Bill Cara’s Week in Review #13, 2013

[12:40 pm ET Sunday] All eyes on Cyprus! Why? I don’t have a clue other than maybe it’s because of the similarities with Hitler’s army take-over of Austria in 1938 – small, defenseless and not able to put up any resistance – before the Nazi forces went on to bigger things and to hell with international law.

Trying to make sense of what’s happening in this event, I watched BNN financial-TV from Toronto, hoping to get an objective viewpoint. The reporter was interviewing someone from the American giant money manager PIMCO who proceeded to say that the whole thing would be quickly resolved and would not affect us much. After all, he said, Cyprus was (I’ll paraphrase) “one-tenth as important as Canada”.

The bloody insult! I turned the channel.

Cyprus is ranked the world’s 125th biggest economy with a GDP of about $22.5 billion. The GDP of Canada, however, is about $1.5 trillion (purchasing power parity), number 14 in the world, about 75 times bigger.

But other than dismissing Canada as a non-player (to a Canadian audience nonetheless), what was this PIMCO Oberleutnant’s message? I suppose he was telling us his boss manages over $2 trillion and the rest of us are Austrian peasants.

I don’t like what I see.

A week ago I started the WIR with these words:

This week equity market prices lifted a bit before the selling started on Friday. The few stocks that out-performed on the upside this week appear very much to me to be whip-saw set-ups. Instead of buying them, you ought to have been selling.

I added a general discussion because people need to be reminded:

Remember, you sell into strength and buy into weakness. That’s a rule the other side – the market interventionists – hate. They are the experts at pump and dump. Regrettably, 70% of you do exactly what they expect you will do. Human emotion tells you to go with the flow – you buy and sell with the crowd. Too many of you listen to the Fed’s Talking Heads and the media clowns.

This week, despite the sizeable gain on Friday, there was some selling. The S&P 500 gained +0.40% on Friday but still managed to lose -0.24% W/W. Are you feeling better because of Friday or are you watching closely?

There is one aspect of the market I find intriguing, which happens to be the US housing market. Too many people I think are confused by the great interest by investors in the Homebuilders, and I don’t understand why.

The chart shows the house builders index rising steadily for 20 months:

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The point & figure chart shows an “Ascending Triple Top Breakout on March 19”:
http://stockcharts.com/def/servlet/SC.pnf?c=$DJUSHB,P

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The answer lies in the mortgage rates, which have plummeted -33% since January 2011, now down to ~3.4%. The response to lower rates is clearly shown in the New Home Sales chart as follows:

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In the coming week there will be three reports on US housing, the first two on Tuesday and the other on Wednesday: (i) S&P Case-Shiller HPI, (ii) New Home Sales, and (iii) Pending Home Sales Index. Along with important econ reports to come this week including Durable Goods Orders, GDP and Personal Income & Outlays, there is the start of Earnings Season.

There will be some disappointments. This week Oracle (ORCL) was one. The stock plunged -12.0%, which was a haircut to shareholders of some -$16 billion – almost the annual GDP of Cyprus.

In US equities this week, there were 5 sectors up and 5 down – thanks to Friday when all 10 were up. In fact had it not been for the gains on Friday only one sector – Consumer Staples (XLP) – would have been up. As it is, the three defensive sectors – XLP, IYH(Healthcare) and XLU (Utilities) – were the leaders. The three leaders on the downside were XLB (Basic Materials), XLF (Financials) and XLE (Energy).

Internationally, only 1 of 19 non-North American equity markets I follow was higher, and of the US Dollar denominated Country ETF’s I follow, 11 of 17 were lower. That’s a lot softer than a week ago, which happened to be softer than the week before that.

This all goes to show the equity market was selling off this week. Capital was flowing into Bonds. The 20-year US Treasury (TLT) popped +1.4% W/W.

Gold (+2.20% W/W) was strong, but Silver (-0.19% after falling -1.42% on Friday), Platinum (-0.41%) and Palladium (-1.42%) were all down. Crude Oil ($WTIC) gained +$0.42/bbl (+0.45% W/W). Copper dropped -5cts (-1.53%).

Now to the charts that I keep in front of you each WIR.

As you know, I recommend studying certain key ratio charts in capital markets to assess “the weight of the evidence” before you firmly establish a mind-set on Bull or Bear. Most of these indicators have been bullish recently.

For these studies I look at the ratio charts of:
• US Bonds ($USB) vs the US S&P 500 ($SPX)
• Global Dow Index ($GDOW) vs US 20-year Treasury Bonds (TLT)
• MSCI World Equity ex-US ($MSWORLD) vs the US S&P 500 ($SPX)
• US small cap Index ($RUT) vs the US large cap S&P 500 ($SPX)
• Canada (EWC, in USD) vs US S&P 500 (SPY)
• US Industrials (XLI) vs S&P 500 (SPY)
• Consumer Discretionary (XLY) vs Consumer Staples (XLP)
• Euro ($XEU) vs US Dollar ($USD)
• US Treasury Inflation Protected Bonds (TIP) vs US 20-yr Treasury Bonds (TLT)
• Goldminers (GDX) vs Gold Bullion ($GOLD)
• Silver Bullion ($SILVER) vs Gold Bullion ($GOLD)
• Junior Gold Miners (GDXJ) vs Senior Gold Miners (GDX)
• Oil Services Companies ($OSX) vs Integrated Oil companies ($XOI)
• Semi-Conductor Tech Companies (SMH) vs Major Tech Companies (XLK)

With these ratio charts, the good thing is that you are looking at the market speak, not the media. You can see for yourself the unfolding of relationships – i.e., what is actually happening in the market today, and from there you can study the reasons for it, such as the corporate or industry reports, the commodity prices, interest and dividend yields, impact of regulation and government policy, and so forth. Not all charts will give you a bullish or bearish picture, at least most of the time, but you take it all under consideration and go from there. There are different time frames – short, intermediate and long – and you are trying to time your entry or exit with the simultaneous reversal of all three. Also, if the big picture gets too extreme one way or the other, the trend is not likely to last in that direction and you ought to be looking for signs of a reversal.

A ratio chart, which is simply the first data series divided by the second, will show you clearly what is happening in terms of market drivers over the time period I am studying. It could be Daily, Weekly or Monthly data. As there may be a market cycle event on the way, I’ll be changing this week from a Daily to a Weekly data series to get a Big Picture view of where the market stands today.

If the line is rising, the first data series is strengthening. The S&P 500 by itself is in the solid thin orange line in the background. In the case of a Bull phase for equities, which some are calling the ‘risk on trade’, the line should be rising for the particular studies that follow, and the line should be above the 8-month Exponential Moving Average.

The following short-term Weekly data series charts show a definite change to ‘risk on’ in mid-November – a point in time when I noted that the pundits were over-the-top with their negative doom-and-gloom forecasts:

1. Weekly US S&P 500 ($SPX) vs Weekly US Bonds ($USB)—conclusion: RSI-7 has dropped below the 70-line, but the ratio at 10.805 is still above the 8-week EMA of 10.67, hence is still Bullish, so a Bullish primary case since mid-November persists. However, the chart is getting close to a Neutral reading, which some will then interpret at Bearish.

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2. Weekly MSCI World Equity ex-US ($MSWORLD) vs US 20-year Treasury Bond (TLT)—conclusion: The RSI-7w failed to regain the 70-line, which is a negative, but the ratio line is still at 14.53, which is above the 8-week EMA of 14.42, so a Bullish primary case since mid-November persists. However, the chart is getting close to a Neutral reading, which some will then interpret at Bearish.

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3. Weekly MSCI World Equity ex-US ($MSWORLD) vs US S&P 500 ($SPX)—conclusion: The Weekly chart has changed from Bearish to Neutral and back to Bearish. International investors have been selling while US investors are rotating through their positions, encouraged by the Dow 30 Bullishness. Econ data and the upcoming Earnings Season may change the minds of the US investors however. The next Bull run for equities will be led by gains made in the international markets, likely starting after the first week in April, pumped up by central banks.

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4. Weekly US small cap Index ($RUT) vs the US large cap S&P 500 ($SPX)—conclusion: A Bullish primary case since min-November persists; however the RSI-7w at 67.24 has dropped below the important 70-line.

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5. Weekly Canada (EWC, in USD) vs US S&P 500 (SPY) —conclusion: Remains sharply Bearish, which is not surprising as the Fed is pumping liquidity into the market and the Bank of Canada is not. But Canada is much oversold, which to me is indicating a possible reversal within one month and, should it happen, that would be a positive indicator for a global Bull run in equities.

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6. Weekly US Industrials and Transports (XLI) vs S&P 500 (SPY)—conclusion: The Bullish primary case since mid-November has broken down. This is a Bearish chart. The leader on the downside is Fedex (FDX -9.7% W/W).

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7. Weekly Consumer Discretionary (XLY) vs Consumer Staples (XLP)—conclusion: From Bullish the chart is now Bearish. The ratio line at 1.34 has fallen below the 8-week EMA (1.35) and the RSI-7w is now below 50 at 45.30.

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8. Weekly Euro ($XEU) vs US Dollar ($USD)—conclusion: Extremely Bearish still, which will hold back the emergence of the next Bull run. As long as there are manufactured events like Cyprus popping up, there will be opinions from politicos that the EU is doomed and the Euro will be weakened. When these Interventionist central bankers and their Friends and Family want the global equity market to lift, they will manufacture a stronger Euro. Watch for it. I believe it will start in April, and by then these people will all be positioned in the stocks they want to hold, ready to profit from their games. This situation is precisely why there is a 1% and a 99%.

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9. Weekly US Treasury Inflation Protected Bonds (TIP) vs US 20-yr Treasuries (TLT)—conclusion: The primary Bullish condition has weakened and is now Neutral, with a forward looking Bearish tone.

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10. Weekly Goldminers (GDX) vs Gold Bullion ($GOLD)—conclusion: Remains sharply Bearish. But is much oversold, which to me is indicating a possible reversal during April. Needs a weaker Dollar to support a Bull run.

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11. Weekly Silver Bullion ($SILVER) vs Gold Bullion ($GOLD)—conclusion: The Weekly data chart has been Bearish for about six months. I am anticipating this chart to go strongly Bullish in April, like 2H10 and 1Q2011.

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12. Weekly Junior Gold Miners (GDXJ) vs Senior Gold Miners (GDX)—conclusion: From “clearly Bearish, and showing no signs it may be ready to reverse”, this chart recently reversed to a Bullish pattern on the Weekly. I believe the market is setting up for a Bull run in precious metal stocks, starting in April.

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13. Weekly Oil Services Companies ($OSX) vs Integrated Oil companies ($XOI)—conclusion: Now Bullish. Risk-off clearly shows here. In absolute terms, CVX and XOM were not strong this week; but relative to the Drillers were very strong. Nabors Drilling (NBR) for example plunged -10.6% this week. With risk-on, this situation reverses. That will be the case by no later than mid-April I believe.

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14. Weekly Semi-Conductor Tech Companies (SMH) vs Major Tech Companies (XLK)—conclusion: A week ago I wrote: “The primary condition has been Bullish since early October, but is threatening to go Bearish. On Friday, SMH dropped -1.72% on the day while XLK was down -0.82%. To stay Bullish, SMH next week must be relatively stronger.” This week SMH dropped -0.31% W/W while XLK was up +0.11%, so the primary trend is now Bearish.

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Using the Weekly ratio chart data this week, I sum up the Bull:Bear picture as being 4 Bullish, 9 Bearish and 1 Neutral. This is the start of the reversal I called for a week ago when I interpreted these 14 charts as being 8 Bullish, 3 Bearish and 3 Neutral.

I think there will be two more weeks of Bearishness ahead, and then BAM!, the central banks will hit the liquidity switch. You’ll see that when the US Dollar sells off.

Now it’s time to look at what happened this week with the US economic reports, which, this week, were plentiful and the data was quite mixed.

For an objective presentation, here is the US summary and the headlines from the Econoday analysts:

The bottom line: he recovery continues to gain traction throughout key sectors. However, uncertainties remain—including the impact of sequestration and Europe. The Fed is keeping monetary policy loose but it is increasingly being debated how much marginal impact the Fed is having.

For this week, the econ headlines were as follows:


• The Fed holds the course on policy
• Housing starts improve in February
• Existing home sales rise as supply jumps
• FHFA home prices gain in January
• Philly Fed makes a comeback in March
• Leading indicators point to moderate momentum

… Looking Ahead: Week of March 25 through 29 — Manufacturing has shown signs of regaining strength—even in regional surveys. The durables orders report could add to that momentum. Existing home sales and FHFA home prices posted advances this past week. New home sales and Case-Shiller this week may boost confidence in the housing recovery. The impact of higher payroll taxes is still a concern and traders will be parsing the personal income report for any slippage in the consumer sector.

From recent weeks, the econ headlines were as follows:


• Retail sales show unexpected strength in February
• Business inventories recover in January after weak Q4
• Consumer sentiment dips in early March
• Industrial production jumps in February
• Empire State manufacturing remains positive in March
• Consumer price inflation spikes in February on energy costs
• Producer price inflation jumps in February
• February employment surprises on the upside
• Consumer credit in January up on student loans
• International trade deficit widens in January on oil
• ISM non-manufacturing index improves in February
• Fed’s Beige Book indicates a soft Q1
• Fed chairman’s testimony soothes markets
• Q4 GDP growth turns positive but not as much as expected
• Personal income fell on fiscal cliff effects
• Motor vehicle sales in February hold strong
• Consumer confidence and sentiment unexpectedly go up
• New home sales unexpectedly jump in January
• Pending home sales jump in January
• FHFA and Case-Shiller home prices rise further in December
• New durables orders swing back down in January
• Markit and ISM manufacturing readings still positive

Because of the track-record of independence and objectivity, I encourage you to read the Econoday reports on the US economy. If we had more time in a day, we’d also be looking at the econ data for the rest of the world – at least more of it.

As for our studies this week, we’ll first look at the detailed economic data for the week that passed and the one ahead. Then we’ll get into the market prices, and the trends and cycles of Currencies, Bonds, Equities, Commodities and Precious Metals.

One final point before we get into our weekly study of markets, when it comes to trading equities I believe that the term “stock-picking” is inadequate and misleading. Instead, since a company is not a stock – i.e., a stock is just a price — you need to be “company picking” and “market timing”. I cannot stress that more.

While pure traders might disagree, I strongly believe that investor success is a consequence of asset allocation and portfolio management as much or more than simply trading execution.


Global Economics Review

Global Report from Econoday Chief Economist Anne Picker:

The tiny island of Cyprus continues to be the focus of global investors. The financial situation there threatens to upset the relative tranquility that has permeated the Eurozone markets since mid-summer when ECB President Mario Draghi said the European Central Bank may undertake fresh unconventional measures in the future, including bond purchases through the securities market program (SMP), and would develop modalities aimed specifically at repairing the monetary policy transmission mechanism… Cyprus is the fifth and latest member of the Eurozone to seek a rescue package from the troika of the European Central Bank, the IMF and the European Union. While relatively small when compared with other countries, Cyprus is seeking €10 billion. The original bailout package included the imposition of a tax on bank deposits of all sizes specifically aimed at ensuring that investors contribute to the deal. Deposits of less than €100,000 were to be subject to a levy of 6.75%, rising to 9.9% for deposits in excess of this amount. In total, the new tax was expected to generate around €5.8 billion. The package was subsequently rejected unanimously by the Cypriot Parliament and alternative ways to raise the needed euros are being sought. Cyprus looked for a loan from Russia but it was subsequently denied. Banks in Cyprus were closed for the week to prevent a run and will be closed until Tuesday — but this too could be extended… This is the first time that savers have been threatened to be hit in this way and the move clearly raises the risk of prompting a run on banks in other financially troubled economies, notably politically gridlocked Italy and (still fiscally challenged) Spain. Any such response would increase dependency upon emergency funding from the ECB, limit the availability of much needed lending to the private sector and, by undermining still typically cautious investor sentiment, threaten the stability of the single currency itself… On Thursday, the European Central Bank turned on the pressure and announced that it will stop emergency funding to Cypriot banks on Monday if the troubled country fails to agree on a bailout program with its European partners by then. The ECB said for it to continue emergency lending thereafter, Nicosia should adhere to the bailout conditions set by the EU and the International Monetary Fund… At this writing (2:00 PM ET Friday), the Cyprus government is in hard negotiations with the Troika to reach a solution on bailout terms. Cypriot Finance Minister Michalis Sarris, who was in talks with Russian authorities for possible financial aid, left Moscow on Friday after failing to secure funding. Cyprus had offered Russia assets in return for cash. Separately, Cyprus agreed with Greece to spin off Greek branches in Cypriot banks. Cyprus agreed with Greece on a takeover of the Greek units of Cypriot banks, which ended uncertainty over the fate of those operations. Troika officials have increased the contribution demanded of Cyprus for its bailout package to €6.7 billion from €5.8 billion according to press reports. The troika wants to include a safety cushion of €900 million to reflect worsened fiscal conditions and expected capital outflows.

Econoday’s Global Perspective is written by chief economist Anne Picker.

US Report from Econoday Senior US Economist Mark Rogers:

The U.S. economic recovery continued to make notable progress this past week. But concerns about Cyprus drowned out that news.

Mark Rogers is the author of The Complete Idiot’s Guide to Economic Indicators, Penguin Books, 2009. I recommend it.

The reason I devote much time in the WIR to the reporting and analysis of economic data is for us to gain an understanding of important reasons behind the ebb and flow of capital market prices and the sector rotation within markets. After you follow these reports from month to month you will get a sense of the interrelationships between the business or economic cycle and the capital market cycle.


Here are the key US economic reports from last week’s calendar.

US NFIB Housing Market Index for mid-March

After the release of the latest data on 3/18/2013, 10:00 AM ET, Econoday reported, Advanced indications on the new home sales market have surprisingly and unfortunately turned lower the last two months. Home builders are blaming lack of available lots and lack of available credit for a two point downturn in the housing market index to 44, off from a recovery peak of 47 hit in December and January and further below breakeven 50 to indicate that more builders describe conditions as bad than good. The results are well below the Econoday consensus for 47 and even the low estimate for 46… Weakness is centered in the present sales component, down four points to 47 which is a negative indication for current new home sales. But the report’s two other components — sales six months out and traffic — both show gains which is a positive indication for future sales and ongoing construction. Six month sales rose one point to 51 which is the best reading since November. The traffic component bounced three points higher to 35, still well below 50 but going in the right direction… Regional breakdown show rising and notable strength in the West where the reading is approaching 60. The Midwest is at 50 while the South, falling to 42, appears to be backing away from 50. The Northeast, under 40, is clearly lagging… Though the today’s report is mostly negative, the readings on future sales and on traffic may help offset negative reaction in today’s stock market. Next data on the housing sector will be housing starts tomorrow morning.

US Housing Starts for February.

After the release of the latest data on 3/19/2013, 8:30:00 AM ET, Econoday reported, Housing starts made a partial comeback in February, but more importantly, housing permits made a sizeable gain. In February, housing starts rebounded 0.8%, following a drop of 7.3% the prior month. The February starts annualized level of 0.917 million units very marginally fell short of analysts’ forecast for 0.919 million units and was up 27.7% on a year-ago basis… The increase in starts was led by a monthly 1.4% increase in the multifamily component after a 19.2% decline in January. The single-family component rose 0.5% after dipping 0.3% in January… By region, the gain in February starts was led by the Midwest region which rebounded a monthly 37.5%. Also gaining was the Northeast, up 18.4%. Declines were seen in the West and South, down 7.2% and 5.7%, respectively. Regional numbers largely reflected reversals of moves in January… Permits continue on a moderate uptrend, rising 4.6% to an annual pace of 0.946 million units. Market expectations were for 0.925 million units for February permits… Overall, housing starts are volatile during winter months due to weather and large seasonal factors. Nonetheless, starts are on a modest uptrend, fueled in part by shortage in supply and also slowly rising demand boosted by low mortgage rates. Permits, less affected by weather, are heading up and this is a positive for the economy. The housing numbers should not only nudge up construction employment but also consumer confidence.

US FOMC Meeting Announcement.

After the release of the latest data on 3/20/2013, 2:00:00 PM ET, Econoday reported, The Fed left policy rates unchanged. However, the vote was 11-1 to retain QE with Kansas City Fed president Esther George dissenting. The Fed acknowledged improvement in portions of the economy but was concerned about fiscal drag. Basically, the Fed is saying that it is going to wait and see how the economy is progressing before making policy changes… Guidance was mostly the same but somewhat expanded. Key numbers are 6.5% unemployment and 2.5% inflation expectations. Rates are expected to remain exceptionally low until this unemployment threshold is reached and as long as inflation expectations do not exceed this mark… But the Fed clarified that it is looking at a wide range of economic information. This reflects recent FedSpeak… “In determining how long to maintain a highly accommodative stance of monetary policy, the Committee will also consider other information, including additional measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2%.” …The Fed does see the economy as having improved but worries about the negative impact of federal sequestration. And the economy-notably in terms of unemployment-is not yet where it needs to be… “Information received since the Federal Open Market Committee met in January suggests a return to moderate economic growth following a pause late last year. Labor market conditions have shown signs of improvement in recent months but the unemployment rate remains elevated. Household spending and business fixed investment advanced, and the housing sector has strengthened further, but fiscal policy has become somewhat more restrictive. Inflation has been running somewhat below the Committee’s longer-run objective, apart from temporary variations that largely reflect fluctuations in energy prices. Longer-term inflation expectations have remained stable” …Overall, the Fed is on hold. Quantitative easing continues as earlier established. Earlier purchase programs for buying mortgage-backed securities and Treasuries continue… “To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee decided to continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month.” …”The Committee will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability. In determining the size, pace, and composition of its asset purchases, the Committee will continue to take appropriate account of the likely efficacy and costs of such purchases as well as the extent of progress toward its economic objectives.” …The Fed is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. This will continue downward pressure on longer-term rates… Fed policy remains extremely loose and policy is on hold. The Fed is waiting to see the impact of fiscal sequestration before even changing guidance on easy policy. But the latest statement indicates that the Fed is watching current data to make future decisions. This is not new to the Fed but it may suggest that the Fed sees the recovery gaining traction.

US FOMC Forecasts.

After the release of the latest data on 3/20/2013, 2:00 PM ET, Econoday reported, The Fed left its forecast for GDP little changed. Unemployment is a little lower. Inflation is a little lower for 2013 but forecasts are unchanged for 2014 and 2015… Regarding the timing of the next firming in policy, 1 participant indicated it should be in 2013 (versus 3 at the December meeting), 4 in 2014 (was 2), 13 in 2015 (was 12), and 1 in 2016… Central Tendency Forecasts…
Change in real GDP:
March projections: 2013: 2.3 to 2.8%; 2014: 2.9 to 3.4%; 2015: 2.9 to 3.7%; longer run: 2.3 to 2.5%
December projections: 2013: 2.3 to 3.0%; 2014: 3.0 to 3.5%; 2015: 3.0 to 3.7%; longer run: 2.3 to 2.5%
Unemployment rate
March projections: 2013: 7.3 to 7.5%; 2014: 6.7 to 7.0%; 2015: 6.0 to 6.5%; longer run: 5.2 to 6.0%
December projections: 2013: 7.4 to 7.7%; 2014: 6.8 to 7.3%; 2015: 6.0 to 6.6%; longer run: 5.2 to 6.0%
PCE inflation
March projections: 2013: 1.3 to 1.7%; 2014: 1.5 to 2.0%; 2015: 1.7 to 2.0%; longer run: 2.0%
December projections: 2013: 1.3 to 2.0%; 2014: 1.5 to 2.0%; 2015: 1.7 to 2.0%; longer run: 2.0%
Core PCE inflation
March projections: 2013: 1.5 to 1.6%; 2014: 1.7 to 2.0%; 2015: 1.8 to 2.1%; longer run: NA
December projections: 2013: 1.6 to 1.9%; 2014: 1.6 to 2.0%; 2015: 1.8 to 2.0%; longer run: NA

US Fed chairman’s media conference.

After the release of the latest data on 3/20/2013, 2:30 PM ET, Econoday reported, During Q&A, Fed Chairman Ben Bernanke noted that the level of asset purchases will depend on the status of the economy, especially labor market numbers including the unemployment rate, payroll jobs, and the hiring rate. The lack of thresholds on QE is due to the complexity of the problem. Asset purchases will depend on the costs and benefits. Bernanke sees the eventual unwinding of assets as manageable… Bernanke noted improvement in the labor market but stated that the Fed needs to make sure that improvement is not temporary but sustained… Regarding Cyprus, Bernanke stated that the Fed is monitoring the situation but does not see substantial risks to the U.S. economy… Bernanke stated that monetary policy is not being determined by asset prices, including stocks, but the Fed is looking at its mandate to focus on unemployment and inflation. He sees the Fed taking a balanced approach to policy. However, he noted that the Fed does not have enough firepower to get to full employment more quickly… Regarding recent stress tests of major banks, the chairman said the severely adverse scenario was appropriate for evaluation of capital needs… Basically, the chairman’s press conference confirms a continuation of easy monetary policy as the economy improves but risks from sequestration remain.

US Jobless Claims for week ending 3/16.

After the release of the latest data on 3/21/2013, 8:30 AM ET, Econoday reported, Jobless claims continue to signal improvement in the labor market. Initial claims did inch 2,000 higher in the March 16 week to 336,000, but the four-week average is down 7,500 to 339,750 which is a new recovery low. A comparison of the March 16 week with the February 16 week, which matches the sampling weeks of the government’s monthly employment report, shows a big 30,000 decline. A comparison of the four-week averages for the sampling weeks shows a 22,000 decline. These comparisons point to solid improvement for the March employment report… Continuing claims are also pointing to improvement. Though edging 5,000 higher in data for the March 9 week to 3.053 million, the four-week average is at a new recovery low of 3.076 million for a 28,000 decline from the prior week. The unemployment rate for insured workers is unchanged at 2.4%, also a recovery low.

US PMI Manufacturing Index Flash.

After the release of the latest data on 3/21/2013, 8:58:00 AM ET, Econoday reported, Growth in the nation’s manufacturing is steady and solid based on the PMI flash index for March which rose six tenths to 54.9 vs the final February reading of 54.3 (the flash reading for February was slightly higher, at 55.2). Any reading above 50 indicates monthly growth, and the further over 50 indicates a greater rate of growth… Orders are building in the report’s sample with new orders at 55.9, for a 1.5 point gain, with new export orders moving back above 50 to 51.2 for a sizable 2.7 point gain. The level of backlogs is little changed at 50.1. …The rate of monthly output growth, at 56.8, is steady and solid while employment is rising, up 1.1 points to 54.6. Delivery times are lengthening which is another sign of activity. Other readings show little change for inventories and a slight easing in price pressures… This report has yet to get much play in the markets but it does offer confirmation that the manufacturing sector, despite weakness in foreign markets, is healthy. The Philly Fed report, which does get a lot of play in the markets and which has been profoundly weak in prior reports, will be posted later this morning at 10:00 a.m. ET.

US FHFA House Price Index for Jan.

After the release of the latest data on 3/21/2013, 9:00:00 AM ET, Econoday reported, Home prices continue to be on the mend. The FHFA price index for January increased 0.6%, following a rise of 0.5% the prior month. The January gain was led by the Pacific region, increasing 1.6%. The weakest region was New England, down 0.7% for the month… The year-on-year rate for January came in at plus 6.5% versus 5.6% for the prior month… Home prices are gradually improving although still below pre-recession peak levels. Still, this trend should be boosting consumer confidence.

US Existing Home Sales data for Feb.

After the release of the latest data on 3/21/2013, 10:00:00 AM ET, Econoday reported, A curious improvement in existing home sales data for February was a jump in supply. Also, sales improved. Existing home sales rose 0.8% to an annualized pace of 4.98 million units. January was revised to up 0.8% from the initial estimate of 0.4%… Low supply had been holding down sales but that appears to be changing as higher prices are bringing more homes into the market. Supply jumped 9.6% to 1.94 million units. Months’ supply rose to 4.7 months from 4.3 months in January… Prices are rising as the median sales price gained 1.8% to $173,600. This followed a drop of 5.3% in January. On a year-ago basis, prices are up 11.6%. Prices for existing home sales are not on a repeat sales basis and are impacted by shifts in sales between high and low end… Overall, the moderate upward trend for improvement in the housing sector continues. The gain in supply is especially positive, reflecting homeowners’ acknowledgement of rising prices. This also should be a boost for consumer confidence although there are cross currents on that issue.

US Philadelphia Fed Survey for March.

After the release of the latest data on 3/21/2013, 10:00:00 AM ET, Econoday reported, The Mid-Atlantic has been lagging other manufacturing regions which makes today’s 2.0 level for March a special plus. The reading, slightly over breakeven zero, indicates modest monthly growth and importantly indicates stability following heavy contraction in February (minus 12.5) and moderate contraction in January (minus 5.8)… New orders, at plus 0.5, show slight improvement from February with the rate of contraction in backlogs easing a bit to minus 6.4 vs minus 11.2. …Shipments, at plus 3.5, and employment, at 2.7, are both showing slightly higher rates of growth. The overall six-month outlook is also positive, improving four tenths to a solidly optimistic level of 32.5. Price data show slightly easing pressures for inputs but continued softness for finished goods… The strength in this report isn’t gangbusters but, compared to prior months, suggests that the Mid-Atlantic region may finally be joining the nation’s other regions in showing growth. Today’s report should be yet another positive for today’s session.

US Leading Economic Indicators for Feb.

After the release of the latest data on 3/21/2013, 10:00:00 AM ET, Econoday reported, The outlook for economic expansion is steady and respectable, at least before effects hit from the government sequester. The index of leading economic indicators is up 0.5% in February, the same rate of growth from an upwardly revised 0.5% in January and vs a 0.4% rate of growth in December… Strength is broad based with eight of 10 components showing monthly gains. Financial readings are strong positives including the report’s leading credit component. Rising use of credit points to resilience for consumer spending and business spending. A special plus for February is a rise in building permits which points to strength for the housing sector. Also up is the factory workweek which indicates strength in manufacturing… Other readings include a 0.2% gain for the coincident index which signals a modest rate of current growth. The lagging index is little changed with a 0.1% gain… The outlook for the economy may be picking up based on this report which is warning, however, that cuts in government spending tied to the sequestration are an unknown risk. The economic news today, aside of course from ongoing uncertainty over Cyprus, has been very good and this report is part of it.


Here are the key US economic reports from next week’s calendar.

US Dallas Fed Manufacturing Survey for mid-March

Before the release of the latest data on 3/25/2013, 10:30 AM ET, Econoday reported, The Dallas Fed general business activity index expanded in February but generally at a slower rate as the business activity index eased to 2.2 from 5.5 in January. Still, this was one of the more positive regional reports on manufacturing. The production index, a key measure of state manufacturing conditions, fell from 12.9 to 6.2, indicating that growth continued but at a slower pace. Other measures of current manufacturing activity also indicated slower growth in February. The new orders index was positive for the second month in a row, although it fell from 12.2 to 2.8.

US Durable Goods Orders for February.

Before the release of the latest data on 3/26/2013, 8:30:00 AM ET, Econoday reported, Durable goods orders in January reversed back down 4.9%, following a spike of 3.6% in December. The transportation component was the key culprit behind the drop, which plunged 19.8% after a 9.9% gain in December. Excluding transportation, durables orders increased a healthy 2.3% in January after a 0.8% rise the month before. Apparently, the manufacturing sector cannot wait for the government to decide on how to resolve fiscal issues. Numbers reflect revisions from the more recent total factory orders report. Total orders should get some lift from transportation as Boeing reported a boost in orders.

US 20-city Home Price Index for January.

Before the release of the latest data on 3/26/2013, 9:00:00 AM ET, Econoday reported, The S&P/Case-Shiller 20-city home price index (SA) was up a very strong 0.9% for December’s 20-city. This rate was the best since last year’s second quarter when monthly gains averaged a recovery best 1.0%. The adjusted year-on-year rate for December was plus 6.9% which is the highest since the giant housing bubble back in 2006. Given last week’s gain in FHFA home prices of 0.6%, Case-Shiller is likely to post a notable gain also.

US New Home Sales for Feb.

Before the release of the latest data on 3/26/2013, 10:00 AM ET, Econoday reported, New home sales in January surged a monthly 15.6% to an annualized 437 thousand from an upwardly revised 378 thousand for December. The median sales price unexpectedly dropped to $226,400 from $249,800 in December. But the data do not reflect repeat transactions. New home sales may track last week’s gain in existing home sales for February. A key number will be months’ supply which may indicate how homebuilders really feel about the housing market. Supply for existing homes jumped sharply in last week’s numbers.

US Richmond Fed Manufacturing Index for March.

Before the release of the latest data on 3/26/2013, 10:00 AM ET, Econoday reported, The Richmond Fed manufacturing index for February posted at 6 to show monthly growth from January which was a very weak month in the region. Shipments were up strongly along with capacity utilization and, very importantly, employment. Negatives were no change for new orders and another contraction for backlogs.

US Pending Home Sales Index for Feb.

Before the release of the latest data on 3/27/2013, 10:00:00 AM ET, Econoday reported, The pending home sales index for January jumped 4.5% in January. At the time, available homes on the market were scarce and sales were increasingly draining what inventory there was, shifting the balance in the favor of sellers. But lack of supply is good for prices where growth is at a seven-year high. February existing homes sales were up and supply was making a comeback.

US Jobless Claims for week ending 3/23.

After the release of the latest data on 3/28/2013, 8:30 AM ET, Econoday reported, Initial jobless claims continue to signal improvement in the labor market. Initial claims did inch 2,000 higher in the March 16 week to 336,000, but the four-week average was down 7,500 to 339,750 for a new recovery low. A comparison of the March 16 week with the February 16 week, which matched the sampling weeks of the government’s monthly employment report, shows a big 30,000 decline. Continuing claims are also pointing to improvement. Though edging 5,000 higher in data for the March 9 week to 3.053 million, the four-week average was at a new recovery low of 3.076 million for a 28,000 decline from the prior week.

US GDP Final Estimate for 4Q2012.

Before the release of the latest data on 3/28/2013, 8:30:00 AM ET, Econoday reported, GDP for the fourth quarter was revised up to an annualized rate of plus 0.1% from the initial estimate of minus 0.1% and compared to a third quarter gain of 3.1%. As expected, net exports were less negative. However, inventory growth was revised down notably. Government purchases also were bumped down. Final sales of domestic product were revised up, to 1.7% from the advance estimate of 1.1%. Final sales to domestic purchasers posted at 1.4% versus the initial estimate of 1.4%. Headline inflation for the GDP price index showed a 0.9% annualized inflation rate versus the initial estimate of 0.6% and 2.7% in the third quarter. When excluding food and energy, inflation was revised to 1.2%, compared to the advance estimate of 1.1% and 1.3% in the third quarter.

US Chicago PMI for March.

Before the release of the latest data on 3/28/2013, 9:45:00 AM ET, Econoday reported, The Chicago PMI for February posted at 56.8, over 50 to indicate monthly growth and 1.2 points over January to indicate an accelerating rate of growth. New orders led the highlights, above 60 at 60.2 for a two point gain from an already very strong 58.2 in January.

US Kansas City Fed Manufacturing Index for March.

Before the release of the latest data on 3/28/2013, 11:00:00 AM ET, Econoday reported, The Kansas City Fed manufacturing index was minus 10 in February, down from minus 2 in January and minus 1 in December. The production index decreased from minus 3 to minus 11, and the shipments, new orders, and order backlog indexes also declined to their lowest levels since early 2009. In contrast, the employment index improved from minus 8 to plus 2, and the new orders for exports index climbed towards positive territory.

US Personal Income & Outlays data for Feb.

Before the release of the latest data on 3/29/2013, 8:30:00 AM ET, Econoday reported, Personal income fell as expected in January due to fiscal cliff effects. Personal income dropped a monthly 3.6%, following a 2.6% surge in December. December was boosted by attempts to avoid January income and payroll tax increases. The wages & salaries component declined 0.6% in January after a 0.7% jump the month before. Personal spending rose 0.2%, following a 0.1% rise in December. Turning to inflation, the headline PCE price index was flat in January, matching the pace the month before. The core rate in January edged up 0.1%, following no change in December. Looking ahead, aggregate weekly earnings jumped 0.6% in February, pointing to a healthy gain in the private wages & salaries component in personal income. Expect high headline PCE inflation but more moderate core. The consumer price index for February jumped 0.7%, following no change in January. The core CPI-excluding food and energy-softened to a 0.2% rise after increasing a strong 0.3% in January.

US Consumer Sentiment Index for late-March.

Before the release of the latest data on 3/29/2013, 8:30:00 AM ET, Econoday reported, The Reuter’s/University of Michigan’s consumer sentiment index took a surprise plunge in early March, to 71.8 versus a roughly 79 pace during the last two weeks of February. Weakness was in the expectations component which fell 8.5 points to 61.7 which was the lowest reading since the fiscal impasse and US ratings cut in the third quarter of 2011.


Technical Indicators & Patterns of International Markets

IMPORTANT NOTE:

We have a Cara All-Weather 100 and a Cara Growth 100. The Cara All-Weather 100 stocks only are featured in our discussions in the WIR.

What follows now is broad market research plus my original research data and number-crunching I do every week. It is all necessary work to help us be a winner or at least stay in the game.

Here is the Daily, Weekly, Monthly RSI-7 and EMA-8 data at Friday’s close for the new Cara 100 All-Weather company stocks:

wir13_13.15.gif
wir13_13.16.gif

In summary we use objective price and volume data to manage risk and show guidance. It is the on-board telemetry to support the performance trader.

The Cara 100 Scoreboard at the end of this week [WIR 13] shows:

12 with Daily RSI-7 below 30 [3 below 20] [0 below 15] [0 below 10]
7 with Weekly RSI-7 below 30 [1 below 20] [0 below 15] [0 below 10]
1 with Monthly RSI-7 below 30 [0 below 20] [0 below 15] [0 below 10]

The Cara 100 Scoreboard from one week ago [WIR 12] shows:

5 with Daily RSI-7 below 30 [0 below 20] [0 below 15] [0 below 10]
6 with Weekly RSI-7 below 30 [0 below 20] [0 below 15] [0 below 10]
2 with Monthly RSI-7 below 30 [1 below 20] [0 below 15] [0 below 10]

The Cara 100 Scoreboard from two weeks ago [WIR 11] shows:

1 with Daily RSI-7 below 30 [0 below 20] [0 below 15] [0 below 10]
5 with Weekly RSI-7 below 30 [0 below 20] [0 below 15] [0 below 10]
1 with Monthly RSI-7 below 30 [1 below 20] [0 below 15] [0 below 10]

The Cara 100 Scoreboard from three weeks ago [WIR 10] shows:

9 with Daily RSI-7 below 30 [0 below 20] [0 below 15] [0 below 10]
6 with Weekly RSI-7 below 30 [0 below 20] [0 below 15] [0 below 10]
3 with Monthly RSI-7 below 30 [1 below 20] [0 below 15] [0 below 10]

The Cara 100 Scoreboard from four weeks ago [WIR 9] shows:

14 with Daily RSI-7 below 30 [7 below 20] [3 below 15] [0 below 10]
4 with Weekly RSI-7 below 30 [1 below 20] [0 below 15] [0 below 10]
2 with Monthly RSI-7 below 30 [0 below 20] [0 below 15] [0 below 10]

The Cara 100 Scoreboard from five weeks ago [WIR 8] shows:

13 with Daily RSI-7 below 30 [1 below 20] [1 below 15] [0 below 10]
1 with Weekly RSI-7 below 30 [1 below 20] [0 below 15] [0 below 10]
3 with Monthly RSI-7 below 30 [0 below 20] [0 below 15] [0 below 10]

The Cara 100 Scoreboard from six weeks ago [WIR 7] shows:

6 with Daily RSI-7 below 30 [1 below 20] [0 below 15] [0 below 10]
1 with Weekly RSI-7 below 30 [1 below 20] [0 below 15] [0 below 10]
2 with Monthly RSI-7 below 30 [0 below 20] [0 below 15] [0 below 10]

The Cara 100 Scoreboard from seven weeks ago [WIR 6] shows:

1 with Daily RSI-7 below 30 [1 below 20] [1 below 15] [0 below 10]
2 with Weekly RSI-7 below 30 [1 below 20] [0 below 15] [0 below 10]
3 with Monthly RSI-7 below 30 [0 below 20] [0 below 15] [0 below 10]

The Cara 100 Scoreboard from eight weeks ago [WIR 5] shows:

7 with Daily RSI-7 below 30 [0 below 20] [0 below 15] [0 below 10]
1 with Weekly RSI-7 below 30 [0 below 20] [0 below 15] [0 below 10]
2 with Monthly RSI-7 below 30 [0 below 20] [0 below 15] [0 below 10]

The Cara 100 Scoreboard from nine weeks ago [WIR 4] shows:

3 with Daily RSI-7 below 30 [0 below 20] [0 below 15] [0 below 10]
0 with Weekly RSI-7 below 30 [0 below 20] [0 below 15] [0 below 10]
2 with Monthly RSI-7 below 30 [1 below 20] [0 below 15] [0 below 10]

The Cara 100 Scoreboard from ten weeks ago [WIR 3] shows:

2 with Daily RSI-7 below 30 [0 below 20] [0 below 15] [0 below 10]
0 with Weekly RSI-7 below 30 [0 below 20] [0 below 15] [0 below 10]
1 with Monthly RSI-7 below 30 [1 below 20] [1 below 15] [0 below 10]

The Cara 100 Scoreboard eleven weeks ago [WIR 2] shows:

0 with Daily RSI-7 below 30 [0 below 20] [0 below 15] [0 below 10]
0 with Weekly RSI-7 below 30 [0 below 20] [0 below 15] [0 below 10]
1 with Monthly RSI-7 below 30 [1 below 20] [0 below 15] [0 below 10]

The Cara 100 Scoreboard from twelve weeks ago [WIR 1] shows:

19 with Daily RSI-7 below 30 [7 below 20] [2 below 15] [0 below 10]
8 with Weekly RSI-7 below 30 [2 below 20] [1 below 15] [0 below 10]
9 with Monthly RSI-7 below 30 [2 below 20] [1 below 15] [0 below 10]

This is an important study because it enables me to easily see which of the Cara 100 company stocks have turned comparatively weakest. I look for whether the weaklings are finding bids at the lower prices and bouncing back or whether they are leading the broad market lower. I look for which sectors they are in, and whether the drivers might be macro-economic, interest rates, commodity prices or corporate developments such as newly reported earnings, dividends or guidance regarding its operations or its industry.

I have found this basic quantitative system to be fairly good at indicating the prospects of a cycle top or bottom, but it is important to realize that individual technical indicators are just that. They are not absolutes, but only indicators and my system examines the trends of those indicators, hopefully enabling me a bigger picture of the market.

We use the more enhanced system to relatively weight the desirability of holding the individual Cara 100 stocks we get to know and trade. As you know, everything is relative in trading. However, we also must study the trends and cycles data of the broad equity market to get a sense of that bigger picture.

We also examine the broad market technical summaries each week. Here is the bigger picture technical data. The data can be found at: http://stockcharts.com/def/servlet/SC.scan

As you know, after the close on Friday, I often look at the 52-week new highs vs new lows at important juncture points.

On Sept 14, there were 943 New Highs and 101 New Lows.
On Sept 21, there were 498 New Highs and 64 New Lows.
On Oct 14, there were 97 New Highs and 102 New Lows.*** Big change
On Oct 19, there were 115 New Highs and 127 New Lows.
On Oct 26, there were 89 New Highs and 127 New Lows.
On Nov 2, there were 240 New Highs and 119 New Lows.
On Nov 9, there were 89 New Highs and 202 New Lows.
On Nov 16, there were 43 New Highs and 318 New Lows.
On Nov 23, there were 173 New Highs and 64 New Lows.
On Nov 30, there were 235 New Highs and 108 New Lows.
On Dec 7, there were 168 New Highs and 97 New Lows.
On Dec 14, there were 140 New Highs and 82 New Lows.
On Dec 21, there were 169 New Highs and 117 New Lows.
On Dec 28, there were 82 New Highs and 74 New Lows.
On Jan 4, there were 579 New Highs and 48 New Lows.*** Big change
On Jan 11, there were 506 New Highs and 55 New Lows.
On Jan 18, there were 693 New Highs and 65 New Lows.
On Jan 25, there were 777 New Highs and 81 New Lows.
On Feb 1, there were 835 New Highs and 68 New Lows.*** Maximum strength
On Feb 8, there were 585 New Highs and 71 New Lows.
On Feb 15, there were 620 New Highs and 158 New Lows.
On Feb 22, there were 209 New Highs and 111 New Lows.*** Big change
On Mar 1, there were 307 New Highs and 156 New Lows.
On Mar 8, there were 754 New Highs and 84 New Lows.
On Mar 15, there were 664 New Highs and 93 New Lows.
On Mar 22, there were 365 New Highs and 67 New Lows.*** Big change

On the NYSE this week, there were 236 New Highs versus 431 the prior week, and 502, 179, 106, 411, 394, 593, 548 and 491 the weeks before that one, which reflects a definite change from a continuing strong market to a weaker one.

2013 was the most bullish start to any year since 1971. But the ratio charts, and these technical indicator charts have put the Bulls on notice that markets cannot continuously increase in price week after week. Whether the driver is corporate fundamental data, quantitative data, economic data, interest rate/yield data or strictly technical price and volume based data, there is always a reason for price motion in markets. It’s often, as I say, unfortunately the liquidity actions of the Fed.

Three weeks ago I remarked: “Our challenge is to find out the cause(s). I think that the recent pop in the $USD, and some weakness in the $XEU (Euro) means that investors are now on guard. They have not turned Bearish yet, but clearly they are cautious at this point.”

Two weeks ago I added: “Despite this week’s enthusiasm for risk-taking, investors ought to continue to be cautious here. The RSI-7 figures are simply too high to allow us to relax. So tighten your stops.”

One week ago I remarked: “I think the selling started on Friday.”

Here is this week’s report:

wir13_13.17.gif
wir13_13.18.gif

As trend is as important as numbers or percentages, compare the current data above with the detailed data from the prior week:

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wir13_13.20.gif

To repeat:

From years of experience, I know that traders who rely entirely on mechanical systems will soon realize that common sense is another necessary ingredient.

No single system back-tests to continuous success – ever. Markets change because the approach and style of traders undergo continuous change. It’s why I say that to trade successfully you need to know a little about a lot of things, always keeping an open mind, looking for the weight of the evidence, all of it based on hard data.

Bear in mind that technical RSI-based Alert signals (i.e., potential Buy signals) are not given until a trend reversal occurs. The term ‘Accumulation’ applies to those stocks that are on a watchlist for purchase candidates. At that point, I begin to focus on the various aspects of technical, quantitative, fundamental and economic conditions for that company and stock (note that a company is not a stock), building sufficient weight of evidence as to cause me to buy the stock.

This is a process that I discuss in my book “Lessons from the Trader Wizard”, asking the reader to try to get a grasp (i.e., a little knowledge) of a wide number of investment topics that will, with experience, help you develop the judgment you need to make your own long-term or short-term oriented trading decisions.

Over my trading career, I have found most people do the opposite. They focus on one or two concepts (like PE or mutual funds or Elliott Wave or even RSI, etc), while harboring the belief that such an approach makes trading easy. Trading is not easy. The market is, frankly, an ugly game of deception that plays people. In recent years, because of digitalization and globalization factors, the deceit is even greater and trading made that much harder.

The only way to build your confidence is to be a student of the market, i.e., drilling down into the data and also understanding the big picture, a process which I try to help with my book Lessons From the Trader Wizard.

I have been using the WIR to state my understanding from the data that from late in the 2Q2012, and going forward, the market had been undergoing a cycle bottom process. I noted that my perspective early on was not the conventional wisdom. I also cautioned at the beginning that a bottoming process takes time and that the technical indicators, the ones I use or other ones, are not always going to pin-point exact bottoms (or tops). However, the trading process is a lot like real estate, which most people do understand: if you happen to rent and then become a buyer during a Buyers’ Market (when prices are down) and sell (and then rent) in a Sellers’ Market (when prices are very high), you will do a more effective job of (i) building assets quickly, and (ii) protecting those assets as good as you can during the tough times. Trading securities is a lot easier and much less costly, in fees and commissions, than ‘trading’ houses! The advantage in securities trading is in the great liquidity of the market.

The more experience you get in trading securities the more you realize that liquidity is the fuel that drives prices. If the market’s liquidity only came from independent traders who I call the owners of capital, then prices would mostly rise and fall because of corporate fundamentals, industry demand and supply, commodity and wage costs, and interest rates. The capitalist system investment model would be much easier to figure out than it is today where Interventionists, like governments and central bankers, have altogether different trading motives, and private equity corporate acquisitors and short and distort syndicates play such a major role in the market.

The market is an intellectual workplace. It’s true that, if we are serious investors and traders, we are all students of the market. And, writing about it, as participants in the Blog Discourse have come to realize, is part of a self-education process.


International Equity Markets Review

This week, $MSWORLD dropped -0.74% to close the week at 1704.49.

Just like a week ago, the $MSWORLD (ex-USA) index seems out of sync with the constituents.

While the index fell -0.74%, the losers were off a lot more. Brazil’s Bovespa ($BVSP -2.9%), All Ords of Australia ($AORD -2.9%), Japan’s Nikkei ($NIKK -1.8%), Hong Kong’s Heng Seng ($HSI -1.9%), India’s Sensex ($BSE -3.6%), and the big three of Europe ($FTSE -1.5%), ($CAC -1.9%) and ($DAX -1.6%) were crushed, but the index was down -0.74% W/W.

Read my notes of a week ago along with these. Something’s going on here!

Here is the Weekly chart of the $MSWORLD (1704.49), slightly above the 8-week EMA (1686.62), which is in dashed blue and the S&P 500 ($SPX) in thin solid orange behind.

wir13_13.21.gif

The current price above the 8-week Exponential Moving Average is (barely) Bullish, and the 7-week Relative Strength Index, which had improved over three weeks from 53.42 to 58.60 to 70.94, has now fallen to 64.23, setting off a SELL Alert. So caution is recommended.

Three weeks ago I noted that aspects of the chart were Bearish and negative “but not enough to force long-term investors out of positions”.

In my simple little system, when the Weekly RSI-7 drops below the 50-line, and the last price drops below the EMA-8week, that condition is a flat-out SELL. We are close.

Obviously the market is a moving target. A true student of the market archives the data and studies one’s ongoing perspective on it.

A week ago I wrote: “So just when it appears to be about to slip it hangs in. I think it has to pull back for a couple weeks in order to spring the trap. In early April I think the Euro is going to start a new Bull run along with equities, commodities and precious metals.”

Here is the international equity re-cap from Econoday:

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wir13_13.23.gif

This advice is important, so I’ll keep it running:

“Trading is a matter of time horizon, which for each of us is different, which is why I say it’s silly to be listening to these Talking Heads as you don’t know whether they are talking about hours, days, weeks, months, quarters or years. They won’t tell you that of course because the uncertainty leaves them an out… The Weekly price series data is more important than the Daily – just as the Monthly is more important than the Weekly. It is the Weekly price series data however that most portfolio managers base their decision making today – if they look at the technical indicators at all… Note that other analysts use different indicators – if they use them at all. The crucial point is that each of us must choose the technical tools they feel works best for them (some people are long-term oriented and others short-term, etc, and some like low-beta stocks and others high-beta, etc) and then stick to applying them consistently.”


Below are 16 country index chart links from StockCharts.com (with their formal approval btw). Global equity markets do not trade in a vacuum. It is important to be watching these markets move through a trend juncture together, pushed and pulled by global currency and commodity strength or weakness as well as local and regional economic forces.


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

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

Brazilian Bovespa stockcharts.com chart


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

Toronto 300 stockcharts.com chart

Toronto CDNX stockcharts.com chart


Europe

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


Here is the latest session data for the London stock exchange FTSE 100.

FTSE 100 stockcharts.com chart


Here is the latest session data for the German DAX 30.

DAX stockcharts.com chart


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

CAC 40 stockcharts.com chart


Here is the latest session data for the Swiss market index. Swiss Market Index stockcharts.com chart


Asia-Pacific

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


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

Tokyo Nikkei 225 Index stockcharts.com chart


Here is the latest chart for the Singapore index .

Singapore Straits Times Index stockcharts.com chart


Here is the latest chart for the Shanghai Composite index .

Shanghai Composite Index stockcharts.com chart


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

Hong Kong Hang Seng stockcharts.com chart


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

Mumbai BSE 30 Sensex Index stockcharts.com chart


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

Sydney All Ordinaries Index stockcharts.com chart


Russia (RTS) stockcharts.com chart


Review of the ETFs for the International equity market

As you know, the country Exchange Traded Funds (ETF) are not the same as the domestic exchange indexes, but are (i) denominated in US Dollars, (ii) traded in NY, mostly by Americans, (iii) traded for several hours each day after Asia-Pacific and European markets have been closed, and (iv) a reflection of the most up-to-date news stories and investment analysis.

Also, depending on extreme currency fluctuations, the USD denominated ETFs may widely differ in performance from the results of the domestic exchanges.

When the world is worried and goes risk-off, it’s the international equities that get hammered the most, and that feeds the US Dollar market, which further lifts the Dollar and worsens the crisis. If that Dollar buying gets out of hand, the markets take on the appearance of a death plunge.

This week in NY, for the eleven major country ETFs I follow (that trade in the US in US Dollars) only one was higher and ten lower. The losers were led by Russia (RSX -3.84% W/W) – too much Russian money fleeing Cyprus? – Brazil (EWZ -3.64%, India (IFN -3.47%) and Australia (EWA -2.17%).

On Friday, there were nine country ETF’s up and just two down. But I doubt there will be much follow-through on Monday.


Table 14: 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

EWJ

10.77 0.04 0.37% 1.22% 2.87% 6.32% 7.81% 10.57% 15.06% 7.81%

EWM

14.50 0.08 0.55% 0.69% -1.69% 1.40% -4.79% -1.63% -1.09% 1.05%

EWW

71.59 0.69 0.97% 0.56% -1.81% 0.04% -0.38% 2.87% 10.77% 18.04%

GXC

69.85 0.37 0.53% -0.16% -4.64% -2.84% -8.54% -3.16% 7.56% 1.99%

EWH

19.54 0.10 0.51% -0.20% -3.70% -0.41% -1.66% 2.14% 8.25% 11.15%

EWU

18.26 0.15 0.83% -0.22% 1.00% 1.05% 0.27% 2.35% 2.58% 5.55%

EWS

13.65 0.05 0.37% -0.22% -0.73% -1.30% -1.73% 0.81% 0.15% 8.33%

ILF

42.87 0.19 0.45% -0.86% -4.52% -1.83% -3.97% -1.49% -1.67% -9.61%

EWC

28.38 0.08 0.28% -1.01% 0.00% 0.32% -1.70% 0.21% -1.73% 0.96%

EWT

13.13 0.03 0.23% -1.65% -4.09% -3.31% -4.99% -0.15% -2.96% -2.01%

EWQ

23.82 0.28 1.19% -1.65% -1.45% 0.08% 0.42% 1.75% 7.88% 8.03%

EWY

57.77 0.59 1.03% -1.73% -5.45% -6.79% -11.08% -6.29% -2.94% -2.10%

EWG

25.07 0.21 0.84% -1.88% -1.03% 1.21% 0.32% 2.04% 7.00% 8.81%

EWA

27.09 0.33 1.23% -2.17% -1.24% 0.74% 6.28% 9.45% 12.13% 18.40%

IFN

20.85 0.04 0.19% -3.47% -5.57% -2.66% -3.02% 1.66% -7.33% -4.01%

EWZ

53.70 -0.15 -0.28% -3.64% -6.85% -2.04% -5.72% -2.31% -3.99% -17.90%

RSX

27.77 -0.05 -0.18% -3.84% -5.80% -5.48% -9.49% -6.02% -6.59% -9.90%

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:

Weekly EWJ

Interactive EWJ Daily data:

Daily EWJ


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:

Weekly EWU Data

Interactive EWU Daily data:

EWU Daily data: Daily EWU Data


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:

Weekly EWC Data

Interactive EWC Daily data:

Daily EWC Data


Taiwan’s equity market

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

Interactive EWT Monthly data:

Interactive EWT Weekly data:

Interactive EWT Daily data:


Indonesia equity market ETF

Here is the Indonesia Fund (IF) equity market ETF Monthly, Weekly and Daily data charts:

IF Summary from Yahoo Finance:
http://finance.yahoo.com/q/pr?s=IF

IF Summary from Google Finance:
http://www.google.com/finance?q=AMEX:IF

IF chart from StockCharts.com:
http://stockcharts.com/charts/gallery.html?IF

Interactive IF Monthly data:

Interactive IF Weekly data:

Interactive IF Daily data:


Here are the links to interactive charts from Investertech.com for the key country ETFs, which you can add technical indicators for as well.

Group 1:

(list one)

(list two)

(list three)

Group 2:

(list one)

(list two)

(list three)


US Equity Markets Review

The S&P 500 (-0.24% W/W) dropped from 1560.70 to 1556.89 this week. But there was a gain of +0.72% from 1545.80 on Friday.

A week earlier on Friday there was a high of 1563.62. I suggested we would see a ~3% pull-back over three weeks, which would take the S&P 500 down to ~1518 before moving higher starting second week of April.

The small cap Russell 2000 btw dropped -0.65% W/W to 946.27. The $RUT hit a high of 954.00 a week ago Friday. A ~3% pull-back would see the $RUT hit ~919.

It’s always interesting to write down these projections and later analyze what went wrong with your earlier thinking.

You know you’re going to be wrong, but it’s a continuous learning experience if the market is approached this way.

Here is the Econoday report on US equities this week:

wir13_13.24.gif

This week, five of the ten US equity market sectors were higher. But on Friday there was not a single losing sector. Without Friday’s gains, the week would have ended nine losing sectors to one winner.

Table 1 shows that for the past four weeks, the S&P 500 (SPY) gained +2.44%. Over the same period, Telecom (IYZ -0.33%) was the single losing sector.


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. I recommend you put them in a watchlist (e.g., 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

Add two of AMZN, DELL, JAVA or YHOO to get a Cara Dozen.

Or while you are at Investertech.com, input up to 30 tickers in the window above “Summaries” – say AAPL MSFT GOOG QCOM RIMM CSCO INTC ORCL GILD EBAY AMZN DELL JAVA YHOO plus up to 16 more – and click on Tech Chart, Basic View, Daily Watch, Performance or Fundamentals and you’ll get a lot of information to compare one against the others.


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

Monthly Nasdaq Composite Data

Monthly S&P 500 Data

Monthly Dow 30 Data

Monthly Russell 2000 Data

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

Weekly Nasdaq Composite Data

Weekly S&P 500 Data

Weekly Dow 30 Data

Weekly Russell 2000 Data

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

Daily Nasdaq Composite Data

Daily S&P 500 Data

Daily Dow 30 Data

Daily Russell 2000 Data


Value Line Dow 30 Stocks Review

The DJIA stocks being reviewed this week [Value Line cycle 13, 26, 39 and 52], are Cisco Systems (CSCO), Verizon (VZ) and AT&T (T). One of them (Cisco) is a Cara All Weather 100 company, but we have presently have no positions in it for our All-Weather accounts.


AT&T [GICS 50, Dow 30] [Value Line cycle 13, 26, 39 and 52]
(T: Google Finance file)
(T: Yahoo Finance file)
(T: StockChart chart)
(T: Investertech chart)
(T: ADVFN Financial Data)
(T: Profile)
(T: Value Line Report Mar. 22: next one is due Jun. 21)


Verizon [GICS 50, Dow 30] [Value Line cycle 13, 26, 39 and 52]
(VZ: Google Finance file)
(VZ: Yahoo Finance file)
(VZ: StockChart chart)
(VZ: Investertech chart)
(VZ: ADVFN Financial Data)
(VZ: Profile)
(VZ: Value Line Report Mar. 22: next one is due Jun. 21)


Cisco Systems [GICS 45, Dow 30, Cara 100] [Value Line cycle 13, 26, 39 and 52]
(CSCO: Google Finance file)
(CSCO: Yahoo Finance file)
(CSCO: StockChart chart)
(CSCO: Investertech chart)
(CSCO: ADVFN Financial Data)
(CSCO: Profile)
(CSCO: Value Line Report Mar. 22: next one is due Jun. 21)


Always before I study a company, I review my prior written notes. In 2011, wth Christmas and traveling during this quarterly cycle, I missed some of those reports. But, I do what I can do.

For WIR #26-2011

AT&T (T June 24 @ $30.44)
Verizon (VZ June 24 @ $36.00)

The $39 billion acquisition of T-Mobile USA from Deutsche Telekom AG, which is not expected to close until 1H2012, will have a large impact on the company’s balance sheet and operations. So, it’s fair to say that the stock could head in various directions.

Like Verizon (VZ), there is a huge dividend for AT&T (T), yielding over 5.5% in both cases, but fairly soft revenue and earnings growth.

I’m sure these stocks are of interest to long-term income-oriented accounts that desire a relatively low risk, but I’m not too keen unless the dividend yield could be supplemented with put option writes premium.

Something to ponder if you are an income-oriented investor is that future dividends might not be safe for some companies. A few years ago I made an assessment in the blog that JP Morgan (JPM) was like the US Treasury, never going to miss a dividend. I was wrong. The dividend was cut after the government bail-out deemed the banks’ shareholder dividends to be unfair to taxpayers even though, I believe, JP Morgan could have made those payments.

For many high-yielding stocks, there is presently a very high pay-out, which for Verizon is presently about 87% of earnings and for AT&T is about 73%. These companies, in a severe recession or depression, could suffer losses and be forced to cut the dividend. The companies also have a lot of debt, and their balance sheets are not as strong as say Cisco’s. It could be that a period of rapidly rising interest rates might impair their debt service ability and threaten the dividend. I don’t think these situations are likely to happen in the case of Verizon and AT&T, but it is a factor to consider if income is your requirement.

Not much else to say.


Cisco Systems (CSCO June 24 @ $14.93)

These charts show that CSCO is over-sold and tried to make a rally move starting this past Monday, but was hit with selling on Wed and Fri.

Technically, CSCO would be a very low risk purchase in the $14-$15 range as that price takes the stock back to the 2008-2009 Bear market lows. In other words, almost every buyer of stock for almost the past two and a quarter years has paid higher.

What strikes me immediately when looking at the Value Line page is:

1. the massive cash position of the company, roughly $8 per share, while the stock is trading at under $15
2. the balance sheet is massively liquid
3. Value Line’s analyst Kevin Downing raised the 6-month price outlook (“Technical”) from a ‘3’ (average) to ‘2’ (superior)
4. 2009 was a cycle low for revenues and, despite all the negative portrayals of this company, the revenues are now in constant lift, with 2012 expected to set a record high for revenues and revenues/share
5. 2012 earnings per share are expected to set a record
6. Cisco is now paying a dividend, which they ought to as they have more cash reserves and a stronger balance sheet than the Fed, and the ops are a cash cow
7. The downside is that CSCO sells their big telecom switches to governments that are having severe budget stresses these days
8. Return on Shareholder Equity has fallen below a 20% level that I require for tech and industrial companies that make it into the Cara 100 highest quality companies, but as long as revenues, cash flow and earnings continue to rise every year by some 7%-8% or more, then I’ll stick with it. Surely the growth in the Internet space can accommodate several strong competitors in addition to Cisco.

Taking a long view on this one is needed, but worth it I believe.


For WIR #39-2011

Telecom equipment and services giants, all of these:

AT&T (T Sept 23 @ $27.85)

A loss of $2.59 in the 13 weeks since June 24.

Verizon (VZ Sept 23 @ $35.88)

A loss of $0.12 in the 13 weeks since June 24.

Cisco Systems (CSCO Sept 23 @ $14.93)

A gain of +$0.68 in the 13 weeks since June 24.

From these charts, it is obvious that, although they lost in % terms over the past quarter, in terms of the broad market sell-off the traders have recently sought haven in the telco’s. In the past several hours, VZ has out-performed T, which might be due to differences in perceived risk, i.e., thoughts that US regulators will not ease up on their concerns about the proposed $39 billion take-over of T-Mobile by AT&T. In the past quarter, investors have obviously concerned about the deal because the stock is well under-performing VZ.

Cisco (CSCO) has dropped the most % wise in the past month and even in the 10 days since Value Line wrote their report. In a period of broad market weakness that is not surprising since the telco’s pay a rich dividend and Cisco, although starting to pay a dividend after all these years, pays very little.

On a balance sheet basis, with $45 billion in cash, Cisco wins hands down. The company could more than eliminate 100% of its debt if the Board chose to do so. Over the past ten years, the decision was to buy back stock, about 25% over that time. But, in absolute dollars, the company’s revenues and earnings have flourished too, far exceeding the growth of the telco’s.

Cisco’s products are precisely what are needed for all users, from the largest to the smallest, of the Internet. As sales are so heavily dependent on government orders, however, and those orders are under budget pressure, the company is having to reduce its growth estimates. Its projected earnings are helter-skelter too.

So the stock has been hammered in the past 18 months. At the best of times recently, the stock has been dead money. Will that improve? I think so. As VL projects a 17 PE multiple and 2012 earnings of $1.35 plus a dividend of $0.32, I can see a high price next year that could be close to the average of the highs of the past four years, which is about $25.60. Using the VL average PE multiple and $1.35 earnings, the stock could get to $23.00 or higher, well up from its current price of $15.61.

I note that on Sept 2 VL raised the stock outlook for the next 6 months (“Technical”) from a market average performer ‘3’ to a superior ‘2’. They did the same for T on Aug 26 and for VZ on Sept 16. So far, VZ is the only one that has performed significantly.

Not that I’m pleased with Cisco’s lower Return on Equity or Net Profit Margin metrics in recent years, there are other reasons for me keeping this company in the Cara 100. But I also have their number one competitor there too, which happens to be Juniper (JNPR).

To sum up the VL reports this week, the analysts seem to like the telco’s only for their high dividend yield, but CSCO they see as having perhaps the better long-term risk adjusted potential. I agree with that assessment. Presently in the major portfolios, we have a 1.43% portfolio weighted position in CSCO and zero in the other two.


For WIR #52-2011

Things are looking up for these telecom equipment and services giants. The current prices are all higher than their respective 8-month, 8-week and 8-day Exponential Moving Averages, which is a bullish sign.

As Cisco is a Cara 100 company, CSCO is therefore eligible for investment in our accounts. We do in fact hold CSCO in both the All-Weather and Growth portfolios. For pure telco’s, however, we presently only hold the Russian company Mobile TeleSystems (MBT), which we hold in both portfolios.

All charts here will show the stock in the solid black line vs the S&P 500 in the dashed orange line.

AT&T (T Dec 23 @ 29.87 vs Sept 23 @ $27.85)

A gain of $2.02 (+7.3%) in the 13 weeks since Sept 23.

The Daily chart shows that T is a bit on the high-risk side now, but I doubt it will pull back below $29.31 in the next couple days or $29.02 in the next couple weeks, based on the 8-period EMA and rising RSI, STO and TRIX.

VL lowered their 3-6 month ‘Technical’ price outlook on Dec 9 from a ‘2’ to a ‘3’.

The T-Mobile deal may in fact crash unless the EU exerts pressure on the US regulatory agencies. But the loss is just 50 cents a share cash in break-up cost, and there is still a chance the deal may get the approval. It’s probably now in the White House hands.

Does Obama look to Germany for campaign funds? 🙂

The $1.72 dividend this year, with $1.76 in the wings for 2012, represents a solid income component to this stock if that’s what you are seeking. Even if they have to pay out on the T-Mobile deal, I think the dividend is well protected.

Do I like the capital appreciation potential? Not really. The metrics for revenue, cash flow and dividends looking forward a couple years are not sufficiently enticing to make me want to buy-and-hold this one.

Verizon (VZ Dec 23 @ $39.38 vs Sept 23 @ $35.88)

A gain of $3.50 (+9.8%) in the 13 weeks since Sept 23.

VZ is even more over-bought than T, for now. Bullish long-term, but cautious in the short-term, especially if risk-on capital is slow to move into equities and decides to go for the commodity price sensitive stocks first, which sometimes happens.

The Verizon dividend may not be as high as for AT&T, but it is still very attractive for income seeking long-term holding accounts. But, again, the metrics for revenue, cash flow and dividends looking forward a couple years are not sufficiently enticing to make me want to buy-and-hold this one either.

Sorry, but even if I think the S&P 500 might lift in 2012, and I do, I cannot look to VZ or T to interest me.

Cisco Systems (CSCO Dec 23 @ $18.47 vs Sept 23 @ $14.93)

A gain of +$3.54 (+23.7%) in the 13 weeks since Sept 23.

Now, Cisco is a different story. This one is the 800-pound gorilla in the internet infrastructure space and demands for bandwidth and speed are never-ending.

CSCO stopped under-performing and began to out-perform the market after bottoming in early August. The chart is bullish going into 2012. It did get a bit over-bought on Friday though.

Looking forward a couple years, I find that the Cisco metrics for revenue, cash flow and dividends may not be superb, but they are still strong enough to be enticing. I remain pretty much in the buy-and-hold camp with CSCO even though for several quarters many traders questioned my wizdom.

However, I think that a lot of Cisco’s problems are in the past. We’ll see. Btw, for my 12+ month outlook for a balanced Growth portfolio, I selected CSCO in this telecom space at the Whistler Conference that ended Oct 3 and for the Balanced accounts (conservative all-weather type), I went with Mobile TeleSystems, largely for the huge dividend. MBT did not disappoint since then capital growth wise either!

Value Line raised their 6-12 month ‘Timeliness’ and 3-6 month ‘Technical’ share price outlooks in mid-Nov from ‘4’ to ‘3’ and from ‘3’ to ‘2’ respectively.

The company has over $8 in cash and the share price is still just $18.47. The company has phenomenal cash flow and earnings power, which on the $10 non-cash component of the share price is a tremendous bargain.

VL has increased their 2012 earnings projection from $1.35 to $1.45 since the last quarterly report, and management is very narrowly guiding forward so that number is likely to be out-performed. At 2012 earnings of say $1.50 and a 17x PE in a stronger equity market looking out a year, I think the prospects of $25.50 are good. That would be a gain of +38% in the next 12-18 months. The 18 cent dividend this year could possibly double next year as well.

All in all, I like this stock, which is why we hold it.


For WIR #13-2012

AT&T (T Mar 23 @ 31.52 vs Dec 23 @ 29.87 vs Sept 23 @ $27.85)

A gain of about +5.5% in the 13 weeks since Dec 23.

The Daily data chart shows a possible break-down in the bullish price momentum seen in the longer-term Weekly and Monthly data charts. Depending on your time horizon, you can go to the Weekly or Monthly EMA-8 to see the current level of support. Also the RSI-7 for both Weekly and Monthly data is above 70, which puts T into the Distribution Zone, but there is no obvious price or RSI breakdown at this point, so there is no SELL Alert.

The Value Line analyst likes the company and the stock. As for me, I like the dividend yield, which is an extremely high 5.6%, but choose not to hold the stock because the company is too slow growing and has an inadequate ROE for my needs. T is not in the Cara 100 and so I would not consider investing in it.

Verizon (VZ Mar 23 @ 39.42 vs Dec 23 @ $39.38 vs Sept 23 @ $35.88)

Flat in the 13 weeks since Dec 23.

These charts are quite similar to the ones for T, which is not surprising since the two companies are direct competitors and both 800-pound gorillas in the US telephony space. The Daily data chart shows a possible break-down in the bullish price momentum seen in the longer-term Weekly and Monthly data charts. Depending on your time horizon, you can go to the Weekly or Monthly EMA-8 to see the current level of support. Also the RSI-7 for both Weekly and Monthly data is above 70, which puts VZ into the Distribution Zone, but there is no obvious price or RSI breakdown at this point, so there is no SELL Alert. But, just like for T, you have to keep your eye on the Daily and Hourly price data now.

The Value Line analyst likes the company and the stock. As for me, I like the dividend yield, which although not as good as T is still an extremely high 5.1%, but I choose not to hold the stock because the company, like AT&T, is too slow growing and has an inadequate ROE for my needs. VZ is not in the Cara 100 and so I would not consider investing in it.

Cisco Systems (CSCO Mar 23 @ 20.53 vs Dec 23 @ $18.47 vs Sept 23 @ $14.93)

A gain of about +11.2% in the 13 weeks since Dec 23.

These charts are much more bullish to the ones for T and VZ.

Cisco is the 800-pound gorilla in the international internet communications space. The Daily data chart shows the same bullish price momentum seen in the longer-term Weekly and Monthly data charts. Even the Hourly data is quite positive. Depending on your time horizon, you can go to the Weekly or Monthly EMA-8 to see the current level of support. Also the RSI-7 for both Weekly and Monthly data is still below the 70 line for the Monthly, Weekly and Daily price data, and the level is rising in each case, so this is a very bullish technical condition.

Of these three companies, only Cisco is a member of the Cara 100 best quality, large cap companies in the world, based on financial strength, management, returns on equity, profit margins, and so forth. Although Return on Shareholder Equity has dropped below the level I’d like to see, once you factor in the company’s $47 billion in cash, then ROE is not a problem for me. In other words, the extreme financial strength and safety is a balancing factor. If the company were to dividend out much of that cash, the ROE would pop up to a much higher level. The first time dividend of $0.18 this past year will likely grow to $0.26 this year and $0.30 for 2013. I’d like to see that dividend tripled.

The business factor that is most growing the Cisco business is the phenomenal growth in mobile bandwidth demand, cloud computing and virtualized data centers. The telephony switch business is also returning to normal levels.

I agree with the conclusion of the Value Line analyst: “These timely shares should appeal to long-term investors as well as those focused on momentum. In addition to its rebounding core operations, the company’s strong positions in data center, collaboration, wireless, and video products augur well for solid risk-adjusted long-term price appreciation potential.”

In fact at the Cara Whistler 2011 Conference on Sept 29-Oct 3, I selected CSCO as my pick for large cap Growth in the 12-24 month time frame. Since then, the stock has grown +35.15% from $15.19 to $20.53.

Also if you re-read what I wrote about Cisco in the past three WIRs (see above), you cannot say I have not been extremely bullish on CSCO when most traders were avoiding it. Yes, I was buying it. It’s my second biggest Tech position in Growth and biggest in All-Weather in our portfolios.


For WIR #26-2012

AT&T (T J 22 @ 35.17 vs Mar 23 @ 31.52 vs Dec 23 @ 29.87 vs Sept 23 @ $27.85)

A gain of about +10.9% in the 13 weeks since March 23, which had been up +5.5% in the 13 weeks since Dec 23.

If you look back to the week of April 23, you will see that T was launched to higher prices. About two days before that the fuse for VZ was lit.

The Daily data chart shows a possible break-down in the bullish price momentum seen in the longer-term Weekly and Monthly data charts. Depending on your time horizon, you can go to the Weekly or Monthly EMA-8 to see the current level of support. Also the RSI-7 for both Weekly and Monthly data is above 70, which puts T into the Distribution Zone, but there is no obvious price or RSI breakdown at this point, so there is no SELL Alert.

As stated the previous quarter: “The Value Line analyst likes the company and the stock. As for me, I like the dividend yield, which is an extremely high 5.6%, but choose not to hold the stock because the company is too slow growing and has an inadequate ROE for my needs. T is not in the Cara 100 and so I would not consider investing in it.” With the price bump, the yield is now about 5.1%. My opinion has not changed, either for T or VZ.

Verizon (VZ Jun 22 @ 43.95 vs Mar 23 @ 39.42 vs Dec 23 @ $39.38 vs Sept 23 @ $35.88)

Up +10.8% in the 13 weeks since Mar 23 following a flat quarter before that.

These charts are quite similar to the ones for T, which is not surprising since the two companies are direct competitors and both 800-pound gorillas in the US telephony space.

The Value Line analyst likes the company and the stock. As for me, I like the dividend yield, which although not as good as T is still an extremely high 4.7%, but I choose not to hold the stock because the company, like AT&T, is too slow growing and has an inadequate ROE for my needs. VZ is not in the Cara 100 and so I would not consider investing in it.

But I’d like to point out an observation about the Telco ETF. In the past year, T and VZ have gained +13.9% and +22.3% respectively. These companies/stocks dominate in the Telco industry ETF (IYZ), but in the past year, IYZ is down -9.9%. Even the S&P 500 is only up +3.7% in the past year.

So, what’s going on? I suspect that the managers of major funds have gone long T and VZ to earn the extremely high dividend and they have shorted IYZ and/or possibly constituent stocks like Nokia (NOK -60.0% Y/Y), Telefonica (TEF -46.6%) and France Telecom (FTE -39.2%). Now, if you are an astute speculator, you might want to watch the extremely high dividends of the latter three companies, checking for non-payment risk, plus note the relative differences in the RSI-7 for the Monthly, Weekly and Daily.

Cisco Systems (CSCO Jun 22 @ 17.13 vs Mar 23 @ 20.53 vs Dec 23 @ $18.47 vs Sept 23 @ $14.93)

A loss of -16.0% in the 13 weeks since Mar 23 vs a gain of about +11.2% in the prior quarter.

CSCO had a tough early May along with the rest of the market, but worse than the average of high quality companies. But, I think the worst is over. We’ll know more if and when the Weekly RSI-7 (presently 17.28) has been crossed to the upside by the end of week price (presently 17.13). But the RSI, Stochastics and TRIX for the weekly data charts are looking promising for the Bulls.

FD: Presently we hold no CSCO in either the Growth or All-Weather portfolio accounts.

I happen to think that the company turned in a fairly good quarter and their conservative guidance in early May was grossly over-reacted to by Wall Street. It is a fact that business conditions are not the best, but this company has managed to continue growing earnings and building balance sheet strength, and recently dividend pay-outs that will soon be quite acceptable, as good as most high-quality companies in the S&P 500.

There is no reason I can fathom as to why this stock is the Dow 30’s 4th worst performer in the past six months and the past three months. With a forward PE under 9 and a superb balance sheet, there is very low risk at this price.


From WIR #39-2012

AT&T (T Sep 21 @ 38.08 vs Jun 22 @ 35.17 vs Mar 23 @ 31.52 vs Dec 23 @ 29.87 vs Sept 23 @ $27.85)

A gain of about +8.7% in the 13 weeks since June 22, which had been up +10.9% in the 13 weeks since March 23, and up +5.5% in the 13 weeks after Dec 23.

Verizon (VZ Sep 21 @ 45.64 vs Jun 22 @ 43.95 vs Mar 23 @ 39.42 vs Dec 23 @ $39.38 vs Sept 23 @ $35.88)

Up +5.33% in the 13 weeks since June 23, which had been up +10.8% in the 13 weeks after Mar 23 following a flat quarter before that.

Cisco Systems (CSCO 18.90 @ Sep 21 vs 17.13 on Jun 23 vs Mar 23 @ 20.53 vs Dec 23 @ $18.47 vs Sept 23 @ $14.93)

A gain of +11.70% in the 13 weeks since Jun 23 vs a loss of -16.0% in the previous 13 weeks after Mar 23 vs a gain of about +11.2% in the prior quarter.

The Monthly chart reflects the tough market and business environment the company faced from competitors and from slowing corporate capex and much lower government purchases in the past eight years. But digital communications is a rapid growth industry and Cisco is the 800-pound gorilla as to its infrastructure. I believe there will be much better days ahead for this company.

The telco companies have benefitted greatly from smart phone adoption by consumers, and that market is expected to continue growing rapidly. The Apple iPhone 5 introduction this week has apparently broken all records around the world, so the sellers and carriers are bound to thrive as a result.

The telcos AT&T and Verizon are near multi-year highs, with very high RSI values, which indicates higher than average risk. The dividends are extremely high in each case, and the dividend to net earnings ratios are in the 70% to 80% levels, which is very high, also an indicator of risk should cash flow drop.

However the financial condition of both companies – if not the balance sheet — is very strong, mostly based on cash flow. But cash flow in each case is expected to slow in its growth rate over the next 3 to 5 years.

I note that Value Line analysts Hellman and Nugent increased the anticipated one-year price performance among large cap stocks to a “1” – on Aug 10 for T and on Jul 6 for VZ – which means superior performance was expected and that has happened. This week, in fact, IYZ (Telco ETF) was #1 sector performer and it has been well above average recently. I attribute this performance in the stock prices to the iPhone buzz, and it may continue for a while, although a week ago both VL analysts dropped the 3- to 6-month stock price outlook down to a market average “3”.

If you can play a defensive game with prudent and timely use of stops and put and call options overwriting, then you can earn a respectable Total Return from these telcos. The VL analyst who covers VZ is slightly more optimistic in that regard, mostly due to the company’s wireless services.

I don’t much care to follow these particular telcos, as you know.

Cisco (CSCO) is a Cara 100 company and usually one we have in the Growth and All-Weather portfolios, as we do today. But trading CSCO is always a challenge, particularly if you don’t do options overwriting, which we stopped doing a while back in order to put the focus back on portfolio performance and away from hedging.

In any case, the balance sheet at Cisco is impeccable, and the growth metrics for cash flow, earnings and dividends is quite impressive. The dividend doubled this year and is likely to grow by over +50% again in 2013, and very much after that. The company has the cash to push the envelope – all $49 billion in the bank vs current liabilities of just $18 billion, much of which is unearned as yet, a mere bookkeeping matter.

In fact, after the recent increase in dividend, the company stated it would use 50% of its cash flow to dividends and share buy-backs. With cash flow expected to grow +9.5% per year for the next 3- to 5-years, what does that tell you. It tells me that CSCO will become more heavily weighted in our portfolios, and also return as a Cara Growth portfolio selection at the conference this coming week.

Maybe that’s a spoiler alert, but it is what it is. CSCO is all good as far as I’m concerned. Revenues may grow at +8.0% going forward vs +11.0% for the past ten years, but that’s based on government budget constraints, which will affect many companies and many industries. However this company produces an essential product and has the resources to maintain industry leadership for many years. Value Line is a Cisco fan, and so am I.

Unfortunately I will be too busy with the conference and incoming business associates next weekend to do the WIR, so I will say here that next week Value Line will be reporting on Procter & Gamble (PG) and Home Dept (HD).

Both of these are very good companies, although only P&G is in the Cara 100 presently. Home Depot used to be but I dropped it several years ago – for good reason – but lately I have been considering a move to put it back – also for good reason.

Home depot is a company that will benefit in the Great Reflation. Besides the metrics are looking good enough to get into the Cara 100. The stock has enjoyed a terrific quarter thanks to expectations of QE.


WIR #52-2012

AT&T (T Dec 21 @ 33.67 is down -11.5% in the 13 weeks since Sep 21 @ 38.08)

I’m not surprised as 13 weeks ago in my last report I pointed you to the warning clouds and said I felt that traders might be shorting the sector ETF (and various telco-related stocks) against T and VZ. The warnings was that hot money can reverse, and apparently it has as some of those other telco-related stocks have been soaring this past quarter, while T and VZ dropped a lot.

4-traders.com has T rated Neutral (short-term), bearish (mid-term) and neutral (long-term).

The chart shows me a Bear, but it has dropped a lot this past 13 weeks and could possibly be ready for a turn. I don’t trade it.

As to the Value Line report, it’s just a “mixed bag”. They prefer Verizon (VZ).

Verizon (VZ Dec 21 @ 43.57 is down -4.3% from Sep 21 @ 45.64)

4-traders.com has VZ rated bullish (short-term), neutral (mid-term) and neutral (long-term). That’s better than T.

Value Line also likes VZ as “a recommended selection for the next six to 12 months. However, those willing to commit funds over the long haul are likely to find many other options out there that offer more alluring appreciation potential. That said, this equity’s dividend yield is more than twice that of the average issue under Value Line review. Moreover, its relatively low Beta and Safety rank of 1 (Highest) make it the darling of many a conservative account.”

How can anybody argue with that?

And with that, I’ll pass.

Cisco Systems (CSCO Dec 21 @ 19.96 is up +5.6% from 18.90 @ Sep 21)

This is where I like to say that Cisco is a Cara 100 company and besides we went long again Nov. 21 @ ~18, so we’ve had a real good month with CSCO.

This is called “talking one’s book” because obviously there are many times when I don’t like to say, and I don’t.

4-traders.com has CSCO rated bullish (short-term), bullish (mid-term) and neutral (long-term).

Value Line lowered the short-term 3-6 month rating on Dec 21 from a ‘2’ (market out-performer” to a ‘3’ (average performer).

Our ranking for CSCO dropped out of the top 33% on Friday, down to #48, but we continue to hold it.

The company started paying a dividend in 2Q2011 and now those dividends are increasing. After paying out $0.18 for 2011, the amount should go to $0.36 in 2012 and possibly to more than $0.50 for 2013.

As Value Line has reported: “CEO John Chambers said he expects the company to grow the top line 5% to 7% annually, and earnings 7% to 9% for the next three to five years. This is a solid forecast, in our view, considering Cisco’s size and challenging operating environment. Our long-term revenue growth target of 7.5% assumes macroeconomic conditions will improve.”

The point is there is improvement and this $20 stock ought to be $30 in two to three years. I’d be a buyer of the dips and trim back every time the RSI falls below the 70-line after being in the Distribution Zone (70 and above) for some time on the Daily and the Weekly.

I am in full agreement with the VL report conclusion: “This financially strong tech company is a solid choice, in our view. Overall, Cisco is executing admirably, outperforming competitors, and appears well exposed to strong growth markets like cloud computing, ‘‘bring your own device’’, smartphones, data centers, and video.”

But for the next couple weeks, there ought to be a pull-back, possibly to about the 19.00 level. There is first level support at 18.80 and next at 17.10. On the upside, there is resistance showing at 20.40.

WIR #13-2013

All charts here will show the stock in the solid blue line vs the S&P 500 in the solid thin orange line.

AT&T (T Mar 22 @ 36.43 is up +8.2% in 13 weeks from Dec 21 @ 33.67, which was down -11.5% in the 13 weeks after Sep 21 @ 38.08)

http://www.investertech.com/tkchart/tkchart.asp?stkname=T&wt=3
http://www.investertech.com/tkchart/tkchart.asp?stkname=T&wt=1
http://www.investertech.com/tkchart/tkchart.asp?stkname=T&wt=0

Weekly data:

wir13_13.25.gif

T has enjoyed a Bull run for the past five months, and in particular over the past three months. The RSI-7w at 72.19 is now over-bought, but could go higher. The last price at 36.43 is above the rising EMA-8 (35.56), which is also Bullish.

4-traders.com has T rated bullish (short-term), neutral (mid-term) and neutral (long-term).

http://www.4-traders.com/AT-T-INC-14324/

As to the Value Line report, they lowered the 3-6 month price outlook on March 15 from ‘3’ (market average) to a ‘4’ (market under-performer).

They prefer go through the usual positive comments like: “high quality” “defensive play” “core holding” and also point out the very high 4.9% dividend yield and “aggressive stock repurchases” but at the end of the day I think VL prefers Verizon (VZ).

Verizon (VZ Mar 22 @ 49.02 is up +12.5% in 13 weeks from Dec 21 @ 43.57, which was down -4.3% from Sep 21 @ 45.64)

http://www.investertech.com/tkchart/tkchart.asp?stkname=VZ&wt=3
http://www.investertech.com/tkchart/tkchart.asp?stkname=VZ&wt=1
http://www.investertech.com/tkchart/tkchart.asp?stkname=VZ&wt=0

Weekly data:

wir13_13.26.gif

4-traders.com has VZ rated bullish (short-term), bullish (mid-term) and bullish (long-term). That’s better than T. But let’s just say I’m not as enthusiastic as 4-Traders.com.

http://www.4-traders.com/VERIZON-COMMUNICATIONS-IN-4830/?type_recherche=…

Value Line also likes VZ as a recommended selection for the next three to six months. On March 1, VL increased the Technical rating from a ‘4’ (under-perform) to a ‘3’ (market perform.

Definitely the quarterly revenues and earnings projections for the period 2012-2014 are superior for VZ over T.

Net profit margins, however, are lower than that of T and there are no expected share buy-backs with VZ. In addition the dividend yield at 4.3% is lower.

So, call it a toss-up for those who are interested. I’m not. I believe income oriented investors should only add long positions after the RSI-7w has dipped below 30 and started to recover (and its 83.98! right now and surely will be much lower in the next couple weeks to a few months)

Cisco Systems (CSCO Mar 22 @ 20.75, which is up +4.0% over 13 weeks from Dec 21 @ 19.96, which was up +5.6% from 18.90 @ Sep 21)

http://www.investertech.com/tkchart/tkchart.asp?stkname=CSCO&wt=3
http://www.investertech.com/tkchart/tkchart.asp?stkname=CSCO&wt=1
http://www.investertech.com/tkchart/tkchart.asp?stkname=CSCO&wt=0

Weekly data:

wir13_13.27.gif

4-traders.com has CSCO rated neutral (short-term), bullish (mid-term) and bullish (long-term). I’m more Bearish short-term. FD: We are not presently holding the stock.

http://www.4-traders.com/CISCO-SYSTEMS-INC-4862/?type_recherche=rapide&m…

Although Value Line increased the Technical (3-6 month) rating on Feb 22 from a ‘3’ (market performer) to a ‘2’ (out-performer), this current report from VL is nothing to write home about. They say sales to the US govt are weak and that the shares are damned with faint praise (“shares offer respectable risk-adjusted long-term price appreciation potential”).

They talk about the Cisco client “wait-and-see” stance, and I’d go along with that for now as an investor.


The Dow 30 Company links in chronological order of the upcoming reports.

Procter & Gamble [GICS 30, Dow 30, Cara 100] [Value Line cycle 1, 14, 27 and 40]
(PG: Google Finance file)
(PG: Yahoo Finance file)
(PG: StockChart chart)
(PG: Investertech chart)
(PG: ADVFN Financial Data)
(PG: Profile)
(PG: Value Line Report Dec. 28: next one is due Mar. 29)


Home Depot [GICS 25, Dow 30, Cara 100 (new Dec 2012)] [Value Line cycle 1, 14, 27 and 40]
(HD: Google Finance file)
(HD: Yahoo Finance file)
(HD: StockChart chart)
(HD: Investertech chart)
(HD: ADVFN Financial Data)
(HD: Profile)
(HD: Value Line Report Dec. 28: next one is due Mar. 29)


Hewlett-Packard [GICS 45, Dow 30] [Value Line cycle 2, 15, 28 and 41]
(HPQ: Google Finance file)
(HPQ: Yahoo Finance file)
(HPQ: StockChart chart)
(HPQ: Investertech chart)
(HPQ: ADVFN Financial Data)
(HPQ: Profile)
(HPQ: Value Line Report Jan. 4: next one is due Apr. 5)


IBM [GICS 45, Dow 30, Cara 100] [Value Line cycle 2, 15, 28 and 41]
(IBM: Google Finance file)
(IBM: Yahoo Finance file)
(IBM: StockChart chart)
(IBM: Investertech chart)
(IBM: ADVFN Financial Data)
(IBM: Profile)
(IBM: Value Line Report Jan. 4: next one is due Apr. 5)


Intel [GICS 45, Dow 30, Cara 100] [Value Line cycle 2, 15, 28 and 41]
(INTC: Google Finance file)
(INTC: Yahoo Finance file)
(INTC: StockChart chart)
(INTC: Investertech chart)
(INTC: ADVFN Financial Data)
(INTC: Profile)
(INTC: Value Line Report Jan. 4: next one is due Apr. 5)


Alcoa [GICS 15, Dow 30] [Value Line cycle 3, 16, 29 and 42]
(AA: Google Finance file)
(AA: Yahoo Finance file)
(AA: StockChart chart)
(AA: Investertech chart)
(AA: ADVFN Financial Data)
(AA: Profile)
(AA: Value Line Report Jan. 11: next one is due Apr. 12)


Dupont [GICS 15, Dow 30] [Value Line cycle 3, 16, 29 and 42]
(DD: Google Finance file)
(DD: Yahoo Finance file)
(DD: StockChart chart)
(DD: Investertech chart)
(DD: ADVFN Financial Data)
(DD: Profile)
(DD: Value Line Report Jan. 11: next one is due Apr. 12)


Merck [GICS 35, Dow 30, Cara 100] [Value Line cycle 3, 16, 29 and 42]
(MRK: Google Finance file)
(MRK: Yahoo Finance file)
(MRK: StockChart chart)
(MRK: Investertech chart)
(MRK: ADVFN Financial Data)
(MRK: Profile)
(MRK: Value Line Report Jan. 11: next one is due Apr. 12)


Pfizer [GICS 35, Dow 30, Cara 100] [Value Line cycle 3, 16, 29 and 42]
(PFE: Google Finance file)
(PFE: Yahoo Finance file)
(PFE: StockChart chart)
(PFE: Investertech chart)
(PFE: ADVFN Financial Data)
(PFE: Profile)
(PFE: Value Line Report Jan. 11: next one is due Apr. 12)


3M Company [GICS 20, Dow 30, ex-Cara US 100 June-06] [Value Line cycle 4, 17, 30 and 43]
(MMM: Google Finance file)
(MMM: Yahoo Finance file)
(MMM: StockChart chart)
(MMM: Investertech chart)
(MMM: ADVFN Financial Data)
(MMM: Profile)
(MMM: Value Line Report Jan. 18: next one is due Apr. 19)


General Electric [GICS 20, Dow 30, ex-Cara 100] [Value Line cycle 4, 17, 30 and 43]
(GE: Google Finance file)
(GE: Yahoo Finance file)
(GE: StockChart chart)
(GE: Investertech chart)
(GE: ADVFN Financial Data)
(GE: Profile)
(GE: Value Line Report Jan. 18: next one is due Apr. 19)


United Technologies [GICS 20, Dow 30, Cara 100] [Value Line cycle 4, 17, 30 and 43]
(UTX: Google Finance file)
(UTX: Yahoo Finance file)
(UTX: StockChart chart)
(UTX: Investertech chart)
(UTX: ADVFN Financial Data)
(UTX: Profile)
(UTX: Value Line Report Jan. 18: next one is due Apr. 19)


Coca Cola [GICS 30, Dow 30, Cara 100] [Value Line cycle 5, 18, 31 and 44]
(KO: Google Finance file)
(KO: Yahoo Finance file)
(KO: StockChart chart)
(KO: Investertech chart)
(KO: ADVFN Financial Data)
(KO: Profile)
(KO: Value Line Report Jan. 25: next one is due Apr. 26)


Wal-Mart [GICS 30, Dow 30, Cara 100] [Value Line cycle 6, 19, 32 and 45]
(WMT: Google Finance file)
(WMT: Yahoo Finance file)
(WMT: StockChart chart)
(WMT: Investertech chart)
(WMT: ADVFN Financial Data)
(WMT: Profile)
(WMT: Value Line Report Feb 1: next one is due May 3)


Disney [GICS 25, Dow 30, Cara 100] [Value Line cycle 7, 20, 33 and 46]
(DIS: Google Finance file)
(DIS: Yahoo Finance file)
(DIS: StockChart chart)
(DIS: Billcara2 chart)
(DIS: ADVFN Financial Data)
(DIS: Profile)
(DIS: Value Line Report Feb 8: next one is due May 10)


American Express [GICS 40, Dow 30] [Value Line cycle 8, 21, 34 and 47]
(AXP: Google Finance file)
(AXP: Yahoo Finance file)
(AXP: StockChart chart)
(AXP: Billcara2 chart)
(AXP: ADVFN Financial Data)
(AXP: Profile)
(AXP: Value Line Report Feb 15: next one is due May 17)


Bank of America [GICS 40, Dow 30] [Value Line cycle 8, 21, 34 and 47]
(BAC: Google Finance file)
(BAC: Yahoo Finance file)
(BAC: StockChart chart)
(BAC: Billcara2 chart)
(BAC: ADVFN Financial Data)
(BAC: Profile)
(BAC: Value Line Report Feb 15: next one is due May 17)


JP Morgan [GICS 40, Dow 30] [Value Line cycle 8, 21, 34 and 47]
(JPM: Google Finance file)
(JPM: Yahoo Finance file)
(JPM: StockChart chart)
(JPM: Billcara2 chart)
(JPM: ADVFN Financial Data)
(JPM: Profile)
(JPM: Value Line Report Feb 15: next one is due May 17)


Microsoft [GICS 45, Dow 30] [Value Line cycle 8, 21, 34 and 47]
(MSFT: Google Finance file)
(MSFT: Yahoo Finance file)
(MSFT: StockChart chart)
(MSFT: Billcara2 chart)
(MSFT: ADVFN Financial Data)
(MSFT: Profile)
(MSFT: Value Line Report Feb 15: next one is due May 17)


Johnson & Johnson [GICS 35, Dow 30, Cara 100] [Value Line cycle 9, 22, 35 and 48]
(JNJ: Google Finance file)
(JNJ: Yahoo Finance file)
(JNJ: StockChart chart)
(JNJ: Investertech chart)
(JNJ: ADVFN Financial Data)
(JNJ: Profile)
(JNJ: Value Line Report Feb. 22: next one is due May 24)


Caterpillar [GICS 20, Dow 30] [Value Line cycle 9, 22, 35 and 48]
(CAT: Google Finance file)
(CAT: Yahoo Finance file)
(CAT: StockChart chart)
(CAT: Investertech chart)
(CAT: ADVFN Financial Data)
(CAT: Profile)
(CAT: Value Line Report Feb. 22: next one is due May 24)


McDonalds [GICS 30, Dow 30, Cara 100] [Value Line cycle 10, 23, 36 and 49]
(MCD: Google Finance file)
(MCD: Yahoo Finance file)
(MCD: StockChart chart)
(MCD: Investertech chart)
(MCD: ADVFN Financial Data)
(MCD: Profile)
(MCD: Value Line Report Mar 1: next one is due May 31)


Chevron Corp [GICS 10, Dow 30] [Value Line cycle 11, 24, 37 and 50]
(CVX: Google Finance file)
(CVX: Yahoo Finance file)
(CVX: StockChart chart)
(CVX: Investertech chart)
(CVX: ADVFN Financial Data)
(CVX: Profile)
(CVX: Value Line Report Mar. 8: next one is due Jun. 7)


ExxonMobil [GICS 10, Dow 30, Cara 100] [Value Line cycle 11, 24, 37 and 50]
(XOM: Google Finance file)
(XOM: Yahoo Finance file)
(XOM: StockChart chart)
(XOM: Investertech chart)
(XOM: ADVFN Financial Data)
(XOM: Profile)
(XOM: Value Line Report Mar. 8: next one is due Jun. 7)


Boeing Co [GICS 20, Dow 30. Cara 100] [Value Line cycle 12, 25, 38 and 51]
(BA: Google Finance file)
(BA: Yahoo Finance file)
(BA: StockChart chart)
(BA: Investertech chart)
(BA: ADVFN Financial Data)
(BA: Profile)
(BA: Value Line Report Mar. 15: next one is due Jun. 14)


Travelers Co [GICS 40, Dow 30] [Value Line cycle 12, 25, 38 and 51]
(TRV: Google Finance file)
(TRV: Yahoo Finance file)
(TRV: StockChart chart)
(TRV: Investertech chart)
(TRV: ADVFN Financial Data)
(TRV: Profile)
(TRV: Value Line Report Mar. 15: next one is due Jun. 14)


UnitedHealth Group [GICS 35, Dow 30] [Value Line cycle 12, 25, 38 and 51]
(UNH: Google Finance file)
(UNH: Yahoo Finance file)
(UNH: StockChart chart)
(UNH: Investertech chart)
(UNH: ADVFN Financial Data)
(TRV: Profile)
(UNH: Value Line Report Mar. 15: next one is due Jun. 14)


AT&T [GICS 50, Dow 30] [Value Line cycle 13, 26, 39 and 52]
(T: Google Finance file)
(T: Yahoo Finance file)
(T: StockChart chart)
(T: Investertech chart)
(T: ADVFN Financial Data)
(T: Profile)
(T: Value Line Report Mar. 22: next one is due Jun. 21)


Verizon [GICS 50, Dow 30] [Value Line cycle 13, 26, 39 and 52]
(VZ: Google Finance file)
(VZ: Yahoo Finance file)
(VZ: StockChart chart)
(VZ: Investertech chart)
(VZ: ADVFN Financial Data)
(VZ: Profile)
(VZ: Value Line Report Mar. 22: next one is due Jun. 21)


Cisco Systems [GICS 45, Dow 30, Cara 100] [Value Line cycle 13, 26, 39 and 52]
(CSCO: Google Finance file)
(CSCO: Yahoo Finance file)
(CSCO: StockChart chart)
(CSCO: Investertech chart)
(CSCO: ADVFN Financial Data)
(CSCO: Profile)
(CSCO: Value Line Report Mar. 22: next one is due Jun. 21)


While it is important to have an understanding of the financial summaries of the companies you invest in, I don’t think you need to be an expert financial analyst to become a great trader. In fact, details often get in the way. A successful trader has a big picture understanding of the macro-economic, corporate fundamental, quantitative data series, and stock price and volume technical picture.

In other words you need to know a little about a lot of things rather than have an expert understanding of one and very little about the rest of the factors that impact a company and its stock price.

Something for newbies to think about:

With respect to investing in general for most people, I think if you focus on just six to ten stocks and the reports of the same one or two analysts for each, you will be less likely to miss the nuances. The greater depth of understanding of the companies will help you better analyze the price charts. In other words, you’ll be able to gain control of your investments rather than get stuck on the road to perdition, flipping from one salesperson’s pitch to another.

With the help of the free Dow 30 quarter-yearly reports from Value Line, it’s not difficult to pick those 6 to 10 stocks, keep the reports and your notes in a hard-copy binder, plus carefully selected items from other analysts you can find on the Web and print out for your files.

To each his own because putting in the hours to study companies and stocks that don’t interest you at all is not going to work out. For me, a six-sector mix of Dow 30 companies like Chevron (CVX), Boeing (BA), Disney (DIS), Walmart (WMT), Merck (MRK) and Intel (INTC) would do the trick, although you might pay heed to what I have to say about the Energy market for 2013-14 and Intel has been suffering lately because of the negative impact the slow economy has had on pc sales, and the move to mobile devices.

That’s not to say you would want to stay fully invested in these stocks at all times if in fact you do follow them and buy them. Every stock has a price motion that swings from over-sold to over-bought. You don’t want to be buying them when they are over-bought and you want to buy them when they are over-sold.

As of August 3, 2012, these six stocks had an average market cap of $146.9 billion, an average RoE of 30.3, and average dividend yield of 2.71%, average Performance YTD and over 12 months of 15.89% and 34.73% respectively, an average beta of 0.873 (you sleep better), and an average PE multiple of 14.2 (vs Dow 30 average of ~17.5).

At times, all of these stocks will encounter operating and financial challenges, but on average if you buy to hold (as a core portfolio), adding to your positions at long-term cycle lows (Monthly price series data showing a RSI-7 under 30 and basing), writing puts at those entry points, and selling a bit and writing calls on the rest at long-term cycle highs (Monthly price series data showing a RSI-7 over 70 and peaking), then you will do well for Total Return (capital growth plus dividend and premium income) over 5-10-20 years.

And every three to five years or so, when there seems to be a market long-term cycle peak occurring, you might wish to revisit the composition of this list, possibly switching one of the stocks with a replacement of similar high quality but probably more current in terms of a growth story.

Also, try to understand what Value Line can do for you: For 1700 stocks in its universe, VL offers a Timeliness Ranking (6 to 12 month relative price outlook) and a Technical Ranking (3 to 6 month outlook) from 1 to 5.

http://www.valueline.com/About/Ranking_System.aspx

But VL is much more than a ranking system. It’s a discipline. Every quarter year, the empirical data is laid out in a consistent presentation along with notes from the covering analyst. Together with services like StockCharts, Finviz and ADVFN, you will find that VL gives you the tools you need for successful trading and managing wealth.

It may take years, but it really is worth the time and effort to get to know the companies you trade. After a while, you’ll appreciate the price motion of each stock and, with more confidence, you’ll be able to go with the flow, selling when the market is chasing the price, and then letting the price come to you when they are trying to sell it, and you may want it.

In other words, do the homework to find the companies with very high quality and then put yourself into selling in a seller’s market and being a buyer in a buyer’s market, as the real estate people like to say. To seize the opportunities without undue risk, you need to be prepared, and this is how to go about it.

Don’t let a salesperson yank your chain with every new idea that is a hot story: stick to your knitting and your goals and objectives will be reached.

People sometimes ask me why I don’t sell my story to Financial Entertainment TV. But these same people don’t understand that common sense in the form advocated by Charles Dow, and repeated often by me, is not exciting enough for today’s media.

You see; I have been writing the same things for years. In the 2005 WIR-13, I republished my public Dow 30 diary from Week 32-1999: Aug 14 (10973.65):

For years we’ve made the case that the market is a game that plays people. Without enough self-discipline to control one’s emotions, an investor will never be successful. He or she will simply be conned by every ‘head fake’ and outright deception that Wall Street can serve up in their constant pursuit of greed… Every individual investor has to have a plan and to work that plan. We’d like our Dow 30 Journal to carry a guarantee of investment success, but that’s not possible. What is absolutely certain however is that with just two things –“facts and common sense”– anybody can take on Wall Street and win… At the turn of the century, Charles Dow in fact said: “The man who is prudent and careful in carrying on a store, factory or real estate business seems to think that totally different methods should be employed in dealing with stocks. Nothing is further from the truth.”

All of this I re-published in Lessons From the Trader Wizard (2008), which has been published in an updated 2012 e-book version, available for under $10 at Amazon.com. I will likely update this book annually and self-publish it.


Sector ETF Summary for the US equity market

The most important sectors in my view are Energy (XLE), Industrials (XLI), Consumer Discretionary (XLY) and Financial (XLF). By overlaying them on the S&P 500 chart ($SPX), you can see more clearly the trend reversal points in the market over the past two years:

wir13_13.27.gif

You can also see from this chart that since the turn of the calendar year, these usual market leaders (XLE, XLI, XLY and XLF) are under-performing the market, and are much more tightly correlated compared to earlier periods. I attribute this to excessive Intervention (Fed models?) in the past three months.

The strong broad market indexes are being support by Defensive sectors like Health (IYH) and Consumer Staples (XLP).

Because of the high RSI-7w (80.87) that has extended above the 70-line for almost three months, investors need to be cautious at this point. That’s not to say I expect to see a crash. I anticipate a ~3% pull-back to about 1515 with the RSI-7w down to close to the 50-line (but not below) before the broad market starts its next Bull run in the second week of April.

Backgrounder:

Each week these numbers change dramatically. Trading short-term is now a prerequisite to risk management and long-term success, and, going up against Wall Street on a short-term basis is a difficult challenge at best.

With sector rotation and the extent of volatility affecting performance, you have to learn to trade. I repeat this statement every week.

The price performance tables that I show every day 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

XLP

39.30 0.36 0.92% 2.10% 1.76% 2.72% 9.78% 11.74% 9.29% 16.69%

IYH

94.51 0.61 0.65% 0.60% 1.21% 4.14% 11.07% 12.34% 10.82% 23.79%

XLU

38.17 0.06 0.16% 0.10% 0.53% 2.66% 7.34% 8.10% 5.94% 10.35%

XLY

52.62 0.64 1.23% 0.06% 0.00% 4.80% 8.65% 11.29% 10.71% 17.98%

IYZ

24.29 0.09 0.37% 0.04% 0.16% -0.33% -1.90% -0.16% -7.04% 7.53%

XLK

30.17 0.19 0.63% -0.10% -0.40% 1.62% 1.21% 4.21% -4.25% 0.60%

SPY

155.60 1.24 0.80% -0.15% 0.10% 2.44% 6.53% 8.97% 6.67% 11.78%

XLI

41.62 0.32 0.77% -0.83% -0.48% 1.91% 7.24% 9.73% 12.55% 12.18%

XLE

78.75 0.62 0.79% -1.07% -0.30% 1.00% 7.88% 9.27% 5.45% 10.17%

SMH

34.90 0.27 0.78% -1.38% -1.69% -0.57% 3.84% 5.92% 8.08% -1.38%

XLF

18.18 0.11 0.61% -1.46% -0.33% 2.48% 7.77% 10.85% 14.85% 16.54%

XLB

39.07 0.05 0.13% -1.96% -1.31% 2.20% 1.53% 5.59% 4.33% 6.98%

You can do a table like Table 1 (below) by entering the following string into the Summary window at Investertech.com and then clicking on the link for Performance. You can also add more ETFs – up to 30 in total. For a list of components to many ETFs, go to the AMEX.com and NYSE.com web sites, and click on ETFs.

SPY XLE XLB XLI XLY XLP IYH XLF XLK SMH IYZ XLU .

You can use this tool to set up personal watchlist charts by industry group and sub-groups.

Another chart you ought to be reviewing every week is the candleglance view from StockCharts.com:

http://stockcharts.com/scripts/php/candleglance.php?XLE,XLB,XLI,XLY,XLP,…
http://tinyurl.com/33m3ss4

Sector rotation is one study I spend hours doing every week.

http://en.wikipedia.org/wiki/Sector_rotation

For a summary chart view, this presentation from StockCharts will save you lots of time.
http://stockcharts.com/scripts/php/candleglance.php?XLE,XLB,XLI,XLY,XLP,…
http://tinyurl.com/33m3ss4

Once involved, you’ll drill down into the nuances of this next chart (link), looking at the cyclical reversals and trying to see the drivers.
http://stockcharts.com/charts/performance/perf.html?[SECT]
http://tinyurl.com/ykk3oyc

The principles of sector rotation have been studied and written about for hundreds of years by many people. My work is based on the individual who mentored me in this subject and taught me more about investing and trading than any other, the late Ian Notley, my former associate. Notley is considered perhaps the finest trend and cycles analyst of the past 50 years. He was recruited to North America in the 1970’s by another friend of mine, Ian McAvity, editor of Deliberations, himself one of the world’s great trend and cycle analysts.

http://www.topline-charts.com/ian_mcavity.htm

The technical analysis work of both Ian’s was inspired by E.S. Coppock.

http://www.topline-charts.com/Encyclopedia/coppock_curve_interpretation.htm


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

SPY Monthly data: SPY Monthly Data

SPY Weekly data: SPY Weekly Data

SPY Daily data: SPY Daily Data


10 (energy: XLE) ETF Chart for Energy:XLE

15 (basic materials: XLB) ETF Chart for Basic Materials:XLB

20 (industrial: XLI) ETF Chart for Industrial:XLI

25 (consumer discretionary: XLY) ETF Chart for Energy:XLY

30 (consumer staples: XLP) ETF Chart for Consumer Staples:XLP

35 (healthcare: IYH) ETF Chart for Health Care:IYH

40 (financial: XLF) ETF Chart for 00Financial:XLF

45 (technology, semiconductor: SMH) ETF Chart for Technology, Semiconductor:SMH

50 (telecom: IYZ) ETF Chart for Telecom:IYZ

55 (utilities: XLU) ETF Chart for Utilities:XLU


Individual US Sector ETFs and Stocks 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 Monthly Data

XLE Weekly data: XLE Weekly Data

XLE Daily 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

CVX

121.18 0.84 0.70% 1.25% 2.20% 4.50% 9.77% 10.45% 2.87% 15.03%

XOM

89.29 1.12 1.27% -0.09% 0.36% 0.10% 0.65% 2.36% -2.86% 4.64%

APA

74.47 0.32 0.43% -1.60% -1.56% -1.23% -7.77% -6.91% -15.94% -26.19%

CEO

185.07 0.92 0.50% -1.73% -4.24% -6.69% -18.33% -14.15% -9.07% -11.66%

TLM

12.04 0.10 0.84% -1.87% -0.33% -6.16% 2.91% 7.40% -13.82% -6.23%

CNQ

32.16 0.14 0.44% -2.34% 3.21% 8.06% 8.43% 10.21% -2.72% -4.48%

TOT

49.60 0.18 0.36% -2.38% -2.80% -1.72% -5.65% -3.88% -5.07% -8.23%

IMO

41.63 0.04 0.10% -2.51% -1.95% -0.98% -3.46% -3.86% -11.67% -5.96%

SU

30.28 0.09 0.30% -2.64% -0.92% -3.17% -10.68% -7.91% -10.49% -6.43%

PTR

131.91 -0.20 -0.15% -2.77% -5.24% -4.59% -9.52% -7.14% 0.58% -6.19%

NE

36.63 0.04 0.11% -3.15% 2.18% -1.61% 1.33% 2.12% -2.94% -3.83%

RIG

51.66 -0.14 -0.27% -3.55% -2.93% -3.04% 11.72% 13.19% 6.41% -6.41%

PDS

8.650 0.000 0.00% -4.84% 4.09% 2.00% 0.82% 7.05% -3.78% -16.02%

NFX

22.86 -0.10 -0.44% -5.18% -3.63% -8.27% -16.14% -15.24% -30.83% -33.84%

PBR

16.85 -0.03 -0.18% -5.39% -1.98% 10.42% -14.03% -15.62% -27.50% -36.82%

SLB

74.37 0.93 1.27% -6.34% -4.60% -4.40% 4.16% 6.72% -0.87% 3.32%

The ETF for Oiler stocks is XLE. This week, XLE closed at 78.75, down -1.07% from 79.60. On Friday there was a gain of +0.79% or else the W/W loss would have been much larger.

Chevron (CVX +1.3% W/W) was the only winner in my watchlist. Schlumberger (SLB -6.3%), PetroBrazil (PBR -5.4%) and Newfield (NFX -5.2%) were the weakest this week.

Here is the Weekly chart of XLE (in solid blue with the 8-week EMA in dashed blue), and the $SPX in thin solid orange. Note that the 8-week EMA dropped from 77.56 to 68.07 this week, which was a SELL Alert. However, the last price is 78.75, which is above the EMA-8w (77.82), is Bullish.

wir13_13.28.gif

Over several weeks now, our simple little system has been flashing SELL and then BUY and then SELL for XLE. These are Alerts only and must be combined with Daily and Monthly data results plus other factors to give a trading signal. Besides, at the end of the day, as I see it, it is a human trader who ought to be pulling the trigger.

The $WTIC gained +$0.42/bbl (+0.45% W/W) to 93.78.

This $WTIC Weekly chart is now Neutral. The price at 93.78 is close to the 8-week EMA at 93.36 and the RSI-7 has stayed above the 50-level, moving from 52.15 to 54.20 this week.

wir13_13.29.gif

FD: We moved back to holding only hold one Energy stock in the All-Weather portfolio, which is CVX, our core holding.

Note that our equity positions are, by company policy, restricted to Cara 100 companies in the broad based portfolios. After we compiled new lists for a Cara Growth 100 and a Cara All-Weather 100, we decided to only discuss stocks in the Cara All-Weather 100 in the free blog. Clients and paying subscribers will have access to the other content.

For All-Weather, across all sectors we are in a much smaller individual position weighting (than the Growth portfolio) because this account invests in more of a balance of equities, bonds, precious metals and cash.

For Growth, we dropped trading value-oriented mega-cap stocks like XOM, CVX, PBR and CEO, and moved to a list of mid-cap stocks of companies that have demonstrated faster growth in recent years. We did the same for all sectors.

Here is a candleglance chart of 10 important Sector 10 components:

http://stockcharts.com/scripts/php/candleglance.php?XOM,PTR,CVX,PBR,TOT,…

Here below is the list of the Cara 100 companies in this sector along with their stock tickers.

CAM Cameron International
CEO CNOOC
CNQ Canadian Natural Resources
CVX Chevron
EPD Enterprise Products Partners LP
NOV National-Oilwell Varco
SLB Schlumberger
SU Suncor Energy
XOM Exxon Mobil

For the Energy (Oil & Gas industries) Sector, the market cap (Feb 1, 2012) of these nine Cara All-Weather 100 stocks was $1.02 trillion.

Note that one of these stocks (EPD Enterprise Products Partners LP) could be considered a pipeline stock in the Utilities sector if you happen to be trying to balance your portfolio.

Another new one, CAM Cameron International is a deep water driller that recently entered a venture with Schlumberger.

NOV National Oilwell Varco is real big in the shale oil & gas industry, which you know I like. We also added several of those players to the Growth portfolio.

I’ll try to update this data once a quarter from now on.

As you know by now, there is a difference between a company and a stock. At times, you can be invested in a great company but the stock is a disappointment.

A stock is a price set in the market. It could change minute to minute depending on various price drivers, some of which have little or nothing to do with the corporation. That price might be materially different that say a consensus valuation of enterprise value of the company, which in turn might be materially different than one company or individual might be prepared to pay to acquire the whole company.

But, first and foremost I believe in investing in the shares of the highest quality companies – just like I believe that we must choose our friends wisely. Track records like price trends tend to persist. For a Cara 100 company, I select only those that trade its shares on the NYSE or NASDAQ, which requires a high level of transparency and where the information is easy to come by. Most major Canadian companies and a great many international companies are dually listed on these exchanges in the US too. I try to build the Cara 100, which is where I invest, with an international flavor, which helps me diversify risk and also observe many different operating environments simultaneously, which also helps me better interpret the macro-economic data we get.

A Cara 100 company has to have a strong balance sheet and a strong Board of directors and management team, the CEO in particular. Compared to the peer group, the operating and net profit margins must be at or near the highest, the Return on Shareholder Equity up there as well, generally close to or above 20%. I need to see acceptable growth rates in revenues, cash flow, earnings, dividends and book value.

These figures are easy to get. FINVIZ.com does a good job of that.

As for the price data charts I find best, I like StockCharts.com. A full range of information comes from 4-traders.com.

Cara 100 Sector 10 (Energy) list:

CAM Cameron International [GICS 10, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


CEO CNOOC [GICS 10, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


CNQ Canadian Natural Resources [GICS 10, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


CVX Chevron Corp [GICS 10, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


EPD Enterprise Products Partners LP [GICS 10, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


NOV National-Oilwell Varco [GICS 10, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


SLB Schlumberger [GICS 10, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


SU Suncor Energy Inc [GICS 10, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


XOM Exxon Mobil Corp [GICS 10, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


http://tinyurl.com/3m4est9
http://tinyurl.com/3c8sxec

Integrated Oil & Gas – Canada

Oil & Gas Exploration & Production -Canada

Info from SeekingAlpha.com this week

10 Cameron International Corp (CAM) Mar21: 8:53 AM Cameron (CAM), which manufactured the blowout preventer that was connected to the Deepwater Horizon rig when it exploded in 2010, won’t face punitive damages from the disaster, a federal judge ruled yesterday. CAM had paid BP $250M to settle most of the legal claims arising from the spill, but the agreement didn’t cover fines, penalties or punitive damages.

10 Cnooc’s (CEO) Mar22: 8:06 AM Cnooc (CEO) says its 2012 profit fell 9.3% due to higher costs for exploration and operating in Canada’s oil sands. Revenue rose 2.8% to 247.6B yuan from 240.9B on higher oil and gas sales. Cnooc’s largest domestic offshore field, Penglai 19-3, was shut because of a spill, hindering production growth. Says it will increase expense on drilling new wells and exploring for resources by 52%


Sector 15 (basic materials: IYM, XLB, IGE and VAW)

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

XLB Monthly data:

XLB Monthly Data

XLB Weekly data:

XLB Weekly Data
XLB Daily Data

Table 3: Senior Basic Materials:
XLB Daily data:

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

CCJ

21.50 0.31 1.46% 0.37% 2.43% -2.23% 6.33% 7.55% 1.46% -4.95%

TS

40.59 0.50 1.25% -0.47% -0.66% -2.85% -5.16% -2.62% -2.19% 4.91%

NUE

46.15 -0.25 -0.54% -0.97% -3.15% 2.15% 3.06% 6.04% 16.87% 7.60%

AA

8.450 0.000 0.00% -2.09% -1.86% -2.20% -6.01% -1.40% -7.45% -15.58%

FBR

11.03 0.08 0.73% -2.13% -4.58% -2.82% -8.54% -2.48% 17.72% 35.34%

VALE

17.16 0.11 0.65% -2.22% -7.89% -5.14% -20.15% -14.63% -7.94% -24.54%

PKX

72.41 -0.21 -0.29% -2.33% -7.75% -12.58% -15.07% -10.98% -14.42% -13.96%

FCX

33.00 0.01 0.03% -2.37% -0.84% 1.69% -6.17% -1.73% -18.82% -13.91%

DOW

32.78 0.30 0.92% -3.05% 0.03% 4.46% -0.82% 2.47% 8.33% -4.90%

GGB

7.440 0.030 0.40% -3.25% -9.27% -9.27% -20.85% -14.68% -25.30% -24.77%

POT

39.55 0.00 0.00% -3.28% -1.57% 1.02% -4.26% -0.98% -10.11% -12.96%

BHP

69.64 -0.05 -0.07% -4.55% -5.35% -8.09% -12.87% -9.52% -0.44% -1.50%

RIO

47.45 0.00 0.00% -5.06% -7.22% -11.42% -20.81% -16.43% -3.99% -9.84%

TCK

28.12 0.03 0.11% -6.20% -7.98% -9.58% -26.04% -22.08% -8.64% -19.47%

MT

13.55 -0.16 -1.17% -8.51% -7.95% -11.21% -24.09% -20.29% -14.67% -30.23%

The ETF for Basic Materials stocks is XLB. These are the producers of commodities and related products.

This week, XLB dropped -1.96% W/W. The close was 39.07. There was a gain of +0.13% on Friday.

The leader was Cameco (CCJ +0.4% W/W). Losers were led by ArcelorMittal steel (MT -8.5%), Teck (TCK -6.2%) and Rio Tinto (RIO -5.1%).

This week Silver Wheaton (SLW) reported a +38% increase in in-situ reserves of silver and gold to 1.1 billion silver equivalent oz. The company is also paying a dividend of $0.14 to shareholders of record on March 28. In my view the stock is a BUY. Production in 2013-2015 will soar. Should silver prices soon lift above $50 as I expect, the company’s earnings will excel. I met the CEO Randy Smallwood for a one-on-one chat this month and can see he is focused on performance 3 to 5 years out.

Here is the Weekly chart of XLB (in solid blue @ 39.07 with the 8-week EMA @ 38.99 in dashed blue), and the $SPX in thin solid orange. That is a Bullish chart, but barely. The RSI-7 is at a Bullish 56.41, but I noted the failure to get above the 70-line.

wir13_13.30.gif

FD: In All-Weather portfolios, we hold only LYB (LyondellBasell) this week, as well as the precious metals related AGI, CEF, FCX, MUX, NGD, RGLD, and SLW. We believe that precious metals are almost finished their cycle-bottom pattern and will soon lead the market higher. We are trading some of the precious metals stocks in the Cara Growth 100 here as well. When we see the Bull move take hold we will be switching a large % of our holding in CEF to the other stocks, but presently it is still a bit too early for that, we believe. By mid-April, that situation will likely change.

Here below is the list of the new Cara All-Weather 100 companies in this sector along with their stock tickers. LyondellBasell (LYB) was added most recently and I switched out New Gold (NGD) for Silver Wheaton (SLW), keeping NGD in the Growth list.

BHP BHP Billiton
CEF Central Fund Of Canada
DOW Dow Chemical
FBR Fibria Celulose
FCX Freeport-McMoRan Copper & Gold
GGB Gerdau
NUE Nucor
POT Potash Corp Of Sask
SLW Silver Wheaton
TCK Teck Resources Ltd
TS Tenaris
VALE Vale

As at Jan. 25, 2013, the total market cap of the 12 Cara All-Weather 100 stocks in this sector was $520.5 billion. Over 50% of the total is attributed to two stocks, BHP and VALE, and BHP is by far the biggest of those two.

As for the price data charts I find best, I like StockCharts.com. A full range of information comes from 4-traders.com.

Cara 100 Sector 15 (Basic Materials) list:

BHP BHP Billiton Ltd [GICS 15, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


DOW Dow Chemical Co [GICS 15, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


FBR Fibria [Votorantim] Celulose [GICS 15, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


FCX Freeport McMoRan [GICS 15, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


GGB Gerdau SA [GICS 15, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


LYB LyondellBasell [GICS 15, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


NUE Nucor Corp [GICS 15, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


POT Potash Cp of Saskatchewan [GICS 15, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


SLW Silver Wheaton [GICS 15, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


TCK Teck-Cominco Ltd [GICS 15, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


TS Tenaris SA [GICS 15, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


VALE Companhia Vale Do Rio [GICS 15, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


http://tinyurl.com/3uyrm6k
http://tinyurl.com/3hwo6k7

Here is the current candleglance chart of 10 important Sector 15 components:

http://stockcharts.com/scripts/php/candleglance.php?BHP,VALE,RIO,MT,DOW,…

Info from SeekingAlpha.com this week

15 Dow Chemical (DOW) Mar21: 5:13 PM Dow Chemical’s (DOW) effort to limit U.S. natural gas exports would effectively create a price cap for the commodity, an Exxon (XOM) executive says. Dow begs to differ, of course, but it has concerns about “a tipping point at which LNG exports turn from a net positive for this nation to a net negative… Once you hit that point, it’s too late to go back.”

15 Silver Wheaton (SLW) Mar22: 6:15 AM Silver Wheaton Corp. (SLW) declares $0.14/share quarterly dividend. Forward yield 1.80%. For shareholders of record Apr. 02. Payable Apr. 12. Ex-div date Mar. 28. 6:03 AM Silver Wheaton (SLW): Q4 EPS of $0.50 beats by $0.01. Revenue of $287.2M beats by $27.8M. Mar19: 5:42 PM Silver Wheaton (SLW) says attributable proven and probable reserves increased 38% in 2012 to a record ~1.1B silver equivalent oz. consisting of 851M oz. of silver and 4.9M oz. of gold. Attributable measured and indicated resources rose 28% to a record 603M silver equivalent oz. consisting of 529M oz. of silver and 1.39M oz. of gold.

15 Vale (VALE) Mar18: 5:05 PM Vale (VALE) has almost doubled its estimated cost of its potash project in Argentina to $11B, as exchange rate controls amid rampant inflation caused the Rio Colorado mine to become commercially unviable, CEO Murilo Ferreira says. Argentina’s government blasted Vale’s claims, but Barrick Gold (ABX), developing the Pascua-Lama mine, had to boost its cost estimate by ~70% within a matter of months.


Sector 20 (industrial: IYJ, XLI, VIS, and IYT)

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

XLI Monthly data: XLI Monthly Data

XLI Weekly data: XLI Weekly Data

XLI Daily 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

HON

75.19 0.60 0.80% 2.36% 2.02% 7.58% 16.12% 17.10% 24.24% 25.84%

PAYX

34.44 0.28 0.82% 1.32% 1.32% 3.99% 8.13% 9.68% -0.32% 7.69%

FLR

64.94 1.31 2.06% 0.71% 0.98% 1.39% 6.46% 9.79% 9.70% 9.03%

UTX

93.59 1.16 1.25% 0.33% 1.65% 3.43% 11.42% 13.39% 15.90% 14.04%

MMM

106.42 1.48 1.41% 0.02% 0.67% 2.78% 12.28% 14.31% 14.17% 20.15%

ERJ

34.80 0.12 0.35% -0.09% 0.40% 3.79% 19.83% 25.63% 28.84% 12.08%

GE

23.37 0.08 0.34% -0.30% -1.68% -0.09% 9.51% 11.93% 3.73% 17.73%

UPS

84.76 1.76 2.12% -0.83% 0.38% 2.19% 11.07% 13.25% 17.92% 5.58%

TXT

30.75 0.04 0.13% -0.97% 1.15% 5.53% 20.68% 25.61% 13.38% 16.35%

CAT

87.48 0.65 0.75% -1.52% -3.35% -4.44% -6.44% -0.48% -4.62% -17.81%

BA

84.82 0.49 0.58% -1.86% 4.42% 10.64% 10.06% 11.36% 21.22% 14.75%

ABB

22.63 0.22 0.98% -2.33% -0.88% -1.95% 6.80% 8.64% 16.05% 12.64%

CMI

113.50 -0.51 -0.45% -3.29% -5.12% 0.63% 0.11% 5.02% 18.02% -5.51%

JOY

58.41 0.12 0.21% -5.99% -7.48% -7.32% -11.50% -6.57% -1.68% -21.70%

FDX

98.48 1.98 2.05% -9.71% -8.65% -6.94% 4.49% 6.19% 16.70% 6.46%

The ETF for Industrial and Transportation stocks is XLI. These are the users of commodities and related products as well as the freight transportation systems that move commodities and business packages to markets around the world.

This week, XLI dropped -0.83% W/W to close at 41.62.

The biggest loser was Fedex (FDX -9.7% W/W). Earnings dropped -31%.
http://www.4-traders.com/FEDEX-CORPORATION-12585/news/FedEx-Plans-Additi…

Joy Global (JOY -6.0%) was another big loser. In late-Feb, the company reported a big drop in orders. Caterpillar, a competitor, seems to be saying the same.

The biggest winner in my watchlist was Honeywell (HON +2.4%).

FD: In the All-Weather portfolios, we hold HUB.B and MMM.

Here is the Weekly chart of XLI (in solid blue @ 41.62 with the 8-week EMA @ 40.95 in dashed blue), and the $SPX in thin solid orange. The Bulls are still running here, but the Weekly RSI-7 has dropped from 85.65 to 75.81 this week.

wir13_13.31.gif

Here below is the list of the Cara 100 companies in this sector along with their stock tickers.

ABB Abb Ltd
CAN Accenture
BA Boeing
CAT Caterpillar
CMI Cummins Inc.
ERJ Embraer
HUB.B Hubbell Inc B
JOY Joy Global
MMM 3M Company
PWR Quanta Services
UTX United Technologies

As at Jan. 25, 2013, the total market cap of the 11 Cara All-Weather 100 stocks in this sector was $368.0 billion. Of the total there were six stocks (UTX, MMM, CAT, BA, ABB and ACN (in that order) with a total cap of $367 billion.

As for the price data charts I find best, I like StockCharts.com. A full range of information comes from 4-traders.com.

Cara 100 Sector 20 (Industrials and Transports) list:

ABB ABB Ltd [GICS 20, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


ACN Accenture [GICS 20, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


BA Boeing Co [GICS 20, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


CAT Caterpillar [GICS 20, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


CMI Cummins Inc [GICS 20, Cara All-Weather 100]

< a href=”http://www.4-traders.com/CUMMINS-INC-12214/”>(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


ERJ Embraer-Empresa Brasil [GICS 20, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


HUB.B Hubbell [GICS 20, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


JOY Joy Global [GICS 20, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


MMM 3M [GICS 20, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


PWR Quanta Services Inc [GICS 20, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


UTX United Technologies [GICS 20, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


http://tinyurl.com/3z2wq7l

The Industrials, Base Materials and Energy sectors are typically the three sectors that are most inversely correlated to the US Dollar.

The US, Swiss and Brazilian companies in the Industrial sector, like the others, get most of their income from abroad. They are also producers and/or transporters of commodities, which increase in price as the Dollar falls.

Here is the current candleglance chart of 10 important Sector 20 components:

http://stockcharts.com/scripts/php/candleglance.php?GE,UTX,UPS,MMM,CAT,A…

To check on general and detailed info for the Industrials group, the Thomson Reuters service is a good one:

http://www.reuters.com/sectors/industries/significant?industryCode=52442

Here is the link to all sectors and industries as classified by Reuters:

http://www.reuters.com/assets/siteindex#sectorsAndIndustries

Info from SeekingAlpha.com this week

20 Boeing (BA) Mar24:1:52 AM As of April, all 100 planes in Japan Airlines’ fleet will be Boeing (BA) aircraft. That could change this summer. According to Reuters, the carrier may spend $4.23B on 20 A350 jets from Airbus to replace Boeing 777s on some flights from Europe to the U.S. The airline’s seven 787 Dreamliners have been out of commission since January as Boeing attempts to resolve problems with the jets’ lithium-ion batteries. Mar19: 5:55 AM Boeing (BA) has won an order for 175 737-800 jets from Dublin-based Ryanair (RYAAY) in a deal worth $15.6B at list prices. The booking makes up for some of Boeing’s hurt for losing out on a $24B order from Indonesia’s Lion Air. 3:14 AM Boeing’s (BA) technical engineers have overwhelmingly approved a new four-year labor agreement, thereby averting a possible strike at a critical time for the company as it works to solve the 787’s battery problems. The authorization comes after the technical works rejected the same offer last month while Boeing’s engineers accepted it. The agreement will lower the firm’s pension costs, as it eliminates pensions for new recruits.

20 Caterpillar (CAT) Mar20: 9:35 AM Caterpillar’s (CAT -1.5%) retail sales of machines -13% Y/Y in three months to February vs -12% in three months to January, with AsiaPacific -26% in Dec-Feb, North America -12%, EMEA -9%, Latin America +3%. Power Systems sales -7% in February period, as in January period; electric power -8%, industrial -25%, transport +15%, petroleum -8%.


Sector 25 (consumer discretionary: XLY, IYC and VCR)

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

XLY Monthly data: XLY Monthly Data

XLY Weekly data: XLY Weekly Data

XLY Daily 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

59.53 5.93 11.06% 8.67% 8.85% 9.29% 14.83% 13.28% 23.35% 7.28%

BBBY

64.59 1.47 2.33% 6.01% 8.79% 12.14% 15.03% 15.92% 4.90% -1.73%

EBAY

53.27 0.35 0.66% 5.67% 0.26% -3.18% -0.60% 3.74% 7.68% 41.60%

TGT

68.42 0.37 0.54% 2.43% 3.12% 7.58% 16.32% 14.80% 4.55% 18.11%

LVS

53.84 0.03 0.06% 0.47% 2.87% 6.13% 10.44% 16.34% 19.86% -6.50%

SNA

81.59 0.35 0.43% 0.44% -0.46% 3.53% 0.90% 4.31% 13.35% 35.44%

TM

103.99 0.46 0.44% 0.06% 0.29% 1.61% 8.33% 14.56% 27.60% 23.17%

BC

34.33 0.29 0.85% -0.06% -3.10% -5.43% 10.21% 23.71% 43.34% 35.75%

JCP

15.43 -0.10 -0.64% -0.32% 2.12% -31.33% -25.96% -21.24% -40.40% -57.88%

MCD

99.27 0.74 0.75% -0.40% 0.57% 4.22% 10.15% 10.08% 5.93% 3.62%

SBUX

57.38 0.33 0.58% -0.49% -2.20% 5.93% 4.33% 7.05% 12.36% 3.93%

WHR

114.39 0.55 0.48% -0.70% -2.85% 4.42% 6.74% 12.83% 34.23% 49.45%

DIS

56.78 0.47 0.83% -1.39% -1.06% 4.66% 11.12% 13.56% 7.66% 31.16%

AMZN

257.75 4.36 1.72% -1.55% -6.00% -2.89% 0.17% 0.32% 0.11% 33.97%

CCL

34.04 0.41 1.22% -2.60% -4.57% -2.72% -9.23% -8.05% -8.96% 6.84%

KSS

46.32 -0.11 -0.24% -6.08% -0.73% 0.28% 9.74% 6.85% -12.31% -3.60%

TTM

24.78 -0.61 -2.40% -9.43% -12.38% -10.12% -16.68% -9.79% -2.29% -6.88%

Consumer stocks are organized by the S&P industry classification system as Discretionary Spending, Staples (the ‘must have’ consumer purchases) and Healthcare (also ‘must have’). Most income here is from the US consumer – in US Dollars – so there is less of an inverse correlation to the US Dollar as we saw in Energy, Basic Materials and Industrials/Transports.

The ETF for Consumer Discretionary stocks is XLY.

This week XLY gained 3cts to 52.62, which is exactly where it closed two weeks ago. So nothing has happened in the index thanks to Friday’s gain of +1.23%; but plenty was going on in the constituents.

This week Nike (NKE +8.7% W/W) soared after Friday’s gain of +11.1%. The company reported Q3 earnings had jumped +55%.
http://www.4-traders.com/NIKE-INC-13739/news/NIKE-Inc-Nike-Third-Quarter…

Bed, Bath and Beyond (BBBY +6.0%) and Ebay (EBAY +5.7%) were other big winners.

Kohl’s (KSS), which had jumped +5.7% a week ago, was down -6.1% W/W this week. The big loser, however, was Tata Motors (TTM -9.4% W/W) as the Indian BSE Sensex index dropped almost -4% this week. With TTM, the stock has been weighed down by slow Feb sales in the Jaguar Land Rover segment. The stock has fallen -13.5% in 9 sessions from a high of 28.64 on Mar 11 to the 24.78 close on Mar 22. This stock will be a BUY within three weeks.

Ebay (EBAY -5.1%) was another big loser.

Here is the Weekly chart of XLY (in solid blue @ 52.62 with the 8-week EMA @ 51.35 in dashed blue), and the $SPX in thin solid orange. The Bulls are still running, but the RSI-7w at 78.81 is Bullish, but very high.

wir13_13.32.gif

FD: In the All-Weather portfolios, we own BBBY, DIS, MAT, MCD, SBUX, TGT and TJX.

Here below is the list of the new Cara 100 companies in this sector along with their stock tickers.

AMZN Amazon.com
ATVI Activision Blizzard
BBBY Bed Bath & Beyond
BC Brunswick Corp.
CCL Carnival Corp.
COST Costco Wholesale
DIS Walt Disney
FL Footlocker
GPS Gap
HD Home Depot
MAT Mattel
MCD McDonalds
ROST Ross Stores
SBUX Starbucks
TGT Target Corp.
TJX TJX Companies
TM Toyota Motor
TTM Tata Motors
WHR Whirlpool

As at Jan. 25, 2013, the total market cap of the 19 Cara All-Weather 100 stocks in this sector was $877.8 billion. Of the total, five stocks (TM, AMZN, HD, DIS and MCD in order) comprised $572 billion in cap (Jan 18).

As for the price data charts I find best, I like StockCharts.com. A full range of information comes from 4-traders.com.

Cara 100 Sector 25 (Consumer Discretionary) list:

AMZN Amazon.com [GICS 25, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


ATVI Activision [GICS 25, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


BBBY Bed Bath & Beyond [GICS 25, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


BC Brunswick Corp [GICS 25, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


CCL Carnival Corp [GICS 25, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


COST Costco Wholesale [GICS 25, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


DIS Disney Co [GICS 25, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


FL Foot Locker [GICS 25, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


GPS Gap Inc [GICS 25, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


HD Home Depot [GICS 25, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


MAT Mattel [GICS 25, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


MCD McDonalds Corp [GICS 25, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


ROSS Ross stores [GICS 25, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


SBUX Starbucks Corp [GICS 25, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


TGT Target Corp [GICS 25, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


TJX TJX Companies [GICS 25, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


TM Toyota Motor Corp [GICS 25, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


TTM Tata Motors [GICS 25, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


WHR Whirlpool Corp [GICS 25, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


http://tinyurl.com/3pxbyu7
http://tinyurl.com/4xx8ogp

Here is the current candleglance chart of 10 important Sector 25 components:

http://stockcharts.com/scripts/php/candleglance.php?TM,DIS,NKE,TGT,EBAY,…

Info from SeekingAlpha.com this week

25 Carnival (CCL) Mar20: 11:49 AM As Carnival (CCL +1%) works on repairs on a pair of cruise liners which experienced dramatic engines problems mid-cruise, cancellations on future cruises are starting to pile up. The company says it will cancel 10 planned trips for Triumph and two European sojourns for Sunshine. Analysts continue to warn that the misadventures on the high seas may force the company to discount cruise prices in order to boost sales.

25 McDonald’s (MCD) Mar21: 8:33 AM McDonald’s (MCD) plans to make chicken McWraps a permanent part of its menu after offering the item in other parts of the world to success. The menu at McDonald’s continues to be shifted with a nod to the fresh/healthy mix at Panera and Chipotle as well as the increased menu pressure from Wendy’s and Burger King. National advertising for McWraps begins April 1. Mar19: 7:17 AM McDonald’s (MCD) plans to shift its strategy in Russia to initiate franchising with Yum Brands, Burger King, and Subway all making a splash in the nation. Last year, the company saw revenue fall off in Russia.

25 Ross Stores (ROST) Mar21: 8:40 AM More on Ross Stores’ (ROST) Q4: The retailer says comparable store sales rose 5% during the period and profit improved on higher merchandise gross margin. Store count up to 1,199. ROST +0.8% premarket. 8:35 AM Ross Stores (ROST): Q4 EPS of $1.07 in-line. Revenue of $2.76B (+15% Y/Y) beats by $0.01B.

25 Starbucks (SBUX) Mar22:10:34 AM Starbucks (SBUX +0.9%) is considering selling bagged coffee and bottled drinks in grocery stores in China, according to a top exec in the region. The plan would include selling a local variety from the Yunnan province. The big picture: Though the development could be huge for the company in the long-term with coffee demand soaring in China, expect Starbucks to adopt a probing, moderated pace at first to avoid the high-profile misfires of U.S. retailers such as RadioShack and Best Buy in the nation. Mar19: 7:20 AM Starbucks (SBUX) buys its first coffee farm with the purchase of a 600-acre property in Costa Rica. The company plans to test new coffee varieties and do research at the location.

25 Target (TGT) Mar19: 1:19 PM Target’s (TGT -0.9%) biggest problem so far in its launch in Canada is empty shelves as shoppers flock to new stores. Execs says the strong store traffic has exceeded expectations, but the supply chain will be adjusted accordingly. Music to TGT investors from a Canadian retail analyst: “Everybody is dying to try the store.” [Pat Cara went to store opening and was impressed, but certainly not overly so. This write-up is way too much hype.]

25 Toyota Motors (TM) Mar22: 8:40 AM Another electric vehicle bombshell: A new report from McKinsey indicates a third of all electric vehicle owners in Japan say they won’t buy another with the nation’s infrastructure not yet ready to support a network of charging stations. Sluggish sales and the looming threat of federal subsidies getting pulled away seems to have more major automakers subtly shifting their focus toward hybrid production instead of pure Evs.


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

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

XLP Monthly data: XLP Monthly Data

XLP Weekly data: XLP Weekly Data

XLP Daily 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

WAG

46.49 0.68 1.48% 9.18% 14.39% 11.19% 22.15% 28.04% 32.41% 39.28%

COST

105.11 1.59 1.54% 3.30% 2.01% 3.90% 3.61% 5.65% 2.69% 16.14%

KO

40.04 -0.03 -0.07% 3.12% 2.09% 3.95% 6.49% 8.54% 5.29% 12.13%

BUD

98.10 2.43 2.54% 2.80% 0.99% 5.05% 10.18% 12.11% 12.75% 35.09%

KMB

95.66 0.73 0.77% 2.57% 1.56% 1.23% 10.74% 13.81% 12.12% 30.40%

KR

32.40 0.40 1.25% 2.47% 3.95% 12.54% 22.87% 23.19% 36.82% 35.00%

WMT

74.28 1.15 1.57% 2.46% 1.71% 5.51% 7.28% 8.20% -0.23% 22.47%

DEO

123.89 1.83 1.50% 2.32% 3.71% 2.46% 4.25% 6.09% 11.40% 28.48%

PEP

78.64 2.49 3.27% 2.08% 1.87% 4.06% 13.43% 12.94% 11.47% 20.26%

KRFT

51.19 -0.47 -0.91% 1.83% 2.98% 7.86% 11.87% 12.43% 0.00% 0.00%

PG

77.27 0.06 0.08% 1.22% 0.12% 0.36% 11.36% 12.44% 11.31% 14.44%

WFM

87.78 1.52 1.76% 0.83% 3.27% 2.27% -4.56% -3.73% -12.00% 5.82%

ABV

42.44 -0.28 -0.66% -1.07% -6.40% -7.70% 0.74% 1.77% 10.46% 0.19%

The ETF for Consumer Staples stocks is XLP. As the purchases of consumer staples are considered must-have, the normal swings in economic growth and contraction do not affect these companies as much as say the Consumer Discretionary stocks.

This week, XLP gained +2.10% W/W. The close on Friday was 39.30. There was a gain of +0.92% on Friday.

A week ago I commented:

Walgreen (WAG +4.8% W/W) was the winner this week in this sector. I heard a media clown hyping the stock early in the week. The company quarterly report that was released ten days ago was unimpressive. The stock popped this Wed. All that happened was that UBS re-rated the stock from Neutral to Buy – their little contribution to push the S&P 500 to a new high… I like the company, but not the stock. I’ll wait for a pull-back.

Somebody liked hearing those words. The WAG soared a further +9.2% this week. I see all kinds of hype going on here.

There were many stocks in this sector that were up +2.0% or more this week. It could be that traders are bracing for a risk-off couple weeks?

Here is the Weekly chart of XLP (in solid blue @ 39.30 with the 8-week EMA @ 38.02 in dashed blue), and the $SPX in thin solid orange. The Bulls remain in charge, but the RSI-7 is up from 80.96 to 88.78 over the past couple weeks. Caution urged.

wir13_13.33.gif

FD: For the All-Weather portfolios, we own ConAgra Foods (CAG) and Church & Dwight (CHD), which are new additions to the Cara All-Weather 100, plus DEO and SYY.

Here below is the list of the new Cara 100 companies in this sector along with their stock tickers.

ABV Companhia De Bebidas – Ambev
CAG Conagra Foods
CHD Church & Dwight
CVS CVS Corp.
DEO Diageo
KO Coca-Cola
SYY Sysco Corp.
WAG Walgreen
WFM Whole Foods Market
WMT Wal-Mart

As at Jan. 18, 2013, the total market cap of the 10 Cara All-Weather 100 stocks in this sector was $773 billion. Of the total, $541 billion is attributed to three stocks: WMT, KO, and ABV.

As for the price data charts I find best, I like StockCharts.com. A full range of information comes from 4-traders.com.

Cara 100 Sector 30 (Consumer Staples) list:

ABV AmBev (Companhia de Bebidas) [GICS 30, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


CAG ConAgra Foods [GICS 30, Cara All-Weather 100]
Xlp

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


CHD Church & Dwight [GICS 30, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


CVS CVS Caremark Corp [GICS 30, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


DEO Diageo plc (ADR) [GICS 30, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


KO Coca-Cola [GICS 30, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


SYY Sysco Corp [GICS 30, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


WAG Walgreen Company [GICS 30, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


WFM Whole Foods Market Inc [GICS 30, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


WMT Wal-Mart Stores Inc , [GICS 30, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


http://tinyurl.com/3m9fr8p

Here is the current candleglance chart of 10 important Sector 30 components:

http://stockcharts.com/scripts/php/candleglance.php?WMT,PG,KO,PEP,ABV,KR…

Info from SeekingAlpha.com this week

30 Coca-Cola (KO) Mar21: 8:06 AM Coca-Cola (KO) says it will cut 750 jobs in the U.S. The bulk of the positions being eliminated are in the Atlanta area. Mar18: 4:49 PM Coca-Cola (KO) looks to capture more ground between bottled-water and its sugary mainstay with the April 1 launch of “Fruitwater,” a line of fruit-flavored seltzer waters. The product will be housed in the company’s Glaceau unit which also produces fast-sellers Vitaminwater and Smartwater.


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

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

IYH Monthly data: IYH Monthly Data

IYH Weekly data: IYH Weekly Data

IYH Daily 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

AMGN

96.56 2.25 2.39% 5.17% 3.83% 11.22% 8.31% 10.78% 17.71% 44.94%

BMY

40.39 0.68 1.71% 3.67% 7.99% 9.46% 23.48% 24.05% 20.17% 22.77%

GSK

46.44 0.42 0.91% 2.52% 4.17% 2.88% 5.23% 6.39% -0.66% 2.56%

BAX

70.94 0.88 1.26% 2.20% 1.50% 5.88% 4.86% 5.49% 16.28% 19.75%

NVS

70.83 0.19 0.27% 1.34% 3.13% 2.36% 10.97% 12.09% 15.62% 28.20%

PFE

28.38 0.27 0.96% 1.28% 0.67% 3.65% 9.53% 13.16% 15.79% 30.60%

MDT

45.99 0.17 0.37% 1.25% 0.86% 2.84% 9.81% 9.45% 6.09% 18.35%

GILD

45.51 0.97 2.18% 0.75% 0.18% 7.21% -39.37% -37.47% -32.84% -2.40%

JNJ

79.74 0.73 0.92% 0.69% 1.98% 4.58% 12.56% 13.48% 15.46% 23.70%

BIIB

178.00 1.45 0.82% 0.69% 3.26% 8.27% 18.67% 18.74% 15.16% 47.46%

CELG

113.13 1.10 0.98% 0.65% 1.59% 11.29% 39.49% 41.94% 46.41% 48.52%

MRK

43.90 0.11 0.25% -0.43% 2.16% 2.16% 6.19% 5.73% -2.25% 16.76%

UNH

54.46 -0.60 -1.09% -0.49% 1.21% -0.02% -0.15% -1.04% -3.06% 1.08%

ABT

33.69 0.21 0.63% -1.32% -2.85% -2.49% 5.12% 2.00% -3.22% 12.08%

WLP

64.03 0.40 0.63% -1.46% 1.59% 3.41% 5.11% 4.44% 8.05% -3.55%

AET

49.91 -0.33 -0.66% -1.89% -1.21% 4.90% 7.91% 7.03% 26.04% 7.33%

MYGN

25.19 -0.30 -1.18% -2.74% 0.24% 0.72% -9.00% -7.15% -8.00% 9.66%

NVO

161.61 0.41 0.25% -7.59% -7.49% -7.36% -2.57% -0.24% 1.67% 14.09%

The ETF I use for Healthcare stocks is IYH.

This week IYH was up +0.60% W/W. The close on Friday was 94.51.

This week a new all-time high for IYH was set at 94.56, “and the beat goes on”. And on.

Here is the Weekly chart of IYH (in solid blue @ 94.56 with the 8-week EMA @ 91.99 in dashed blue), and the $SPX in thin solid orange. The Bull remains in control. But the RSI-7w is up in three weeks from 83.40 to 90.25, and cannot go much higher. Be careful now as the last time it was close to this there was no further gain in about 8 or 9 months.

wir13_13.34.gif

FD: For the All-Weather portfolios we own BMY, CELG, JNJ, MRK, NVS and PFE. We sold out two positions this week, but higher prices in our holdings are keeping us locked in. Higher stops are in place and are essential.

Here below is the list of the new Cara 100 companies in this sector along with their stock tickers.

AET Aetna Inc.
BMY Bristol-Myers Squibb
CELG Celgene Corp.
GILD Gilead Sciences
GSK GlaxoSmithKline
JNJ Johnson & Johnson
MRK Merck
NVS Novartis
PFE Pfizer

As at Jan. 25, 2013, the total market cap of the nine Cara All-Weather 100 stocks in this sector was $1,006.4 trillion. Of these, the big five were (in order) JNJ, PFE, NVS, MRK and GSK, with a (Jan. 19) market cap of $814 billion.

As for the price data charts I find best, I like StockCharts.com. A full range of information comes from 4-traders.com.

Cara 100 Sector 35 (Healthcare) list:

AET Aetna Inc [GICS 35, Cara 100 G50]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


BMY Bristol Myers Squibb Co [GICS 35, Cara 100 V50]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


CELG Celgene Corp [GICS 35, Cara 100 G50]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


GILD Gilead Sciences [GICS 35, Cara 100 G50]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


GSK GlaxoSmithKline plc (ADR) [GICS 35, Cara 100 V50]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


JNJ Johnson & Johnson [GICS 35, Cara 100 V50]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


MRK Merck [GICS 35, Cara 100 V50]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


NVS Novartis [GICS 35, Cara 100 V50]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


PFE Pfizer [GICS 35, Cara 100 V50]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


http://tinyurl.com/4yta7j7

Here is the current candleglance chart of 10 important Sector 35 components:

http://stockcharts.com/scripts/php/candleglance.php?JNJ,PFE,NVS,MRK,GSK,…,

Info from SeekingAlpha.com this week

35 Novartis (NVS) Mar21: 12:34 PM Novartis (NVS -0.9%) says that new data presented at the 65th annual meeting of the American Academy of Neurology analysis shows Gilenya, a treatment for relapsing forms of multiple sclerosis, significantly reduced rate of brain volume loss across three large Phase III studies Mar21: 8:59 AM Novartis’ (NVS -1.1%) approved Gilenya treatment cut brain volume loss in multiple sclerosis patients by a third vs a comparator and a placebo and in three large Phase III trials. Brain volume loss is an important indicator of disease progression; data also shows that Gilenya consistently reduces relapse rates across disease activity.


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 Monthly Data

XLF Weekly data: XLF Weekly Data

XLF Daily 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

BAC

12.56 -0.01 -0.08% -0.08% 4.06% 9.79% 4.41% 11.25% 37.87% 30.83%

MA

517.50 3.49 0.68% -0.36% -2.22% -1.21% 1.42% 4.85% 12.62% 24.15%

RY

60.01 0.70 1.18% -0.50% -1.12% -4.70% -2.25% -1.43% 4.53% 3.52%

TD

82.09 0.39 0.48% -1.58% -0.87% -0.67% -2.74% -2.62% -2.23% -2.26%

BNS

58.13 0.45 0.78% -1.77% -1.51% -1.67% -0.43% -0.79% 5.25% 4.44%

SCHW

17.54 0.08 0.46% -1.79% -0.68% 4.84% 16.31% 22.49% 29.16% 17.88%

HBC

53.46 0.16 0.30% -1.98% -2.57% -3.10% -1.53% 1.52% 12.29% 19.92%

JPM

48.78 0.43 0.89% -2.48% -2.83% -0.27% 9.23% 10.86% 19.32% 9.25%

WFC

37.20 0.06 0.16% -2.62% 1.92% 3.85% 6.13% 7.89% 6.38% 11.54%

BBD

17.91 0.05 0.28% -3.92% -6.08% -1.10% 0.79% 1.24% 2.11% 0.84%

IBN

40.45 0.03 0.07% -4.17% -9.85% -4.12% -11.10% -9.37% 1.79% 13.56%

CS

27.18 0.59 2.22% -4.30% -0.91% -4.09% 7.52% 10.49% 18.79% -4.63%

UBS

15.60 0.25 1.63% -4.76% -1.83% -3.11% -4.65% -2.26% 20.74% 10.25%

GS

146.60 1.22 0.84% -5.32% -4.17% -4.86% 11.35% 14.14% 25.60% 17.52%

HDB

36.50 -0.42 -1.14% -5.39% -9.45% -6.86% -11.39% -11.17% -0.73% 11.11%

DB

42.11 0.11 0.26% -5.65% -6.71% -10.40% -7.33% -3.59% -1.27% -16.10%

MS

22.18 0.12 0.54% -5.98% -3.69% -5.94% 13.05% 17.23% 29.86% 13.22%

The ETF for Financial stocks is XLF. If you want to check on strictly banking stocks, the $BKX Banking industry Index is what you want. For Insurance, try $INSR.

This week the Financial (XLF) sector was down -1.46% W/W, from 18.45 to 18.17.

FD: We hold no Financial sector positions in the All-Weather accounts this week.

With QE, there will be more leadership from the banks and some would be attractive. But they need to fall back a bit before I’d enter.

This week all the banks on my watchlist were losers, although Bank of America (BAC) dropped just a tad. Morgan Stanley (MS -6.0%), Deutsche Bank (DB -5.7%) and HDFC (HDB -5.4%) were the big losers. HDB also dropped -4.3% a week ago. Within three weeks I think HDB will be a BUY.

Here is the Weekly chart of XLF (in solid blue @ 18.17 with the 8-week EMA 17.84 in dashed blue), and the $SPX in thin solid orange. The Bull keeps running. But the Weekly RSI-7, which is in high-risk territory, dropped this week from 86.37 to 72.82, and is close to signaling a SELL Alert. Note that the last price is also now down close to the 8-week EMA, and dropping through that would be another Bearish indicator.

wir13_13.35.gif

Here below is the list of the new Cara 100 companies in this sector along with their stock tickers.

BBD Banco Bradesco
BNS Bank Of Nova Scotia
IBN ICICI Bank
MA Mastercard
RJF Raymond James Financial
RY Royal Bank Of Canada
SCHW Charles Schwab
TD Toronto Dominion Bank

As at Jan. 25, 2013, the total market cap of the eight Cara All-Weather 100 stocks in this sector was $424.3 billion. The largest five (in order) are RY, TD, BBD, BNS and MA, with a combined market cap (Jan. 18) of $373 billion.

As for the price data charts I find best, I like StockCharts.com. A full range of information comes from 4-traders.com.

Cara 100 Sector 40 (Financials) list:

BBD Banco Bradesco SA (ADR) [GICS 40, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


BNS Bank of Nova Scotia (USA) [GICS 40, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


IBN ICICI Bank [GICS 40, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


MA Mastercard [GICS 40, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


RJF Raymond James Financial [GICS 40, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


RY Royal Bank of Canada (USA) [GICS 40, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


SCHW Charles Schwab Corp [GICS 40, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


TD Toronto Dominion Bank (USA) [GICS 40, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


http://tinyurl.com/4y24xyy

Here is the current candleglance chart of 10 important Sector 40 components:

http://stockcharts.com/scripts/php/candleglance.php?HBC,JPM,WFC,C,BAC,GS…

Daily charts of electronic brokers and exchanges

Weekly charts of electronic brokers and exchanges

Info from SeekingAlpha.com this week

40 Schwab (SCHW) Mar18: 11:24 AM Schwab (SCHW) files for a lineup of “fundamental indexing” ETFs, with 5 of the offerings copycats of already-available mutual funds. Jokingly called by its creator Rob Arnott “active management in drag,” fundamental indexing looks at earnings, cash flow, dividends, and book value, and tends to favor smaller-cap stocks. The most popular current RAFI ETF is PowerShares’ (PRF) which has outperformed the SPY.


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

The ETF for Technology stocks is XLK. Because the Semi-conductor manufacturers are a technology that is needed in the manufacture of most equipment and in most manufacturing processes today, I think it is the most important technology. So; I also focus on the Semi-conductor industry group, and the ETF for that is SMH.

XLK dropped -0.10% W/W. The close was 30.17. There has not been much change in the past couple weeks.

SMH dropped -1.38% W/W. The close was 34.90.

I could write about the ups and downs of the solar stocks, but won’t other than to say that STP dropped a further -36.9% W/W to close at $0.42. The stock traded as high as $1.78 in Feb. A week ago I wrote:

Near bankrupt Suntech Power (STP), one of the world’s largest makers of solar panels, was crushed -44.4% this week (to $0.70). The interest payments on its notes was delayed.
http://www.4-traders.com/SUNTECH-POWER-HOLDINGS-CO-14497/news/Suntech-Power-Holdings-Co-Ltd-ADR-Suntech-Signs-Forbearance-Agreement-with-Convertible-Note-H-16515535/

The company is being restructured: http://www.4-traders.com/SUNTECH-POWER-HOLDINGS-CO-14497/news/Suntech-Po…

Juniper (JNPR -7.2% W/W) was a big loser this week. But the biggest loser was Oracle (ORCL -12.0% W/W). We bought a bit after the crash.
http://www.4-traders.com/ORACLE-CORPORATION-4892/news/Disappointing-Orac…

Here is the Weekly chart of XLK (in solid blue @ 30.17 with the 8-week EMA @ 29.84 in dashed blue), and the $SPX in thin solid orange. The chart is stilly Bullish, but I noted that the rising RSI-7w cannot seem to get above the 70-line.

wir13_13.36.gif

FD: In the All-Weather accounts we hold AAPL, GOOG, ORCL and SNDK.

Our holdings are restricted to Cara 100 companies.

Here below is the list of the new Cara 100 companies in this sector along with their stock tickers.

AAPL Apple Inc.
ADBE Adobe Systems
BRCM Broadcom
CSCO Cisco Systems
CTSH Cognizant Technology Solutions
EMC EMC Corp.
GOOG Google
IBM IBM
INFY Infosys
INTC Intel
JNPR Juniper Networks
MSFT Microsoft
ORCL Oracle Corp.
QCOM Qualcomm
SNDK SanDisk

As at Jan. 18, 2013, the total market cap of the 15 Cara All-Weather 100 stocks in this sector was $1.811 trillion. Of these, there are eight over $100 billion in market cap each, (AAPL, GOOG, MSFT, IBM, ORCL, CSCO, QCOM and INTC in order) with a combined market cap of $1.645 billion. Interestingly, Google has now captured 2nd place, ahead of Microsoft and IBM.

A full range of information comes from 4-traders.com. As for the price data charts I find best, I like StockCharts.com.

Cara 100 Sector 45 (Technology) list:

AAPL Apple Inc [GICS 45, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


ADBE Adobe Systems Inc [GICS 45, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


BRCM Broadcom Corp [GICS 45, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)



CSCO Cisco Systems Inc [GICS 45, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


CTSH Cognizant Technology [GICS 45, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


EMC EMC Corporation [GICS 45, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


GOOG Google [GICS 45, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


IBM IBM [GICS 45, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


INFY Infosys Technologies Ltd [GICS 45, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


INTC Intel Corp [GICS 45, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


JNPR Juniper Networks [GICS 45, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


MSFT Microsoft [GICS 45, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


ORCL Oracle [GICS 45, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


QCOM Qualcomm Inc [GICS 45, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


SNDK SanDisk Corp [GICS 45, Cara All-Weather 100]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


http://tinyurl.com/3d8t3xl
http://tinyurl.com/3stja82

Here is the current candleglance chart of 10 important Sector 45 components:

http://stockcharts.com/scripts/php/candleglance.php?AAPL,MSFT,GOOG,IBM,O…,

Here is the current candleglance chart of 10 important Semi-conductor stock components:

http://stockcharts.com/scripts/php/candleglance.php?INTC,TSM,TXN,BRCM,AM…

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

SMH Monthly data: SMH Monthly Data

SMH Weekly data: SMH Weekly Data

SMH Daily data: SMH Daily Data

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

XLK Monthly data: XLK Monthly Data

XLK Weekly data: XLK Weekly Data

XLK Daily 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

FSLR

28.85 -0.15 -0.52% 8.42% 9.74% -14.67% -9.82% -6.69% 36.08% 7.05%

AAPL

461.91 9.18 2.03% 4.11% 6.99% 2.46% -15.87% -11.06% -34.02% -22.93%

HPQ

23.04 0.72 3.23% 3.88% 9.71% 20.00% 53.40% 60.67% 30.98% 0.04%

ADBE

42.97 0.79 1.87% 3.84% 3.54% 11.47% 12.08% 13.95% 27.02% 27.43%

BIDU

86.49 0.57 0.66% 1.66% -3.06% -3.02% -16.93% -12.37% -22.16% -39.82%

QCOM

65.92 0.57 0.87% 1.46% -1.10% 1.51% 1.81% 7.00% 2.58% -0.56%

MSFT

28.25 0.14 0.50% 0.78% 0.89% 1.77% 2.28% 2.91% -9.43% -11.72%

GOOG

810.31 -0.95 -0.12% -0.49% -2.55% 1.33% 12.04% 13.23% 10.40% 25.43%

BBRY

14.91 -1.25 -7.74% -0.53% 14.17% 13.13% 27.22% 36.66% 131.16% 8.20%

DELL

14.14 0.00 0.00% -1.19% -0.14% 1.58% 32.40% 35.57% 36.49% -16.92%

IBM

212.08 -0.18 -0.08% -1.32% 0.81% 5.47% 8.01% 9.65% 2.96% 3.21%

ATVI

14.34 0.28 1.99% -2.12% -3.37% -1.17% 31.08% 34.65% 18.71% 12.65%

INFY

52.37 0.16 0.31% -2.28% -4.89% -2.08% 22.19% 22.73% 7.49% -7.26%

SAP

81.04 0.32 0.40% -4.19% -2.61% 2.70% -1.65% 1.80% 11.17% 14.87%

CTSH

74.90 -1.24 -1.63% -4.42% -6.97% -1.94% -1.63% 1.59% 9.17% -1.92%

EMC

24.15 -0.35 -1.43% -4.73% -0.62% 3.03% -2.78% -5.74% -13.81% -17.10%

EA

17.97 0.27 1.53% -4.82% -3.28% 0.90% 23.51% 29.37% 35.73% 5.96%

CSCO

20.75 -0.09 -0.43% -5.34% -4.95% -0.72% 2.02% 3.96% 9.79% 1.82%

JNPR

18.72 -0.17 -0.90% -7.19% -9.52% -12.73% -8.91% -7.19% 1.24% -10.64%

ORCL

31.98 -0.32 -0.99% -12.00% -10.45% -7.97% -7.81% -5.27% -1.51% 11.70%

STP

0.4225 -0.0175 -3.98% -36.94% -65.37% -70.45% -73.59% -62.61% -60.88% -86.63%
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

MU

10.04 0.97 10.69% 7.15% 9.13% 25.19% 51.43% 58.86% 57.86% 15.27%

STM

7.930 0.040 0.51% 3.80% -0.75% -1.12% 6.87% 11.38% 30.21% -3.65%

SNDK

55.19 0.56 1.03% 0.15% 6.44% 11.56% 23.36% 24.53% 21.97% 8.43%

INTC

21.33 0.29 1.38% -0.23% -1.16% 4.46% -0.23% 2.75% -7.78% -23.55%

AMAT

13.26 0.30 2.31% -0.38% -2.07% -2.28% 11.99% 15.30% 15.91% 4.82%

BRCM

34.42 -0.06 -0.17% -0.66% 2.75% -0.32% -0.26% 3.74% -5.02% -9.64%

LLTC

37.39 0.41 1.11% -0.87% -2.68% -1.35% 3.89% 9.26% 13.61% 11.95%

XLNX

37.97 0.12 0.32% -1.25% -1.04% 0.03% 2.37% 5.18% 8.64% 4.80%

ALTR

34.72 -0.09 -0.26% -1.25% -1.50% -1.78% -3.29% 0.64% -5.50% -10.75%

ADI

44.90 0.35 0.79% -1.38% -2.50% -1.36% 2.05% 6.42% 11.36% 12.76%

TXN

34.46 0.17 0.50% -1.77% -2.35% 0.82% 6.65% 11.41% 18.87% 3.08%

KLAC

51.62 0.36 0.70% -1.96% -6.42% -5.77% 4.14% 6.72% 8.31% -1.26%

UMC

1.8100 0.0000 0.00% -2.16% -1.63% -4.74% -11.27% -9.05% -13.81% -31.95%

AMD

2.5400 -0.1000 -3.79% -2.31% -0.78% -2.68% 0.40% -1.93% -29.44% -68.37%

ATML

6.740 0.120 1.81% -2.32% 4.33% -0.44% -3.16% 8.19% 6.31% -34.12%

TSM

17.07 0.18 1.07% -3.23% -4.69% -9.68% -5.69% 0.71% 15.34% 13.57%

LSI

6.610 -0.080 -1.20% -3.64% -4.48% -6.90% -3.64% -3.64% -9.20% -23.85%

TER

15.81 -0.13 -0.82% -6.06% -7.33% -6.39% -9.61% -5.61% 8.29% -5.56%

Info from SeekingAlpha.com this week

45 Adobe Systems (ADBE) Mar19: 4:39 PM A little more on Adobe: Free cash flow was $261.8M, well above net income of $178M. Marketing Cloud (online ad tech) revenue +20% Y/Y to $215M (21% of total). Digital Media revenue -5% Y/Y and digital marketing +1%, both affected by shift to subscriptions. EMEA was soft, -10% Y/Y. Americas -1%, Asia -1%. Opex +16% Y/Y thanks to cloud software investments. Gross margin was 84.4%, -530 bps Y/Y (due to cost of supporting cloud services)

45 Apple (AAPL) Mar24: 5:16 AM Apple (AAPL) has paid $20M to acquire Silicon Valley start-up WifiSLAM, which develops ways for mobile apps to identify a user’s whereabouts in a building using Wi-Fi signals. The technology can enable new types of retail and social networking apps, and would allow Apple to match Google in offering indoor mapping in places such as airports and shopping malls. Meanwhile, Apple had to temporarily shut down its password reset system on Friday due to a security flaw. Mar21: 2:44 PM Production of a cheaper iPhone will likely start in June, says Jefferies’ Peter Misek in an afternoon note that’s helping Apple (AAPL +0.7%) outperform. Foxconn and Jabil (JBL) are expected to provide plastic cases. Misek and other sell-side analysts have already predicted a less costly iPhone will arrive this year, though some claim its case will use a composite rather than plastic. Meanwhile, Apple received top marks in J.D. Power’s U.S. smartphone satisfaction study for the 9th straight time – its score of 855 is slightly above a prior 849, and well above an average of 796.

45 Cisco Systems (CSCO) Mar21: 8:17 AM Cisco (CSCO) is downgraded to Sell at FBR Capital, which says the company will find it difficult to offset weakening router and switching demand. Negative tech trends “could significantly blur the lines between routers, switches, AND servers.” FBR throws in a downgrade of Juniper Networks (JNPR) as well. Both are down more than 1% premarket.

45 Intel (INTC) Mar21: 8:42 PM Though Intel’s (INTC) superb credit rating has allowed it to issue dirt-cheap debt to finance buybacks, “leverage works best when a company is growing,” cautions Bernstein’s Stacy Rasgon. The chip giant’s aggressive cash-return strategy has already led net cash to fall below $5B, its lowest level since ’95. Now, with weak PC demand pressuring sales, capex about to surge, and a 4.2% dividend soaking up over half of free cash flow, Intel probably has little choice but to either slow its buyback activity or further weaken its net cash balance.

45 Juniper (JNPR) Mar19: 10:01 AM A harsh downgrade to Sell from Goldman sends Juniper (JNPR -4.5%) lower. The firm is worried about share loss and margin pressure in the carrier router space (42% of 2013E sales) thanks to Alcatel-Lucent’s (ALU) 2012 arrival, sees Juniper’s switching share flattening thanks to Cisco’s Nexus 6000 launch and the impact of software-defined networking, and expects “continued share loss” in security hardware thanks to “product feature gaps and the cannibalistic effect on sales from the transition to a software model.” 2013-2015 estimates have been lowered. Mar18: 7:02 PM Juniper (JNPR) has jumped on board the 100G optical bandwagon: a line card containing two 100G links has been introduced for Juniper’s PTX switches, which combine optical and data networking capabilities in the same box. Among the systems the line card works with is the new PTX3000, which delivers twice the density of the older PTX5000. In the wake of the announcement, Light Reading thinks Juniper, still best-known in the carrier realm for its routers, has a “very strong claim on being an optical company.”

45 Microsoft (MSFT) Mar19: 1:25 PM More on Microsoft: The WSJ reports the DOJ and SEC are examining allegations from a former Chinese Microsoft rep that he/she was told by a local Microsoft exec to “offer kickbacks to Chinese officials in return for signing off on software contracts.” Also being reviewed are allegations resellers offered bribes to score software deals with the Romania’s communications ministry, and that Italian consultants lavished gifts and trips on procurement officials to win government deals. The probe is said to be in the preliminary stage. 11:33 AM Microsoft (MSFT +0.1%) roundup: 1) Microsoft has acquired NetBreeze, a developer of language/data/text analysis tech. NetBreeze’s tools will provide social media analytics for Microsoft’s Dynamics CRM suite. Salesforce and Oracle also have ambitions in this space. 2) Weak PC forecasts or not, Acer CEO J.T. Wang claims momentum for touch-enabled Windows 8 hardware is picking up. 3) Can you say ‘Surface’ in Mandarin? Microsoft has opened a store on Alibaba’s popular Tmall shopping site. The company’s Chinese profits have long been hurt by widespread piracy.

45 Oracle (ORCL) Mar20: 5:19 PM Oracle (ORCL) guides on its FQ3 call (webcast) for -1% to +4% Y/Y revenue growth in FQ4, and EPS of $0.85-$0.91. The former is below a consensus for 5.2% growth, while the latter is in-line with an $0.88 consensus. New software license/cloud subscription growth is expected to be in a range of 1%-11%, and hardware product sales are expected to fall 13%-23%. Oracle blames its FQ3 miss in part on deal push-outs and sales execution issues related to new hires. Oracle insists its win rate remains strong, and that the macro situation is unchanged. Shares -7% AH. 4:24 PM More on Oracle: New software license/cloud subscription sales fell 2% Y/Y, down sharply from FQ2’s +17% and below guidance of +3%-13% (is cloud competition a factor?). Hardware product sales -23%, same as FQ2 and worse than guidance of flat to -10% (plunging UNIX server demand). License update/product support sales +7% (same as FQ2). Cloud software sales (boosted by acquisitions) grew “well over 100%.” $2.1B in buybacks propped up EPS. Opex -2% Y/Y. ORCL -6.6% AH. CC at 5PM ET (webcast), guidance should be provided.


Sector 50 (telecom: IYZ, VOX and IXP)

The ETF for I use for Telecom stocks is IYZ.

This week, IYZ gained a penny (+0.04% W/W) to close at 24.29.

Verizon (VZ +2.08% W/W) and AT&T (T no change) were mixed.

America Movil (AMX +8.8% W/W) recovered part of the loss of -13.2% a week ago.

Here is the Weekly chart of IYZ (in solid blue @ 24.28 with the 8-week EMA @ 24.33 in dashed blue), and the $SPX in thin solid orange. Call it Neutral with a Bearish tone. The RSI-7w is stuck at 49.00 and the 8-week EMA at 24.32 is just slightly above the last price (24.29).

wir13_13.37.gif

FD: We sold the MBT and RCI so that we hold nothing in this sector presently.

Here below is the list of the new Cara 100 companies in this sector along with their stock tickers.

CHA China Telecom Corp
MBT Mobile Telesystems
RCI Rogers Communication
TEF Telefonica Sa

As at Jan. 18, 2013, the total market cap of the four Cara All-Weather 100 stocks in this sector was $155 billion. Of these, Telefonica (TEF) is largest with a $57 billion market cap.

As for the price data charts I find best, I like StockCharts.com. A full range of information comes from 4-traders.com.

Cara 100 Sector 50 (Telecom) list:

CHA China Telecom Corp [GICS 50, Cara 100 V50]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


MBT Mobile TeleSystems (ADR) [GICS 50, Cara 100 V50]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


RCI Rogers Communications [GICS 50, Cara 100 V50]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


TEF Telefonica SA [GICS 50, Cara 100 V50]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


http://tinyurl.com/3dd857s

Here is the current candleglance chart of 10 important Sector 50 components:

http://stockcharts.com/scripts/php/candleglance.php?T,VZ,CHL,CHA,VOD,TEF…,

Table 14: Telecom

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

AMX

20.25 0.46 2.32% 8.75% -5.55% -7.74% -13.20% -12.53% -19.77% -15.02%

DCM

15.77 0.23 1.48% 3.68% 4.09% 3.68% 8.46% 6.84% -4.83% -7.07%

VZ

49.02 0.22 0.45% 2.08% 2.21% 7.97% 10.73% 12.51% 7.41% 23.60%

VOD

28.03 0.19 0.68% 1.37% 1.15% 12.08% 9.28% 11.54% -2.88% 1.05%

FTE

10.96 0.08 0.74% 0.27% 6.41% 9.05% -2.14% -1.08% -15.04% -28.04%

T

36.43 0.28 0.77% 0.00% -0.68% 2.10% 4.09% 8.20% -4.33% 14.88%

RCI

49.01 0.60 1.24% -0.10% 1.98% 2.38% 5.90% 7.53% 20.80% 28.37%

TU

68.09 0.17 0.25% -0.41% 0.46% 0.06% 3.91% 3.86% 9.73% 19.41%

BCE

45.68 0.19 0.42% -0.41% 0.04% 2.61% 4.79% 5.94% 4.72% 14.17%

CHA

51.60 1.17 2.32% -0.58% -3.26% 0.17% -10.99% -5.77% -13.09% -3.75%

CHL

52.75 -0.41 -0.77% -0.81% -3.48% -5.01% -11.39% -8.77% -4.11% -0.57%

TEF

14.80 0.20 1.37% -1.00% 2.07% 15.53% 7.71% 9.87% 1.79% -12.48%

MBT

20.20 0.09 0.45% -1.75% -6.39% -1.75% 7.62% 9.37% 14.90% 12.47%

NOK

3.3300 -0.1200 -3.48% -2.92% -9.51% -11.90% -18.98% -16.54% 20.22% -36.57%

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

IYZ Monthly data: IYZ Monthly Data

IYZ Weekly data: IYZ Weekly Data

IYZ Daily data: IYZ Daily Data

Info from SeekingAlpha.com this week

50 China Telecom Corp (CHA) Mar20: 2:59 AM China Telecom (CHA): Q4 net profit -17% to 2.36B yuan ($380M) vs consensus of 2.04B yuan. Revenues +17% to 73.1B yuan vs 73.2B yuan, with wireless data sales boosted by iPhone use. ARPU 53.9 yuan, stronger than expected. Mobile subscribers +8M to 160.6M. To boost capex 40% this year to 75B yuan.


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

The Utilities sector ETF is XLU.

This week, XLU gained +0.10% to close at $38.17.

Here is the Weekly chart of XLU (in solid blue @ 38.17 with the 8-week EMA @ 37.21 in dashed blue), and the $SPX in thin solid orange. The Bull is still on the run. But the RSI-7w is up to 83.45.

wir13_13.38.gif

FD: We hold EXC and TRP in the All-Weather portfolio accounts for this sector although EPD (in Sector 10) would probably also qualify here as well.

Here below is the list of the new Cara 100 companies in this sector along with their stock tickers. We may move Enterprise Products Partners (EPD) into this list.

EXC Exelon Corp.
TRP TransCanada Pipelines

As at Jan. 18, 2013, the total market cap of the two Cara 100 stocks in this sector was $60.7 billion.

As for the price data charts I find best, I like StockCharts.com. A full range of information comes from 4-traders.com.

Cara 100 Sector 55 (Utilities) list:

EXC Exelon Corp [GICS 55, Cara 100 V50]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


TRP TransCanada Corp [GICS 55, Cara 100 V50]

(Profile)
(Quotes)
(News)
(Calendar)
(Financials)
(Technical Analysis)
(Fundamental Analysis)
(Consensus Analysis)


Table 12: US Utilities

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

NGG

57.57 1.28 2.27% 3.64% 5.15% 5.50% -0.24% 0.77% 3.12% 13.75%

EXC

33.85 0.15 0.45% 1.38% 5.35% 11.02% 13.51% 13.29% -4.32% -13.18%

DUK

70.61 0.35 0.50% 0.94% 1.39% 1.66% 8.61% 9.46% 10.19% 238.33%

TRP

48.48 -0.01 -0.02% 0.94% 2.04% 4.10% 1.15% 2.11% 5.60% 11.29%

PCG

43.80 0.13 0.30% 0.55% 2.38% 4.34% 7.22% 5.57% 2.84% 1.08%

PEG

33.41 -0.01 -0.03% 0.39% 2.20% 3.89% 8.02% 8.69% 5.39% 12.08%

SO

45.66 0.23 0.51% 0.31% 0.75% 2.06% 4.29% 5.40% 0.88% 3.61%

D

56.77 -0.15 -0.26% -0.04% 1.61% 0.69% 7.28% 9.30% 7.72% 12.59%

AEP

47.86 0.23 0.48% -0.08% 0.78% 3.64% 9.64% 10.15% 8.75% 24.96%

ED

59.09 0.18 0.31% -0.14% 0.24% 1.04% 4.42% 5.42% -0.02% 3.20%

FE

40.85 -0.63 -1.52% -2.97% -0.12% 0.76% -2.69% -1.83% -7.56% -8.45%

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

XLU Monthly data: XLU Monthly Data

XLU Weekly data: XLU Weekly Data

XLU Daily data: XLU Daily Data

http://investertech.com/markets/mkview.asp?qte=ss&ty=tk&qt=AEP+D+DUK+ED+…

Here is the list of North American Utilities that I follow:

AEP D DUK ED EXC FE NEE NGG PCG PEG SO TRP

For study purposes, there is a good mix of electric (AEP, D, DUK, FE, NEE and SO), gas (NGG, TRP) and diversified (ED, EXC, PCG, PEG) utilities.

Here is the current candleglance chart of 10 important Sector 55 components:

http://stockcharts.com/scripts/php/candleglance.php?SO,NGG,EXC,TRP,D,DUK…,

Info from SeekingAlpha.com this week

none


Bonds & Yields Review

There was some risk-off trading this week, which helps Bond prices.

This week, prices of Treasury bond prices lifted, particularly for the 5-, 10-, 20- and 30-year issues.

In terms of basis points (bp) moves W/W, the yields this week on the 5-, 10- and 30-year US Treasuries were down -4 to 0.79%; down -7 to 1.92%; and down -6 to 3.16%.

One of the key US Treasury prices is the TLT (average 20-year Treasury fund). TLT lifted +1.36% W/W to close at 117.33.

The inflation-protected Treasuries (TIP +0.26% W/W) closed at 120.87.

The 30-minute data chart of TLT (117.33) that covers the past two weeks shows that the inverse correlation between stocks and bonds is back to normal, although the equity market’s gain on Friday seems a bit much.

wir13_13.39.gif

In any case, the Weekly data chart shows that the 8-week EMA (117.03) (dashed blue line) is now slightly under the price (117.33), which puts the ongoing Bear profile since the beginning of December into a Neutral posture. The rising RSI-7w is stuck at 47.89 under the important 50-line.

wir13_13.40.gif

This is all happening pretty much as expected. Two weeks ago I remarked: “Maybe the Bear persists for a bit, which is now indicated by this chart, but I believe there will be another test of upper resistance before the Dollar and the Treasury market enter a period of long-running weakness.” I added a week ago: “That might happen over the next couple weeks.”

FD: A couple weeks ago, we had increased from 9.00% to 13.0% in TLT. This week we stayed at 13.0%, “as we think there may be one more shake-out coming for equities and capital will be temporarily placed in Bonds”. That is happening now with the sudden and phony Cyprus “bank crisis”. Two weeks from now you will be told that another QE has averted another crisis, and equities, commodities and precious metals will begin to lift, and US Bonds and the Dollar fall.

Your enemy is the Fed. Get used to this stuff.

We do not trade Bonds in the Growth accounts.

As you know, in the All-Weather portfolios we hold bonds as well as cash, precious metals and relatively stable equities. Over many years, the strategy has proved itself to be successful. In the Growth accounts, we hold only equities and (less) cash, and the equities tend to be a bit smaller in market cap and pay out less in dividends than the equities we hold in the All-Weather portfolios.

Here is the Econoday write-up on US Bonds this week.

wir13_13.41.gif

Backgrounder:

A long time ago, the Treasury bonds ceased being income instruments; but, with an extremely low beta, they do hedge portfolio risk for some (very, very long-term oriented) traders, and the counter-cyclicality to the S&P 500 is obvious from the charts. The problem, again, is Total Return.

The TIP:TLT ratio chart is also a very effective indicator of trend reversals between inflation and deflation and back. Equity markets will lift when traders first see that inflation is on the way. I showed that chart at the open of this WIR.

Wall Street traders no longer view the Treasuries as income instruments. They trade them like penny stocks – only there is significantly less margin required by Humungous Bank & Broker (HB&B). lol … Of course, there is not much default risk to HB&B because they always have a buyer in the Fed ready to take them off the hook. That is not so funny.

Income investing btw will not go away. Risk averse investors have a need. This is an area of business I am personally pursuing now with asset-backed securities for accredited investors because I think the bond market is virtually dead for long-term oriented investors, and will not be revived for a few years.

As I say, I think it’s deplorable what the central planners have done to the fixed income market. Older people need higher income. Maybe in two years (say 2015-16), the fixed income market will get back to normal.

Table 10: US Treasury Yields

US Treasury Bonds
Maturity Yield Yesterday Last Week Last Month
3 Month 0.04 0.05 0.05 0.09
6 Month 0.09 0.09 0.09 0.11
2 Year 0.24 0.24 0.24 0.25
3 Year 0.37 0.37 0.37 0.41
5 Year 0.79 0.78 0.83 0.86
10 Year 1.92 1.91 1.99 2.01
30 Year 3.16 3.15 3.22 3.21
Municipal Bonds
Maturity Yield Yesterday Last Week Last Month
2yr AA 0.58 0.61 0.56 0.55
2yr AAA 0.46 0.46 0.42 0.42
2yr A 0.87 0.76 0.75 0.61
5yr AAA 0.96 0.98 0.95 0.89
5yr AA 1.12 1.11 1.11 1.11
5yr A 1.20 1.13 1.28 1.20
10yr AAA 1.88 1.85 1.93 1.54
10yr AA 2.04 2.02 2.10 2.04
10yr A 2.27 2.33 2.22 1.98
20yr AAA 2.34 2.34 2.75 2.50
20yr AA 3.31 3.31 3.29 3.17
20yr A 3.27 3.15 3.23 2.98
Corporate Bonds
Maturity Yield Yesterday Last Week Last Month
2yr AA 0.49 0.50 0.48 0.51
2yr A 0.72 0.73 0.73 0.76
5yr AAA 1.04 1.04 1.15 0.96
5yr AA 1.29 1.29 1.30 1.35
5yr A 1.63 1.64 1.58 1.72
10yr AAA 2.48 2.49 2.47 2.50
10yr AA 2.91 2.93 2.95 2.96
10yr A 3.04 3.05 3.03 3.06
20yr AAA 3.50 3.52 3.59 3.53
20yr AA 4.03 4.03 3.99 3.94
20yr A 4.23 4.26 4.26 4.28

http://stockcharts.com/scripts/php/candleglance.php?TLT,IGOV,$DJCBP

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

Interest rates and bond yields.

TNX0X Weekly Data

IRX0X Weekly Data

Interactive Daily data charts:

TNX0X Daily Data

IRX0X Daily Data


Interactive Chart of Interest rates and bond yields.


US Bond Funds — Interactive Monthly Data Charts SHY Monthly data series chart:

US Bond Funds - Monthly Data For SHY


IEF Monthly data series chart:

US Bond Funds - Monthly Data For IEF


TLT Monthly data series chart:

US Bond Funds - Monthly Data For TLT


AGG Monthly data series chart:

US Bond Funds - Monthly Data For AGG


LQD Monthly data series chart:

US Bond Funds - Monthly Data For LQD


TIP Monthly data series chart:

US Bond Funds - Monthly Data For TIP


US Bond Funds — Interactive Weekly Data Charts

SHY Weekly data series chart:

US Bond Funds - Weekly Data For SHY

IEF Weekly data series chart:

US Bond Funds - Weekly Data For IEF

TLT Weekly data series chart:

US Bond Funds - Weekly Data For TLT

AGG Weekly data series chart:

US Bond Funds - Weekly Data For AGG

LQD Weekly data series chart:

US Bond Funds - Weekly Data For LQD

TIP Weekly data series chart:

US Bond Funds - Weekly Data For TIP


US Bond Funds — Interactive Daily Data Charts

SHY Daily data series chart:

US Bond Funds - Daily Data For SHY

IEF Daily data series chart:

US Bond Funds - Daily Data For IEF

TLT Daily data series chart:

US Bond Funds - Daily Data For TLT

AGG Daily data series chart:

US Bond Funds - Daily Data For AGG

LQD Daily data series chart:

US Bond Funds - Daily Data For LQD

TIP Daily data series chart:

US Bond Funds - Daily Data For TIP


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

NLY

16.13 0.40 2.54% 3.00% 5.42% 7.75% 12.64% 9.28% -8.14% -0.31%

TLT

117.33 0.09 0.08% 1.36% 2.25% 0.26% -1.87% -4.02% -3.47% 4.62%

IEF

106.89 0.04 0.04% 0.56% 1.17% 0.42% -0.09% -0.69% -0.66% 4.07%

TIP

120.87 0.21 0.17% 0.26% 0.73% 0.37% -0.39% -0.96% -0.52% 2.84%

AGG

110.41 0.04 0.04% 0.18% 0.54% 0.09% -0.49% -0.64% -1.38% 0.87%

SHY

84.43 -0.02 -0.02% -0.01% 0.01% 0.00% 0.04% 0.02% -0.01% 0.20%

DRE

16.90 0.12 0.72% -0.71% 1.56% 7.64% 20.37% 21.41% 11.48% 19.01%

AVB

126.83 1.38 1.10% -1.20% 2.22% -1.55% -6.76% -7.19% -8.63% -6.43%

EQR

54.66 0.27 0.50% -2.55% -0.49% -4.46% -4.12% -3.44% -4.82% -8.13%

Some people think this 11-minute video is a good basic explanation of the bond market:
http://www.youtube.com/watch?v=EmVrny8k6qo


Commodities Review

This week Commodities ($CRB -0.59% W/W) dropped despite econ data that was showing a growing economy. The index is at 294.70.

“This index will go much higher this year. There is a Commodities Bull just around the corner, although I don’t think it is much more than a Baby Bull in its early potential.”

Here is the Weekly data chart of $CRB (solid blue line (294.70) with 8-week EMA (295.74) in dashed blue) vs US Dollar Index ($USD 82.13) (solid thin green line). “The Dollar Bull is still in the ring and doing damage.” Note that the EMA-8w has thwarted the attempt of the last price to move above it into a Bullish position. Same with the RSI-7w, which bounced back from the 50-line to close the week at 45.21. In three weeks, the week ending April 12, you will be looking at a Commodity Bull chart. Watch for it.

wir13_13.42.gif


Although I use the $CRB (Reuters/Jeffries Index), principally because it’s the oldest, there are many commodity indexes: http://www.crbtrader.com/crbindex/ • Astmax Commodity Index(AMCI) • Commin Commodity Index • Dow Jones-AIG Commodity Index • Goldman Sachs Commodity Index • Reuters/Jefferies CRB Index • Rogers International Commodity Index • Standard & Poor’s Commodity Index • NCDEX Commodity Index • Deutsche Bank Liquid Commodity Index (DBLCI) • UBS Bloomberg Constant Maturity Commodity Index (CMCI)

Here is a link to an article that discusses the major ones that have been around for a while: http://www.rogersrawmaterials.com/overviewandanalysis.PDF

Here is a current price summary of the heaviest weighted commodities contracts: http://money.cnn.com/data/commodities/

These indexes change their component weightings perhaps annually or even monthly, for example: http://www.seekingalpha.com/article/43586-the-new-generation-of-diversif… http://tinyurl.com/a5myfj

$CRB Index

Open Futures Contracts


Interactive Chart of Weekly CRB Commodities Index:

CRB Commodities Index - Weekly Chart

Interactive Chart of Daily CRB Commodities Index:

CRB Commodities Index - Daily Chart


Oil Review

This week $WTIC gained +$0.42/bbl (+0.45% W/W) to close at $93.78.

Stronger econ data in the US over the past three weeks bolstered prices again.

Here’s the Daily data charts of $WTIC (93.78) in solid blue vs the 8-day EMA (93.02) in dashed blue, and the $USD Index (82.53) in solid thin green. This chart has moved from Neutral to Bullish after the 8-day EMA and the RSI-7d both supported the price.

wir13_13.43.gif

The weekly high-low was 94.47—91.84 vs (i) 93.84—90.89 (ii) 92.03—89.33 (iii) 94.46—90.04 (iv) 97.49—92.44 (v) 98.11—94.97 (vi) 97.76—95.04 and (vii) 98.24—95.47 in the prior seven weeks.

Here is the Econoday write-up on Crude Oil this week:

wir13_13.44.gif

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

Interactive Chart of Weekly Crude Oil:

Crude Oil- Weekly Chart

Interactive Chart of Daily Crude Oil:

Crude Oil- Daily Chart


Gold & Precious Metals Review

The gold bullion market

Gold is now on a bit of a roll thanks to how the IMF and ECB are handling the situation in Cyprus.

After a week when $GOLD had gained +$14,80/oz (+0.94%), this week $GOLD was up a further +$17.60 (+1.11% W/W) to close at $1608.80.

Two weeks ago in this space I had noted: “The last two weeks, with $GOLD falling a total of just -$3.20/oz, the US Dollar has risen +0.56% and +1.02%, which is a lot.”

A week ago I wrote in this space:

Putting this week’s gain into perspective, there needs to be a much bigger gain to get the fence-sitters back in the game. I’d say $1600 is the first step, followed quickly in early April to $1800 and soon afterward to $1900.

Now we have the 1600 level behind us, I believe the next target is a whopping 1800.

The fact that very few people believe me does not in the least concern me.

Here is the Daily data chart of $GOLD (1608.80) with the $USD (82.53), in the overlaid solid green line. Note the counter-trend with the Dollar. Note the 8-day EMA is at 1602.84, which is now Bullish (for the Daily at least). The Daily RSI-7 is up to 61.19 this week, which is Bullish.

As I remarked two weeks ago: “Traders are watching for a reversal.” One will come in early April.

wir13_13.45.gif

The high-low for the week was 1616.50—1589.60 vs (i) 1598.80—1574.50 (ii) 1585.80—1560.40 (iii) 1619.70—1564.00 (iv) 1618.80—1554.30 (v) 1667.90—1596.70 (vi) 1687.00—1661.80 (vii) 1685.00—1651.00 (viii) 1695.90—1655.00 (ix) 1697.80—1659.50 (x) 1678.80—1642.60 and (xi) 1695.40—1626.00 over the past eleven weeks.

Two weeks ago I reported:

The Bull & Bear Financial Report that is published by my friends David Robinson and Valerie Waters carry in their Feb-Mar issue a lengthy article that features 23 Gold and 21 Silver forecasts of many of the market’s best known analysts around the world. Each analyst is quoted extensively. You ought to read it, and can get it here.
http://www.goldstocknews.com/GSNpdf/GSN-0213.pdf
The table of individual forecasts shows a low-high-average forecast summary of $1529.09-$1,903.87-$1,753.37 price for Gold and $26.20-$39.75-$33.21 price for Silver. But, as you now know, from a week ago: “I believe these big name analysts have far under-shot the mark. I believe the lows have already been made this YTD and the highs will be over $2500 and $50 respectively. Moreover, I believe prices in 2014 will be higher than that.

I am a Gold Bull based on capital market conditions and for no other reason. I have written in this blog previously:

“At the end of the day the Gold Bull only dies (and the Bear appears) when governments around the world bring their budgets into balance and set legislative policy that permits free markets to work more efficiently so that the private sector can build wealth, creating jobs, generating more tax revenues. That happens on occasion, and often for lengthy periods like 1982-2000. Today, the governments have to stop owning the bond market, and let rates move to levels that brings in private sector investment. Then capital will flow out of precious metals and cash hoards and into the economy… I continue to believe: “There is nothing bearish about the precious metals market other than the talk on Financial Entertainment TV and I’m telling you who is paying for that to happen.” … Despite the recent pull-backs, I have stated clearly in these pages: “I continue to believe that within a few months $GOLD will surge to $1900 (back to the highs of August 2011) and then after a period of consolidation up to $2300. In about a year [4Q2013], I believe $GOLD will be in the $2700-$3000 range.” … “I’d say many of you are hopeful, but most of you don’t believe it will happen.” … We all know that price forecasting like this is tantamount to tea-leaf reading because we never know what government civil servants and central banks are planning behind closed doors; however, the rocketing higher of debt in the US, Europe, Japan and many of the world’s smaller economies is impossible to continue without wealth being created simultaneously, and failing that, currencies will have to weaken. Given that central banks have used their ammunition and governments have for the most part become socialist in order to stay in or regain elected power, it is impossible for the private sector to build wealth quick enough to stay in a semblance of balance with the debt that has been and is being created. Ergo there must soon be a radical change in asset pricing. That’s been happening of course since about 2001, and I don’t see the process ending for several years yet. With each cycle, there will be even higher Precious Metal prices, commodity prices, collectable art works prices, and price-earnings multiples for equities. Without assets being somewhat in balance with liabilities (i.e., somebody’s debt), currencies must – absolutely must – suffer devaluation. As to Precious Metal prices, it’s just a matter of time.”

I believe every word of this. A weak US Dollar would get the ball rolling. This week, the $USD lifted +0.48% W/W to 82.53, and yet $GOLD still lifted.

Interactive Chart of Weekly Gold EOD Continuous Contract Index:

http://investertech.com/tkchart/tkchart.asp?stkname=gld&cht=Tech+Chart&p…

http://investertech.com/tkchart/tkchart.asp?stkname=gld&cht=Tech+Chart&p…

http://investertech.com/tkchart/tkchart.asp?stkname=gld&cht=Tech+Chart&p…

Here is the current candleglance chart of 10 important precious metals and copper market components:

http://stockcharts.com/freecharts/candleglance.html?$SILVER,$GOLD,$PLAT,$COPPER,GDX,GDXJ,UXG,SVM,SLW,FCX,

Spot gold chart for the week

Interactive Chart of Weekly Gold EOD Continuous Contract Index:

GOLD EOD Continuous Contract Index - Weekly Chart

Interactive Chart of Daily Gold EOD Continuous Contract Index:

GOLD EOD Continuous Contract Index- Daily Chart

Interactive chart of recent trading for the Gold Bullion index.


The silver market

Spot silver chart for the week

Interactive daily data

This week $SILVER dropped -$0.06 (-0.19% W/W) to close at 28.73.

There was a loss a week ago too, but two weeks ago $SILVER was at 28.93, only twenty cents higher.

Getting ready to rock and roll.

Here is the Daily chart of $SILVER (28.73) in the solid blue line with the 8-day EMA (28.87) in dashed blue, close by, and the $USD (82.53) in solid thin green, very strong for almost two months now. $SILVER is still Bearish, but the RSI-7d is testing the 50-line, ready, I believe, for a break-through. This shows me again that “$SILVER is close to completing a cycle bottom”.

wir13_13.46.gif

The Weekly hi-low was 29.33—28.40 vs (i) 29.35—28.53 (ii) 29.26—28.33 (iii) 29.44—27.92 (iv) 30.15—28.25 (v) 31.53—29.66 (vi) 32.12—31.30 (vii) 32.30—30.75 and (viii) 32.49—31.12 over the previous eight weeks.

As I have stated: “Every dip has been an opportunity to buy Silver bullion, as I see it. But we must be prudent.”

As an active trader in mines and metals, I usually watch the Sydney and London miners overnight to give me a heads-up as to where prices will be at 9:30am ET in the US and Cdn market.

I also watch the action of all the major precious metals and metals, and the related stocks, before I come to a conclusion on any one of them. For now the stocks are in a Bear – resulting, I believe, from fraudulent ETF trading — and the price of physicals is dubious, held back by securitized contracts from actually being bullish.

I believe that many formerly Bullish traders have capitulated. We’ll have to see by year-end – or even in three months – if they are pleased in having done that.

Here is the current candleglance chart of 10 important precious metals and copper market components:

http://stockcharts.com/freecharts/candleglance.html?$SILVER,$GOLD,$PLAT,$COPPER,GDX,GDXJ,UXG,SVM,SLW,FCX,

http://stockcharts.com/scripts/php/candleglance.php?$SILVER,$GOLD,$PLAT,$COPPER
http://tinyurl.com/22rsj4r

http://stockcharts.com/charts/gallery.html?s=$silver
http://tinyurl.com/y8k8ud4

Interactive Chart of Weekly Silver EOD Continuous Contract Index:

SILVER EOD Continuous Contract Index - Weekly Chart

Interactive Chart of Daily Silver EOD Continuous Contract Index:

SILVER EOD Continuous Contract Index- Daily Chart


The platinum market

http://stockcharts.com/charts/gallery.html?s=$plat
http://tinyurl.com/ydwz4pn

This week $PLAT dropped -$6.50 (-0.41% W/W) to close at $1583.20. Despite the losses over the past two weeks, this contract is still up about +$8 over two weeks.

Here is the Daily chart of $PLAT ($1583.20) in the solid blue line (with the 8-day EMA (1583.01) in dashed blue, which is now below the last price, which is a positive, and the $USD (82.53) in the solid thin green line. But the RSI-7d is still Bearish at 44.50. It needs to get above the 50-line, which I anticipate will happen next week.

As you know, auto production is high and every new auto requires lots of platinum. Inventory is less than a year, I believe.

wir13_13.47.gif

The hi-low this week was 1597.10—1549.80 vs (i) 1615.00—1578.50 (ii) 1610.00—1564.00 (iii) 1630.80—1565.50 (iv) 1704.70—1599.00 (v) 1735.90—1671.10 (vi) 1744.50—1684.70 (vii) 1699.90—1659.70 and (viii) 1704.60—1666.60 over the previous eightn weeks.

Here is a list of PLAT/PALL stocks to watch:

ANO Anooraq Res.
ELR.TO Eastern Platinum
JLP.L Jubilee Platinum
NKP.AX Nkwe Platinum
PDL.TO North American Palladium
PLA.AX Platinum Australia
PLG Platinum Group Metals
NKL.V Prophesy Platinum Corp

Spot platinum chart for the week

Interactive Chart of Weekly Platinum EOD Continuous Contract Index:

PLAT EOD Continuous Contract Index - Weekly Chart

Interactive Chart of Daily Platinum EOD Continuous Contract Index:

PLAT EOD Continuous Contract Index- Daily Chart

Interactive chart of the Platinum metal index.


The palladium market

This week $PALL dropped -$10.95 (-1.42% W/W) to close at $760.05. There was a loss of -$11.85 a week ago.

Here is the Daily chart of $PALL (760.05) in the solid blue line with the 8-day EMA (759.44) in dashed blue, which is still a bit bullish, and the $USD (82.13) in the thin solid green line. The RSI-7d is holding above the 50-line at 51.20. So call this Neutral with a Bullish tone. Like the others, there is a counter-trend with the Dollar.

wir13_13.48.gif

The weekly hi-low was 779.00—727.30 vs (i) 784.65—755.55 (ii) 788.45—713.00 (iii) 752.35—714.00 (iv) 767.35—708.30 (v) 777.60—744.00 (vi) 772.90—740.25 (vii) 760.50—734.30 (viii) 742.10—714.25 (ix) 732.95—696.25 (x) 705.00—663.20 (xi) 718.85—681.00 and (xii) 710.80—681.50 over the previous 12 weeks.

The pattern is still Bullish with a Weekly EMA-8 at 750.99 and a RSI-7w at 60.27.

Spot palladium chart for the week

Interactive Chart of Weekly Palladium EOD Continuous Contract Index:

PALL EOD Continuous Contract Index - Weekly Chart

Interactive Chart of Daily Palladium EOD Continuous Contract Index:

PALL EOD Continuous Contract Index- Daily Chart

Interactive chart of the Palladium metal index.


The (base metal) copper market

“Copper is still on its way to $4, I believe.”

This week $COPPER was down -$0.05 (-1.53% W/W) to close at 3.466.

Here is the Daily data chart of $COPPER (3.466) in the solid blue line with the 8-day EMA (3.465) in dashed blue, which is neutral, and the $USD (82.53) in the solid thin green line. The chart is Bearish because the RSI-d is still below the 50-line at 43.59, “but likely basing for a reversal within (three) weeks”. The count-down is on. Note the counter trend with the US Dollar.

wir13_13.49.gif

http://stockcharts.com/charts/gallery.html?s=$copper
http://tinyurl.com/ybgnb7f

Interactive Daily data

Interactive Weekly data

Interactive Chart of Weekly Copper EOD Continuous Contract Index:

COPPER EOD Continuous Contract Index - Weekly Chart

Interactive Chart of Daily Copper EOD Continuous Contract Index:

COPPER EOD Continuous Contract Index- Daily Chart

Interactive chart of the Copper metal index.


Goldminer Equities

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

SVM

3.9800 -0.0800 -1.97% 9.04% 5.01% 4.46% -24.05% -20.56% -39.88% -39.51%

MUX

2.9800 -0.0400 -1.32% 8.36% 12.88% 16.86% -24.75% -20.53% -36.46% -20.32%

AUY

15.64 0.13 0.84% 7.64% 9.52% 4.55% -9.75% -7.51% -19.13% 1.69%

SSRI

10.80 -0.15 -1.37% 5.37% 7.78% 2.18% -29.82% -24.16% -35.56% -25.16%

NEM

41.61 0.16 0.39% 4.86% 6.01% 1.94% -11.28% -6.66% -26.11% -20.61%

IAG

7.240 0.060 0.84% 4.62% 10.53% -1.63% -38.54% -35.41% -55.66% -45.11%

GG

33.56 0.11 0.33% 3.45% 2.88% 3.10% -10.55% -4.66% -28.49% -23.41%

AEM

41.04 -0.16 -0.39% 3.40% 4.64% 2.11% -23.05% -19.55% -21.17% 25.12%

BVN

25.89 -0.37 -1.41% 3.31% 4.19% 0.31% -28.46% -25.60% -33.60% -33.39%

EGO

9.760 0.100 1.04% 2.85% 2.63% 1.56% -26.40% -23.27% -37.23% -24.22%

KGC

8.130 0.020 0.25% 2.78% 2.65% 5.86% -17.55% -13.33% -21.30% -18.21%

SLW

31.23 0.25 0.81% 2.73% 1.26% -2.44% -15.64% -9.45% -21.75% -2.35%

ABX

29.38 -0.23 -0.78% 2.66% 1.63% -3.64% -17.31% -11.98% -31.45% -31.80%

GDX

38.16 -0.27 -0.70% 2.20% 2.83% 0.61% -18.98% -15.54% -30.38% -21.72%

RBY

2.5000 -0.0700 -2.72% 2.04% 21.36% 19.62% -5.30% 2.04% -34.21% -23.78%

GDXJ

17.00 -0.12 -0.70% 0.89% 5.59% 4.87% -17.23% -16.21% -33.23% -29.17%

CEF

19.67 -0.31 -1.55% 0.87% 0.51% 0.10% -8.72% -6.91% -17.35% -7.74%

CDE

19.00 -0.31 -1.61% -0.52% 0.42% -0.84% -24.60% -18.49% -34.62% -18.77%

NG

3.9500 -0.1000 -2.47% -1.25% 1.28% -1.00% -18.22% -11.63% -36.19% -41.39%

PAAS

16.48 -0.29 -1.73% -1.38% 2.04% -0.72% -14.21% -9.30% -26.63% -22.37%

GFI

7.930 -0.270 -3.29% -1.61% -0.88% -9.06% -36.41% -33.25% -40.15% -42.07%

HMY

6.390 -0.230 -3.47% -2.59% 1.91% -0.47% -28.04% -22.92% -31.22% -41.21%

AU

23.91 -0.54 -2.21% -2.73% -2.80% -4.93% -23.66% -21.19% -34.69% -35.64%

KGN

3.0900 -0.0600 -1.90% -3.13% -3.74% -15.34% -23.51% -23.13% -18.04% -41.03%

HL

4.0500 -0.1200 -2.88% -4.26% -4.71% -16.84% -33.72% -28.45% -40.70% -8.99%

ANV

17.16 -1.00 -5.51% -5.30% -5.40% -11.68% -44.12% -41.09% -56.58% -44.03%

Several weeks ago I remarked: “It appears that capitulation is a lengthy process”… In my view, however, we are witnessing the birthing of an elephant.

This week the Senior Goldminers ETF (GDX) was up +2.20% W/W at 38.16, and the Junior Goldminers ETF (GDXJ +0.89% W/W) was less strong after have sizeable up-moves in the previous two weeks. The close was $17.00.

A week ago I remarked: “I’m not so sure that precious metals are fully based and ready to soar. But I think we are very close.” The count-down is on. Maybe two weeks to go before blast-off.

Here is the Daily GDX chart with the $USD in the background in solid green. The price at 38.16 is now above the 8-day EMA at 37.74, and the RSI-7d is up to 58.38. That’s Bullish (for the Daily).

wir13_13.50.gif

Two weeks ago, I remarked in this space: “If you look at the price to Fwd Earnings for the producers, the multiples are extremely low in the 5x-10x range. Moreover the short position in some of these producers is extremely high. Such a combination is unwarranted and risky, in my view. I would not be short one of these senior producing goldminers at this point. Obviously the Shorts believe the price of $GOLD is going to collapse or they would not be taking such enormous risk. We’ll revert to this discussion in the near future.”

Big shorts this week boomed in some cases. Silvercorp (SVM +9.0% W/W) and McEwen (MUX +8.4%) and Yamana (AUY +7.6%), I believe have had some shorts closed. Please check that for me. Look at both the US and Cdn markets.

Now here is the Daily XME:GDX ratio chart. XME is the S&P 500 Mines & Metals ETF and GDX is the senior gold producers ETF. A week ago I commented:

The base metals miners were in relatively much better shape than the precious metal miners – until now. The TRIX is breaking down and the RSI-7w has given a SELL Alert. This means that the base metal miners are soon going to be less favored than the precious metal miners – maybe something like 3Q2011.

There you have it. The ratio line (and its RSI-7d) is dropping again this week, meaning the precious metal miners have gotten the support they needed to complete their Bear cycle. For the next couple months, I anticipate this ratio line to plunge. Got Gold?

wir13_13.51.gif

“I still believe there will be a Gold Bull appear soon after the start of the New Year.”

…“So we are now into March and the Gold Bull is still in hiding, but at least the XME:GDX ratio chart is showing a potential change in trend.”

…“…Patience is required.”

…”I am starting to see the whites of their eyes…”

These things take time to work out. We never know when the Fed, Friends & Family are prepared to move markets. We can only approximate the timing based on what we see (not what we hear!).

Here is the current candleglance chart of 10 important Gold and Silver mining companies:

http://stockcharts.com/scripts/php/candleglance.php?ABX,GG,NEM,KGC,BVN,G…,


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

LIHR IAG EGO RGLD GOLD TSE_AGI GSS NG NGD AEM

Interactive Daily data

Interactive Weekly data


Here are the key Silver miners and the SLV ETF: SLV SIL SVM CDE HL PAAS SSRI SLW MGN

Interactive Daily data

Interactive Weekly data


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

Interactive Chart of Weekly US Goldminers Index:

Weekly US Goldminers Index - Weekly Chart

Interactive Chart of Daily US Goldminers Index:

Daily US Goldminers Index - Daily Chart


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

Here are the US Goldminer ETF (GDX) index Weekly and Daily data charts:

GDX Weekly data:

GDX Weekly Data Chart

GDX Daily data:

GDX Daily Data Chart


The Toronto Exchange-listed goldminer iUnits S&P/TSX Capped Gold Index ETF trades under the ticker symbol TSE:XGD.

Just like GDX on the AMEX, you can trade XGD on Toronto. Canadian Dollar fluctuations will impact XGD vs GDX.

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

Interactive Chart of XGD Weekly data:

XGD Weekly Data Chart

Interactive Chart of XGD Daily data:

XGD Daily Data Chart


Central Bank Update and Currencies Overview

You know my posture re currencies: “We are all forced to be currency traders today.” That requires continuous study of the central bank meetings – and the G20 meetings.

In this section, I reproduce any of the Econoday studies of international central bank meetings and reports for the current week – if there are any. This week there was one – from the Reserve Bank of India. When available, these are important reviews to be reading and following month to month.

wir13_13.52.gif

A month ago all the key central bankers were attending the G20 meeting in Russia [and as we know the G20 report to the public was a crock] and now they have returned home to (i) devise strategies and tactics that permits more QE without the appearance of more QE, and (ii) publicly announce they are sitting on their thumbs, er their hands. I suppose that’s when they conspired to attack Cyprus. Everybody it seems wants their hands on all that Russian mob money.

Here is the Econoday write-up on the international currency market this week:

wir13_13.53.gif

Deny it or not, most of the central banks would like to increase monetary stimulus, which devalues their currencies, simultaneously. That is the only way out of a major currency war, which if it happens would lead to an international trade war, something nobody wants.

Background:

The $USD is a trade-weighted US Dollar index, we used to call the Morgan Dollar.

The Forex market is a four trillion dollar a day marketplace, which dwarfs the size of the stock and bond markets. In this market, the Euro/USD is the highest volume trader, and London is the center of the universe.

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. The Euro is by far the biggest component.

(As inserted in this space continuously) For some time I have opined that the $USD clearly no longer meets the needs of a globalized world with respect to a reserve currency benchmark.

There was some nonsense being peddled at the GOP convention this year that maybe the US ought to peg its Dollar to GOLD. Will not happen!

You see; neither side of the room at the country club in DC would agree to “play” in handcuffs.

I have suggested that Gold may now be the de facto benchmark and that I do not foresee a time when any of the G-20 governments or central bankers would want to cede power to the hard money crowd, so, if there are to be changes, a new form of paper money is likely to be introduced or, more likely, a new US Dollar index.

I would not be surprised, as I have often stated, if this US Dollar Index is someday reconstructed to include the Chinese Yuan, Brazilian Real, Indian Rupee, Russian Ruble, and Mexican Peso. What we have today – something we used to call the Morgan Dollar – is a joke. A new US Dollar index would simply be constructed by all G-20 currencies based on their past five-year trade weighted average. Then every five years, change the weighting to reflect the latest international trade data of the US.

As I see it, such a development has been crucially needed for the almost nine years I have been blogging. If you recall, I referred to it as a need for a General Agreement on Currencies.

There is a Powershares ETF that tracks the G-10 currencies (NYSE:DBV). I think we need track that vs the $USD. The ratio is expressed as a line $USD:DBV.

http://tinyurl.com/ltxpk4

As commodities are mostly priced in $USD for international transactions presently, you still need to study forex price trends and cycles when trading commodity price-sensitive instruments.

For currency traders, there is also an Emerging economy E-10 currency fund, the Wisdom Tree Emerging Currency Fund (NYSE:CEW), apparently holding the Mexican new peso, Brazilian real, Chilean peso, South African rand, Polish zloty, Israeli shekel, Turkish lira, Chinese yuan, South Korean won, Taiwanese dollar, and Indian rupee. I don’t know much about it.

http://tinyurl.com/6ybt2bz

Regarding currencies, I find the ADVFN.com service (with inexpensive real-time price feed) to be quite useful. I have set up a monitor (one of 200-some tickers) for currencies, which you can do as well.

Click on: http://www.advfn.com/p.php?pid=m_tools

Into the window for stocks, enter the following string of currency pairs:

FX:EURUSD, FX:AUDUSD, FX:GBPUSD, FX:EURGBP, FX:EURCHF, FX:EURCAD, FX:USDCAD, FX:EURJPY, FX:USDJPY, FX:AUDJPY, FX:EURAUD

When you call up the stocks, you’ll see they are interactive, which means they update in real-time (if you paid the $10/mo for this data) or 15-20-minute delayed prices (free), and can be displayed with indicators and overlays.

If you are new to examining currency pairs charts; think about it that in any pair where the latest trend line is rising, the first ticker is the one that is strong. So EURUSD, which is the way the contract is traded, when the trend line is up, the Euro is in rally mode against the US Dollar.

The symbol USD in any pair is the denomination versus $USD, which is the trade-weighted US Dollar index (i.e., multiple currencies as described above).

A chart of the Euro vs Dollar (i.e., EURUSD) with an overlay of currencies (GBP, AUD and CAD in this case) will show you if, as, and the point when, currencies are impacting capital markets. We are looking for commonality in trend direction of the currencies in their trading against the US Dollar.


Individual Currencies Review

This week, the US Dollar ($USD) gained +0.48% W/W to close at 82.53. There was a loss of -0.55% on Friday and one of -0.54% the prior Friday, so the Dollar is not as strong as many presume.

Two weeks ago I wrote in this space: “At some point soon, I think, the USD will top out.” A week ago I added: “Maybe Friday did the trick. I think I’ll wait for a couple weeks to decide.” I’m glad I waited, but this Friday was another show of weakness for the US Dollar. Seems the 1% want to take home their Gold for the weekend. Heaven forbid they hold it in a bank that the IMF and ECB have a hate-on for.

Here is the Daily data chart of the $USD (82.53) in solid blue line along with 8-day EMA in dashed blue (82.72), and the S&P 500 (1556.89) in solid thin orange line, showing counter-cyclicality – at least until recently.

wir13_13.54.gif

Since the end of January, the chart had been quite Bullish for the Dollar, which ought to have meant Bearish for the S&P 500, but it didn’t happen that way. Since the last price has broken below the EMA-8d, this Daily data is now a Bearish chart. Also, the RSI-7d has broken below the 50-line at 48.83, which is a SELL, so now we look to the Weekly data, which is still Dollar Bullish.

The high-low this week was 83.32—82.43 vs (i) 83.18—82.06 (ii) 82.94—81.96 (iii) 82.51—81.07 (iv) 81.59—80.27 (v) 80.62—79.84 (vi) 80.28—78.92 (vii) 79.93—78.92 (viii) 80.15—79.68 (ix) 80.19—79.35 (x) 80.87—79.43 and (xi) 80.87—79.28, over the previous eleven weeks.

http://stockcharts.com/charts/gallery.html?s=$usd
http://tinyurl.com/y9c3sr4

Weekly US Dollar Index - Weekly Chart

Interactive Chart of Daily US US Dollar Index:

Daily US Dollar Index - Daily Chart


This week, the Euro ($XEU -0.64% W/W) closed lower at 129.93, but there was a gain of +0.71% on Friday and one of +0.56% on the previous Friday.

Here is the Daily data chart of the Euro ($XEU 129.93) in US Dollar terms, in the solid blue line, with the 8-day EMA (129.66) in dashed blue, which is Bullish, and the S&P 500 1560.70 in the thin solid orange line. The RSI-7d though is still at 49.87, which is still Bearish.

wir13_13.55.gif

The new high-low for the Euro this week was 130.09—128.44 vs (i) 131.07—129.12 (ii) 131.18—129.55 (iii) 133.19—129.67 (iv) 133.97—131.46 (v) 134.97—133.09 (vi) 135.97—133.54 (vii) 134.79—132.65 (viii) 133.94—132.57 (ix) 133.65—130.23 (x) 132.74—130.04 (xi) 132.83—131.75, and (xii) 133.08—131.50 over the previous 12 weeks.

As noted previously, there had been a very bullish strengthening move in the Euro since mid-July after the Eurozone political and central bank leaders seemed to get their act in gear re the weakness from Greece, Spain, Italy, etc. Then four weeks ago, right before the Italian election, I reported: “Except for a bit of weakness in the Euro at the beginning of the year, this week was only the second period of weakness, and it may be short-lived.” Unfortunately the Euro Bear arrived four weeks ago, and may persist for a couple weeks longer.

Some of us believe the Dollar has just now begun to top out and the Euro bottom out.

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

Weekly Euro Dollar Index - Priced in USD

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

Daily Euro Dollar Index - Priced in USD


The Pound sterling future ($XBP) lifted +0.76% W/W to close at 152.31. That’s a strong two-week move.

Here is the Daily data chart of the Pound @ 152.31 in the solid blue line with the 8-d EMA @ 151.22 in dashed blue and the S&P 500 @ 1560.70 in the solid thin orange line. Together with the RSI-7d at 71.71 and rising, this is a Bullish chart.

wir13_13.56.gif

The hi-lo for the week was 152.48—150.42 vs (i) 151.77—148.56 (ii) 151.81—148.86 (iii) 152.22—149.86 (iv) 154.85—151.58 (v) 156.97—154.75 (vi) 158.44—156.31 (vii) 158.75—156.75 (viii) 158.92—157.57 (ix) 161.01—158.54 (x) 161.71—159.93 (xi) 163.14—160.13 (xii) 161-82—160.67 and (xiii) 163.02—161.52 over the previous 13 weeks.

http://stockcharts.com/charts/gallery.html?s=$xbp
http://tinyurl.com/yasdzc2

Weekly British Pound Index:

Weekly British Pound - Weekly Chart

Daily British Pound Index:

Daily British Pound Index - Daily Chart


Weekly Japanese Yen Index:

The Yen ($XJY) lifted +0.85% W/W. The close was 105.84.

A week ago, I noted: “There was some short-covering on Friday as the Yen soared +0.85% on the day. That resulted in a gain of +0.75% W/W. The close this week was 104.95.” This Friday, the $YEN gained +0.46%. So traders now don’t want to be short the Yen going into the week-end. That is a change.

The recent losses have been large. “In late September, the Yen contract traded above 128. That is a skyfall.”

Here is the Daily data chart of the Yen (solid blue line) at 105.84, with the EMA-8d at 105.12, which is a new Bullish indicator (for the Daily data), and the S&P 500 (in the thin solid orange line) at 1556.89.

wir13_13.57.gif

The contract hi-lo for the week was 106.07—104.03 vs (i) 105.18—103.54 (ii) 107.46—103.55 (iii) 110.02—106.23 (iv) 107.80—106.35 (v) 107.92—105.86 (vi) 108.47—106.72 (vii) 110.59—107.56 (viii) 113.12—109.67 (ix) 113.64—110.96 (x) 115.07—111.80 (xi) 116.15—113.14 (xii) 118.43—116.06 and (xiii) 119.55—118.20, over the previous 13 weeks.

The Weekly RSI-7 has lifted from 4.93 to 14.15 to 23.97 over the past two weeks.

Watch for US duties or some other kind of prohibition against imported Japanese goods.

Weekly Japanese Yen - Weekly Chart

Daily Japanese Yen Index:

Daily Japanese Yen Index - Daily Chart


Daily Canadian Dollar:

This week the Cdn Dollar ($CDW) dropped -0.40% to 97.69. There was a small gain of +0.10% on Friday.

The Daily data chart of the Cdn Dollar ($CDW) in the solid blue line to the S&P 500 ($SPX) in the thin solid orange line shows a cycle bottoming process.

wir13_13.58.gif

But the Weekly data chart of the Loonie shows there is still a couple weeks to go before we hit the green light on buying.

wir13_13.59.gif

The high-low for the Loonie this week was 98.03—97.24 vs (i) 98.23—97.13 (ii) 97.71—96.74 (iii) 97.83—96.68 (iv) 98.91—97.50 (v) 100.03—99.15 (vi) 100.51—99.63 (vii) 100.43—99.02 (viii) 100.87—99.01 (ix) 101.69—100.52 (x) 101.89—101.17 (xi) 101.67—100.29 (xii) 100.94—100.30 and (xiii) 101.70—100.47, over the previous 13 weeks, which is still Bearish.

As written up in this space previously:

There is usually a rising Canadian Dollar when commodity prices and related beneficiaries like Oilers and Miners are in strong long-term Bull phases. The opposite happens in disinflationary markets, and early on in deflationary markets. In deflationary markets, the G-8 govts and central banks tend to flood the international financial system with new money (to generate a wealth effect) and the Oilers and Miners benefit from that.

We are seeing only the first side of the currency war. Pretty soon the Americans will have to stand down or else their exports will get crunched, and unemployment levels will rise again.

http://stockcharts.com/charts/gallery.html?s=$cdw
http://tinyurl.com/ycx58us

Weekly Canadian Dollar Index:

Weekly Canadian Dollar - Weekly Chart

Daily Canadian Dollar Index:

Daily Canadian Dollar Index - Daily Chart

Here is the China Yuan (CNY) chart.


Wrap-up:

One of the great joys in life is baby-sitting a grandchild for a day. If you are lucky enough to do that periodically, you get to see the development. It’s a natural process somewhat akin to the cycles of markets.

If you study the market data closely and pay attention to the interrelationships between the various asset classes and the constituent parts of each, you will see a harmony in the process and you will marvel at it.

But, truly, grand-children are more fun.

In my case, the life cycle is topping out. I give the process until year-end, and then I’ll be taking a break for three or four months.

Have a good week ahead.


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