I warned about this problem more than two years ago. I was reminded of that this week as the world’s three biggest CDS players crashed and burned. Citi (C -60.4%), JPMorgan (JPM -34.1%), and Bank of America (BAC -30.2%) all plunged in price.

The Big 3 banks are the link to consumer borrowing. Yes, I am also focused on the retailers – as I stated a week ago -- because that’s the link to consumer spending.

Borrow and spend. Isn’t that what America is about? Frankly, isn’t that the universal culture today?

Speaking of the Big 3 Banks, you will see that I have been saying that we do not face an economic crisis today; rather, we face a potential economic crisis. We are, however, directly staring at the results of a real financial crisis within the three largest banks in the US. Their share prices this week tell you that.

The CDS problem, by the way, is one you are not going to hear much about because (i) the world’s biggest bankers don’t want it discussed, (ii) it was a type of Ponzi scheme to begin with, and (iii) the whole concept, which was created only ten years ago by JP Morgan and legalized eight years ago, has never been understood, and, intentionally, never been regulated.

The bottom line is that a CDS is an intangible built on the once trustworthy reputation of bankers as a party to a financial transaction that would always make good on their promises. As long as bankers were lenders and agents, all was fine. But, as principals, unfortunately, many bankers were greedy and some were liars.

Politicians, who now have to clean up this banker’s mess, have no option. They will tell you that it’s a matter of reflate or sink into Depression.

No, no, no. There will be no Depression. You heard it here first. Because of globalization, economic depression is not an option. Reflation, which is the printing of money by borrowing on the credit of our sons and daughters, and their sons and daughters, is the only option.

Even now, late in the year 2008, the term reflation is just beginning to get traction. When I first referred to it here, people thought I meant inflation.

For the record, on the subject of reflation, the CDS problem, and the Big 3 banks, here is what I wrote on October 16:

Today the Swiss government injected $5 billion into UBS and the Swiss National Bank bought almost $55 billion in UBS’ toxic assets. A couple days ago, the UK government did the same for HBOS and Royal Bank of Scotland, while Germany did the same for Deutsche Bank. In the US, the Treasury and Fed have arranged a quarter trillion dollars in support for a select group of America’s biggest banks.

Why the panic bail-outs? The answer lies in the $55 trillion dollar Credit Default Swap market that is unraveling day to day. Banks and central banks are totally focused on the breaks to the credit ring when up to $400 billion of Lehman Brothers CDS obligations come due in the next week, with nobody at the teller window to pay up. Lehman Brothers is, as you know, bankrupt.

What this means is that unspecified banks holding the Lehman CDS derivatives will get nothing, and then they will be unable to meet their obligations to other banks. At stake are the Money Market Funds on deposit in these banks. The entire system could collapse, so banks do not want to be in the position of lending to one another. The credit market has failed.

Economists like Roubini and Feldstein and so many others have no clue what they are doing in setting fires here. If you listen carefully to their rants of economic forces coming to bear to form a perfect storm that can only result in another Great Depression, you will not hear an iota of news. We heard all their theories – the precise same ones – three months ago and more, back when the credit ring had not broken because Lehman Brothers had not yet failed, and equity markets were much stronger.

So, what these economists are doing, at this point in time, is almost criminal.

Have you failed to notice that Bloomberg TV is not interviewing the leading bankers who do know what is going down within their walls today. These bankers do not want to talk like the former CEO of now dead Lehman Brothers, Dick Fuld, who told the world that his bank was strong when just a couple days later it filed bankruptcy.

Fuld didn’t know how quickly the CDS failures would take down his bank, and now his peers on Wall Street are keeping their mouths shut. Bloomberg reporters are missing the story. But think about it: how is it that finance ministers and central bankers can together inject over $1 trillion into banks in the past week and yet have these few major banks still not lend to one another and still have their stocks teeter on collapse?

This is not an economic story; it’s a financial story that is centered in the viability of the largest banks of the world. These banks are calling loans of hedge fund clients and selling holdings like oil and metal futures. Risk taking has died, and these banks are responsible.

Now, what to do? As I continue to say, keep your head clear of all that crapola you read and hear from mainstream media. They are merely facilitating Speaker’s Corner for every Tom, Dick & Harry who is touting his book or his high-priced banquet speaking engagements. Watch, instead, the price and volume data series for the three biggest banks in the world that control well over 90% of the CDS market: JPMorgan Chase (JPM), Citigroup (C), and Bank of America (BAC). Several months ago, I listed the extent of their CDS involvement in these pages. Nothing’s changed except Lehman Brothers has failed, and the financial system has moved to the brink of collapse. It will be saved; the only issue is how big will be the burden on future generations.

Watch this chart of the Big 3 players in the CDS market and you will see that Lehman Brothers started to look shaky at the start of May, which caused a plunge in the share prices of the Big 3 until Lehman was forced to declare bankruptcy and Henry Paulson needed to appeal to Congress and the G-7 for emergency help. The fact the crisis was sold to the public as an economic issue and not a crisis and bail-out of the banks was another criminal act. These people must think they control all media, but the truth in time comes out.

Following the start of the bail-outs in July the share prices of the Big 3 banks have been volatile, but side-tracking, while other key non-bank stocks have been trashed as no-nothing media Talking Heads ran their mouths. The result is that the pensions and other holdings of Mom & Pop have been hammered beyond all comprehension, and I sit among you saying keep your head about you, there is a turn at the cycle bottom and a new Bull is being born from the injection of mega-trillions from all governments and central banks.

This crisis will soon be over – but first the bankers must show us they have survived the next wave of CDS obligations coming due this week and next. The answer will be in the share prices of JPM, C and BAC. Don’t watch anything else for the answer to how this crisis will be played out this month. Here is the chart again.

I think it is the best judgment at this point in time to wait until the share prices of these banks show a rebound. Then jump on board the equity market rocket. There will be another lift-off, and there are many stocks – I have listed over 100 – that will be passengers on what will be seen as another moon-shot. One of these events will result in the new Bull market being as obvious to you all as it is to me today.

The weather here in Nassau is rather nice, although a bit breezy. The few tourists are enjoying themselves -- wedding parties mostly. A year or so from now, there will be additions to these new families, and life will go on.

Have a good day.

You know, the world is full of smart people being misled by even smarter people. Full stop. That’s the reason why the financial world is in trouble today.

Anyway, I just enjoy myself on the beach in The Bahamas trying to get people to focus. Watch the volume and the prices. Follow the money flow. Look for clues in the trends and cycles.

Let’s look at the state of the equity market today. In the past 12 months, with the exception of General Motors (GM -88.4%), which is an auto manufacturer that can’t sell autos to consumers who have no money or ability to get a bank loan, and Alcoa (AA -76.0%), which is the major supplier of aluminum to GM and the other auto manufacturers, the three biggest losers in the DJIA index are the Big 3 Banks: C -87.7%, BAC -72.8% and JPM -44.2%. That says it all for the week and for the year.

In any case, today’s WIR includes the Value Line analysis of the Big 3 US Banks as well as American Express and Microsoft (although the AIG report was dropped from the calendar), which many say are all banks too.

That’s the trouble these days --- everybody is a bank or wants to be a bank because banks hold the unfair advantage, and when they screw things up, they have the US taxpayer to bail them out. I saw this problem coming 20 years ago so I incorporated myself as William Cara Investment Bancorp Ltd and got regulated as a Limited Market Dealer before people in the industry saw I had slipped under the radar. “Are you really a bank?” they would ask. But, it took them ten years to start asking that question.

I try to be early.

On April 8 this year, I blogged about the next economic crisis in America, which I opined would be unemployment. The Jobs Report for March showed a rise in jobless from 4.8% to 5.1%. I opined it would grow to a peak of maybe 8.75% in the following 24 months. That raised a lot of eyebrows. Let’s just say I had my skeptics. Well, on Friday this week, the Goldman Sachs research department forecasted a jobless rate of 9.0% by the end of 2009. So, now that a “legitimate” economist has finally come out (almost 8 months later) to tell the truth, I can move on.

Do you recall when I used to publish a table in the blog sidebar about the foreclosures, writing at the time that millions of Americans would be pushed by their bankers out of their homes onto the streets? There was a reaction to that too. But I no longer post these things because, well, why tell you something you already know. My job is to give you a heads-up – at a point you can do something about it.

This week I gave you the “Trade of the Generation (TOG)”. I recommended selling bonds, which proceeded to tank, and buy gold/goldminers, which proceeded to soar.

Yes, I must have a lot of readers because on Friday $GOLD (+$43.10 +5.8% to 791.80) and $XAU (+26.1% to 88.80) both had moon-shots. As rayg already reported,

Bill,

Thanks for the TOG call on Thursday. Here are the results:

Gold-up 53.3 to 802.20
PHLX gold/silver-up 26.71%
Gold miners- up 20.28%

One year returns in one day....AMAZING!!!

Tks

Ray
Posted by: rayg at November 22, 2008 9:28 AM

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Bill,

On the bond side:

30 yr T-bond down 4 9/32
10 yr T-bond down 2 2/32

Again, nice call. I know the bull call has had its doubters....but a bottoming of the mkt is a process....it doesn't happen in one day...and isn't realized until AFTER it has happened.
Keep up your fine work here.

Ray
Posted by: rayg at November 22, 2008 9:32 AM

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It was just Wednesday November 12 that I gave you my Report on Goldcorp (GG). When the price was $17.75, I said we went long and with put writes our cost basis was well under $17. Seven trading sessions later, GG closed at $24.22 (+41%). The gain yesterday, after I gave you the TOG was +27.3%. With put and call option strategies, you would have made your three-year Bull market performance target this week.

We all have our crosses to bear. At a wine tasting on Friday evening, I was asked what I do for work. I replied that I am a securities trader. “Why?” the person wanted to know, “the prices are all falling.” Rather than get into a heavy discussion, I politely said that some traders do well at such times, and asked what that person worked at. Why was I not surprised when the answer came back, “I invest too – in real estate. I buy a home, live in it for about four years and sell it. I have done that about seven times and made a lot of money. Never lost money.” “Good luck for the next four years,” I replied.

But, not to be rude, I did say that there are parallels between real estate and securities investment. I pointed out that in both cases we are seeking quality in the asset, value in the purchase price and high cash on cash returns. Why, again, was I not surprised by the rejoinder? “Well I don’t understand the stock market.” I quickly moved on to the Cabernet Sauvignon table where the Napa Valley CA Cakebread Cellars was the closest thing to a house investment I could see.

Capital markets, fine wine and a Caribbean beach lifestyle… now that’s the life.

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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. Please 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 Industrial Production for October. Econoday reported, “Industrial production in October rebounded but from a large downward revision to September. Special factors continue to distort the numbers, however. Overall industrial production in October rose 1.3 percent, following a sharp 3.7 percent drop in September. The October increase exceeded the market forecast for a 0.2 percent rise. However, September was revised down from an initial estimate of a 2.8 percent fall. In the latest month, the manufacturing component made a partial comeback of 0.6 percent after a 3.7 percent fall the month before. Meanwhile, utilities output increased 0.4 percent in October while mining output posted a 6.1 percent boost… The downward revision to September, according to the Fed news release, was primarily due to a larger estimate of the impact of Hurricanes Gustav and Ike on the chemical industry. September also had been depressed by a strike at Boeing. Hurricane and strike effects were mostly reversed in October. The Fed estimates that without these special effects, industrial output fell about 2/3 percent in both September and October… Overall capacity utilization in October rose to 76.4 percent from 75.5 percent in September and compared to the consensus forecast for 76.4 percent… On a year-on-year basis, industrial production in October stood at down 4.1 percent… Once special effects are taken into account, today's report shows the manufacturing sector continuing to decline. With the negative Empire State report earlier this morning, the impact on equities is likely on the downside. One can also expect flight to safety in Treasuries. Today's announcement by Citigroup of 50,000 job cuts will also make markets nervous.”

US Producer Price Inflation Index for October. Econoday reported: “Producer price inflation fell sharply at the headline level on lower energy but the core is remaining stubbornly high due to a few components. The overall PPI dropped 2.8 percent, following a 0.4 percent decline in September. The October decrease was greater than the market forecast for a 1.7 percent decline in the overall PPI. However, the core PPI rate increased 0.4 percent - matching September's gain and far exceeding the consensus forecast for a 0.1 percent rise… Pulling the headline number down was a monthly 12.8 percent plunge in energy costs, following a 2.9 percent decrease in September. Within energy, gasoline plummeted 24.9 percent, home heated oil declined 9.6 percent, natural gas fell, 5.9 percent, and electricity dipped 0.5 percent. Food fell 0.2 percent after a rise of the same amount the month before… The core rate was kept elevated due to strong price gains for light trucks, civilian aircraft, and beer. Nonetheless, despite the strong core in October, price weakness is spreading among components. Significant decreases were seen for passenger cars, pharmaceutical preparations, and computer equipment… For the overall PPI, the year-on-year rate dropped to up 5.1 percent in October from up 8.7 percent the month before (seasonally adjusted). The core rate firmed to up 4.4 percent from up 4.1 percent in September… Overall, markets focused on the headline number as favorable and anticipate a slowing economy will bring the core down. Also, more attention was being given Hewlett-Packard's better-than-expected revenues. Markets were little changed on the PPI report.”

US Consumer Price Inflation Index for October. Econoday reported, “Consumer price inflation was pulled down by energy in October but other components also pointed to weak consumer demand. The headline CPI fell 1.0 percent in October, following a flat reading the prior month. The October headline came in lower than the consensus forecast for a drop of 0.7 percent. Price weakening, however, was more pervasive than just in energy. The core rate in October dipped 0.1 percent after edging up 0.1 percent in September. The core figure was softer than the market forecast for a 0.1 percent rise. Notably weak were vehicles and apparel… Year-on-year, the overall CPI eased to up 3.7 percent (seasonally adjusted) in October from 4.9 percent in September. The year-ago core rate declined to up 2.2 percent, compared to up 2.5 percent in September… Today's report not only shows inflation slowing from lower energy costs but also from weak import prices and declining consumer demand. The bottom line is that inflation is improving for good (lower energy) and bad (recession) reasons.”

US Housing starts data for October. Econoday reported, “Housing starts in October continued their downward spiral. Starts fell 4.5 percent, following a 3.0 percent drop in September. The October pace of 0.791 million units annualized was down 38.0 percent year-on-year and was above of the consensus projection for 0.780 million units. The drop in starts was led by the multifamily component which declined 6.8 percent while the single-family component decreased 3.3 percent… By region, the decline in starts was led by a monthly 31.0 percent drop in the Northeast with the Midwest also falling 13.7 percent. The West and South posted gains of 7.5 percent and 1.5 percent, respectively… Permits also declined in October, dropping 12.0 percent, following a 6.1 percent decline in the prior month. The October 0.708 million unit pace for permits was down 40.1 percent year-on-year… Today's report shows the housing sector still not stabilizing. This will pull the economy down further in the fourth quarter and even impact the first quarter of 2009.”

I leave the links in here because the Econoday Reports contain terrific charts and other information, and after the report is published, the link leads to the updated report.

How is next week’s calendar looking? For starters it’s US Thanksgiving Week. Usually the following day (Friday) is a low volume day.

US Economic Calendar.

US Existing Home Sales data for October. After the release of the September data, Econoday reported, “The worst may be over for the housing sector, a possibility raised by improvement in pending home sales and now a solid gain in existing home sales. Sales of existing homes jumped 5.5 percent in September to an annual rate of 5.18 million -- the best rate since August last year. The month-on-month percentage jump is the best in more than five years while the year-on-year rate of +1.4 percent is the first positive rate in three years. Of course these gains are being made against easy comparisons, in fact against record lows. Gains were concentrated in the West which has been hardest hit during the downturn… The bad news in the report is a steep drop in prices. The median price plunged 5.7 percent in the month of September for a year-on-year decline of 9.0 percent. Price declines are certain to raise foreclosures and are definitely more bad news for financial firms. But supply on the market is down, at least a bit at 9.9 months supply vs. 10.6 months in August.”

US Durable Goods Orders for October. After the September data was released, Econoday reported: “Durable goods orders in September unexpectedly rebounded but strength was isolated. Durable goods orders rose 0.8 percent in September, following a 5.5 percent decrease in August. The jump in September was far above the consensus projection for a 1.1 percent contraction. However, excluding the transportation component, new orders fell 1.1 percent, after a 4.1 percent drop the month before. The market had forecast a 1.5 percent decrease. The gain in the latest headline number was the result of a surge in aircraft orders - up 10.1 percent for defense aircraft and up 29.7 percent for nondefense aircraft. Outside of aircraft, durables orders remain weak… Strength in September was led by transportation which jumped 6.3 percent. Also posting gains were machinery, up 0.5 percent, and electrical equipment, up 1.5 percent. But there were sharp declines in a number of other components. Industries with lower orders were primary metals, down 4.5 percent; fabricated metals, down 0.9 percent; computers & electronics, down 1.4 percent; and communications equipment, down 14.6 percent… Year-on-year, new orders for durable goods improved to down 3.6 percent in September from down 5.8 percent the previous month… Today's report is mixed after going into the detail. Certainly, the aircraft industry (or rather Boeing) is doing well despite the recent strike. But outside of aircraft, durables manufacturing is still on a downturn. For today, equities will like the numbers since they beat expectations and bond yields should firm a little. But many traders will be waiting on the sidelines until after the Fed's announcement at 2:15 EDT today on rates. Stay tuned.”

US Personal Income and Outlays for October. After the September data was released, Econoday reported, “The September personal income report shows the consumer sector softening - notably with a pullback in spending. Personal income in September edged up 0.2 percent, following a 0.4 percent rebound in August. The September rise was just above the consensus forecast for a 0.1 percent increase. Within personal income, the wages and salaries component nudged up a slim 0.1 percent in September, after posting a 0.4 percent boost the previous month… Spending weakened even further in September. Personal consumption expenditures dropped 0.3 percent, following no change in August. The consensus had forecast a decline of 0.3 percent for personal spending. Most of the weakness in the latest month was in durables with a monthly 2.9 percent fall. Nondurables also declined, by 0.8 percent, while services rose 0.2 percent… On the inflation front, the headline PCE price inflation remained modest. The overall index rose an incremental 0.1 percent, following a flat reading in August. The core PCE price index inflation rate was unchanged with a 0.2 percent. The market had forecast a core increase of a mere 0.1 percent for the latest month… Year on year, personal income growth slipped to up 3.9 percent from up 4.3 percent in August. Headline PCE inflation slowed to up 4.2 percent from up 4.5 percent the month before. Core PCE inflation softened to 2.4 percent from 2.5 percent in August. Both headline and core PCE price inflation remain above the Fed's implicit inflation target range of 1-1/2 to 2 percent annualized. But with the trend in oil prices and in consumer spending, the Fed likely will get its forecast for target inflation in coming months… The September personal income report shows the consumer sector retrenching - and this was before October's negative numbers in the stock market and drop in consumer confidence. The numbers were close to expectations and the markets are more likely to focus on end of the month issues for closing accounts for October. Nonetheless, the numbers are worrisome for where the consumer is headed in coming months. Today's pending report on consumer sentiment is the next indicator on the pulse of the consumer sector.”

US New Home Sales data for October. After the September data was released, Econoday reported, “The new home sales report for September, together with last week's stronger report on existing homes, points to the possibility that the sector has bottomed. New home sales came in at a better-than-expected annual rate of 464,000, up 2.7 percent on the month but an improvement offset, though not completely offset, by downward revisions to prior months. The 464,000 rate, nevertheless, marks the first back-to-back sub-500 rates since the '91 recession. In a clear plus, supply is coming down, at 10.4 months for the current sales rate and down from 11.4 months in August. Builders are definitely cutting back as the number of new homes for sale, at 394,000, is the lowest in four years… The median price, of $218,400, is also the lowest in four years. The rate of price decline, at -0.9 percent month-on-month and -9.1 percent year-on-year, is consistent with price declines underway for existing homes as distressed sales push prices down… Regional data show improvement for the West where existing home sales also bounced back in September. New home sales have been unusually weak in the Northeast which saw a record low total in September, in data going back to the '70s. It's hard to judge reaction in today's financial markets, but stocks did rally after the report was issued.”

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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.”

Oh, sorry, that was a week ago.

In the wild closing hour of Friday, the DJIA, S&P 500 and NASDAQ Composite skyrocketed +6.38%, +6.32% and +5.76% respectively.”

By the end of the day, the DJIA (+494.13 +6.54% to 8046.42), S&P 500 (+47.59 +6.32% to 800.03) and NASDAQ Composite (+68.23 +5.18% to 1384.35) set another daily record.

The story of this market continues to be volatility.

The big difference, however, is the massive volume that came into the market in the last hour on Friday.

The same key problem still exists though. A week ago, 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%. This week, the three biggest losers were C -60.4%, JPM -34.1%, and BAC -30.2%. GE was 6th worst, dropping -12.4%.

For the final hour, from 3:00pm through 4:00pm, here was the lift on these 4 important stocks: C +12.54%, JPM +10.78%, BAC +12.89%, and GE +6.85%. That’s for a single hour in time.

There are people who actually say that market timing is not important!

How prices will move on Monday at the open will be seen at that moment, but my feeling is that there will be a significant rally if the Tim Geithner to Treasury story is factual, as it appears to be. Former Treasury Secretary Larry Summers (under Clinton) will be heading up the National Economics Council. The bankers would be pleased.

As for the rest of us, that’s a different story. Being traders, we trade prices. So we leave the rest of that stuff to shady characters in unseen boardrooms. Hopefully, we’ll get an SEC chairperson who is a professional, and not a professional politician. We need better.

We deserve better. What we don’t deserve is more unnecessary regulation. The term “Subject to Regulatory Approval” has always been code for subject to approval by bankers, for the interest of bankers.

Somebody in the Obama Administration, hopefully, will appreciate the difference between a financial service and the capital market. The one is largely based on credit and debt and the other largely based on assets and equity. Any solution to resolving the issues of the day must be rooted in attacking the conflict of interest issue. There must be checks and balances in any system that involves money. Self regulation of bankers and broker-dealers has proven a disaster.

If you disagree, then try to explain how Credit Default Swaps came to be and how the financial, business and economic crisis that all governments are facing today could have been avoided.

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Sector ETF Summary for the US equity market

There were some major losses in the country ETF’s this week. Brazil (EWZ) plunged -15.0%. Canada (EWC) dropped -13.3%. That should not be surprising after seeing the price of oil drop -13.2% to 49.93/bbl.

Thankfully, the equity market is close to a bottom, and many traders are beginning to see values in prices and that the quality of many corporations has remained intact.

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	28.83	2.62	10.00%	0.10%	-0.83%	4.95%	-31.50%	-23.63%	-30.21%	-31.29%
XLP	22.99	1.05	4.79%	-2.09%	-5.20%	0.83%	-19.02%	-18.88%	-17.69%	-18.62%
XLK	13.89	0.70	5.31%	-6.21%	-12.31%	-7.77%	-46.82%	-39.61%	-43.17%	-45.59%
XLE	44.42	4.46	11.16%	-7.01%	-10.89%	1.76%	-44.13%	-41.81%	-50.12%	-38.43%
XLI	20.59	0.59	2.95%	-8.08%	-13.60%	-6.79%	-46.53%	-40.51%	-46.42%	-45.34%
SPY	79.52	4.07	5.39%	-8.20%	-15.28%	-8.64%	-45.13%	-37.79%	-42.99%	-43.88%
IYH	47.18	1.53	3.35%	-8.55%	-11.85%	-8.57%	-32.70%	-29.52%	-25.85%	-31.95%
XLY	17.45	1.12	6.86%	-9.02%	-17.30%	-10.14%	-45.81%	-41.81%	-45.86%	-47.07%
SMH	15.25	0.55	3.74%	-10.82%	-19.10%	-16.89%	-51.37%	-47.01%	-52.77%	-51.48%
XLB	20.10	0.22	1.11%	-11.53%	-19.41%	-12.23%	-51.33%	-49.62%	-55.01%	-48.38%
IYZ	13.64	0.53	4.04%	-11.72%	-15.38%	-3.06%	-53.24%	-41.56%	-47.66%	-51.67%
XLF	9.680	0.290	3.09%	-23.96%	-31.93%	-28.56%	-65.87%	-51.48%	-61.09%	-66.14%

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	75.81	7.30	10.66%	2.89%	2.52%	9.81%	-18.93%	-5.65%	-19.07%	-12.90%
PTR	74.27	9.97	15.51%	0.94%	-0.04%	17.85%	-57.23%	-41.61%	-47.70%	-58.97%
CVX	70.49	6.09	9.46%	-3.01%	-4.04%	10.30%	-24.58%	-20.37%	-31.58%	-17.80%
TOT	48.45	4.38	9.94%	-6.38%	-9.74%	5.74%	-41.82%	-33.88%	-46.13%	-40.08%
SLB	45.00	5.40	13.64%	-7.71%	-12.42%	-5.30%	-55.26%	-54.53%	-56.98%	-50.97%
STO	15.25	1.88	14.06%	-7.97%	-22.90%	-7.91%	-51.18%	-51.69%	-62.90%	-51.57%
IMO	26.97	2.86	11.86%	-9.65%	-16.24%	-11.02%	-50.89%	-48.20%	-55.77%	-48.23%
CEO	68.09	6.30	10.20%	-10.47%	-12.71%	9.26%	-59.33%	-52.69%	-66.46%	-57.18%
SU	16.39	1.73	11.80%	-13.19%	-23.55%	-18.66%	-70.27%	-72.29%	-77.21%	-67.51%
ECA	38.16	3.85	11.22%	-14.17%	-22.12%	-10.76%	-45.18%	-48.62%	-59.87%	-43.42%
PBR	17.40	2.46	16.47%	-18.88%	-35.00%	-17.34%	-85.35%	-67.81%	-76.86%	-82.43%
RIG	57.08	1.68	3.03%	-19.48%	-25.98%	-13.85%	-60.89%	-56.66%	-63.15%	-53.13%

Crude Oil ($WTIC) closed the week down -$7.67/bbl (-13.32%) to 49.93.

A week ago I wrote, “OPEC is talking production cut-backs, but the immediate squeeze in the banking system is what is driving commodity prices down.”

This week, the Energy sector (XLE) lost -7.01% W/W to 44.42. The gain on Friday, mostly the last hour, was +11.16%, which says all you need to know.

Panic down; panic up.

Actually, I wrote that a week ago, but same old, same old.

A week ago, I wrote, “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.”

This week, XOM was best in class, lifting +2.9% W/W. Some of the others were crunched: RIG -19.5%, PBR -18.9%, ECA -14.2%, and SU -13.2%.

PBR was down -19.9% the prior week as well.

As I stated here two weeks 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.”

I think as soon as the pressure comes off the Banks, the Oils will perform well. Could be this week if we can believe in the final hour Friday.

Monthly chart

Weekly chart

Daily 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
PKX	54.18	10.84	25.01%	1.63%	-12.05%	26.32%	-63.01%	-51.48%	-59.16%	-63.76%
BHP	29.13	4.51	18.32%	-10.75%	-23.46%	-6.21%	-58.63%	-58.91%	-67.23%	-58.30%
RTP	131.11	16.99	14.89%	-12.48%	-21.66%	-10.92%	-68.76%	-66.26%	-74.26%	-67.69%
RIO	10.03	1.23	13.98%	-12.55%	-21.33%	-4.48%	-69.34%	-63.47%	-75.99%	-69.07%
NUE	28.28	2.76	10.82%	-13.60%	-18.71%	-19.22%	-51.22%	-45.96%	-62.74%	-45.64%
MT	17.82	2.30	14.82%	-16.38%	-20.09%	-18.85%	-76.68%	-77.33%	-81.99%	-74.45%
DOW	17.38	0.76	4.57%	-17.83%	-28.27%	-27.16%	-55.15%	-48.96%	-58.00%	-55.74%
TS	17.75	-0.15	-0.84%	-19.57%	-16.74%	3.98%	-60.01%	-67.51%	-70.85%	-61.66%
GGB	4.7800	0.5800	13.81%	-21.25%	-25.66%	0.42%	-83.34%	-74.23%	-90.33%	-82.41%
AA	8.440	1.590	23.21%	-22.14%	-24.58%	-10.31%	-76.64%	-73.74%	-79.76%	-76.00%
VCP	5.770	0.200	3.59%	-22.86%	-37.62%	-19.41%	-80.57%	-73.59%	-81.58%	-80.31%
TCK	3.5800	0.4100	12.93%	-31.81%	-62.79%	-62.63%	-90.12%	-91.44%	-92.93%	-90.46%

Basic Materials (XLB -11.53% W/W to 20.10) was only up +1.11% on Friday.

The sector was weak, but the Goldminers were soaring.

Volatility was extreme here. Teck (TCK) was down -31.8% W/W, which included the Friday gain of +12.9%. BHP was down -10.8% including Friday’s gain of +18.3%.

The equity market clearly is not functioning as a value discovery mechanism. It’s more like a casino.

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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	52.31	3.10	6.30%	-1.56%	0.75%	12.37%	-24.36%	-15.89%	-24.60%	-25.42%
MMM	61.30	4.51	7.94%	-2.79%	-5.45%	2.84%	-25.89%	-13.55%	-19.47%	-24.54%
BA	39.58	2.47	6.66%	-3.56%	-15.03%	-12.51%	-54.31%	-37.72%	-51.25%	-54.72%
ERJ	13.46	1.16	9.43%	-3.86%	-21.56%	-19.50%	-70.18%	-58.64%	-66.65%	-69.75%
FDX	60.91	4.16	7.33%	-5.38%	-5.68%	7.22%	-29.31%	-25.05%	-31.49%	-33.58%
CAT	34.67	1.83	5.57%	-6.20%	-9.83%	4.11%	-50.91%	-49.53%	-58.43%	-48.97%
UTX	46.67	3.45	7.98%	-7.09%	-9.92%	-1.35%	-37.95%	-27.32%	-35.20%	-35.88%
HON	25.38	1.71	7.22%	-7.20%	-13.56%	-6.55%	-57.63%	-47.94%	-57.78%	-52.92%
ABB	9.950	0.830	9.10%	-8.46%	-15.10%	-9.63%	-65.26%	-57.51%	-69.13%	-62.93%
TXT	13.16	1.21	10.13%	-10.66%	-18.77%	7.69%	-80.30%	-65.40%	-78.98%	-79.41%
FLR	31.90	2.34	7.92%	-10.72%	-22.25%	-4.38%	-55.82%	-59.87%	-66.66%	-51.79%
GE	14.03	1.19	9.27%	-12.42%	-25.61%	-21.31%	-61.83%	-51.20%	-54.79%	-62.25%

Industrials (XLI -8.08% W/W) closed at 20.59. They gained only +2.95% on Friday. GE was a drag. GE dropped -12.4% W/W but was up +9.3% on Friday.

But, like I wrote a week ago, “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.” Just try to avoid those with weak balance sheets, and financial services components.

I like this sector.

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

“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 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.”

I believe there will be some nice gains made in this sector next week.

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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	47.88	4.27	9.79%	2.90%	-3.10%	0.19%	-24.34%	-20.98%	-28.58%	-23.85%
DIS	21.12	2.39	12.76%	0.19%	-9.59%	-6.59%	-33.67%	-33.65%	-37.25%	-32.95%
TM	63.68	3.89	6.51%	0.00%	-7.06%	-3.65%	-40.18%	-27.88%	-36.44%	-41.08%
EBAY	12.01	0.84	7.52%	-2.83%	-15.36%	-19.34%	-63.03%	-51.02%	-60.06%	-61.98%
TTM	3.8200	0.1800	4.95%	-4.98%	-13.57%	-3.54%	-80.36%	-58.92%	-75.40%	-77.40%
BDK	35.54	2.37	7.15%	-9.98%	-21.87%	-20.99%	-49.18%	-41.96%	-44.42%	-55.49%
BC	2.1900	0.1400	6.83%	-10.25%	-37.43%	-33.43%	-87.06%	-83.02%	-85.76%	-88.43%
JCP	15.14	0.76	5.29%	-12.33%	-32.41%	-19.89%	-63.65%	-58.83%	-64.28%	-62.22%
BBBY	17.54	0.37	2.15%	-14.85%	-23.67%	-25.07%	-38.15%	-40.76%	-44.03%	-42.04%
TGT	28.08	0.08	0.29%	-14.99%	-23.11%	-14.70%	-43.28%	-45.01%	-46.89%	-48.10%
CCL	15.77	0.75	4.99%	-16.87%	-28.42%	-40.54%	-63.88%	-56.21%	-57.87%	-62.75%
WHR	31.97	1.05	3.40%	-18.21%	-28.03%	-34.97%	-59.98%	-60.16%	-55.69%	-57.95%

Consumer Discretionary (XLY -9.02% W/W) closed at 17.45, but it was up +6.86% on Friday.

Last week I wrote, “The US Retailers though should be the key for traders to watch.”

$RLX dropped -9.42% this week, but was up +6.41% on Friday. Keep an eye on it. I believe that as soon as the Banks signal their issues are under control, then I think $RLX will fly.

As I stated a week ago, 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.

Here is the StockCharts.com chart for $RLX.

Nike (NKE +9.8%) was a winner. The big losers this week were WHR -18.2%, CCL -16.9% and TGT -15.0%, all of them different types of companies.

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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
PEP	54.59	4.30	8.55%	2.00%	-1.39%	5.47%	-27.49%	-21.33%	-18.85%	-27.25%
WMT	52.92	2.26	4.46%	0.40%	-2.70%	2.96%	12.84%	-9.54%	-4.18%	17.97%
PG	63.09	3.76	6.34%	-0.03%	-2.17%	7.17%	-12.75%	-9.74%	-3.19%	-12.69%
ABV	46.40	6.45	16.15%	-0.41%	-2.25%	27.09%	-35.98%	-25.14%	-37.29%	-32.14%
WAG	23.16	0.31	1.36%	-1.15%	-3.02%	2.52%	-37.98%	-36.08%	-34.35%	-41.22%
KO	44.00	2.93	7.13%	-2.27%	-4.86%	5.74%	-27.98%	-17.77%	-22.33%	-29.32%
KFT	26.56	1.69	6.80%	-3.21%	-6.77%	-1.99%	-17.13%	-18.70%	-17.90%	-19.05%
DEO	51.96	1.71	3.40%	-4.68%	-11.72%	-8.62%	-38.91%	-28.81%	-34.09%	-40.95%
PDA	27.97	4.60	19.68%	-4.70%	-18.45%	14.58%	-41.89%	-44.16%	-50.83%	-39.95%
KR	26.21	1.73	7.07%	-6.46%	-4.76%	-0.68%	2.10%	-6.49%	-3.28%	-7.16%
SBUX	7.830	0.660	9.21%	-9.06%	-25.78%	-19.11%	-59.45%	-50.06%	-53.06%	-65.67%
WFMI	8.190	-0.240	-2.85%	-12.69%	-18.51%	-23.74%	-79.40%	-55.42%	-70.75%	-80.23%

Consumer Staples (XLP -2.09% W/W to 22.99) was 2nd best performer, next to Utilities (XLU).

PEP was up +2.0%, while WFMI dropped -12.7%. I noted that Wal-Mart (WMT) was doing zip all week until the company suddenly announced Friday that Mike Duke would be the new CEO following Lee Scott. WMT jumped +4.5% on Friday, but was up just +0.4% W/W.

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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
BMY	19.11	-0.17	-0.88%	-2.40%	-7.01%	8.33%	-26.87%	-12.74%	-13.25%	-30.41%
JNJ	58.35	2.54	4.55%	-2.83%	-3.11%	-4.01%	-11.47%	-18.14%	-11.23%	-13.09%
PFE	15.67	1.22	8.44%	-3.75%	-7.06%	-5.43%	-31.60%	-19.10%	-20.58%	-29.89%
AMGN	54.90	4.77	9.52%	-5.72%	-6.74%	-3.97%	17.81%	-13.96%	30.40%	3.90%
NVS	45.11	-0.39	-0.86%	-7.83%	-9.09%	-4.49%	-17.34%	-19.09%	-14.97%	-14.06%
GSK	32.85	0.31	0.95%	-9.38%	-14.52%	-8.09%	-34.52%	-28.88%	-26.30%	-31.38%
NVO	45.10	-0.32	-0.70%	-10.73%	-14.10%	-1.03%	-29.31%	-22.50%	-33.45%	-64.16%
DNA	72.74	-0.29	-0.40%	-10.85%	-12.84%	-8.89%	7.92%	-25.34%	6.63%	-1.91%
UNH	17.15	0.85	5.21%	-14.34%	-23.54%	-25.14%	-69.74%	-43.40%	-49.80%	-67.89%
WLP	30.08	0.64	2.17%	-14.64%	-22.29%	-25.54%	-65.43%	-43.93%	-43.97%	-62.99%
MDT	30.98	1.94	6.68%	-17.28%	-22.18%	-18.06%	-37.41%	-45.22%	-38.57%	-35.85%
AET	17.68	-0.62	-3.39%	-24.22%	-24.70%	-37.42%	-68.79%	-58.55%	-60.57%	-67.14%

The Healthcare sector (IYH -8.55% W/W to 47.18) was middle of the pack. The gain on Friday was +3.35%.

BMY had a small loss of -2.4%, while AET plunged -24.2%. Anything to do with finance is getting 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
HBC	46.86	1.08	2.36%	-10.91%	-21.04%	-14.82%	-43.16%	-38.49%	-44.14%	-43.28%
IBN	13.09	1.76	15.53%	-13.37%	-27.96%	5.23%	-78.94%	-55.93%	-68.07%	-76.67%
MS	10.05	0.85	9.24%	-16.46%	-37.11%	-39.16%	-80.27%	-72.88%	-76.57%	-79.28%
BBD	8.450	0.850	11.18%	-17.08%	-25.42%	-0.12%	-72.23%	-55.01%	-63.00%	-70.67%
UBS	9.450	1.010	11.97%	-17.83%	-36.96%	-27.42%	-79.36%	-53.13%	-67.79%	-78.37%
DB	24.58	1.76	7.71%	-19.93%	-36.97%	-31.05%	-80.95%	-70.68%	-78.70%	-79.84%
GS	53.31	1.31	2.52%	-20.11%	-31.46%	-46.90%	-74.32%	-65.92%	-70.15%	-74.55%
RY	28.65	0.81	2.91%	-20.62%	-28.00%	-21.31%	-43.36%	-33.86%	-42.95%	-42.21%
CS	21.00	1.99	10.47%	-22.08%	-37.20%	-43.00%	-64.81%	-53.53%	-59.69%	-62.89%
JPM	22.72	-0.66	-2.82%	-34.09%	-39.81%	-35.87%	-46.12%	-37.34%	-46.50%	-44.15%
MER	8.340	0.380	4.77%	-36.82%	-50.21%	-47.41%	-84.19%	-65.74%	-81.46%	-83.90%
C	3.7700	-0.9400	-19.96%	-60.40%	-68.10%	-68.95%	-86.96%	-78.42%	-82.10%	-87.73%

“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). 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, they should all be laid out. Same for the Old Boys Club directors who aided and abetted these criminals!”

That was written a week ago. This week, XLF plunged -23.96%, which included a gain of +3.09% on Friday. The Big 3 banks in the DJIA index were losers #1, 2 and 3 this week: C down a mere -60.4%, JPM down -34.1% and BAC down -30.2%.

It’s all about the unwinding of a $55 trillion Credit Default Swap mess.

The Fed can drop the rate to zero, and the Treasury can pump a couple hundred billion dollars into this group, but it won’t amount to squat. CDS is a serious problem.

Yes, equities might rally, but the CDS issues must be resolved or else there will be another test of the lows.

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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
HPQ	34.64	2.81	8.83%	13.72%	0.00%	6.78%	-30.46%	-25.43%	-22.68%	-29.13%
RIMM	44.80	3.28	7.90%	12.00%	-7.91%	-0.36%	-60.60%	-66.14%	-66.29%	-59.65%
INTC	13.11	0.88	7.20%	-1.58%	-10.39%	-8.19%	-48.28%	-43.12%	-44.59%	-46.77%
ORCL	16.38	0.98	6.36%	-3.08%	-6.56%	1.11%	-27.17%	-26.55%	-25.58%	-18.95%
ADBE	21.38	0.63	3.04%	-4.30%	-13.05%	-10.51%	-48.74%	-51.97%	-47.79%	-48.90%
UMC	1.9300	0.1700	9.66%	-4.93%	-7.66%	21.38%	-42.22%	-18.57%	-44.54%	-43.90%
ALTR	14.27	0.87	6.49%	-4.99%	-8.17%	-13.57%	-22.99%	-36.89%	-36.38%	-21.89%
TSM	6.510	0.660	11.28%	-6.47%	-16.32%	0.77%	-31.97%	-36.18%	-41.61%	-29.77%
IBM	74.88	3.14	4.38%	-6.78%	-13.20%	-8.76%	-28.47%	-39.12%	-39.36%	-26.75%
INFY	22.96	1.85	8.76%	-7.12%	-14.01%	-8.96%	-48.32%	-42.97%	-47.72%	-40.61%
CTSH	15.58	0.90	6.13%	-7.65%	-19.77%	-6.43%	-51.66%	-47.91%	-48.26%	-48.26%
BRCM	14.09	0.45	3.30%	-8.39%	-15.07%	-9.91%	-46.47%	-47.46%	-44.85%	-48.08%
QCOM	30.17	0.96	3.29%	-8.41%	-15.40%	-13.78%	-21.41%	-44.85%	-34.67%	-25.43%
AAPL	82.58	2.09	2.60%	-8.49%	-15.94%	-14.32%	-57.62%	-52.62%	-53.66%	-50.98%
CSCO	15.17	0.70	4.84%	-8.72%	-13.71%	-6.99%	-42.84%	-37.39%	-40.20%	-46.30%
TXN	14.67	0.65	4.64%	-8.94%	-14.81%	-13.45%	-54.65%	-39.85%	-54.34%	-52.12%
SAP	31.15	1.45	4.88%	-11.61%	-13.01%	-4.36%	-38.60%	-44.38%	-40.36%	-39.49%
STM	6.580	0.240	3.79%	-12.27%	-21.76%	-16.39%	-53.23%	-47.28%	-47.40%	-56.51%
ADI	16.92	-0.02	-0.12%	-12.29%	-17.46%	-12.20%	-44.29%	-41.05%	-49.27%	-45.49%
LLTC	18.90	0.34	1.83%	-13.90%	-12.17%	-4.69%	-38.93%	-42.54%	-47.88%	-37.44%
GOOG	262.43	2.87	1.11%	-15.35%	-20.75%	-22.65%	-61.70%	-46.06%	-52.28%	-60.27%
AMAT	8.350	0.210	2.58%	-18.38%	-26.11%	-26.75%	-52.04%	-54.52%	-55.80%	-53.61%
FSLR	92.81	5.58	6.40%	-20.53%	-37.99%	-23.00%	-65.33%	-66.77%	-66.79%	-56.32%
SNDK	5.630	0.310	5.83%	-21.26%	-43.59%	-29.00%	-83.03%	-61.78%	-80.57%	-84.44%
STP	6.050	0.660	12.24%	-43.72%	-58.56%	-58.67%	-92.96%	-86.47%	-86.92%	-90.51%

Tech (XLK -6.21% W/W to 13.64) and Semi-conductors (SMH -10.82% W/W to 15.25) were stronger Friday, but not enough to warrant optimism.

The issue here is that the Semi-conductors should be leading the Techs higher in a rally.

Research In Motion (RIMM +12.0% W/W) recovered a bit from the previous week’s loss of -17.8%.

Intel (INTC -1.6% W/W) did not recover from the previous week’s loss of -9.0%.

Intel needs help from the pc makers and the auto makers.

STP -43.7%, SNDK -21.3% and FLSR -20.5% were all hammered. Anything to do with chips got smashed.

This week, I decided to extend the Tech chart to 25 companies. In my own work, I box these into peer groups. Another way of looking at groups is via correlation studies. Enter INTC into the correlation tracker for 6 months and see the numbers of stocks that run 98-99% correlation. What you should do if you day trade is to run the Fast Stochastic overlays. You’ll see all these stocks move up and down together. You might even box the trades so that a single key stroke gives you a basket of say six stocks on the buy or sell. It’s like running your own little mutual fund.

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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 -11.72% W/W) closed at 13.64.

Verizon (VZ -5.1%) and AT&T (T -8.9%) performed badly.

A week ago, I noted IYZ had been up Monday through Thursday but took a loss W/W because of Friday. I wrote, “The loss of Friday was 4.28%, mostly late in the session, so this is a sector that could turn on a dime.”

Three 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.”

But now it looks like Bonds are headed south, so I will have no interest in the Telcos. Their high dividends competes with bond yields. If bond yields are going to rally (it’s a possibility – I did call the Sell on Bonds as part of the Trade of the Generation), then the Telcos are likely to have tough sledding.

Of course, a rising tide will lift most boats (unless they have a hole in the bottom).

TLT (average 20-year Treasuries) was up +8.14% W/W, despite taking a hit on Friday of -1.45%. The TIP (Treasury Inflation Protected) was up +3.39% W/W. I think the bond prices are way over-done on the upside and will now come off.

A week ago, I wrote, “… 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 (at some point soon). 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.”

Corporate bonds were trashed this week.

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

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

XLU Monthly data:

XLU Weekly data:

XLU Daily data:

Utilities (XLU +0.10% to 28.83) was sector performer #1 again this week even though the ETF gained just 3 cents.

A week ago, I wrote, “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	0.01	0.01	0.07	0.96
6 Month	0.39	0.42	0.85	1.46
2 Year	1.10	0.98	1.21	1.50
3 Year	1.35	1.18	1.53	1.16
5 Year	2.01	1.89	2.32	2.51
10 Year	3.19	3.01	3.73	3.59
30 Year	3.67	3.49	4.22	4.05

Municipal Bonds

Maturity	Yield	Yesterday	Last Week	Last Month
2yr AA	2.63	2.50	2.55	3.10
2yr AAA	2.35	2.22	2.18	2.85
2yr A	2.77	2.73	2.73	3.59
5yr AAA	2.83	2.86	3.11	3.59
5yr AA	2.97	2.95	3.14	3.73
5yr A	3.07	3.10	3.42	3.94
10yr AAA	3.80	3.78	4.42	5.18
10yr AA	3.82	3.81	4.03	4.39
10yr A	3.88	3.81	4.27	5.78
20yr AAA	5.12	5.21	5.05	5.04
20yr AA	5.22	5.18	5.17	5.38
20yr A	5.69	5.57	5.57	5.78

Corporate Bonds

Maturity	Yield	Yesterday	Last Week	Last Month
2yr AA	5.91	5.47	5.34	5.95
2yr A	6.61	6.28	5.79	10.34
5yr AAA	4.93	5.08	5.58	5.57
5yr AA	6.93	6.87	6.58	6.50
5yr A	7.62	7.56	7.32	7.40
10yr AAA	4.97	4.81	5.50	6.10
10yr AA	6.30	6.16	6.56	6.85
10yr A	7.00	6.81	6.88	7.18
20yr AAA	5.87	5.77	6.35	6.11
20yr AA	5.97	5.95	6.43	6.03
20yr A	9.61	9.57	8.06	7.23

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The 20-year Treasury ETF (TLT), which three weeks ago plunged by -4.03%, was up +1.50% and then +1.01% the past two weeks. This week, the gain was +8.14% as traders blindly chased bonds as they fled equities. Only on Friday was there any semblance of common sense.

TLT closed at 102.92, up from 95.17, and that was in spite of a loss of -1.45% on Friday. When have bond traders seen a four day move like that before? Are they really going to say that the macro-economic reports were “surprising”? Inflation has been known to be falling for the couple months that oil prices have been plunging.

Long time followers can skip the next section, but there are more videos I’d like you to watch after that.

For three 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 some additional videos about the history of debt and the HB&B. As you know, I think that as people go into debt to the banks, they become chattels of those bankers.

Part 1 of 5
Part 2 of 5
Part 3 of 5
Part 4 of 5
Part 5 of 5

We need our freedom, but in most countries today that decision is up to us. It is those who get caught up in the ‘Borrow and Spend’ lifestyle that are the losers, and the people who are begging for help today. That includes bankers btw.

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.

This chart is stunning to long-term observers of the debt markets.

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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
TLT	102.92	-1.51	-1.45%	8.14%	9.23%	6.40%	9.05%	10.50%	11.31%	10.13%
IEF	92.89	-0.64	-0.68%	3.39%	4.79%	3.92%	6.00%	4.22%	4.71%	6.56%
SHY	84.63	-0.14	-0.17%	0.45%	0.74%	0.57%	2.78%	1.79%	1.80%	2.59%
AGG	96.62	-0.70	-0.72%	-0.37%	-0.48%	1.49%	-4.95%	-3.85%	-5.42%	-5.06%
TIP	92.53	-0.95	-1.02%	-3.13%	-2.02%	-1.93%	-13.23%	-13.27%	-15.02%	-13.33%
EQR	25.35	3.22	14.55%	-8.35%	-23.32%	-15.72%	-30.41%	-38.68%	-39.54%	-29.25%
NLY	12.12	0.75	6.60%	-8.80%	-16.47%	2.28%	-33.04%	-13.61%	-29.21%	-26.55%
AVB	47.80	5.00	11.68%	-13.81%	-25.72%	-25.53%	-47.67%	-51.34%	-52.75%	-50.43%
FRE	0.4100	-0.0800	-16.33%	-38.81%	-52.33%	-44.59%	-98.75%	-87.03%	-98.44%	-98.42%
FNM	0.3000	-0.0300	-9.09%	-44.44%	-59.46%	-54.55%	-99.20%	-93.81%	-98.92%	-98.97%
DRE	4.9400	0.7700	18.47%	-49.12%	-62.52%	-58.38%	-80.72%	-79.16%	-81.15%	-81.08%

This week FNM dropped to $0.30 and FRE dropped to $0.41.

(From the last WIR) 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 stay listed, 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 with 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... You don’t have to go any further than the GSE’s, Fannie and Freddie, to see how corrupt America has become.

When Fannie and Freddie are resuscitated, what do you think the ultimate cost will be to the US taxpayer? A trillion dollars or more? Why do you think this bail-out is going on?

I say that if Fannie and Freddie were pushed into bankruptcy and a NuFanny and NuFreddie were floated to take their place, except entirely in the private sector, life as we know it would go on. ARMS would be rolled over. New mortgages would be written.

Just like the insurance company AIG, the US Treasury must rescue Fannie & Freddie in order to save the banks. This is all about saving the banks, and by that I mean the present shareholders, bondholders and senior executive contracts and their pensions.

Regardless of rolling the bail-out package into various economic stimuli packages, this bail-out is not about saving the US economy or trying to stop foreclosures or whatever.

Those in power today, ie, the gnomes who control the politicians, are going to be the gnomes who are in power tomorrow. Paulson today; Geithner tomorrow.

Life moves on with not much “change”. Did we really expect it?

The public will be short-changed as usual. But, the Wall Street bankers, the Washington politicians and lobbyists, and most of the S&P 500 corporate CEO’s will continue to get theirs. They will not permit President-elect Obama to change the culture. Speech making and great oratory aside, the public will be looking for change. It could be a short honeymoon.

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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

Seven losing weeks of big losses in the past eight, the $CRB index dropped again this week (-6.54%) to 231.38. In early July, the $CRB hit a high of 493.97.

The 50-day MA for $CRB is 293.85 and the 200-day MA is 387.75.

This index is largely about Oil, which you know is crashing.

$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 -$7.67/bbl (-13.32%W/W) to 49.93. That was a phenomenal move.

Economists will tell you it’s a macro-economic thing. Traders, on the other hand, will tell you they have been forced to sell, and have lost their appetite for risk.

Falling oil prices have more to do with Banks than anything in the oil industry.

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 77.29, and the 200d MA is 108.00. The price in mid-July hit a record high of $149.90.

As I stated a while back, when Goldman Sachs opined that Crude Oil prices then at $140 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. I removed them from the Cara 100. GS this week was knocked down a further -20.1%. I wonder how many hedge funds are suing them for misrepresentation. Just wondering.

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.

As opined a while back, 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 (like First Solar FSLR???). I think both pathways are needed to get to the destination we need to get to as a free society.

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… 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. I don’t think it’s going to 30 as some people have predicted. If so, America will be even more dependent on foreign oil – like from Venezuela for instance.

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 +49.30/oz this week, which included a gain of $43.10 on Friday and a large gain on the Thursday.

People are writing to ask how I could have possibly known to issue the Buy on Gold and Goldminers immediately before the moon-shot.

Aha, you haven’t seen me holding a dowsing rod.

For $GOLD, the 50d MA is now 800.18, which is right about the price today. Will there be a break-through? The 200d MA is 877.34. There are issues to be resolved.

For example, I didn’t like the action of palladium and platinum this week. Silver gained just two cents W/W – although the gain on Friday was +$0.46 (+5.04%). Also, copper prices were hammered all week, including Friday.

I also need to see bond yields rise a bit and the $USD to fall before I am really convinced that the initial two-day rally is sustainable into a two or three month one. Eventually – say within a year or two – I expect that the global reflation programs will help drive the gold price to double what it was this week, but as a trader I need to stay focused on the day to day prices.

So we just need to watch.

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 gained +$0.02/oz (+0.16% W/W) to 9.51. On Friday there was a gain of +$0.46/oz though as silver got caught up in the gold rally.

A lot of this has to do with Geithner who would be brought in to shore up the banks. A healthy banker has plenty of money to lend to the gold funds and to underwrite loans to the precious metal miners. The bankers have shut down a lot of the mining because they will not extend the miners credit. The banker’s economic models of the miner’s resource deposits shrink the size of the orebody (and hence its value) when lower metal prices result in higher cut-off grades used for making these calculations.

For $SILVER, the 50d MA is now 10.68, and the 200d MA is 15.43.

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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 (-$19.40/oz -2.30%) closed at 825.70. Still, the price on Friday did gain +$35.60/oz on the day (+4.51%).

The 50-day MA dropped all the way from 1047.19 to 989.45 and now 947.92 in the pst two weeks. The 200-day MA has fallen from 1711.39 to 1690.15 to 1661.38.

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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The $PALL data I have is wrong. The charts below are for the previous week.

The spot price closed on Friday at 182, down from 214 the previous Friday at the close. The price was quite flat for three days.

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 lost -$18.55 -10.82% W/W to 152.95. Eight weeks ago it was 307.45.

The 50-day MA for $COPPER is 228.81 (243.73 a week ago), and the 200-day MA is 331.21 (vs 337.58). The price dropped right through the 50-day MA, which is sliding.

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
GFI	7.300	1.970	36.96%	22.07%	9.61%	37.48%	-52.60%	-21.51%	-47.93%	-57.26%
ABX	27.05	6.45	31.31%	21.35%	12.90%	36.00%	-41.22%	-24.84%	-36.64%	-35.19%
NEM	28.79	5.79	25.17%	18.82%	10.65%	20.86%	-45.05%	-35.87%	-42.28%	-43.06%
AU	19.61	5.90	43.03%	18.20%	9.43%	29.87%	-57.24%	-29.21%	-49.87%	-54.04%
EGO	5.220	0.960	22.54%	16.52%	6.10%	62.62%	-15.81%	-34.17%	-37.26%	-6.45%
HMY	7.160	1.580	28.32%	14.74%	3.92%	8.98%	-33.40%	-15.86%	-43.22%	-26.49%
KGC	13.77	3.10	29.05%	12.59%	9.46%	56.30%	-31.66%	-20.03%	-35.50%	-22.34%
LIHR	13.39	3.35	33.37%	11.96%	-5.04%	26.08%	-59.63%	-34.56%	-58.40%	-60.14%
GG	24.22	5.19	27.27%	11.82%	10.34%	42.39%	-33.90%	-30.56%	-43.69%	-26.29%
AUY	4.4100	0.8100	22.50%	3.04%	-6.77%	9.43%	-68.20%	-61.55%	-72.69%	-66.54%
AEM	32.31	5.82	21.97%	-2.27%	-0.12%	24.27%	-42.83%	-44.30%	-54.45%	-36.37%
BVN	12.72	1.42	12.57%	-2.38%	-4.58%	13.98%	-58.21%	-45.48%	-62.10%	-52.32%

This week (compared to the previous two weeks), the results were $XAU +10.72 (-5.82% and +5.06%); GDX +12.07% (-5.86% and +0.46%); and XGD +19.26% (-3.20% and +4.95%). The break-out happened right after I issued a Buy, referring to it as the Trade of the Generation (ie, 20 years).

Last week, I published a blog on Goldcorp (GG), which is my preferred goldminer. The report was a Team Cara effort, and was roundly applauded… Subsequently (what I reported in the WIR), 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 then said 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

Desjardins is the largest financial cooperative in Canada, offering complete banking services to 5.8 million members and clients.

The report I issued on Goldcorp (GG) was well received. Our team is a good one.

This week, Goldcorp (GG) gained +27.3% to $24.22. In Canada the G.TO was up +18.4% to C$31.04. The USD/Loonie market does play a role in the gap analysis between GG and G.TO.

Yes, it is true that I have been underground in mines from Eastern Canada to the Arctic Circle at Great Bear Lake and from British Columbia to Colorado. I respect the miners too –not all the suits on Bay Street (Toronto) and Howe Street (Vancouver), of course, but most of them.

We have a pretty good group of mining analysts and data gatherers on Team Cara.

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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.

This week the $USD gained +1.24% W/W to close at 87.80.

The 50-day MA for the $USD is 82.85 and the 200-day MA is 76.03.

The reflation that must take place in the US to save AIG, Fannie & Freddie, C, JPM, BAC, the auto makers, and a couple hundred other companies ought to be destructive for the $USD. It’s just a matter of time.

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 -0.12% this week to close at 125.89. There was a big gain (+1.00%) on Friday.

The Euro 50day MA is 1.3380 and the 200day MA is 1.4880.

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% a week ago and this week rebounded +1.31% to 1.4932.

The 50-day MA and 200-day MA are at 1.6733 and 1.8836.

Weekly British Pound Index:

Daily British Pound Index:

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Weekly Japanese Yen Index:

The Japanese Yen ($XJY) gained +1.21% this week to close at 104.21.

The Yen’s 50-day MA is 99.57 and the 200-day MA is 96.03.

Daily Japanese Yen Index:

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The Loonie (Cdn Dollar) plunged -3.88% a week ago and did much the same this week, falling -2.33% W/W to close at 78.95.

There was, however, a gain of +2.07% on Friday. Typically the Cdn dollar tracks gold and oil, but maybe not day to day.

The Loonie traded as high as 110.17 American in 3Q07.

The 50-day MA and 200-day MA is at 86.65 and 95.38, 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 continued to plummet. The global panic of a couple weeks back regained momentum. Look at the volatility over the past three weeks:

UK FTSE moved from 4377.3 to 4365.0 to 4233.0 and now down to 3777.3

German DAX moved from 4988.0 to 4938.5 to 4710.2 and now down to 4127.4

Aussie All-Ords moved from 3982.7 to 4006.6 to 3726.0 and now down 3386.9

HK Hang Seng moved from 13968.7 to 14243.4 to 13542.7 and now down 12659.2

India’s BSE 30 moved from 9788.1 to 9964.3 to 9385.4 and now down 8915.2

Japan’s Nikkei 225 moved from 8577.0 to 8853.0 to 8462.4 and now down 7910.8

Brazil’s Bovespa moved from 37256.8 to 36665.1 to 35777.2 and now down 31238.6.

There is the same picture in all countries.

The major Bankers all played the same game, and now the results are in. Everybody loses.

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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 next year. In time, I will also set up more tables and track the domestic market prices. This will come after we switch to the Drupal platform later this month.

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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
EWH	9.490	0.960	11.25%	-0.73%	-13.81%	-1.15%	-56.45%	-39.01%	-49.89%	-53.16%
GXC	37.80	4.64	13.99%	-3.08%	-7.80%	9.41%	-57.48%	-39.36%	-51.85%	-56.53%
EWJ	8.280	0.480	6.15%	-3.72%	-8.51%	-0.24%	-37.41%	-27.24%	-37.46%	-37.93%
EWU	11.00	0.48	4.56%	-6.22%	-16.16%	-4.76%	-53.94%	-42.04%	-51.92%	-54.83%
EWA	12.37	1.41	12.86%	-7.41%	-20.45%	-6.57%	-57.02%	-46.86%	-58.03%	-59.03%
RSX	12.20	1.58	14.88%	-8.20%	-32.33%	-5.06%	-76.79%	-69.85%	-78.86%	-74.08%
EWG	15.17	0.87	6.08%	-9.22%	-15.91%	-1.81%	-57.13%	-44.19%	-54.77%	-55.86%
EWQ	17.40	0.57	3.39%	-9.80%	-16.06%	-6.55%	-54.14%	-42.08%	-53.35%	-53.59%
IFN	16.40	1.75	11.95%	-11.11%	-17.26%	-8.23%	-73.51%	-56.20%	-64.92%	-69.43%
EWC	15.20	0.73	5.04%	-13.29%	-20.92%	-11.58%	-53.09%	-50.16%	-56.99%	-51.30%
EWZ	29.36	2.14	7.86%	-15.02%	-22.78%	-1.94%	-63.73%	-60.71%	-70.27%	-61.70%

The country market ETFs were all down again. It was another bad week overall. But there were big gins in the ETF’s on Friday.

Russia (RSX) gained +14.08%. China (GXC) gained +13.99%. Australia (EWA) gained +12.86%. India (IFN) gained +11.95%. The smallest gainer on Friday was France (EWQ), which was up +3.39% on the day.

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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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Taiwan’s equity market

This week I asked the Shanghai Fly if he would report from China on what he can tell us about Taiwan. You know the Fly as someone I go to for off the wall research in China, as it were. Some of you know him as a secondary school student, who I think will one day become a Trader Wizard. For my purposes, the Fly is every bit as helpful as say the Greater China Morgan Stanley Economics Team of Qing Wang and Denise Yam. But that's another story.

Here is the Fly's report on Taiwan:

Bill,
Sorry, but I'll have to list the main points in a short manner. My workload is piling up with special exams in 40 days and so on. I spent hours researching the material for this report carefully though, and at least you'll see a few numbers not often mentioned elsewhere (and which I haven't seen covered by western news).

Tourism:
14 million people went on a trip to Hong Kong in 2006 from the mainland bringing Hong Kong 120 billion HKD in tourism revenues(roughly $15 billion). However, in 2007, only 81000 mainland Chinese went to Taiwan for a trip(18% less than 2006). In 2004, only 30000 mainland Chinese visited Taiwan, and around 25000 in 2003!. The number is rapidly increasing.

Put into perspective, about 3 million tourists visit Taiwan every year. Once relations improve, mainland Chinese will visit Taiwan like they visit Hong Kong, leading to a huge boost in tourism revenues. If 14 million mainland Chinese a year are going to go to a city like Hong Kong that has barely any cultural scenes, I can imagine how much more attractive Taiwan will be. Now 3 million tourists to Taiwan generate about $4 billion in revenues now. Assuming mainland tourists to Taiwan increase to half of the number of that of Hong Kong that'll be 7 million a year, well dwarfing the current amount. Assuming they spend $4 billion too, that's 1% to the GDP. In short, the additional revenues from tourism will be strong and likely to have a good impact on the economy.

Investment:
http://www.iht.com/articles/2008/07/17/business/taiinvest.php

Various measures taken to remove restrictions on direct investment.
http://www.internationaltaxreview.com/?Page=10&PUBID=35&ISS=24924&SID=710741&TYPE=20

Before this, Taiwanese funds could only invest 1% of their net asset value in mainland Chinese stocks.

Economy:
It appears they're taking some doubtful steps to boost consumption. It appears to be a rather shoddy plan to me. http://news.bbc.co.uk/2/hi/asia-pacific/7735027.stm But it should be noted that public debt is under 30% of GDP, and therefore there is ample room for fiscal stimulus. With $98 billion in foreign debt and $270+ or so billion of foreign exchanges that should be ample.

Financial Sector:
The financial sector appears to be in an invisible crisis."Overall return for local banks in 2006 was negative. Taiwan is the 114th place in the world in terms of soundness of banks (WEF 2007).

Taiwan's financial sector is facing a serious crisis"
http://www.iht.com/articles/2008/10/20/business/deal21.php

Other than that, many banks were privatized to influential families a while ago. There's some controversy over it, but it's rather old and I haven't digged into it.

Overall, Taiwanese banks/financial sector appears to be quite "Asian", murky and relatively less transparent than Western ones, which are not serving as a good role model now either, with all the accounting rule changes etc.

Major competitiveness:

The competitiveness of the Taiwanese tech sector is formidable."No one knows for sure how much of China's exports in information and communications hardware are made in Taiwanese-owned factories, but the estimates run from 40% to 80%. As many as 1 million Taiwanese live and work on the mainland. "(There are only 23 million Taiwanese, so that's 5% with a very intimate relation with mainland China).

International:
Right now with the volatility index at 80, fear is permeating the world market.

The Taiwan index is at multi year lows. (See third chart) In fact, according to the third chart in that link, Taiwan's stock index has been going sideways for nearly 2 decades and is headed for the lower part of the channel.

I think that sums it up, I know it's a very coarse overview. But gathering information online has its drawbacks. I'll be able to keep more eyes out for info all the time after I'm admitted into university.

PS Regarding courses, I will only apply to enroll in finance/economics courses as a major, though I may minor in something else.

Thank you, Fly.

Btw, it was the Fly who told me that he believes that in China's guidance to develop an urban based consumer society in order to balance the present emphasis on manufacturing for the world, there would be many tens of millions of small rural truck farmers (averaging say an acre of land) moved to the cities to prepare the rural areas into large farms like in the US, that would be needing farm equipment, fertilizer, and so forth. He told me that a while back.

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

Interactive EWT Monthly data:

Interactive EWT Weekly data:

Interactive EWT 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.

I wrote those words a week ago, but, sure enough, the same thing happened this week, except in reverse.

Panic in; panic out. Breathe into the paper bag.

But, by extrapolating the US equity market to the rest of the world (about $44 trillion), you would have seen that, in a single hour, $2.8 trillion in global market capital was gained.

By the end of the day, the DJIA (+494.13 +6.54% to 8046.42), S&P 500 (+47.59 +6.32% to 800.03) and NASDAQ Composite (+68.23 +5.18% to 1384.35) set records.

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
HPQ	34.64	2.81	8.83%	13.72%	0.00%	6.78%	-30.46%	-25.43%	-22.68%	-29.13%
XOM	75.81	7.30	10.66%	2.89%	2.52%	9.81%	-18.93%	-5.65%	-19.07%	-12.90%
GM	3.0600	0.1800	6.25%	1.66%	-29.82%	-48.57%	-87.46%	-69.15%	-84.00%	-88.40%
WMT	52.92	2.26	4.46%	0.40%	-2.70%	2.96%	12.84%	-9.54%	-4.18%	17.97%
DIS	21.12	2.39	12.76%	0.19%	-9.59%	-6.59%	-33.67%	-33.65%	-37.25%	-32.95%
PG	63.09	3.76	6.34%	-0.03%	-2.17%	7.17%	-12.75%	-9.74%	-3.19%	-12.69%
INTC	13.11	0.88	7.20%	-1.58%	-10.39%	-8.19%	-48.28%	-43.12%	-44.59%	-46.77%
MCD	55.15	2.24	4.23%	-1.75%	-0.58%	3.94%	-5.08%	-11.49%	-6.18%	-3.80%
MSFT	19.68	2.15	12.26%	-1.89%	-8.47%	-10.38%	-44.12%	-27.59%	-30.34%	-42.51%
KO	44.00	2.93	7.13%	-2.27%	-4.86%	5.74%	-27.98%	-17.77%	-22.33%	-29.32%
MMM	61.30	4.51	7.94%	-2.79%	-5.45%	2.84%	-25.89%	-13.55%	-19.47%	-24.54%
JNJ	58.35	2.54	4.55%	-2.83%	-3.11%	-4.01%	-11.47%	-18.14%	-11.23%	-13.09%
CVX	70.49	6.09	9.46%	-3.01%	-4.04%	10.30%	-24.58%	-20.37%	-31.58%	-17.80%
KFT	26.56	1.69	6.80%	-3.21%	-6.77%	-1.99%	-17.13%	-18.70%	-17.90%	-19.05%
BA	39.58	2.47	6.66%	-3.56%	-15.03%	-12.51%	-54.31%	-37.72%	-51.25%	-54.72%
PFE	15.67	1.22	8.44%	-3.75%	-7.06%	-5.43%	-31.60%	-19.10%	-20.58%	-29.89%
VZ	28.47	1.97	7.43%	-5.10%	-5.26%	13.52%	-34.11%	-17.65%	-23.51%	-32.13%
HD	19.29	0.77	4.16%	-6.09%	-8.40%	4.21%	-26.12%	-27.40%	-28.37%	-31.23%
CAT	34.67	1.83	5.57%	-6.20%	-9.83%	4.11%	-50.91%	-49.53%	-58.43%	-48.97%
AXP	18.69	1.46	8.47%	-6.50%	-26.16%	-22.29%	-63.38%	-49.50%	-58.91%	-65.61%
IBM	74.88	3.14	4.38%	-6.78%	-13.20%	-8.76%	-28.47%	-39.12%	-39.36%	-26.75%
UTX	46.67	3.45	7.98%	-7.09%	-9.92%	-1.35%	-37.95%	-27.32%	-35.20%	-35.88%
T	25.19	0.68	2.77%	-8.90%	-6.70%	2.07%	-38.56%	-18.11%	-35.23%	-32.74%
MRK	24.40	0.84	3.57%	-10.72%	-15.63%	-10.79%	-57.47%	-29.93%	-37.64%	-56.83%
GE	14.03	1.19	9.27%	-12.42%	-25.61%	-21.31%	-61.83%	-51.20%	-54.79%	-62.25%
DD	23.03	1.08	4.92%	-16.04%	-24.39%	-21.48%	-47.35%	-47.85%	-52.52%	-48.07%
AA	8.440	1.590	23.21%	-22.14%	-24.58%	-10.31%	-76.64%	-73.74%	-79.76%	-76.00%
BAC	11.47	0.22	1.96%	-30.15%	-44.02%	-45.56%	-71.72%	-60.50%	-67.08%	-72.78%
JPM	22.72	-0.66	-2.82%	-34.09%	-39.81%	-35.87%	-46.12%	-37.34%	-46.50%	-44.15%
C	3.7700	-0.9400	-19.96%	-60.40%	-68.10%	-68.95%	-86.96%	-78.42%	-82.10%	-87.73%

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 was supposed to have reported on six DJIA components, none of which is a Cara 100 company: American International Group (AIG); American Express (AXP); Bank of America (BAC); Citigroup (C); JP Morgan (JPM); and Microsoft (MSFT). The AIG report was not done. Here are the charts.

Value Line reported previously on AIG:

Shares of this blue chip have fallen considerably since our May review, and we are advising most investors to stay on the sidelines at least until the dust settles (Timeliness: 5). The firm’s second quarter showing did little to inspire confidence and renewed fears that more fallout from the credit crunch is likely. A comprehensive review of AIG’s operations is under way. The objectives are to improve results, reduce risk, and protect the company’s capital base. Management said it will report findings to investors in September. However, Wall Street is already speculating whether or not AIG will sell off some of its units that are not central to the insurance business.
Erik M. Manning August 22, 2008

Since when is AIG a “blue-chip”? In any case, the price of AIG on the date of the report three months ago was $22.85. Friday’s close was $1.60. In the interim, the funds injected by Treasury into AIG are into too many tens of billions to even contemplate how serious this situation is.

In the Aug 22 VL report the following statement was discovered to be ridiculous in terms of misleading understatement: “Management said that a portfolio of credit default swaps (insurance policies to protect bondholders against defaults) fell in value by $5.6 billion, or $3.6 billion after taxes.” At the end of the day, management should be sent to prison for egregious reports like this. Moreover, the SEC ought to consider the Cara Rule, which would require the company CFO to be, like the CEO, on the Board of Directors, and that the CFO (and not the CEO) personally deliver every financial report and guidance. CEO’s are meant to be leaders, to be uplifting at all times. If they aren’t doing the job, the CFO should be the check and balance. The Board should have direct access.

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Citigroup (C) is the story of the week. The Value Line report of November 21 shows a price of C being $10.80. The close on Nov 21 was $3.77. That’s a -65% haircut since the analyst actually did the work, which shows that an analyst’s report could be dated in a couple hours in this market environment.

It’s always fun to see the gap between the observation and thinking of a professional analyst and the reality. The events at Citi, and the analysts commentary, make for a great case study:

An acquisition may be forthcoming in an attempt to boost deposits and to stay competitive with other large banks. CFO Gary Crittenden recently suggested that Citi has the wherewithal to buy a competitor, after losing a fight with Wells Fargo to purchase Wachovia. The deal would have brought over $400 billion in deposits with which to make loans and the like.

These shares remain untimely. Loan quality continues to deteriorate, even as management has tightened its underwriting criteria and toughened lending terms. Historically, credit card losses have risen and fallen with unemployment levels, and mortgage losses have generally continued for a longer period, even after employment has stabilized. We expect that the bank may be forced to continue adding to its loan loss reserve to offset nonperforming assets. Although capital has been boosted by a $25 billion investment from the Treasury, we expect that earnings will be challenged as loan growth and interest income are constrained, as the bank sells off parts of the business and the global economy continues to languish. We have lowered our estimates to reflect our view.

Douglas Maurer, CFA November 21, 2008

Do you recall when I mentioned several times in the blog that the height of deceit was for a really weak bank to be publicly reporting they were on the acquisitions trail? I mentioned it with Royal Bank of Scotland, Barclays, and a few US banks. I also offered some advice to the SEC investigators by saying that any banking amalgamation this year ought to be scrutinized in minute detail.

The reason I gave was that management of the weak companies would be off the hook if the combined data was able to cover up the mistakes and problems these managers did not want uncovered after they had made incriminating statements. The public should not have to put up with this nonsense. What I’m talking about is not rocket science. Senior execs were allowed to alter (ie, back date) legal records and get off scott-free. I suppose the SEC under the Administration will let these bankers have their freedom while the rest of us get the ‘change’.

As to the loss in shareholder equity in Citi this week, which happens to be -60.4% (but who’s counting anyway?), this was a series of daily hits. I guess “Citi never sleeps”.

The obese lady has sung. I could hear her from Riyadh.

The lights have gone out. If the AIG rescue ends up costing the US taxpayer about $150 billion, then Citi will be three or four times that. The only question now is who is going to pony up? US Treasury or the Kingdom Holding Company?

And how much will the US taxpayers be on the hook for Bank of America, which is not ever going to be called Bank of Saudi Arabia, and JP Morgan, which is unlikely to ever be called JP Morgan Chase Qatar? I figure that’s a trillion right there.

As for Wells Fargo Bank, with all the other sub-prime lenders bankrupt now, when is Warren Buffett going to pony up the $100 billion this bank is going to need? Oh, I forgot, Warren has gone shirtless. It seems his Hathaway is down -40% in the past 45 days. Is that like trying to fit a 17-inch neck into a 10?

Woe are these banks. That is, woe until just a few moments before 3pm on Friday when having been selected by President-elect Obama as the new Treasury Secretary, Tim Geithner popped onto everybody's radar. You could smell the relief among bankers in the 500 point move in the DJIA index in just 60 minutes to close the week. If true, those bankers must be partying this weekend.

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I really don’t care to discuss these banks. They are all speculations. Not being in the room with Paulson, Dimon, Mack, Geithner, Obama, Rubin, and friends, the rest of us don’t have a clue.

And speaking of boardrooms, Jamie Dimon goes from Citigroup to Bank One to JP Morgan – like musical chairs. He then listens to Geithner play the violin from his A Director’s chair at the New York Fed.

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As for American Express (AXP), I like the VL analyst’s wrap:

But we think stock-price recovery potential is appealing, assuming, of course, that the economic situation in the U.S. improves with time. Patient investors may want to take a look at these shares.

Frederick L. Harris, III November 21, 2008

I find it funny actually. The report is dated November 21, priced at $22.40, while the closing price on Friday Nov 21 was $18.69. That’s a gap of -16.6%, so I guess the “stock price recovery potential is (even more) appealing.” But, “that’s assuming, of course, the US economy improves with time.”

Hmm… Is this stuff getting too deep for the Grade 12 Economics class at Oakville’s Appleby College or is it actually a pre-requisite knowledge for Grade 7 entrance?

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Microsoft (MSFT $19.68) is down -42.5 in the past year, which seems to be explained by the fact that revenues of the biggest customers (like Dell for instance) are falling Year over Year.

Aha, on Monday we get an important piece of news on this front. Hewlett-Packard (HPQ) is reporting. They pre-reported indications of a good profit performance, but some of us want to know about sales. Mark Hurd has proven an effective cost cutter, but can he sell computers?

I ran the 6-month correlation study for MSFT and discovered there is a 95-96% correlation with XLNX, ADSK, DSI, ELOS, KELYA, LFUS, NVLS, ONEQ, PSP and VECO. I wonder if Bill Gates or Steve Ballmer even know half the stuff that students-of-the-market know?

The VL analyst seems really cranked up on the positive aspects of Microsoft and MSFT. I wonder what he thinks of the global economic recession, the potential Yahoo take-over, or the issues within Google? I guess we wouldn’t know because he just seems to be cranked. He’s drooling over the good start to the fiscal year, the terrific share buy-backs and the upcoming Windows and Office suite, which might actually work.

Enough of this stuff. It’s not going to help me make money.

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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 Nov. 21: next one is due Feb. 20)

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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 Nov. 21: next one is due Feb. 20)

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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 Nov. 21: next one is due Feb. 20)

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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 Nov. 21: next one is due Feb. 20)

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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 Nov. 21: next one is due Feb. 20)

---

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 ????)

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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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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)

---

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

---

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

---

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

---

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

---

IBM [GICS 45, Dow 30, Cara 100]
(IBM: Google Finance file)
(IBM: Yahoo Finance file)
(IBM: StockChart chart)
(IBM: Billcara2 chart)
(IBM: ADVFN Financial Data)
(IBM: Value Line Report Oct. 10: next one is due Jan. 9)

---

Intel [GICS 45, Dow 30, Cara 100]
(INTC: Google Finance file)
(INTC: Yahoo Finance file)
(INTC: StockChart chart)
(INTC: Billcara2 chart)
(INTC: ADVFN Financial Data)
(INTC: Value Line Report Oct. 10: next one is due Jan. 9)

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

---

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

---

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

---

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

---

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

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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)

---

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)

---

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)

---

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)

---

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)

---

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 Nov. 21: next one is due Feb. 20)

---

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 Nov. 21: next one is due Feb. 20)

---

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 Nov. 21: next one is due Feb. 20)

---

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 Nov. 21: next one is due Feb. 20)

---

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 Nov. 21: next one is due Feb. 20)

---

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 Nov. 21: next one is due Feb. 20)

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Wrap-up:

For the Cara Bahamas 2009 Conference, the event co-coordinator, Jim Watt, is looking for suggestions/discussions here for topics that would really make you want to come to Paradise Island/Nassau and be able to justify the cost when money is tight.

Response emails could be sent to JimWatt [at] CaraTrading.com.

Jim says our group will get considerable room price reductions at Atlantis, reducing the cost of a family holiday there. Many of the activities will be sponsored.

This conference will be about trading. I happen to believe that attendees will learn enough to be able to recover the cost of attendance just from trading profits. Meeting other Caraistas will be priceless.

…Now I can get to the Hash, then Jollification, and finally to bed. Big week coming up.

Have a good one.

Should, in fact, be a good one. Thanksgiving is a time for celebrating the harvest, which for many of you has not been so bountiful. But, the Obama message is one of hope. This will be a week he introduces his A Team.

The Obama Team will be encouraging us to plant our seeds now so that next year's harvest will be a good one. He hopes, I hope, we all hope.

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