly data:

XLF Weekly data:

XLF Daily data:

Table 8: Senior financial company equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
JPM	34.47	-2.72	-7.31%	-8.69%	-16.44%	-12.36%	-18.26%	-8.83%	-24.92%	-23.65%
RY	36.09	-2.08	-5.45%	-9.30%	-6.82%	-8.10%	-28.65%	-18.50%	-27.14%	-33.36%
BBD	10.19	-1.19	-10.46%	-10.06%	-12.91%	-10.46%	-66.51%	-46.03%	-55.29%	-67.38%
HBC	52.60	-1.33	-2.47%	-11.37%	-10.85%	-23.97%	-36.20%	-34.65%	-39.13%	-40.80%
GS	66.73	-3.26	-4.66%	-14.21%	-27.86%	-41.62%	-67.86%	-59.94%	-64.90%	-71.40%
IBN	15.11	-1.06	-6.56%	-16.84%	-12.76%	-6.21%	-75.69%	-51.91%	-65.09%	-76.45%
CS	26.95	-1.43	-5.04%	-19.41%	-27.94%	-37.90%	-54.84%	-42.66%	-49.88%	-55.83%
C	9.520	0.070	0.74%	-19.46%	-30.26%	-36.02%	-67.08%	-47.35%	-59.05%	-73.81%
MER	13.20	-0.60	-4.35%	-21.19%	-28.99%	-27.27%	-74.98%	-49.19%	-72.99%	-77.38%
DB	30.70	-3.65	-10.63%	-21.28%	-19.17%	-29.43%	-76.21%	-66.08%	-73.85%	-75.61%
UBS	11.50	-2.13	-15.63%	-23.28%	-31.95%	-26.98%	-74.89%	-42.04%	-62.75%	-76.65%
MS	12.03	-1.18	-8.93%	-24.72%	-31.14%	-37.47%	-76.39%	-70.40%	-74.38%	-78.37%

Financials (XLF -10.48%) was the worst performing sector. The rats (executive managers) are not only throwing the staff overboard, they have commandeered the life rafts for themselves. It is really sad thing to watch the television coverage of the Pink Slip Parties (PSP) in Manhattan. But this is a time – under great stress – where strong communities are forged. Let these people never forget the Paulson’s, Dimon’s and Fuld’s and the peer group of those guys who destroyed the financial services model in their greedy pursuit of capital market domination. It makes me puke just thinking of the 100,000 people laid off because of the multi-billion dollar bonus packages that each of the senior executive teams of Humungous Bank & Broker demanded as their piece. Like Fuld was in his company gymnasium by a fellow employee of Lehman Brothers, they should all be laid out. Same for the Old Boys Club directors who aided and abetted these criminals!

These people were only permitted to act imprudently because they systematically removed the controls over them. They put their people into positions of authority in the central banks, finance ministries and securities regulators.

The result is that tens of thousands of very bright, extremely well-educated family people now have to sell their homes and try to move on for a new and different life. This disgusts me. I hope Americans never forget what happened here.

Henry Paulson can say all he wants until the moment he departs the White House. Then, if you think Sarah Palin’s detractors went after her post-election, and they did, wait until you see what I think is going to happen to Paulson and friends. People will pay for this debacle. I was the first person to call it Paulson’s Folly – now you see why.

Anyway, XLF plunged -10.48% this week, including -5.07% on Friday. The previous week’s loss was -8.26%, while there was a gain of +14.39%. As I said a week ago, “This is like watching tournament ping-pong.”

The best of the lot this week was Jamie Dimon’s JP Morgan (JPM -8.7% which included a loss of -7.3% on Friday). It helps that Dimon is the most influential director on the New York Fed board. I can just see the Chinese Wall there… “Jamie, would you like another $50 billion? Yes, seriously; take it!” That’s a wall that is a centimeter high I am guessing. It’s kind of like the term Self Regulatory Organization has meaning. Not!

The worst hit of the banks this week were MER (-24.7%), UBS (-23.3%) and DB (-21.3).

How many years in prison do you think the UBS head of wealth management is going to get after being prosecuted for his alleged conspiracy to defraud the US taxpayer of billions? I start the over/under at 5.

Eight years ago, people like that merely wrote checks for $100 million or whatever and pleaded no contest. It’ll be no contest this time around, only in a different light. That UBS guy doesn’t stand a chance as I see it. The appropriate message will be sent to his peers.

Yes, I am offshore, and I know the offshore financial services business. I call it babysitting untold billions of the rich and powerful who, for the most part, do not declare taxable income where they likely should. These are highly successful people who didn’t get the capital they amassed offshore by being dim light-bulbs although some may qualify since the funds were handed down from previous generations. Anyway, my aim is to show the world that legitimate offshore active portfolio management is possible -- that’s mind and management and not just a pretense like I see happening in say, oh maybe Cayman or BVI for example. If I am right, there ought to be a flood of successful traders coming to visit me to see how it’s done.

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

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

SMH Monthly data:

SMH Weekly data:

SMH Daily data:

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

XLK Monthly data:

XLK Weekly data:

XLK Daily data:

Table 9: Senior technology equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
SAP	35.24	-1.06	-2.92%	-1.59%	-0.25%	-1.67%	-30.53%	-38.54%	-29.67%	-31.17%
ORCL	16.90	-0.82	-4.63%	-3.59%	-7.60%	-0.71%	-24.86%	-27.12%	-22.41%	-16.25%
CSCO	16.62	-0.64	-3.71%	-5.46%	-6.47%	-7.20%	-37.38%	-32.63%	-35.46%	-44.06%
GOOG	310.02	-2.06	-0.66%	-6.38%	-13.73%	-16.78%	-54.75%	-38.67%	-46.21%	-51.69%
INFY	24.72	-1.49	-5.68%	-7.42%	-15.69%	-4.78%	-44.36%	-41.52%	-44.24%	-41.46%
QCOM	32.94	-1.88	-5.40%	-7.63%	-13.90%	-17.13%	-14.20%	-41.54%	-25.36%	-17.73%
AAPL	90.24	-6.20	-6.43%	-8.14%	-16.13%	-7.35%	-53.69%	-49.68%	-51.55%	-45.67%
INTC	13.32	-1.11	-7.69%	-8.95%	-16.91%	-14.06%	-47.46%	-45.32%	-44.13%	-48.47%
ADBE	22.34	-1.96	-8.07%	-9.15%	-16.14%	-20.72%	-46.44%	-50.75%	-45.43%	-45.54%
CTSH	16.87	-1.15	-6.38%	-13.13%	-12.14%	-9.50%	-47.66%	-45.69%	-44.92%	-45.32%
RIMM	40.00	-3.80	-8.68%	-17.78%	-20.68%	-32.21%	-64.82%	-69.40%	-71.13%	-63.62%
SNDK	7.150	-0.670	-8.57%	-28.36%	-19.57%	-53.90%	-78.44%	-59.88%	-77.24%	-81.20%

Tech (XLK -6.50%) and Semi-conductors (SMH -9.28%) were hurt by the Friday losses of -4.57% and -8.80% respectively.

The losses were widespread.

Research In Motion (RIMM -17.8% W/W) was particularly hard hit.

Intel (INTC -9.0%) took a bad weekly loss after the loss on Friday of 7.7%.

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Sector 50 (telecom: IYZ, VOX and IXP)

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

IYZ Monthly data:

IYZ Weekly data:

IYZ Daily data:

Telecom (IYZ -4.16% W/W) closed at 115.45. The loss of Friday was 4.28%, mostly late in the session, so this is a sector that could turn on a dime.

Verizon (VZ -0.2%) was DJIA 30 performer #3 this week and AT&T (T +2.4%) was #1.

Two weeks ago I wrote in this space, “Verizon (VZ +18.3%) and AT&T (T +8.5%) were both up strongly. Maybe that’s a signal that the bond market is going to stabilize here.”

After bonds had been looking very shaky the week before, the following week the TLT (average 20-year Treasuries) was up +1.50% W/W, despite taking a hit on Friday. The TIP (Treasury Inflation Protected) was up +2.24%. Then this week, TLT lifted +1.01% and TIP gained +1.14%.

A week ago I added, “The market breathes. You need to be a doctor sometimes to recognize the vital signs (the “tells”), but the market never dies. Today, it’s us; tomorrow our children. You need to teach them the important things to look for.”

This week, I’ll add that the bond market can gain for one of two reasons, (i) hot money leaving equities for a safer place, or (ii) because bonds represent sustainable long-term fixed income. The latter case does not apply because ultimately with G-20 governments reflating to kick-start the business and economic cycle the interest rate cycle has to also kick into gear. The only thing that will hold it down would be the combination of disinflation and wealth creation, which would keep interest rates low while corporations would be able to offer a higher yield to attract capital as a preference to issuing more common stock.

I’d be nervous making that assumption. In addition the governments of the world will be crowding out the corporate bond market because they need to keep rolling over the debt they are issuing today for their economic stimulus programs. That will not be healthy for the bond market.

Bond financing is essential to the telco operators, so I am not hot on the telco stocks right now, particularly in the developed economies.

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

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

XLU Monthly data:

XLU Weekly data:

XLU Daily data:

Utilities (XLU -0.93% to 28.80) was sector performer #1 this week, following the #3 performance a week ago.

I am starting to get more interested in the utilities on account of the massive spending I think the G-20’s are going to do in rebuilding infrastructure.

When you read this white paper by Citigroup regarding infrastructure, you will see the importance they place on the deed to more fully develop the regulated utilities. I agree with it, and I also noted that in the past two years there have been major plays in California and Texas by private equity to take control of large utility corporations.

Here is the list of North American Utilities that I follow 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

The winners this week were PEG +3.9%, PCG +3.1% and D +1.6%. The losers were ED -7.0%, NGG -6.8% and EXC -6.0%.

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Bonds & Yields Review

Table 10: US Treasury Yields

US Treasury Bonds

Maturity	Yield	Yesterday	Last Week	Last Month
3 Month	0.07	0.15	0.22	0.15
6 Month	0.85	0.89	0.79	0.81
2 Year	1.21	1.23	1.32	1.56
3 Year	1.53	1.61	1.12	1.34
5 Year	2.32	2.42	2.56	2.83
10 Year	3.73	3.86	3.78	3.95
30 Year	4.22	4.36	4.26	4.20

Municipal Bonds

Maturity	Yield	Yesterday	Last Week	Last Month
2yr AA	2.55	2.53	3.00	3.11
2yr AAA	2.18	2.24	2.27	2.78
2yr A	2.73	2.70	3.09	3.35
5yr AAA	3.11	2.97	3.14	3.59
5yr AA	3.14	3.12	3.18	3.66
5yr A	3.42	3.52	3.31	4.02
10yr AAA	4.42	4.53	4.00	4.99
10yr AA	4.03	4.19	4.08	4.51
10yr A	4.27	4.37	4.17	5.11
20yr AAA	5.05	5.17	5.30	5.66
20yr AA	5.17	4.99	4.94	6.15
20yr A	5.57	4.93	5.47	6.16

Corporate Bonds

Maturity	Yield	Yesterday	Last Week	Last Month
2yr AA	5.34	5.22	5.13	5.87
2yr A	5.79	5.67	5.99	8.53
5yr AAA	5.58	5.70	6.15	5.73
5yr AA	6.58	6.47	6.48	7.41
5yr A	7.32	7.25	6.97	7.08
10yr AAA	5.50	5.60	5.68	5.67
10yr AA	6.56	6.50	6.30	7.25
10yr A	6.88	6.98	7.07	7.35
20yr AAA	6.35	6.54	6.60	5.95
20yr AA	6.43	6.59	6.54	5.98
20yr A	8.06	8.18	8.48	6.78

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The 20-year Treasury ETF (TLT), which two weeks ago plunged by -4.03%, was up +1.50% a week ago, and then +1.01% this week to close at 95.17.

Foe two weeks I ran the following request, “At this point, I’d like people to think about how money is created and what’s happening to the debts of America. It is at the same time misunderstood and mind-boggling… Because there is a widespread lack of understanding of banks, money, and debt, here are videos that will take maybe 90 minutes of your time to watch that will tell you pretty much all you need to know. The material is taught in secondary schools.”

30-minute video that explains the US national debt.

How money is created from debt.

Five part series: Money as Debt

Part 1
Part 2
Part 3
Part 4
Part 5

Here are the charts of the US debt market that I consider to be the important ones.

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

Interest rates and bond yields.

Interactive Daily data charts:

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Interactive Chart of Interest rates and bond yields.

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US Bond Funds -- Interactive Monthly Data Charts

SHY Monthly data series chart:

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IEF Monthly data series chart:

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TLT Monthly data series chart:

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AGG Monthly data series chart:

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LQD Monthly data series chart:

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TIP Monthly data series chart:

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US Bond Funds -- Interactive Weekly Data Charts

SHY Weekly data series chart:

IEF Weekly data series chart:

TLT Weekly data series chart:

AGG Weekly data series chart:

LQD Weekly data series chart:

TIP Weekly data series chart:

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US Bond Funds -- Interactive Daily Data Charts

SHY Daily data series chart:

IEF Daily data series chart:

TLT Daily data series chart:

AGG Daily data series chart:

LQD Daily data series chart:

TIP Daily data series chart:

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Table 11: Interest-sensitive securities

Sorted by 1-Week Price Performance.

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
IEF	89.84	0.88	0.99%	1.35%	2.22%	2.86%	2.52%	1.35%	1.96%	4.93%
TIP	95.52	0.98	1.04%	1.14%	3.41%	0.05%	-10.43%	-9.73%	-10.69%	-8.76%
TLT	95.17	1.85	1.98%	1.01%	2.52%	1.38%	0.84%	3.18%	4.14%	4.10%
SHY	84.25	-0.02	-0.02%	0.29%	0.06%	0.42%	2.32%	1.62%	1.60%	3.10%
AGG	96.98	0.29	0.30%	-0.11%	1.06%	2.69%	-4.59%	-2.95%	-4.57%	-3.63%
NLY	13.29	-0.64	-4.59%	-8.41%	-4.39%	6.07%	-26.57%	-6.67%	-20.80%	-18.57%
AVB	55.46	-5.80	-9.47%	-13.82%	-21.91%	-24.19%	-39.29%	-45.57%	-46.63%	-47.75%
EQR	27.66	-4.39	-13.70%	-16.33%	-20.81%	-14.92%	-24.07%	-39.30%	-36.94%	-28.02%
FRE	0.6700	-0.0600	-8.22%	-22.09%	-34.95%	-39.09%	-97.95%	-88.72%	-97.54%	-98.48%
DRE	9.710	-1.680	-14.75%	-26.33%	-31.18%	-36.95%	-62.10%	-62.39%	-62.65%	-65.38%
FNM	0.5400	-0.0800	-12.90%	-27.03%	-41.94%	-43.16%	-98.56%	-93.44%	-98.19%	-98.87%

This week FNM dropped from $0.74 to $0.54 and FRE dropped from $0.86 to $0.67. These stocks only continue to be NYSE-listed (breaking the NYSE $1 rule) in order to continue the sham that they can qualify as investment grade securities for US banks and Fund managers. If Fannie and Freddie didn’t, think where money managers like PIMCO would be. This deceit, which I call the Barney Frank Rule, must be stopped.

Previously these were the only companies in NYSE history that were permitted to trade without submitting audited financial statements. The senior executives – the very people who were piecing off the politicians in Congress, including the House Finance Committee, and now the White House, were permitted to depart with honor and significant multi-million dollar severance packages.

The corruption can no longer be hidden. What concerns me is that the arrogant people who are involved – from the politicians to GSE executive management to the NYSE Board – are laughing in our faces. You don’t have to go any further than the GSE’s, Fannie and Freddie, to see how corrupt America has become.

I know there are financial editors reading this who have zero intention to do honest reportage. Why don’t they simply replay the video of Barney Frank telling Americans in the summer that Fannie & Freddie were “ok” – not in the greatest shape maybe, but in his words, not a problem?

Why don’t these upstanding editors review the video of Freddie's CEO more recently explaining to the public how his company was ok for many months? Surprise, surprise, Freddie Mac just took a $25.3 billion loss for the quarter, and the CEO is now begging Treasury for an emergency $13.8 billion bail-out package.

Fannie suffered an even bigger quarterly loss ($29 billion) and the CEO there says that the $100 billion recently earmarked for Fannie and Freddie will not be adequate to rescue them!

Meanwhile, the NYSE sees fit to sustain the listings of these bankrupt penny stocks. Once Upon a Time in America (1984), the long 4 hour version, was one of my favorite movies. It’s rated #95 best all-time movie. “Max” rises from a street punk through the mob to become Secretary of Commerce. The story is more believable than what I see happening in America today. They couldn’t fit in all the corruption at the highest levels and still tell today's story Hollywood style in just four hours.

Why, I continue to ask, would serious people invest in these companies? Who is clean enough to do the necessary clean-up? Who in the media even cares anymore?

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Consumer Finance -USA -- Interactive Weekly Data Charts

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Consumer Finance -USA -- Interactive Daily Data Charts

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Commodities Review

Six losing weeks of big losses in the past seven, the $CRB index dropped again this week (-3.61%) to 247.58. In early July, the $CRB hit a high of 493.97.

The 50-day MA for $CRB is 306.10 and the 200-day MA is 387.05.

$CRB Index

Open Futures Contracts

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Interactive Chart of Weekly CRB Commodities Index:

Interactive Chart of Daily CRB Commodities Index:

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Oil Review

$WTIC dropped -$3.44/bbl (-5.64%) to 57.60.

After falling in price from the $150 level, I opined, “I believe that oil-related funds are shutting down and there is forced selling in the market. I also think that credit to the hedge funds has been shut down… The drop in Crude Oil prices -- US Light Sweet Crude called West Texas Intermediate as well as European Brent – is the major reason why the commodity index ($CRB) has tanked.”

For $WTIC, the 50d MA is now 82.31, and the 200d MA is 108.93. The price in mid-July hit a record high of $149.90.

As I stated a week ago, when Goldman Sachs opined that Crude Oil prices would soon hit $200, I think they were selling out hedge fund positions. I no longer trust them. Besides I think their business model is broken. They attracted the best because as an investment bank they were allowed to be super aggressive and had 35 to 1 leverage to back their deals. Now that leverage is going to be less than 10 to 1. The talent will exit via the elevator on Fridays and not return the following Monday.

The good news about the falling oil price is that the monster price cut is like a tax rebate to corporations and consumers alike. The bad news is that politicians will take credit for getting inflation under control. It’s all a big joke. That’s how much credibility politicians have today.

As opined a week ago, for traders who like the oil stocks, there is also good news in that as the Crude Oil price drops, there is less incentive for government to subsidize alternative energy programs. President-elect Obama says his key program will do just that – wind, solar, biomass, etc. We’ll have to see how much he does about that. If he doesn’t back up his elegant words, then he’ll just be like the smooth-talking Dandy’s who preceded him.

In any event, a stable oil price in a range of $60 to $75 is sufficient for oil companies to plan ahead, and make good profits during the interim.

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

Interactive Chart of Weekly Crude Oil:

Interactive Chart of Daily Crude Oil:

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Gold & Precious Metals Review

$GOLD gained +8.30/oz this week, which is surprising because the $USD was up a strong +0.93% W/W. $GOLD closed at 742.50.

(As) I have previously opined, “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 802.50, which will have a 7-handle next week (meaning the 50-day MA will be in the 700’s). The 200d MA is 881.35.

There was hope the G-20 leaders on Friday might actually spend some money rather than drown us in words. $GOLD lifted +$37.50/oz on the day. After it hit a spike top, the price started to slide back.

The G-20 meetings ended with nothing in the way of specific programs that would indicate immediate reflation. Perhaps they want to wait to hear from Pres. Obama after Jan. 20 – or at least see what deals he can “talk” his way through Congress in the interim. It could also be a wait-and-see if Paul Volcker is appointed the next Treasury Secretary, which might diminish the prospects for a higher gold price, at least for a couple months until the massive spending programs of the G-20 nations actually start getting implemented.

So, it’s back to watching paint dry. If the $USD rallies from its close of 86.72, I expect downward pressure on $GOLD.

Spot gold chart for the week

Interactive Chart of Weekly Gold EOD Continuous Contract Index:

Interactive Chart of Daily Gold EOD Continuous Contract Index:

Interactive chart of recent trading for the Gold Bullion index.

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Spot silver chart for the week

Interactive daily data

$SILVER dropped --$0.47/oz (-4.75%) to 9.49 W/W. On Friday there was a gain of +$0.69/oz as G-20 talk started to get traction, and the Euro plunged -1.26% on the day.

For $SILVER, the 50d MA is now 10.86, and the 200d MA is 15.62.

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Interactive Chart of Weekly Silver EOD Continuous Contract Index:

Interactive Chart of Daily Silver EOD Continuous Contract Index:

Interactive chart of the Silver Bullion index.

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$PLAT (-$6.90/oz -0.81%) closed at 845.10. Still, the close three weeks ago was $47.60/oz lower. The price on Friday did gain +$32.00/oz on the day (+3.95%).

The 50-day MA dropped all the way from 1047.19 to 989.45, and the 200-day MA from 1711.39 to 1690.15.

Spot platinum chart for the week

Interactive Chart of Weekly Platinum EOD Continuous Contract Index:

Interactive Chart of Daily Platinum EOD Continuous Contract Index:

Interactive chart of the Platinum metal index.

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$PALL (-$10.15/oz -4.50%) closed at 215.60.

Still, the three-week gain is +39.45/oz, from 176.15, which is a large move.

The 50-day MA is 218.62 and the 200-day MA is 382.18, which is bearish, but clearly improving. The current price seems stuck right under the 50-day MA, which is sliding. Watch for a possible break-through.

Spot palladium chart for the week

Interactive Chart of Weekly Palladium EOD Continuous Contract Index:

Interactive Chart of Daily Palladium EOD Continuous Contract Index:

Interactive chart of the Palladium metal index.

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$COPPER gained +$1.80 +1.06% W/W to 171.50. Seven weeks ago it was 307.45.

The 50-day MA for $COPPER is 243.73 and the 200-day MA is 337.58.

Interactive Chart of Weekly Copper EOD Continuous Contract Index:

Interactive Chart of Daily Copper EOD Continuous Contract Index:

Interactive chart of the Copper metal index.

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Table 12: Senior gold equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
AEM	33.06	-0.19	-0.57%	2.19%	19.57%	-7.45%	-41.51%	-34.66%	-47.85%	-35.45%
GG	21.66	-0.65	-2.91%	-1.32%	16.08%	7.81%	-40.88%	-29.95%	-43.43%	-34.86%
BVN	13.03	-1.55	-10.63%	-2.25%	3.09%	-10.45%	-57.19%	-39.87%	-58.10%	-54.50%
KGC	12.23	-1.26	-9.34%	-2.78%	17.26%	13.77%	-39.31%	-21.40%	-36.76%	-31.29%
NEM	24.23	-1.95	-7.45%	-6.88%	-8.01%	-11.76%	-53.75%	-43.51%	-46.27%	-52.68%
ABX	22.29	-1.06	-4.54%	-6.97%	-1.98%	-5.59%	-51.56%	-33.62%	-40.97%	-47.70%
AU	16.59	-0.80	-4.60%	-7.42%	-9.10%	-10.66%	-63.82%	-39.61%	-56.92%	-64.78%
EGO	4.4800	-0.3100	-6.47%	-8.94%	5.41%	22.74%	-27.74%	-38.55%	-36.54%	-20.57%
HMY	6.240	-0.370	-5.60%	-9.43%	-14.64%	-21.71%	-41.95%	-20.20%	-49.10%	-42.17%
AUY	4.2800	-0.2100	-4.68%	-9.51%	-7.56%	-8.74%	-69.14%	-58.16%	-69.10%	-68.11%
GFI	5.980	-0.280	-4.47%	-10.21%	-10.08%	-7.57%	-61.17%	-34.29%	-55.77%	-67.46%
LIHR	11.96	-1.44	-10.75%	-15.18%	-6.42%	-6.05%	-63.94%	-38.29%	-56.16%	-67.35%

This week (compared to a week ago), the results were $XAU -5.82% (+5.06%); GDX -5.86% (+0.46%); and XGD -3.20% (+4.95%). So it seems that what was gained a week ago was given back this week.

This week, I published a blog on Goldcorp (GG), which is my preferred goldminer. The report was a Team Cara effort, and was roundly applauded. Every month I will try to publish a CTAB Briefing in the hopes that you can learn how I professionally manage trading accounts. Case studies will help you learn.

Subsequently, Pierre Brodeur, one of the quant/technical analysts wrote me to say:

Although Goldcorp’s rating (my rating) has not changed on GG with respect to the S&P 1200 and the global materials industry, I think you should be aware that from a Canadian perspective with respect to the TSX Composite and the Global Gold industry, Goldcorp has moved to a rating of 9.5 out of 10.

On an absolute basis, Goldcorp broke out of its bearish resistance line (which was at CDN$27) Friday by trading above CDN$28.00 during the day and then closed at CDN$26.21. My preferred strategy on a bearish line breakout is to buy on a confirmation signal which should come from a double top (CDN$28) breakout at CDN$29 which would give the stock a lot of blue sky or a price objective of $CDN36 actually.

The implication is that it should only be a question of time before the view from a global perspective (CTAB looks at global benchmarks) catches up to the Canadian view. In my mind, this information reduces the risks even more on purchasing GG now regardless of what the charts say from a global perspective, if you believe the Canadian perspective leads on commodity related stocks, which is what I believe…!

I listen to all the members on my team before I make decisions, but especially Pierre, who is the consummate professional. Until he retired a year or to ago, he had responsibility for a very large team of quants at the huge Desjardins group:

About Desjardins

We are more than a bank. We are the largest financial cooperative in Canada. We offer complete banking services to our 5.8 million members and clients. We use the strength of cooperation not only to provide our members and clients with a wide range of banking services, but also to contribute to the economic and social development of their communities.

I have somewhat less than a million clients (smiley goes here), but I’m working on it. The report I issued on Goldcorp (GG) was well received. Our team is a good one.

This week, GG lost -1.3%, but the big losers were LIHR -15.2% and GFI -10.2%. AEM was up 2.2%. Oldtimers will remember Paul Penna, who was the first Canadian stock promoter who effectively built a huge US retail sponsorship, which he did for his Agnico-Eagle stock. The regulators always had to watch Paul, but he was ahead of his time. Starting in 1972, he paved the way for others to follow with their Cdn gold explorers and developers mining Yankee dollars. Quite a character was Paul. I never met him, but I usually tried to sit in the front row of his presentations so I could study the man.

Like Murray Pezim, who I did know well, the mould was broken with those guys. They are both enshrined in the Canadian Mining Hall of Fame. Come to think of it, I do know a great many of this Hall of Fame.

I can hear the Wall Street crowd right about now mumbling that Cara has friends in low places, but let me tell you without the Pezims and the Pennas mine finance would never have been raised, and Toronto would never have become the risk finance capital for global mining companies.

I got hooked as student-in-accounts with Thorne Gunn Helliwell & Christenson (much later became KPMG Canada) when I was sent to audit the books on Bay Street of mining promoter Murray Watts. I must have ticked and bopped my way through 50 company ledgers. But I loved hearing the stories. Google Murray Watts mining to see the history.

When I was 12 or 13, my Dad’s best friend was Carl Ashenhurst, who was at the time chief accountant at Noranda Mines. He was an encyclopedia of Canadian mining. I used to listen for hours as he and my Dad talked about the market. I got hooked. “Mining Explained” was my playbook when I was 15. Mining got into my blood.

I have now been underground in mines from Eastern Canada to the Arctic Circle at Great Bear Lake to Colorado. I even got caught in an underground shaft in dynamite blasting along with the President of a small silver mine about 90 miles east of Yellowknife taken over from the Hunt Brothers. I was also with the Merrill Lynch mining analyst Jim Perone, at the time. For a moment, I thought we were all dead.

I’ll never finish this WIR if I keep thinking about mining.

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To watch the moves in precious metal miners, you will have to monitor the individual stock charts, preferably in real-time, as follows:

NEM ABX AU GFI GG HMY AUY KGC BVN
Interactive Daily data
Interactive Weekly data

MDG LIHRY AEM BGO IAG EGO RGLD GOLD CDE GRS
Interactive Daily data
Interactive Weekly data

SSRI SIL NG KRY UXG GRZ TSE_HRG TSE_GUY TSE_AGI
Interactive Daily data
Interactive Weekly data

NXG GSS MNG DROOY MFN RNO RANGY MRB CLG
Interactive Daily data
Interactive Weekly data

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Here are the key Silver miners and the SLV ETF:

SLV SIL CDE HL PAAS SSRI SLW MGN

Interactive Daily data
Interactive Weekly data

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Here are the Weekly and Daily Data charts of the indexes:

Weekly U.S. Goldminers Index:

Interactive Chart of Weekly U.S. Goldminers Index:

Interactive Chart of Daily U.S. Goldminers Index:

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The U.S. goldminer share trust ETF trades under the ticker symbol GDX.

Here are the U.S. Goldminer ETF (GDX) index Weekly and Daily data charts:

GDX Weekly data:

GDX Daily data:

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The Toronto Exchange-listed goldminer iUnits S&P/TSX Capped Gold Index ETF trades under the ticker symbol TSE:XGD. Yes, just like GDX on the AMEX, you can trade XGD on Toronto.

Here are the Weekly and Daily data charts for the TSX Goldshares (XGD) index:

Interactive Chart of XGD Weekly data:

Interactive Chart of XGD Daily data:

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Forex Review

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 gained +0.93% W/W to close at 86.72.

The 50-day MA for the $USD is 82.06 and the 200-day MA is 75.75.

I believe that, in time, the net effect of global reflation, pushed mostly by Washington, ought to weaken the $USD, possibly heading it for a test of the all-time low of 70.70… If so; precious metal prices will ultimately soar. I’m glad to see Don Coxe is in agreement (Barron’s Nov 10).

Interactive Chart of Weekly U.S. Dollar Index:

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

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The Euro ($XEU) dropped -0.89% this week to close at 126.04. There was a huge loss (-1.26%) on Friday.

The Euro 50day MA is 1.3534 and the 200day MA is 1.4931.

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

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

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The Pound plunged -5.80% this week to close at 1.4739.

The 50-day MA and 200-day MA are at 1.7006 and 1.8953.

Weekly British Pound Index:

Daily British Pound Index:

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Weekly Japanese Yen Index:

The Japanese Yen ($XJY) gained +1.20% this week to close at 103.01.

The Yen’s 50-day MA is 98.43 and the 200-day MA is 95.76.

Daily Japanese Yen Index:

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The Loonie (Cdn Dollar) plunged -3.88% W/W to close at 80.83.

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 88.03 and 95.88, respectively.

Weekly Canadian Dollar Index:

Daily Canadian Dollar Index:

Here is the China Yuan (CNY) chart.

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International Equity Markets Review

Equity market prices this week plummeted.

The global panic of a couple weeks back regained momentum.

Look at the volatility over the past three weeks:

UK FTSE soared from 3883.4 to 4377.3, then dropped to 4365.0 and now 4233.0

German DAX soared from 4295.7 to 4988.0, then dropped to 4938.5 and now 4710.2

Aussie All-Ords lifted again from 3831.6 to 3982.7 to 4006.6 and now 3726.0

HK Hang Seng lifted again from 12618.4 to 13968.7 to 14243.4 and now 13542.7

India’s BSE 30 lifted again from 8701.1 to 9788.1 to 9964.3 and now 9385.4

Japan’s Nikkei 225 lifted again from 7649.1 to 8577.0 to 8853.0 and now 8462.4

Brazil’s Bovespa soared from 31481.6 to 37256.8 before dropping back to 36665.1 and now 35777.2.

Do you recall this from the last WIR: “A week ago in this space I opined, …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 these markets lift more on higher volume. Until then, I remain a cautious Bull. Continue to raise stops…. No change. Markets are confused. The retail sales data is horrid, and traders are waiting to see how President-elect Obama is going to play his cards.”

This picture is looking bad to the long-term oriented trader. The day traders are effectively killing them.

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

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

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Here is the latest session data for the exchanges of the Americas.

Here is the latest chart for the Brazilian Bovespa stock exchange in Sao Paulo.

Brazilian Bovespa stockcharts.com chart

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

Toronto 300 stockcharts.com chart

Toronto CDNX stockcharts.com chart

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Europe

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

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

FTSE 100 stockcharts.com chart

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Here is the latest session data for the German DAX.

DAX stockcharts.com chart

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

CAC 40 stockcharts.com chart

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

Italian Milan Index stockcharts.com chart

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

Swiss Market Index stockcharts.com chart

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Asia-Pacific

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

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

Tokyo Nikkei 225 Index stockcharts.com chart

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Here is the latest chart for the Singapore index .

Singapore Straits Times Index stockcharts.com chart

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Here is the latest chart for the Shanghai Composite index .

Shanghai Composite Index stockcharts.com chart

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

Hong Kong Hang Seng stockcharts.com chart

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

Mumbai BSE 30 Sensex Index stockcharts.com chart

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

Sydney All Ordinaries Index stockcharts.com chart

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Russia (RTS) stockcharts.com chart

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

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
GXC	39.00	-3.50	-8.24%	-4.88%	-1.91%	-7.50%	-56.13%	-38.35%	-51.63%	-59.69%
EWJ	8.600	-0.490	-5.39%	-4.97%	-4.44%	-1.60%	-35.00%	-24.23%	-35.39%	-37.13%
IFN	18.45	-0.87	-4.50%	-6.91%	-9.34%	-3.05%	-70.19%	-55.04%	-61.48%	-68.91%
EWQ	19.29	-1.31	-6.36%	-6.95%	-5.90%	-7.44%	-49.16%	-36.90%	-47.71%	-49.99%
EWG	16.71	-1.20	-6.70%	-7.37%	-9.58%	-9.72%	-52.78%	-39.59%	-49.68%	-52.64%
EWC	17.53	-0.83	-4.52%	-8.79%	-8.60%	-8.08%	-45.90%	-40.76%	-48.83%	-47.29%
EWZ	34.55	-2.69	-7.22%	-9.13%	-8.26%	-7.94%	-57.32%	-52.16%	-63.34%	-58.80%
EWU	11.73	-0.66	-5.33%	-10.59%	-12.20%	-11.07%	-50.88%	-38.87%	-48.60%	-54.18%
EWH	9.560	-0.950	-9.04%	-13.17%	-8.25%	-11.56%	-56.13%	-41.60%	-51.05%	-57.70%
EWA	13.36	-1.16	-7.99%	-14.08%	-10.87%	-11.52%	-53.58%	-42.39%	-54.60%	-58.57%
RSX	13.29	-1.11	-7.71%	-26.29%	-29.68%	-18.47%	-74.71%	-68.45%	-76.50%	-73.11%

The country market ETFs were down between -5% (China and Japan) and over -26% for Russia. It was a bad week overall. The losses on Friday were astounding. Selling these ETF’s on Friday will carry over to their domestic markets on Monday.

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Japanese equity market ETF: EWJ

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

Interactive EWJ Monthly data:

Interactive EWJ Weekly data:

Interactive EWJ Daily data:

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U.K. equity market ETF

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

Interactive EWU Monthly data:

Interactive EWU Weekly data:

Interactive EWU Daily data:

EWU Daily data:

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Canada’s equity market

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

Interactive EWC Monthly data:

Interactive EWC Weekly data:

Interactive EWC Daily data:

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US Equity Markets Review

Had you left your market monitor unattended at 3:00pm ET on Friday, and returned at 4:00pm, you would hardly believe your eyes. But, by extrapolating the US equity market to the rest of the world (about $44 trillion), you would have seen that $2 trillion in global market capital was wiped out in a single hour.

In that closing hour, the DJIA, S&P 500 and NASDAQ Composite plunged -4.71%, -4.77% and -4.50% respectively.

By the end of the day, the DJIA (-337.94 -3.82% to 8497.31), the S&P 500 (-38.00 -4.17% to 873.29) and NASDAQ Composite (-79.85 -5.00% to 1516.85) were down sharply. Yet at 3:00pm these markets had been higher!

The DJIA (-5.00% W/W to 8497.31), S&P 500 (-6.20% to 873.29), NASDAQ Composite (-7.92% to 1516.85), and Russell 2000 small cap index (-9.74% to 456.52) were all down sharply Week Over Week, mostly caused by the last hour losses on Friday.

The only gainers in the DJIA this week were: T +2.41%, and MCD +1.19%.

Nobody can tell you from hour to hour where this market is going. It’s dog eat dog out there. Best your dog be a pit bull.

A dozen NASDAQ stocks to watch.

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

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

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

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Table 14: Dow 30 List

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
T	27.65	-1.02	-3.56%	2.41%	3.29%	9.33%	-32.56%	-11.15%	-30.19%	-29.72%
MCD	56.13	-0.12	-0.21%	1.19%	-3.11%	4.33%	-3.39%	-11.75%	-7.13%	-1.01%
VZ	30.00	-1.14	-3.66%	-0.17%	1.11%	10.33%	-30.57%	-13.52%	-22.98%	-31.07%
JNJ	60.05	-2.85	-4.53%	-0.28%	-2.10%	-4.15%	-8.89%	-15.65%	-10.12%	-10.23%
XOM	73.68	-1.73	-2.29%	-0.37%	-0.59%	8.29%	-21.21%	-4.87%	-18.05%	-14.63%
CVX	72.68	-3.03	-4.00%	-1.06%	-2.57%	16.57%	-22.23%	-16.05%	-25.62%	-15.64%
PG	63.11	-1.94	-2.98%	-2.14%	-2.22%	2.22%	-12.72%	-9.47%	-3.65%	-11.78%
HD	20.54	-1.69	-7.60%	-2.47%	-12.93%	1.63%	-21.33%	-24.40%	-29.46%	-29.25%
KO	45.02	-1.26	-2.72%	-2.66%	2.18%	1.86%	-26.31%	-18.18%	-20.37%	-26.63%
MMM	63.06	-1.37	-2.13%	-2.73%	-1.93%	11.63%	-23.76%	-13.66%	-18.87%	-21.38%
UTX	50.23	-2.05	-3.92%	-3.05%	-8.61%	-0.95%	-33.21%	-24.03%	-33.17%	-32.96%
WMT	52.71	-2.22	-4.04%	-3.09%	-5.55%	-1.97%	12.39%	-9.28%	-8.25%	13.33%
AA	10.84	-0.36	-3.21%	-3.13%	-5.74%	-8.14%	-70.00%	-65.98%	-74.19%	-70.59%
PFE	16.28	-0.45	-2.69%	-3.44%	-8.07%	-3.73%	-28.94%	-17.69%	-18.84%	-31.05%
KFT	27.44	-0.67	-2.38%	-3.69%	-5.96%	-4.12%	-14.38%	-16.06%	-13.47%	-16.80%
CAT	36.96	-2.45	-6.22%	-3.88%	-3.25%	-6.00%	-47.67%	-47.42%	-55.34%	-47.22%
MRK	27.33	-1.20	-4.21%	-5.50%	-11.70%	-4.11%	-52.36%	-23.96%	-31.38%	-52.30%
MSFT	20.06	-1.19	-5.60%	-6.70%	-10.17%	-16.17%	-43.04%	-28.13%	-32.98%	-40.88%
IBM	80.33	-3.88	-4.61%	-6.89%	-13.60%	-11.51%	-23.27%	-36.72%	-37.01%	-22.34%
JPM	34.47	-2.72	-7.31%	-8.69%	-16.44%	-12.36%	-18.26%	-8.83%	-24.92%	-23.65%
INTC	13.32	-1.11	-7.69%	-8.95%	-16.91%	-14.06%	-47.46%	-45.32%	-44.13%	-48.47%
DIS	21.08	-0.57	-2.63%	-9.76%	-18.64%	-14.83%	-33.79%	-34.80%	-39.43%	-33.84%
DD	27.43	-1.86	-6.35%	-9.95%	-14.39%	-18.77%	-37.29%	-39.37%	-44.68%	-40.25%
BA	41.04	-2.12	-4.91%	-11.89%	-21.71%	-7.88%	-52.62%	-36.64%	-52.11%	-55.77%
HPQ	30.46	-1.25	-3.94%	-12.07%	-20.43%	-23.29%	-38.85%	-33.05%	-33.26%	-37.93%
GE	16.02	-0.84	-4.98%	-15.06%	-17.89%	-18.39%	-56.42%	-45.73%	-50.72%	-58.93%
C	9.520	0.070	0.74%	-19.46%	-30.26%	-36.02%	-67.08%	-47.35%	-59.05%	-73.81%
BAC	16.42	-0.68	-3.98%	-19.86%	-32.06%	-29.35%	-59.52%	-45.59%	-55.38%	-64.09%
AXP	19.99	-0.79	-3.80%	-21.02%	-27.31%	-14.32%	-60.83%	-47.67%	-59.62%	-66.18%
GM	3.0100	0.0600	2.03%	-30.96%	-48.01%	-53.19%	-87.67%	-73.48%	-85.09%	-90.35%

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)

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Value Line Report(s) this past Friday

This week, Value Line reported on two DJIA components, one of which is a Cara 100 company, and until three years ago so was the other: Disney (DIS) and 3M (MMM).

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Disney [GICS 25, Dow 30, Cara 100]
(DIS: Google Finance file)
(DIS: Yahoo Finance file)
(DIS: StockChart chart)
(DIS: Billcara2 chart)
(DIS: ADVFN Financial Data)
(DIS: Value Line Report Nov. 14: next one is due Feb. 13)

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3M Company [GICS 20, Dow 30, Cara US 100 June 25-06]
(MMM: Google Finance file)
(MMM: Yahoo Finance file)
(MMM: StockChart chart)
(MMM: Billcara2 chart)
(MMM: ADVFN Financial Data)
(MMM: Value Line Report Nov. 14: next one is due Feb. 13)

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I don’t have much to say about these two companies. The hour is late.

With 3M, I note the Balance Sheet is stronger than it’s been for a few years. The dividend is well protected. But the earnings and cash flow per share are sliding and will continue to fall through the recession. They ought to stay week until sometime in 2010. So I’d avoid it for now.

Still, MMM is down -18.9% over 6 months, so the stock should recover a bit on broad market rallies.

The company could be a corporate acquisitor as it holds $3 billion in cash.

I noted that the Value Line report was done when the stock price was $65.61, and the close a few days later was $63.06.

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Re Disney, the Value Line report was done at $26.02 and the DIS closed the week at 21.08, so the numbers are so out of whack, the analysis doesn’t make sense.

The corporate balance sheet is just so-so. It’s rated A, but doesn’t look that strong. I don’t care for the deficit working capital ratio in tough economic times. A severe recession could hurt the stock further.

But I do like the management, and will keep the company on the Cara 100 list.

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

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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)

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American Express [GICS 40, Dow 30]
(AXP: Google Finance file)
(AXP: Yahoo Finance file)
(AXP: StockChart chart)
(AXP: Billcara2 chart)
(AXP: ADVFN Financial Data)
(AXP: Value Line Report Aug. 22: next one is due Nov. 21)

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Bank of America [GICS 40, Dow 30]
(BAC: Google Finance file)
(BAC: Yahoo Finance file)
(BAC: StockChart chart)
(BAC: Billcara2 chart)
(BAC: ADVFN Financial Data)
(BAC: Value Line Report Aug. 22: next one is due Nov. 21)

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Citigroup [GICS 40, Dow 30]
(C: Google Finance file)
(C: Yahoo Finance file)
(C: StockChart chart)
(C: Billcara2 chart)
(C: ADVFN Financial Data)
(C: Value Line Report Aug. 22: next one is due Nov. 21)

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JP Morgan [GICS 40, Dow 30]
(JPM: Google Finance file)
(JPM: Yahoo Finance file)
(JPM: StockChart chart)
(JPM: Billcara2 chart)
(JPM: ADVFN Financial Data)
(JPM: Value Line Report Aug. 22: next one is due Nov. 21)

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Microsoft [GICS 45, Dow 30]
(MSFT: Google Finance file)
(MSFT: Yahoo Finance file)
(MSFT: StockChart chart)
(MSFT: Billcara2 chart)
(MSFT: ADVFN Financial Data)
(MSFT: Value Line Report Aug. 22: next one is due Nov. 21)

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General Motors [GICS 25, Dow 30]
(GM: Google Finance file)
(GM: Yahoo Finance file)
(GM: StockChart chart)
(GM: Billcara2 chart)
(GM: ADVFN Financial Data)
(GM: Value Line Report Aug. 29: next one is due Nov. 28)

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Johnson & Johnson [GICS 35, Dow 30, Cara 100]
(JNJ: Google Finance file)
(JNJ: Yahoo Finance fle)
(JNJ: StockChart chart)
(JNJ: Billcara2 chart)
(JNJ: ADVFN Financial Data)
(JNJ: Value Line Report Aug. 29: next one is due Nov. 28)

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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)

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

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

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

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

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

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Procter & Gamble Co. [GICS 30, Dow 30, Cara 100]
(PG: Google Finance file)
(PG: Yahoo Finance file)
(PG: StockChart chart)
(PG: Billcara2 chart)
(PG: ADVFN Financial Data)
(PG: Value Line Report Oct. 3: next one is due Jan. 2)

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Home Depot [GICS 25, Dow 30]
(HD: Google Finance file)
(HD: Yahoo Finance file)
(HD: StockChart chart)
(HD: Billcara2 chart)
(HD: ADVFN Financial Data)
(HD: Value Line Report Oct. 3: next one is due Jan. 2)

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General Electric [GICS 20, Dow 30, Cara 100]
(GE: Google Finance file)
(GE: Yahoo Finance file)
(GE: StockChart chart)
(GE: Billcara2 chart)
(GE: ADVFN Financial Data)
(GE: Value Line Report Oct. 10: next one is due Jan. 9)

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Hewlett-Packard [GICS 45, Dow 30]
(HPQ: Google Finance file)
(HPQ: Yahoo Finance file)
(HPQ: StockChart chart)
(HPQ: Billcara2 chart)
(HPQ: ADVFN Financial Data)
(HPQ: Value Line Report Oct. 10: next one is due Jan. 9)

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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)

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Intel [GICS 45, Dow 30, Cara 100]
(INTC: Google Finance file)
(INTC: Yahoo Finance file)
(INTC: StockChart chart)
(INTC: Billcara2 chart)
(INTC: ADVFN Financial Data)
(INTC: Value Line Report 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)

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Dupont [GICS 15, Dow 30]
(DD: Google Finance file)
(DD: Yahoo Finance file)
(DD: StockChart chart)
(DD: Billcara2 chart)
(DD: ADVFN Financial Data)
(DD: Value Line Report Oct. 17: next one is due Jan. 16)

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Merck [GICS 35, Dow 30]
(MRK: Google Finance file)
(MRK: Yahoo Finance file)
(MRK: StockChart chart)
(MRK: Billcara2 chart)
(MRK: ADVFN Financial Data)
(MRK: Value Line Report Oct. 17: next one is due Jan. 16)

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Pfizer [GICS 35, Dow 30]
(PFE: Google Finance file)
(PFE: Yahoo Finance file)
(PFE: StockChart chart)
(PFE: Billcara2 chart)
(PFE: ADVFN Financial Data)
(PFE: Value Line Report Oct. 17: next one is due Jan. 16)

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United Technologies [GICS 20, Dow 30, Cara 100]
(UTX: Google Finance file)
(UTX: Yahoo Finance file)
(UTX: StockChart chart)
(UTX: Billcara2 chart)
(UTX: ADVFN Financial Data)
(UTX: Value Line Report Oct 24: next one is due Jan. 23)

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Caterpillar [GICS 20, Dow 30]
(CAT: Google Finance file)
(CAT: Yahoo Finance file)
(CAT: StockChart chart)
(CAT: Billcara2 chart)
(CAT: ADVFN Financial Data)
(CAT: Value Line Report Oct 24: next one is due Jan. 23)

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 Oct. 31: next one is due Jan. 30)

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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 Oct. 31: next one is due Jan. 30)

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Wal-Mart [GICS 30, Dow 30, Cara 100]
(WMT: Google Finance file)
(WMT: Yahoo Finance file)
(WMT: StockChart chart)
(WMT: Billcara2 chart)
(WMT: ADVFN Financial Data)
(WMT: Value Line Report Nov. 7: next one is due Feb. 6)

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Disney [GICS 25, Dow 30, Cara 100]
(DIS: Google Finance file)
(DIS: Yahoo Finance file)
(DIS: StockChart chart)
(DIS: Billcara2 chart)
(DIS: ADVFN Financial Data)
(DIS: Value Line Report Nov. 14: next one is due Feb. 13)

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3M Company [GICS 20, Dow 30, Cara US 100 June 25-06]
(MMM: Google Finance file)
(MMM: Yahoo Finance file)
(MMM: StockChart chart)
(MMM: Billcara2 chart)
(MMM: ADVFN Financial Data)
(MMM: Value Line Report Nov. 14: next one is due Feb. 13)

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Wrap-up:

On his path to the White House, the keynote speech that President-elect Obama frequently gave, that we all know, is centered in the following words:

"Now even as we speak, there are those who are preparing to divide us. Well, I say to them tonight, there is not a liberal America and a conservative America -- there is the United States of America. There is not a black America and a white America and Latino America and Asian America -- there's the United States of America. ...We are one people, all of us pledging allegiance to the stars and stripes, all of us defending the United States of America."

We should all consider these very important words in the context of those spoken in court by Michael Richards (Kramer on the Seinfeld TV show) after being accused of making racial comments in his comedy act.

(To paraphrase Richards)
Have you ever wondered about why Whites are racists, and no other
race is?

How many are actually paying attention to this? There are African
Americans, Mexican Americans, Asian Americans, Arab Americans,
etc. And then there are just Americans.

You pass me on the street and sneer in my direction. You also call
me 'White boy,' 'Cracker,' 'Honkey,' 'Whitey,' 'Caveman' ... and
that's OK.

But when I call you, Nigger, Kike, Towel head, Sand-nigger, Camel
Jockey, Beaner, Gook, or Chink ... You call me a racist.

You say that whites commit a lot of violence against you ... so why
are the ghettos the most dangerous places to live?

You have the United Negro College Fund. You have Martin Luther
King Day. You have Black History Month. You have Cesar Chavez
Day. You have Yom Hashoah. You have Ma'uled Al-Nabi. You have
the NAACP. You have BET ...

If we had WET (White Entertainment Television), we'd be racists.
If we had a White Pride Day, you would call us racists. If we had
White History Month, we'd be racists. If we had any organization
for only 20 whites to 'advance' OUR lives, we'd be racists.

We have an Hispanic Chamber of Commerce, a Black Chamber of
Commerce, and then we just have the plain Chamber of Commerce.
Wonder who pays for that??

A white woman could not be in the Miss Black American pageant,
but any color can be in the Miss America pageant.

If we had a college fund that only gave white students scholarships
...You know we'd be racists.

There are over 60 openly proclaimed Black Colleges in the US ..
Yet if there were 'White colleges' That would be a racist college.

In the Million Man March, you believed that you were marching
for your race and rights.

If we marched for our race and rights, you would call us racists.
You are proud to be black, brown, yellow and orange,...
and you're not afraid to announce it.

But when we announce our white pride, you call us racists.

You rob us, carjack us, and shoot at us. But, when a white police
officer shoots a black gang member or beats up a black drug-
dealer running from the law and posing a threat to society, you
call him a racist.

Why is it that only whites can be racists??

Admittedly this is strong talk from Michael Richards, but is he wrong to say it any more than we should label as brilliant the powerful rhetoric of President-elect Barack Obama? Maybe Obama should have been debating Michael Richards?

Nobody who has known me has ever called me a racist. In fact, they call me the salt of the earth because I am grounded in reality. I detest political correctness and deceitful illusion, especially when the latter impacts capital markets. To the extent I can, I deal in facts. For that, I have been called eccentric. But, as long as I can work for social equity, I don’t care what I’m called. I want to push people to think.

Barack Obama campaigned on the need for change. We have his words committed to memory. I think time will tell whether he's good for his word. I sure hope so because there is absolutely no place in our society for racism or discrimination of any kind.

Have a good weekend. The day here Saturday in Nassau Bahamas was a sunny 82 degrees, with a very light breeze. As I write these words, I hear the distinctive clank of the scuba tanks being loaded on the Sandals dive boat a hundred yards away. Sunday turned very breezy and not so sunny. In between Saturday and Sunday, I enjoyed the Country & Western themed BBQ at the Nassau Yacht Club. Nice people.

Life is good, but what makes it particularly so is that this country, The Bahamas, is 85% black, but 100% racially integrated and proud of it. Pride is the first word that should come to mind when you are thinking of the people of The Bahamas.

From April 3 to the 13th, I am looking forward to hosting Cara Bahamas 2009 at the Atlantis Resort. The program is being put together over the next two weeks. The event will be co-sponsored by Cara Trading Advisors (Bahamas) Ltd and Bank of Bahamas International.

We will be reaching out to the world -- anybody in the Cara Community (including the lurkers), all traders, financial and legal professionals, venture investors, students-of-the-market, public company CEOs, and your families -- to come see that it just might be Better in The Bahamas. We have many special events planned around the timing of the Christian and Jewish holidays. It's a time when markets are typically quiet and the weather here spectacular.

Jim Watt is the event coordinator. The program will be published here in the blog before the end of November, but attendees will need to register with us before booking local hotel arrangements. If you need an earlier answer, please contact JimWatt [at] CaraTrading.com, and I will get a system generated cc. The event will need to be 80% to 90% booked by the end of December in order for us to finalize the local arrangements.

All I can say is that if you think I put a lot of effort into this blog, and I do, you haven't seen 'nuthin yet. I will try my best to make this a spectacular vacation and educational experience.

And, that’s all she wrote… Good night.

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