Bill Cara

NASDAQ Composite (interactive) chart

Here is the latest chart for the Shanghai Composite index .

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

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

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

US Equity Markets Review

DJIA (interactive) chart

Table 15: Dow 30 List

You can do this table yourself by entering the following string into the Summaries window at www.billcara2.com and then clicking on the link for Performance.

AA AIG AXP BA C CAT DD DIS GE GM HD HON HPQ IBM INTC JNJ JPM KO MCD MMM MO MRK MSFT PFE PG T UTX VZ WMT XOM

Here are the links to interactive Dow charts from Billcara2.com that I broke into groups of ten, which you can add technical indicators for as well. (list one) (list two) (list three)

The Americas

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.

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

Sector ETF Summary for the US equity market

The tables I show in this section are for ten (GICS) Sector Index Funds (ETF's) only, but they cover the full spectrum of the US equity market.

Table 1: Cara ETF List

You can do this table yourself by entering the following string into the Summary window at Billcara2.com and then clicking on the link for Performance. XLE XLB XLI XLY XLP IYH XLF SMH IYZ XLU XLK SPY . You can also add more ETFâs â up to 30 in total.

For a list of components to any ETF, go to the AMEX.com web site, and click on ETF's.

10 (energy: XLE)

Table 2: Senior oil & gas equities

15 (basic materials: XLB)

Table 3: Senior metals and steel equities

Table 13: Senior gold equities

20 (industrial: XLI)

Table 4: Senior capital goods makers and transportation

25 (consumer discretionary: XLY)

Table 5: Senior consumer discretionary equities

30 (consumer staples: XLP)

Table 6: Senior consumer staples equities

35 (healthcare: IYH)

Table 7: Senior healthcare equities

40 (financial: XLF)

Table 8: Senior financial company equities

45 (technology, semiconductor: SMH)

Table 9: Senior technology equities

50 (telecom: IYZ)

55 (utilities: XLU)

Table 12: US Utilities

International Equity Market USD-denominated ETF Review

Table 14: International equities perspective

Japanese equity market ETF: EWJ

Here is the Japanese (EWJ) equity market ETF Daily data charts:

Interactive EWJ Daily data:

Interactive EWJ Weekly data:

U.K. equity market ETF

Here is the United Kingdom (EWU) equity market ETF Daily data charts:

Interactive EWU Daily data:

EWU Daily data:

Interactive EWU Weekly data:

Canada's equity market

Here is the Canadian (EWC) equity market ETF Daily data charts:

Interactive EWC Daily data:

Interactive EWC Weekly data:

Bonds & Yields Review

Table 10: Yahoo Finance U.S. Treasury Debt, Municipal and Corporate Bond Yields

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

US Bond Funds -- Interactive Daily Data Charts

SHY Daily data series chart:

IEF Daily data series chart:

TLT Daily data series chart:

AGG Daily data series chart:

LQD Daily data series chart:

TIP Daily data series chart:

Table 11: Interest-sensitive securities

Consumer Finance -USA -- Interactive Daily Data Charts

Commodities Review

$CRB Index

Open Futures Contracts

Interactive Chart of Daily CRB Commodities Index:

Interactive Chart of Weekly CRB Commodities Index:

Oil Review

Here is the e-miNY Mar-08 Crude Oil chart.

Interactive Chart of Weekly Crude Oil:

Gold & Precious Metals Review

Interactive Chart of Daily Gold EOD Continuous Contract Index:

Interactive Chart of Weekly Gold EOD Continuous Contract Index:

Interactive daily data

Interactive Chart of Daily Silver EOD Continuous Contract Index:

Interactive chart of the Silver Bullion index.

Interactive Chart of Weekly Silver EOD Continuous Contract Index:

Spot platinum chart for the past three days

Interactive Chart of Daily Platinum EOD Continuous Contract Index:

Interactive Chart of Weekly Platinum EOD Continuous Contract Index:

Interactive chart of the Platinum metal index.

Spot palladium chart for the week

Interactive Chart of Daily Palladium EOD Continuous Contract Index:

Interactive Chart of Weekly Palladium EOD Continuous Contract Index:

Interactive chart of the Palladium metal index.

Interactive Chart of Weekly Copper EOD Continuous Contract Index:

Interactive Chart of Daily Copper EOD Continuous Contract Index:

Interactive chart of the Copper metal index.

Table 13: Senior gold equities

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

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

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

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

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

Here are the key Silver miners and the SLV ETF:

SLV SIL CDE HL PAAS SSRI SLW MGN

Interactive Daily data
Interactive Weekly data

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

Interactive Chart of Daily U.S. Goldminers Index:

Weekly U.S. Goldminers Index:

Interactive Chart of Weekly U.S. Goldminers Index:

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

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

GDX Daily data:

GDX Weekly data:

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

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

Interactive Chart of XGD Daily data:

Interactive Chart of XGD Weekly data:

Forex Review

Here is the chart of the week's trading in the $USD.

Interactive Chart of Daily U.S. Dollar Index:

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

Daily British Pound Index:

Daily Japanese Yen Index:

Daily Canadian Dollar Index:

Wrap-up

Cara's Commentary & Community Chat, Tues., Dec. 2, 2008, 6:36am ET

Yesterday was the perfect storm with an announcement from an economic society that the US has been in a recession for a year, which given the generally accepted definition means since the start of 3Q07, which was followed by the manufacturing order book data that has disappeared, which was followed by Fed Chairman Bernanke and Treasury Secretary Paulson speaking to adoring crowds of their banker friends.

]]> So how did the rest of us respond? Was it price capitulation or indifference? Money flow tsunami or ripple? Reaction or simply no action?

As one of us expressed loudly and clearly in these pages recently, “I’m short and I’d pay to have (these people) do their thing.”

The market today is not a matter of confidence; it’s one of credibility. None of these people have any. That, my friends, is all that happened yesterday. We simply came to the mutual understanding that none of these so-called authorities have any credibility or authority.

Long ago, I opined that we would soon be seeing a -1000 point drop in the DJIA index. In percentage terms, a DJIA over about 11000 would have given us that -1000 point drop. I guess I was right.

I guess I was right too when I gave you my forecast for 2008, which few of you wanted to hear. For 'proof of concept', let's review my notes.

Daily Report for Wed, January 2, 2008

With resolutions in hand, we can start the New Year fresh.

The year will begin cautiously. There are a lot of unknowns. Of what we do know from the economic data, there are a lot of negatives.

Wall Street analysts will be looking at the mega-billion dollar write-downs of the Humungous Bank & Broker firms like Citi and Bank of America, but this issue is also a Buy-side one as pension, hedge and mutual funds and corporations have also purchased this bad paper.

Globally, I expect the aggregate damage will be somewhere between $250 billion and $1 trillion, something the world has never seen before. In terms of the total size of the stock and bond markets (ie, at least $100 trillion), that is not an overwhelming amount, however. The issue is that some financial institutions will fail and when they do, others will not get paid and hence will run into financial difficulties along the way.

Accordingly, fiat money of most of the economic powers will be poured into the financial system to keep it afloat, which will drive up the price of precious metals, which are storehouses of value. Normally, the $USD would plummet at that point, but this time, I think, the $USD will remain in the 75-83 range.

While other nations may walk away from creditors, I think the possibility of the US authorities doing that are slim to none, and that will keep the $USD and Treasury prices strong.

The bond market though will have its challenges in 2008 because with all the money printing, interest rates will not be able to drop too low, and probably will be higher at year-end 2008 than at the beginning.

Crude Oil prices will have to fall unless the producers determine they wish to have a world depression. Already the economies of North America, Europe and some of Asia are slowing, and oil alternatives growing, which will pull down the oil price from its perch at almost $100/bbl. By year-end, I believe that prices will be much closer to 75 than 125/bbl.

I have no idea where equity prices will close the year at, but I suspect that as and when corporate earnings fall, due to write-downs, business failure affect, slowing economies, etc, there will be significantly lower prices in the interim. At the cycle lows of 2008 for the DJIA and Nasdaq Composite, I believe the levels will fall from 13264 to about 10000 and from 2652 to about 2000, respectively. But, frankly, forecasting major market index levels at times like this is a mug’s game since none of us knows how much money printing will happen among the major powers. As I say, I used to live in a modern $15,000 house and drink a six cent Coke. Money printing, taxation and wealth destruction via military conflict is one hundred percent the reason why the prices, apples to apples, are twenty times higher today. Share prices too are affected by money printing and inflation.

This morning, spot gold is up about +8 to roughly 843.50/oz, and the March USD is down -0.29 pct. March Palladium is weak, down -0.73 pct.

On the deal’s front, PHH Arval, a large mortgage and vehicle fleet company, has lost its $2 billion sale to GE and Blackstone because HB&B pulled the financing. I expect to see more of that.

Wrap Up

The New Year’s Junkanoo at the US Embassy party at Nick’s Iguana Restaurant was in fact an interesting one in that the parade didn’t start until 3:30am. I departed at 8:30am, having drunk coffee since 6am, still not having seen the Valley Boys. The Embassy staff was in good spirits, every one of them delightful people, and incredibly polite. I met the ambassadors, past and present, plus staff from customs, DEA, economics, etc.

The weather today in Nassau is the first nasty day in the past month, but it should blow over in a day. South Florida may get temps into the high 30’s, but with the Gulf Stream and being another 100+ miles south, I expect the low of the day will be about 60 and the high in the low 70’s, down from the usual 80-83. But it’s blowy, overcast and will probably rain.

I’ll just stay in and get more work done. :-)

Recently I received several unsolicited offers to join Team Cara in one capacity or other. Thank you and I will attempt to get back to all who wrote me.

Trader Geoff will write up the requirements in the trading area. We are looking for five geographically diverse full-time independent traders – Hong Kong, Singapore, Europe, etc.

Also, I am going to look for someone who is a former business editor, probably retired now, who could help me with copy edit of investment research and manuscripts for three books I’d like to publish in 2008 (ie, one of my resolutions).

One project I want to start this month… is to prepare a report on how the Cara Community has been affected by participating here… Some of you have stated that learning patience was the biggest factor. Others have pointed to how important you have found looking at the cause-and-effect paradigm, or at the big picture.

One factor in your success is that many of you now have learned how to filter info from sales discussion. For some reason, the mainstream media thinks that well-informed investors and traders have interest in hearing self-interested promoters. I mean, today the public even clearly sees when the supposedly independent media are grinding axes, and these media personalities are shocked that we call them clowns for doing so.

I think 2008 will be possibly my busiest year ever, so retirement isn’t as bad as I thought it might be. LOL

Given that the DJIA is now at 8149 (down -38.6% from 13264) and the NASDAQ is 1398 (down -47.3% from 2652), and that C has fallen -76.8% from 27.89 to 6.45, and BAC is down -67.1% from 39.02 to 12.85, I think my pessimism to start the year was justified.

Yes, financial institutions have failed – the biggest ones in fact – and yes, the rest are worried they won’t get paid. Yes, Crude Oil has moved from 100 to 50, which is closer to 75 than 125. Yes, both the $USD and $GOLD is stronger than most thought it would be. And, yes, there has been $1 trillion or more pumped into the system by the monetary authorities, with no end in sight, as active printing presses (ie, debt monetization) emerge.

But, mostly, my forecast was right because “many of you now have learned how to filter info from sales discussion… (and can clearly see) self-interested promoters (like the Administration, the bankers, Financial Entertainment TV and even the supposedly independent media) have been grinding axes, and these media personalities are… clowns for doing so.”

Just for the record, as they say.

Daily Report for Tue, Dec 02, 2008

Markets Re-cap

From Thursday Nov.20 (DJIA =7997.28) there was a substantial +10.4% lift to the 8829.04 close on Friday. So, while yesterday’s loss of -7.7% in the DJIA index was literally a melt-down, it only partially offset the previous four and a half day melt-up. Today promises higher equity prices if DJIA futures and European bourse trading are any indication.

]]> Panic in; panic out; panic in… Selling volatility, ie, shorting the puts after a pull-back and the calls after a rally has been a spectacular trade. I am sure the banker’s prop trading desks are earning their mega-billion bonuses we are soon to be reading about.

Monday’s economic data included the ISM Report on Manufacturing and Construction Spending, both of which were below expectations. Interestingly, the National Bureau of Economic Research reported that the US entered a recession in December 2007. Today’s economic data calendar is a light one with only Auto sales, Weekly Chain Store Sales data and Redbook data expected, and we know it’s not going to be uplifting.

To start the week, the DJIA (-679.95 -7.70% to 8149.09), S&P 500 (-80.03 -8.93% to 816.21), and NASDAQ Composite (-137.5 -8.95% to 1398.07) fell more in a single day than anytime since Black Monday Oct. 19, 1987.

The Toronto Composite (-864.4 -9.32% to 8406.21) was even worse; however, the Venture Board (-27.2 -3.55% to 739.12) got off easier.

Most of the selling, apparently, is coming from redemptions at mutual and hedge funds. Of course, there are hedge funds that have now stopped permitting redemptions, which shows the credibility of that business model.

In NY, there were no sectors better than the defensive pair of Health Care (XLV) and Consumer staples (XLP) but even these plunged -5.1% and -5.5% on the day. The extreme losers were the Financials (XLF -16.7%) and, to a lesser extent, the Energy sector (XLE -10.6%).

The worst hit industries among the Financials were the REITs ($DJR -19.3%), Broker-Dealers ($XBD -17.5%) and Banks ($BKX -17.4%), while Oil Services ($OSX -15.9%) helped sink the Energy complex.

Among the Banks and Brokers, where we all know the credit ring is broken and that Credit Default Swap contracts may not be settled when due, the losers were Morgan Stanley (MS -23.1%), Merrill Lynch (MER -23.4%), Citi (C -22.9%), Bank of America (BAC -20.9%), Wachovia Bank (WB -20.5%), JP Morgan (-17.5%) and Goldman Sachs (GS -16.8%).

Once upon a time in America… there were solvent banks. Now they are all fraudsters.

In the Cara 100, there were 100 losers on the day, which adds up to zero winners. The worst of the lot happened to be Brunswick Corp (BC -25.8%), Teck Corp (TCK -20.1%) and Tata Motors (TTM -17.6%).

If your bank is insolvent, why not take down the best clients with them. Then the US Treasury, ie, taxpayer, is forced to bail out everybody, and the government gets to call it a stimulus plan. Not!

International equity markets in the Asia-Pacific region were hammered as well: Australia (-4.02%), Hong Kong (-4.98% to 13405.9), India (-1.14% to 8739.2) and Japan (-6.35% to 7863.7). Shanghai China was down just -0.26% to 1889.6, which sounds reasonable because they’re the ones with all the money. The “C” in China stands for Creditor Nation, ie, a country with a balance of payments surplus, and one getting stronger by the month.

Feb gold futures were knocked down this morning to 778.3 (up from yesterday’s close of 770.15) and oil to 49.25, which is flat with yesterday’s close.

But the DJIA equity futures have lifted and at 7:00am ET, European bourses were strong: French CAC up +1.47%, German DAX up +2.48%, and UK FTSE 100 up +1.28. Dead cat bounce, entry of value players or just the prop desks at Humungous Bank & Broke (HB&B) getting cranked up to whip-saw yesterday’s sellers? Take your pick.

Yesterday, there was panic in to the $USD, which lifted to 86.98 (+0.50%), and out of the Pound (-3.29% to 148.80), Euro (-0.61% to 126.17) and Cdn Loonie (-0.68% to 80.29). Debts in Japan were being repaid as the carry trade was unwound a bit during the day (Yen +2.67$ to 107.34).

For some ridiculous reason, there was a panic into the US 30-year long bond ($USB +2.33% to 131.62), which is now paying 3.236%. Over 30-years, that will be a disastrous pay-back return on one’s capital. The 10-year and 5-year Treasury Notes are paying just 2.719% and 1.723% respectively, but not respectfully. The 3-month T-Bill at an annual yield of 0.01% is not worth the electronic entry it’s printed on.

Comments:

I have already commented enough. President-elect Obama’s A-Team can’t arrive on the scene quick enough. Nobody cares any more. There isn’t a monetary authority in the US who has any authority. They just tell stories, and the public is no longer interested.

When they plan to do something about the CDS trade exchange and settlement problems is the only thing we want to hear. There cannot be a 2000 basis spread between corporate and Treasury debt, and have anything except corporate bankruptcies.

Interesting isn’t it that it will be the bankers taking these corporation down when themselves are insolvent and being pumped up by the people’s money – the very people who had been earning it legitimately by working for those corporations.

Oh my; only in America can people who should be indicted get a free pass to avoid prison, and stick around to bully the rest of us.

Tell me what’s the difference between Max (who rose to Commerce Secretary) and Paulson other than of course the Max of ‘Once Upon A Time In America’ was born a street kid and Paulson with a silver spoon in Palm Beach?

p.s. Sorry I earlier mixed Noodles and Max until somebody pointed it out. That movie -- the long version -- was probably my favorite one of all time.

SITE ADMIN NOTE:
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Links & Charts

International Economics Review

US Economic Calendar.

Knobias Cara100 Tables

Cara 100 Daily RSI-7 Charts

At least one RSI value >70:

At least one RSI value <30:

International Equity Markets Review

Europe

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

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

Here is the latest session data for the German DAX.

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

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

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

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.

NASDAQ Composite (interactive) chart

Here is the latest chart for the Shanghai Composite index .

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

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

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

US Equity Markets Review

DJIA (interactive) chart

Table 15: Dow 30 List

You can do this table yourself by entering the following string into the Summaries window at www.billcara2.com and then clicking on the link for Performance.

AA AIG AXP BA C CAT DD DIS GE GM HD HON HPQ IBM INTC JNJ JPM KO MCD MMM MO MRK MSFT PFE PG T UTX VZ WMT XOM

Here are the links to interactive Dow charts from Billcara2.com that I broke into groups of ten, which you can add technical indicators for as well. (list one) (list two) (list three)

The Americas

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.

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

Sector ETF Summary for the US equity market

The tables I show in this section are for ten (GICS) Sector Index Funds (ETF's) only, but they cover the full spectrum of the US equity market.

Table 1: Cara ETF List

For a list of components to any ETF, go to the AMEX.com web site, and click on ETF's.

10 (energy: XLE)

Table 2: Senior oil & gas equities

15 (basic materials: XLB)

Table 3: Senior metals and steel equities

Table 13: Senior gold equities

20 (industrial: XLI)

Table 4: Senior capital goods makers and transportation

25 (consumer discretionary: XLY)

Table 5: Senior consumer discretionary equities

30 (consumer staples: XLP)

Table 6: Senior consumer staples equities

35 (healthcare: IYH)

Table 7: Senior healthcare equities

40 (financial: XLF)

Table 8: Senior financial company equities

45 (technology, semiconductor: SMH)

Table 9: Senior technology equities

50 (telecom: IYZ)

55 (utilities: XLU)

Table 12: US Utilities

International Equity Market USD-denominated ETF Review

Table 14: International equities perspective

Japanese equity market ETF: EWJ

Here is the Japanese (EWJ) equity market ETF Daily data charts:

Interactive EWJ Daily data:

Interactive EWJ Weekly data:

U.K. equity market ETF

Here is the United Kingdom (EWU) equity market ETF Daily data charts:

Interactive EWU Daily data:

EWU Daily data:

Interactive EWU Weekly data:

Canada's equity market

Here is the Canadian (EWC) equity market ETF Daily data charts:

Interactive EWC Daily data:

Interactive EWC Weekly data:

Bonds & Yields Review

Table 10: Yahoo Finance U.S. Treasury Debt, Municipal and Corporate Bond Yields

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

US Bond Funds -- Interactive Daily Data Charts

SHY Daily data series chart:

IEF Daily data series chart:

TLT Daily data series chart:

AGG Daily data series chart:

LQD Daily data series chart:

TIP Daily data series chart:

Table 11: Interest-sensitive securities

Consumer Finance -USA -- Interactive Daily Data Charts

Commodities Review

$CRB Index

Open Futures Contracts

Interactive Chart of Daily CRB Commodities Index:

Interactive Chart of Weekly CRB Commodities Index:

Oil Review

Here is the e-miNY Mar-08 Crude Oil chart.

Interactive Chart of Weekly Crude Oil:

Gold & Precious Metals Review

Interactive Chart of Daily Gold EOD Continuous Contract Index:

Interactive Chart of Weekly Gold EOD Continuous Contract Index:

Interactive daily data

Interactive Chart of Daily Silver EOD Continuous Contract Index:

Interactive chart of the Silver Bullion index.

Interactive Chart of Weekly Silver EOD Continuous Contract Index:

Spot platinum chart for the past three days

Interactive Chart of Daily Platinum EOD Continuous Contract Index:

Interactive Chart of Weekly Platinum EOD Continuous Contract Index:

Interactive chart of the Platinum metal index.

Spot palladium chart for the week

Interactive Chart of Daily Palladium EOD Continuous Contract Index:

Interactive Chart of Weekly Palladium EOD Continuous Contract Index:

Interactive chart of the Palladium metal index.

Interactive Chart of Weekly Copper EOD Continuous Contract Index:

Interactive Chart of Daily Copper EOD Continuous Contract Index:

Interactive chart of the Copper metal index.

Table 13: Senior gold equities

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

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

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

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

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

Here are the key Silver miners and the SLV ETF:

SLV SIL CDE HL PAAS SSRI SLW MGN

Interactive Daily data
Interactive Weekly data

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

Interactive Chart of Daily U.S. Goldminers Index:

Weekly U.S. Goldminers Index:

Interactive Chart of Weekly U.S. Goldminers Index:

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

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

GDX Daily data:

GDX Weekly data:

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

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

Interactive Chart of XGD Daily data:

Interactive Chart of XGD Weekly data:

Forex Review

Here is the chart of the week's trading in the $USD.

Interactive Chart of Daily U.S. Dollar Index:

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

Daily British Pound Index:

Daily Japanese Yen Index:

Daily Canadian Dollar Index:

Wrap-up

Daily Report for Mon, Dec 01, 2008

Daily Report

The blowing up of credit spreads, as seen in the attached graphic, is an indicator of the level of risk aversion in today's capital market. Without solving the credit crisis, there is likely to be profit-taking following every brief period of bullishness. We are seeing that today.

]]> Corporations can't afford a 2000 basis point credit spread, which is double previous worst case scenarios. Without a solution to the credit crisis, there will be a flood of Chapter 11 bankruptcies in the US. There will also be an extended period where traders remain earning nil income from US Treasury Bills, which is a destruction of wealth.

On October 16, I published a Survivor's List of zero or low debt companies that appeared to my Belgium-based colleague Pascal Willain and I to be stocks worthy of consideration during the long-term cycle bottoming process in equity markets.

http://www.billcara.com/archives/2008/10/help_with_your_trading_plan_th.html

Hopefully, the Obama A-Team can attack the credit spread problems.

Links & Charts

International Economics Review

US Economic Calendar.

International Equity Markets Review

Europe

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

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

Here is the latest session data for the German DAX.

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

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

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

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.

NASDAQ Composite (interactive) chart

Here is the latest chart for the Shanghai Composite index .

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

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

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

US Equity Markets Review

DJIA (interactive) chart

Oil Review

Here is the e-miNY Aug-08 Crude Oil chart.

Gold & Precious Metals Review

Weekly International Economic Report .

Forex Review

Here is the chart of the week's trading in the $USD.

Cara's Commentary & Community Chat, Mon., Dec. 1, 2008, 6:37am ET

US Economic data this week will likely hold back last week’s market advance. While everybody expects Tuesday’s vehicle sales report to be a bad one, the harshest data is likely to come from this morning’s (10:00am ET) order book in the manufacturing data, and in the rising unemployment to come in Friday’s employment data.

]]> The Asia-Pacific and European markets started the week on a negative note, and the $USD futures are up; while the US equity futures are down and it appears that the T-Bill yield will come under further pressure.

As I suspected as much when I was writing the WIR on Sunday morning, I gave the heads-up:

For $GOLD, the 50d MA is now 798.33, so the current 819 price may represent a break-through. The 200d MA is 875.05. However, there are issues to be resolved… The palladium, platinum, silver and copper prices did kick into gear this week, which supports the move in gold. But, I also need to see bond yields rise a bit and the $USD to fall before I am really convinced that the initial seven-session rally is sustainable into a two or three month one… As always, we need to watch prices by the minute, by the hour. It will be interesting to see if the $USD falls here, which would sustain the goldminer rally, or whether the $USD pops up and the goldminers are collared.

At this point, the $USD has strengthened to 86.90 and spot gold has dropped -18.30 to 793.50.

In other words, the volatility continues. A few days of panic in, followed by a few days of panic out.

I will leave the Daily Report until after 9am to watch for breaking news, if any. Then I anticipate lower prices for equities until at least after the results of the Treasury auction is completed at 1:00pm ET.

SITE ADMIN NOTE: We are switching to the new blog today. We will continue making posts on both for a while to avoid causing problems for people, but comments will be moved over to the new site TODAY. Go over to caracommunity.com, set up an account, and give it a shot.

You can give suggestions or mention problems in the comment thread, by clicking on the "contact author" link next to a comment of mine, or by emailing me at jeff at billcara dot com. Thanks!

FYI, the link to this post on the new site is here.

Week in Review #48 (2008-11-30)

Trader appetite has changed. This was a week in the market when traders turned aggressive, taking on more risk.

]]> In this Week In Review, I’ll look at market structure again. But rather than focus on the GICS coding system, we’ll look at specific stocks and see how they fit in the food chain.

Commenting on the Canadian market in particular, my associate Pierre Brodeur sent the message that his quant work was showing that

“In the past few days, many short and ultra short sectorial ETFs have been “biting the dust” as their bullish support lines have been broken. (Mining and gold) are now in bull mode while the Bearish Canadian Energy sector is now standing on its bullish line ready to break. Finally, the TSX Bullish % reversed into a column of X yesterday which is testimony that: (1)- More and more market participants “believe” that this upswing is different this time, and (2)- Upswing is finally more broad-based as the mid and small caps are starting to participate. Conclusion: Now is the time to modify the strategy from being defensive (capital preservation) to a capital appreciation strategy.”

A few days earlier, I too believed the move was about to start, so after the close of the market on Wednesday November 19, I gave you the “Trade of the Generation (TOG)”. I recommended selling bonds, and buying gold/goldminers.

To this point, after just five and a half sessions in the US, the gold trade has been spectacular to the upside. In a short time, so too will the bonds break out – only I believe they will sink in price as yields rise. That will happen, I think, when the $USD starts to sink as the various US bail-outs and economic stimuli plans are kicked into gear, which will be more aggressive than the rest of the world. After all, it is the US-centric Credit Default Swap problem at Citi, Bank of America and JP Morgan that is the source of the global financial problems.

Here are the charts of $GOLD (819 up +$83/oz from 736 at TOG or +11.3% ) and $XAU (101.59 up +29.16 from 72.43 at TOG or +40.3%) as rayg reported a week ago had already started,

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

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

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

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

On Wednesday November 12, I gave you my Report on Goldcorp (GG). When the price had dropped below our $18.90 stop to $17.75, I wrote an ADDENDUM to the blog entry precisely as we went long again on GG. I stated that with put writes our cost basis was well under $17. Ten and a half trading sessions later, GG closed at $26.97 (+58.8%).

With put and call option strategies, you would have made a satisfying three-year Bull market performance target in less than two weeks.

[Deleted section: I do work 100 hour weeks -- now for three months on end -- and sometimes I get pissed at the stupid letters I occasionally get. I don't edit my stuff, and today I was rushing and didn't re-read a word. So I put in material here that on second thought should not have been published. Let's leave it at that.]

Btw, please note that in the price performance tables in the Saturday report and in this Week In Review (WIR), I used the 1-week performance that represents the past five sessions, which extends to the prior Friday price changes for US data because of the Thanksgiving holiday on Thursday.

I do have a system that facilitates both calculations, but I use the 5-day week for comparative studies. For some of you, there is clearly fault to my logic if you are using these tables to compare apples to apples, ie, the tables from week to week! Of course, that’s only if you are following only the US stocks.

So W/W for our purposes means the past five trading sessions. As the previous Friday was one that was up +6.54% for the DJIA, +6.32% for the S&P 500 and +5.18% for the NASDAQ Composite, the calculations you see in this WIR will be materially different than those for the three-and-a-half trading sessions in the US this week. The Canadian data is ok because there were five full trading sessions this week.

However, it is what it is. I do all this work by hand, and do not have the time to show multiple views of the data.

Global Economics Review

I encourage everybody to read these reports from Econoday and discuss them in the Discourse. Please check the publishing date if you are looking for the latest data. The current issues, when posted, are good ones.

Here are the key US economic reports and the Econoday analysis from last week.

US Economic Calendar.
US Existing Home Sales data for October. Econoday reported, “Home prices are now breaking lower in what is certain to further intensify pressures on foreclosures and the banking sector. The median sales price of an existing home fell a very steep 4.2 percent in October to $183,300, a level last seen in first quarter 2004. The year-on-year decrease of 11.9 percent is the worst in 10 years of available data. New home sales data for September showed a similar year-on-year decline… Selling rates in today's report are less alarming. The annual unit sales rate in October did fall to 4.98 million but the rate is above most of the monthly rates this year and is only 1.6 percent below a year ago, a comparison, in a rare positive, that suggests the sector may be bottoming. But supply on the market remains extremely swollen, at 4.23 million units for 10.2 months of supply, up from 10.0 in September… Distressed sales continue to inflate supply and deflate prices. The report said 45 percent of sales are foreclosure related, this is up from prior months. Stocks rallied on the report which, despite all the negatives, does show stable rates of sales and quiets, for now, concern that buyers, rattled by the drop in prices, are breaking purchase agreements.”
US Durable Goods Orders for October. Econoday reported: “Durable goods orders in October plummeted by more than double market expectations, pointing to a deep decline in the economy in the fourth quarter. Durable goods orders dropped 6.2 percent in October, following a 0.2 percent decline in September. The fall in the latest month was far worse than the market forecast for a 2.6 percent decrease. Excluding the transportation component, new orders fell 4.4 percent, after declining 2.3 percent the month before. The consensus had forecast a 1.5 percent contraction… The drop in October was led by transportation and primary metals, which fell 11.1 percent and 12.6 percent, respectively. Declines for the latest month were widespread - every major industry group fell in October. The credit crunch and gloomy economic outlook have hit business investment. The outlook for capital equipment spending is not good as nondefense capital goods orders declined 3.6 percent after a 1.0 percent decrease in September… Year-on-year, new orders for durable goods worsened to down 10.6 percent in October from down 4.6 percent the previous month… The decrease in the October headline number indicates that the current contraction may be worse than many have built in.”

US Personal Income and Outlays for October. Econoday reported, “The October personal income report showed consumers pulling back sharply on spending. Meanwhile, headline inflation fell as core inflation came to a standstill. Personal income in October posted a moderate 0.3 percent gain in October, following a 0.1 percent rise in September. The October rise was above the consensus projection for a 0.1 percent increase. But strength for the month was temporary and due to a rebound in rental income. Rental income had been depressed in September due to hurricanes. Payroll income, however, was soft. The wages and salaries component nudged up 0.1 percent, following a 0.1 percent dip in September… Consumers cut back on shopping in the latest month as personal consumption expenditures plummeted 1.0 percent, following a 0.3 percent decline the month before. The October number came in just below the forecast for a drop of 0.9 percent. Weakness in the latest month was led by durables which fell a monthly 4.0 percent with nondurables dropping by 2.5 percent. These were from decreases in auto and gasoline sales. Services spending edged up only 0.3 percent. On the inflation front, the headline PCE price index dropped 0.6 percent after rising 0.1 percent in September. The core PCE price index was unchanged, following a 0.2 percent rise in September. The market expectation was for no change in the October core index… Year on year, personal income growth was little changed at up 3.3 percent, compared to up 3.2 percent in September. Headline PCE inflation slowed to up 3.2 percent from up 4.1 percent the prior month. Core PCE inflation slipped to 2.1 percent from 2.4 percent in September. Both headline and core PCE price inflation are headed closer to the Fed's implicit inflation target range of 1-1/2 to 2 percent annualized. Continued weak oil prices and soft consumer spending likely will get inflation within the Fed's target within a few months. If you believe the reports that the Fed will ease further from the current 1 percent Fed target, today's news certainly keeps the door open for such a move… The October personal income report clearly shows further retreat by the consumer sector. Fourth quarter spending in real GDP is likely to fall significantly. Today's news should be a negative for equities - especially in light of how bad today's durables orders report was.”

US New Home Sales data for October. Econoday reported, “New home sales are breaking down further, bringing in line the whole host of housing indicators to indicate deepening contraction in demand and deep contraction in prices. New home sales dropped to an annual rate of 433,000 in October, down a very steep 5.3 percent on the month and down 40.1 percent from a year ago. A level comparable to 433,000 was last seen in the 1991 recession, more than 17 years ago. The 40 percent year-on-year drop isn't a record but it's very near a record in more than 40 years of available data… The median price for a new home fell 1.7 percent in the month to $218,000, a level 7.0 percent lower than a year ago. The year-on-year decline is actually an improvement from the prior month but future improvement, given the decline in sales and a swelling in supply, is unlikely. There were 381,000 new homes on the market in October, down a record 8.0 percent from the prior month but, when compared against the sales rate, actually shows deterioration, at 11.1 months of supply vs. 10.9 months in September. Stocks fell in immediate reaction to the report, a report that tops off a morning of deeply troubling data.”

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

How is next week’s calendar looking?

US Economic Calendar.
US Construction Spending data for October. Under the Obama Administration economic development program, I anticipate more weight will be given to this report. After the release of the September data, Econoday reported, “Construction spending in September declined but not as much as feared. Construction outlays fell 0.3 percent in September, following a revised 0.1 percent dip in August. The September decrease was less than the consensus forecast for a 0.8 percent drop. But July and August numbers were revised down notably. Weakness in the latest month was led by declines in private residential and public construction - both fell 1.3 percent for September. The private nonresidential component rebounded 1.2 percent… Within the residential component, single-family construction dropped 4.7 percent after a 4.0 percent fall in August. Multifamily outlays posted a partial rebound of 2.7 percent, following a 6.6 decrease in August… Leading the rebound in private nonresidential construction were a 5.2 percent turnaround in manufacturing and a 2.5 percent rise in power construction outlays… On a year-on-year basis, overall construction outlays were unchanged at down 6.6 percent in September… Today's numbers show construction still on a downturn. Tight mortgage credit, pullbacks in investment by businesses, and weak revenues for state and local governments point to continued negative numbers in coming months. For today, the dip was less than expected but focus will be a very negative ISM manufacturing number.”
US ISM Manufacturing Report for October. After the September data was released, Econoday reported: “In deeply recessionary results, the ISM's manufacturing index fell to 38.9 in October, down nearly 5 points from September and far below the break-even 50 level to indicate that a much greater share of purchasing managers are reporting weakness than strength. Readings are alarming, down to levels last seen in the early 80s. Order data have come apart, pointing to quarter-to-quarter contraction for the manufacturing sector: new orders 32.2 Oct. vs. 38.8 Sep. and backlog orders 29.5 vs. 35.0. Even export orders, which had held solidly above 50 and had been the report's only highlight, fell 11 points to 41.0 in a reflection of dollar strength and weakening demand from foreign economies. Production fell nearly 7 points to 34.1 with employment in lockstep at 34.6 for a drop of more than 7 points. The drop in demand is backing up inventory where readings show pressure… The prices paid reading confirms weakness in demand, down more than 15 points to 37.0. The outlook for the manufacturing sector is definitely a concern for the whole economy, largely the result of weakness in domestic consumer demand. Keep a special watch this week for vehicle and chain-store reports as early indications point to similar trouble seen into today's ISM report. There was limited reaction to the report though money did move into Treasuries.”

US Motor Vehicle Sales for November. After the October data was released, Econoday reported, “In shockingly weak numbers, total domestic-made light vehicle sales came in at a pathetic 7.7 million annual unit sales rate. The rate is the lowest since the early 80s, also a time of recession. The car rate of 3.9 million is the lowest yet in data going back to 1967. The 7.7 million rate compares with 9.5 million in September and points to a major decline in the motor vehicle & parts component which makes up about one fifth of total retail sales. Vehicle sales are contracting faster than other retail sectors and are making up an ever thinning proportion of total sales… Total sales, based on comments from retailers, are also likely to be a disappointment in October. Total retail sales contracted in August and September and a contraction in October would be the first string of three since, once again, the early 80s. Markets showed no reaction to the results which nevertheless offer the first hard evidence of retail disappointment for October.”

Sales for all vehicle manufacturers in the world are down. In fact, the ratings for Toyota Motor were cut this week from AAA to AA, which affected the price of a Toyota bond I hold in my own account.

US Productivity and Costs data revised for Q3. After the earlier Q3 data was released, Econoday reported, “Productivity and labor costs in the third quarter deteriorated, reflecting a drop in output and jump in compensation. Third quarter productivity slowed to an annualized 1.1 percent increase, following a 3.6 percent gain in the second quarter. The third quarter rise was above the market forecast for a 0.8 percent annualized gain. The stronger-than-expected positive number was due to hours worked falling more than output. Meanwhile, unit labor costs rebounded to a 2.3 percent annualized increase, following a modest 0.8 percent rise in the second quarter. The third quarter cost figure was higher than the consensus projections for a 2.8 percent boost… Compensation per hour jumped 4.7 percent, after a 3.5 percent hike in the second quarter… Year-on-year, productivity was up 2.0 percent in the third quarter, following a 3.2 percent increase the prior quarter. Year-on-year, unit labor costs in the third quarter stood at up 2.3 percent, compared to up 0.8 percent for the second quarter. Compensation rose 4.3 percent on a year-ago basis - up from 4.0 percent in the second quarter… The latest productivity and costs numbers largely reflect businesses adjusting to the current recession. Hours worked are being but back as output falls. The jump in compensation is good for consumers but that growth is not likely to last. Overall, the numbers are not good for either equities or bonds.”

US ISM non-manufacturing report for November. After the October data was released, Econoday reported, “The biggest news from a very weak ISM non-manufacturing report is a more than 3 point drop in the employment index to 41.5. This is a record low for the index which tracks very closely with actual payroll changes and points, as do a host of other indicators, to big trouble for Friday's employment report. Other readings included a nearly 6 point drop in the headline composite index to 44.4, and similar drops in the business activity and new orders indexes. Prices paid fell back nearly 20 points to 53.4, further confirmation of weak demand and pointing away from the risk of inflation. Money moved into Treasuries and out of the dollar in immediate reaction to the report.”

The Bank of England (BoE) and European Central Bank (ECB) report their latest monetary policy on Thursday morning at 7:00am ET and 7:45am ET respectively. As the Fed is cutting the key rate in the US, these other major banks must follow, but they are reluctant to do as much because they know that the US problems have been exacerbated by CDS holdings and imprudent lending by Citi, Bank of America and JP Morgan, primarily. Ultimately, the pressure on the Euro and Pound will be less, which will help boost the precious metal and commodity prices. As the Fed rate is almost zero, and the credit spreads between corporate debt and US Treasuries is so wide, the Fed will soon have to raise the key lending rate, and Europe will soon follow. Even though there is a clear and nasty recession in most major economies, and deflation of real estate, commodity and equity prices has presented a problem, it is also a concern that inflation is not yet under control and that the monster reflation policies of the G-20 countries will sooner or later result in a boost to the inflation numbers. Bond yields, then, will have to rise, and prices fall, at some point in the next few months.

US Factory Orders for October. After the September data was released, Econoday reported, “The plunge in energy prices may be a plus for the economic outlook but it sank the dollar value of orders for nondurable goods in September and in turn for total factory orders which fell 2.5 percent. Orders for nondurable goods fell 5.5 percent in the month following a 3.2 percent plunge in August. Orders for durable goods actually rebounded in September, up 0.9 percent vs. a 5.5 percent plunge in August and against an initial estimate of a 0.8 percent gain… There are no details offered in this report for nondurable goods but a rehashing on the durable side is in order given deep concern over the health of the manufacturing sector, concern heightened by a rare 30 handle for yesterday's ISM index. Orders for defense and transportations goods propped up the month though orders for nondefense capital goods, reflecting strength in machinery, were strong. But other categories were weak including furniture, computers and primary metals. Manufacturers in the latter category have been on the news wires warning that conditions plunged in October… Other readings in the report include a 2.8 percent drop in total shipments. Shipments, which were down also in August, are of course when sales are tallied and when the data are registered in the GDP accounts. Unfilled orders are still a positive, up 0.4 percent in the month and showing no sign yet of cancellations. Inventories fell back 0.7 percent which is an important positive that reduces the risk of overhang, a greater risk than ever given the prospect of weakening orders and weakening shipments… The end of the Boeing strike and replacement demand tied to the Hurricanes Ike and Gustav may give a lift to factory data in October and through year end. But the lift is not likely to be enough given the collapse underway in retail sales, which of course will cut demand for consumer goods and the machinery and materials needed to make them. There was no reaction in the financial markets.”

US Jobs Report for November. After the October report was released, Econoday reported, “The October jobs report came in significantly worse than expected - showing an acceleration in the pace of contraction for the economy. Nonfarm payroll employment in October plummeted another 240,000, following a revised drop of 284,000 in September and a revised decrease of 127,000 in August. Payroll jobs have fallen for ten consecutive months. The October decline in nonfarm employment was notably worse than the market forecast for a 200,000 decrease. The August and September numbers were revised down a net 179,000. For the year-to-date, the economy has lost 1.2 million jobs net.

Indeed, the October report shows labor market weakness spreading. The latest job losses were widespread with few positives. The October drop was led by manufacturing and construction which fell by 90,000 and 49,000, respectively. Rounding out the goods-producing sector, natural resources & mining rose 7,000 in the latest month… Service-providing jobs fell 108,000 after sliding 201,000 in September. In this category, trade & transportation dropped 67,000 while professional & businesses services declined 45,000. The only major categories with gains were education & health services and government-up 21,000 and 23,000, respectively… On a year-on-year basis, nonfarm payroll employment growth worsened to down 0.8 percent in October from down 0.5 percent in September… Average weekly hours were unchanged at 33.6 hours in October… However, wage inflation is holding steady and is a little on the soft side. Average hourly earnings posted a 0.2 percent rise in October, matching both the boost the month before and the market forecast. Year-on-year, wages were up 3.5 percent in October - firming only slightly from 3.4 percent in September… Turning to the household survey, the civilian unemployment rate jumped to 6.5 percent in October from 6.1 percent the month before. The latest number was higher than the consensus forecast for a rise to 6.3 percent and was the highest since 6.5 percent set in March 1994… The October employment report shows the economy in a significant recession. The numbers should weigh heavily on equities and likely result in flight to safety with Treasuries. More specifically, we can expect more retrenchment by the consumer sector over job losses and fears of job losses. It is likely to be a disappointing holiday season for retailers.”

The macro-economic data paints a dour picture, which well-known economists are using to their advantage as they flock to Financial Entertainment TV to raise their personal profiles. That may help sell their books and seminars and elevate their standing back in the ivory towers, but it does little to nothing for their personal reputations.

If these people were better traders they would understand that capital markets have dislocated from fundamental, quant, technical AND macro-economic data since the breaking of the credit ring, which caused Bear Stearns and then Lehman Brothers to fail, and almost took down Citigroup, recently the world’s biggest financial services company. Forced selling because of a breakdown in the credit markets has literally destroyed hedge funds and turned the mutual fund market on its head.

During this process, the only contribution most economists have made is to throw matches on the fire we all see. The pensions of Mom & Pop are being driven to pathetic levels and I put some of the blame on these “big-name” economists. At some point, these people should consider the bigger picture, which is that society’s values have been severely harmed by personal greed, economists included.

An exception to that statement is the work of the Econoday team, which is a superlative educational service, I find. Also, the Merrill Lynch North American economist David A. Rosenberg I have long noted as being a superb source of analysis and commentary. And, to be honest, there are many others.

In summing up this point, I’d like to say that, while it’s fine to be passionate about your job, we need to deal with reality. Traders should no more listen to a spouting-off economist at this point than expect a bush league driver to win a Formula One Grand Prix race. I’ll leave it at that.

The traders for the biggest capital pools in the world are out on the track fighting for their careers and it has zero to do with macro-economics. We are dealing with market prices, and we know that maybe never again will there be W/W gains in large cap stocks like C +76.0%, BAC +44.4%, JPM +35.4%, GE +33.7%, BHP +62.6%, AA +57.1%, VZ +23.2%, MER +66.1%, MS +60.3%, DB +56.3%, UBS +51.0%, CS +55.8%, and NUE +39.8%.

Although the economic commentary, for the most part, is in one ear and out the other, clearly some of us traders still review the underlying macro-economic data because it helps us stay grounded.

US Equity Markets Review

DJIA ino.com chart

DJIA stockcharts.com chart

NASDAQ Composite ino.com chart

NASDAQ Composite stockcharts.com chart

Here is the list of the ten highest-weighted non-financial stocks in the NASDAQ Composite. Put them in a watchlist (see Google Finance Portfolio) and watch them like a hawk:

AAPL MSFT GOOG QCOM RIMM CSCO INTC ORCL GILD EBAY

Daily RSI-7 for the Nasdaq 100 Big-10

Weekly RSI-7 for the Nasdaq 100 Big-10

Monthly RSI-7 for the Nasdaq 100 Big-10

At the close Friday, the DJIA (+9.73% W/W to 8829.04), S&P 500 (+12.03% to 896.24), NASDAQ Composite (+10.92% to 1535.57), and Russell 2000 small cap index (+16.38% to 473.14) were extremely strong.

The story of this market continues to be volatility. The big difference, however, is the money flow into Financials (XLF +34.82% W/W), Energy (XLE +25.83%), Telecom (IYZ +26.09% W/W) and Consumer Discretionary (XLY +19.40% W/W).

All 30 of the DJIA index components had big weeks, with the leader, GM, up +81.94% W/W, and the laggard, JNJ, being up +4.96% W/W.

A week ago in this space, I wrote, “There are people who actually say that market timing is not important! How prices will move on Monday at the open will be seen at that moment, but my feeling is that there will be a significant rally if the Tim Geithner to Treasury story is factual, as it appears to be. Former Treasury Secretary Larry Summers (under Clinton) will be heading up the National Economics Council. The bankers would be pleased.”

I also added a warning:

Somebody in the Obama Administration, hopefully, will appreciate the difference between a financial service and the capital market. The one is largely based on credit and debt and the other largely based on assets and equity. Any solution to resolving the issues of the day must be rooted in attacking the conflict of interest issue. There must be checks and balances in any system that involves money. Self regulation of bankers and broker-dealers has proven a disaster… If you disagree, then try to explain how Credit Default Swaps came to be and how the financial, business and economic crisis that all governments are facing today could have been avoided (after the CDS contracts were allowed to get out of control).

For equities to continue to prosper, the pre-requisite is a healthy credit market. That is not the case today.

Sector ETF Summary for the US equity market

All country ETF’s were up over +10% W/W. There were some absolutely monstrous gains. Brazil (EWZ) was up +29.2% after having plunged -15.0% the week before. Russia (RSX) gained +37.1%. Australia (EWA) gained +24.6%.

A week ago I wrote, “Thankfully, the equity market is close to a bottom, and many traders are beginning to see values in prices and that the quality of many corporations has remained intact.”

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

SPY Monthly data:

SPY Weekly data:

SPY Daily data:

The tables I show are for eleven GICS Sector Index Funds (ETF’s), including two for Technology (XLK and SMH), for a total of ten GICS sectors. They cover the full spectrum of the US equity market.

Table 1: Cara ETF List is sorted by price performance Week over Week (W/W), i.e. 1W%N.

You can do this table yourself by entering the following string into the Summary window at Billcara2.com and then clicking on the link for Performance. SPY XLE XLB XLI XLY XLP IYH XLF XLK SMH IYZ XLU . You can also add more ETF’s – up to 30 in total.

For a list of components to many ETFs, go to the AMEX.com web site, and click on ETF’s.

10 (energy: XLE)

15 (basic materials: XLB)

20 (industrial: XLI)

25 (consumer discretionary: XLY)

30 (consumer staples: XLP)

35 (healthcare: IYH)

40 (financial: XLF)

45 (technology, semiconductor: SMH)

50 (telecom: IYZ)

55 (utilities: XLU)

Individual Sector ETF Review

Sector 10 (energy: XLE, IYE, VDE, OIH, PBW and IXC)

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

XLE Monthly data:

XLE Weekly data:

XLE Daily data:

Table 2: Senior oil & gas equities

Crude Oil ($WTIC) closed the week up +$4.50/bbl (+9.01%) to 54.43.

This week, the Energy sector (XLE) gained +25.83% W/W to 50.28. There was a small loss (-1.60%) on Friday, which was the only losing sector on the day.

Exxon (XOM) gained +17.0% to 80.15 and was a laggard among the better quality, large cap oils. Two weeks ago I wrote, “This week, XOM was down just -0.4% W/W, including the loss of -2.3% on Friday. This one looks ready to lift back higher into the trading range.” Then a week ago I added, “This week, XOM was best in class, lifting +2.9% W/W… As I stated here two weeks ago, “I like the energy sector here, and I like XOM. I am not a believer that the economic recession and the future emphasis to be placed by the Administration on alt energy is going to break the business model. I love the financial strength, cash flow, earnings and dividends… I think as soon as the pressure comes off the Banks, the Oils will perform well. Could be this week if we can believe in the final hour Friday.”

Suncor (SU +46.3%), PetroBrazil (PBR +40.2%), Imperial Oil (IMO +39.9%), EnCana (ECA +36.4%), China National Offshore (CEO +32.7%), and PetroChina (PTR +28.4%) were the leaders.

Of course, the Financials were up +34.82% W/W, so the pressure was off!

Monthly chart

Weekly chart

Daily chart

Integrated Oil & Gas - Canada

Oil & Gas Exploration & Production -Canada

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

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

XLB Monthly data:

XLB Weekly data:

XLB Daily data:

Table 3: Senior Basic Materials:

Basic Materials (XLB +16.45% W/W to 23.15) had a strong week.

The superior quality companies and the Goldminers were soaring. For instance, BHP (BHP +62.6%), Alcoa (AA+57.1%), Gerdau Steel (GGB +55.2%), Teck Corp (TCK +55.2%), Mittal Steel (MT +52.3%), Nucor Steel (NUE +39.8%), and Vale (RIO +35.7%).

It is just shocking to me to be able to list these price gains. However, traders are not stupid. This is real money they deal in. Rio Tinto (RTP), for instance lost the control bid from BHP, and sunk -12.4% this week.

In addition, it was that $55 billion release of obligations from bankers to BHP for the RTP acquisition that took some substantial pressure off the banks this week.

Still, despite the massive gains this week in all the sectors, nothing much has changed from a week ago when I wrote, “The equity market clearly is not functioning as a value discovery mechanism. It’s more like a casino.” The smart play then, for the average trader, is to focus on the stocks of the highest quality companies, in particular those that have the strongest balance sheets.

The character of the equity market is likely to change to reward solid management, consistent revenue and cash flow growth, growing dividends, and so forth. Without the help from bankers, the mo-mo players and big-name acquisitors are not likely to be favored.

In this sector, BHP will likely be a winner, particularly if it uses its cash to buy back shares and raise its dividend. I like Teck Corp, but there is an issue of cleaning off a lot of debt built up from previous acquisitions, all of which were accretive, but perhaps not well timed in terms of what’s happened to the credit markets.

Among the goldminers this week, the big winners were the ones that followed the prior week’s surge in Barrick (ABX +43.0% W/W) and Goldcorp (+41.7% W/W), such as Yamana (AUY +61.4%), Buenaventura (BVN +59.3% -- note the closing hour rally!), Anglogold Ashanti (AU +55.7%, which did nothing on Friday), Harmony Gold (HMY +54.8%), Goldfields (GFI +54.2%) and Lihir (LIHR +51.1%).

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

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

XLI Monthly data:

XLI Weekly data:

XLI Daily data:

Table 4: Senior capital goods makers and transportation:

Industrials (XLI +15.55% W/W) closed at 23.11. They gained +2.17% on Friday, which was second best performer next to Financials (XLF +2.51% on the day).

Three big winners W/W were FLR +54.1%, ABB +41.8% and GE +33.7%. The laggards were UTX +12.3% and BA +14.9%.

A week ago I wrote, “But, like I wrote a week ago, “This is a sector I like for the 2008-2011 Bull market. You must be selective, but the G-20 economic stimulus packages will clearly help some of these companies.” Just try to avoid those with weak balance sheets, and financial services components… I like this sector.”

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

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

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

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

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

XLY Monthly data:

XLY Weekly data:

XLY Daily data:

Table 5: Senior consumer discretionary equities

Consumer Discretionary (XLY +19.40% W/W) closed at 20.49, including being up +6.86% on the prior Friday.

Two weeks ago I wrote, “The US Retailers though should be the key for traders to watch.”

$RLX was up +6.41% on the prior Friday. I wrote, “Keep an eye on it. I believe that as soon as the Banks signal their issues are under control, then I think $RLX will fly.” There were some big winners there in the three-and-a-half trading days this week.

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

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

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

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

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

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

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

Here is the StockCharts.com chart for $RLX.

The big winners this week were: CCL +39.8%, BC +32.2%, and JCP +32.1%. Less popular were WAG +8.3% and PG +8.5%.

Once the $USD falls (with debt monetization) there will be a new emphasis on locally produced goods for resale, which may change the consumer discretionary/retailing landscape. I should think about this more and report on it.

People constantly ask me where I get my research, and the truth is I don’t have time to read too much anymore. I just watch prices and think about markets in terms of the inter-relationships I understand.

In time, I intend to get one of the pro traders to catalog the in-bound broker-dealer research and to publish the highlights plus internal notes on the CTAB site. Clients will get access to the source material, but I will not make it publicly available. Hope you understand.

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

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

XLP Monthly data:

XLP Weekly data:

XLP Daily data:

Table 6: Senior consumer staples equities

Consumer Staples (XLP +9.71% W/W to 24.07) dropped from 2nd best performer to 10th of ten.

Consumer Staples (XLP), Healthcare (IYH) and (to an extent) Utilities (XLU) are considered “Defensives”. During market rallies, traders favor non-defensive sectors. This week, XLU (#8), IYH (#9) and XLP (#10) were the three worst performers.

In the first hour of a trading session, I will watch the relative performance of IYH and XLP (and similar ETF’s in these sectors) to the others: Financials (XLF), Consumer Discretionary (XLY), Tech (XLK and SMH), Energy (XLE), Basic Materials (XLB) and Industrials (XLI). The relative performance tells me how the day is likely to go.

Late in the session, I look at this again as an indicator of how the market is setting up to close.

In the Consumer Staples on this non-defensive week, the most aggressive stocks were likely to lead, and that was the case: Brazilian processed foods manufacturer Perdigão PDA soared +37.1% and high-end US food retailer Whole Foods Market WFMI lifted +25.5% while Walgreens drugstores WAG and personal products manufacturer Procter & Gamble PG were up only +8.3% and +8.5% respectively.

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

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

IYH Monthly data:

IYH Weekly data:

IYH Daily data:

Table 7: Senior healthcare equities

The Healthcare sector (IYH +9.73% W/W to 50.09) was second worst sector performer.

A week ago, I wrote, “AET plunged -24.2%. Anything to do with finance is getting hammered.” That was during a “defensive” week when traders were looking for safe havens and were avoiding financials. This week was the opposite.

So, in the “defensive” healthcare sector on this week where the market took a more aggressive stance, the leading three stocks on my monitor were what I expected: those having a financial/insurance component UNH +28.9%, WLP +20.9% and AET +19.2%.

The laggards were the pharma and consumer health products stocks: NVS +3.1%, DNA +4.9% and JNJ +5.0%.

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

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

XLF Monthly data:

XLF Weekly data:

XLF Daily data:

Table 8: Senior financial company equities

A week ago, XLF plunged -24.0%, which included a gain of +3.1% on Friday. The Big 3 banks in the DJIA index were losers #1, 2 and 3: C down -60.4%, JPM down -34.1% and BAC down -30.2%. It was all about the unwinding of a $55 trillion Credit Default Swap mess.

As I wrote, “The Fed can drop the rate to zero, and the Treasury can pump a couple hundred billion dollars into this group, but it won’t amount to squat… Yes, equities might rally, but the CDS issues must be resolved or else there will be another test of the lows.”

This week US equities rallied, and on Friday the $USD gained +1.1%. Many people think the problems are over. The media might even tell you that. Not!

You know; so much is published in the mainstream media that is orchestrated by the people who pull most of the strings in society.

This week, the WSJ published, “Under fire for his role in the near-collapse of Citigroup Inc., Robert Rubin said its problems were due to the buckling financial system, not the company's own mistakes, and that his role was peripheral to the bank's main operations even though he was one of its highest-paid officials.

"Nobody was prepared for this," Mr. Rubin said in an interview.” For more information.

The facts are that Citi, Bank of America and JP Morgan owned 95% of the CDS problem that caused the “buckling” of the financial system. Leading banker Robert Rubin was up to his neck in “the problem”.

Moreover, after the CDS product was created at JP Morgan in 1998, it was introduced to the Clinton Administration under Rubin’s watch as Treasury Secretary. Shortly after he departed the White House, Congress legislated the introduction of the CDS.

What this WSJ quote from Robert Rubin illustrates is simply that a b.s. artist feels he can re-write history. Ain’t so, Mr. Rubin. The truth is known.

Enron was once the biggest bankruptcy in world history. The banks were behind that mess when they orchestrated the offshore and off-book debt, deliberately hiding it, which has now been admitted, and some criminal prosecutions made and large fines paid. But the Bear Stearns bankruptcy, which happened because of the CDS problem, was multiple times bigger than Enron. After the patchwork, these bankers gave testimony and had their research departments publish reports that the problems were under control. Not!

It was only a matter of time before Lehman Brothers went bankrupt, which was a failure that dwarfed Bear Stearns, causing even more “buckling”. But the bankers then, for a while said the problem was owned by Lehman and its CEO Dick Fuld. Not! The CDS problem was still hanging over their heads, and pretty soon the bankers went to Washington, to their friend in Treasury, Secretary Paulson, and asked for help. Paulson agreed and got the Congress to back him. Everybody tried to call it an economic stimulus package. Not! More lies. We knew it was a bail-out of Wall Street banks.

Next, in a near-bankruptcy that would have dwarfed even Lehman Brothers, Citigroup -- recently the biggest financial services company in the world -- required emergency rescue. Treasury money was then paid to Citi, but, rescue from what? Nobody wants to admit that it is the CDS problem again. Citi could not settle its obligations. Without the US Treasury, the banking system is broke. No Japanese bank, no British, Canadian, French, German or Italian bank can expect to settle trades if Citi, Bank of america and JPM walk from their obligations. That's the problem.

Normally, the US banks go to their controller, the Federal Reserve Bank, for money. But, after using up all the liquidity from their $800 billion T-Bill holdings in exchange for worthless mortgage-backed securities, which are illiquid (ie, nobody else wants to buy them), the Fed has no money to dish out. Only because Paulson tricked Congress to have the Treasury backstop the Fed was the Fed able to issue some $4 trillion in guarantees. But without the Treasury behind it, the Fed is impecunious, as the lawyers like to say. That simply means hard up, penniless, unable to pay for the necessities. That’s the Fed today. They would love to raise the interest rates today to start earning some money, but (i) that is politically unacceptable, (ii) traders won’t borrow from the Fed, and will just avoid all forms of risk, and (iii) traders will borrow from abroad if they absolutely need to. So, the Fed is in a pinch.

So who better than the President of the New York Fed, Tim Geithner, to be called by President-elect Obama to run Treasury? Geithner knows the CDS problem better than anybody and, under Obama’s fresh new Administration he can make them transparent and start to work on solutions that the present Treasury Secretary and friends on Wall Street have refused to do.

This problem will be solved one way only. The Fed must monetize the debt. That means, in simple terms, a dime today will buy you a nickel’s worth tomorrow. The $USD will fall as more US Dollars are printed. Why is it that there are more thousand dollar bills in existence today than $100 bills? Because they are not circulated; they are printed to monetize debt.

It’s that bookkeeping thing where assets must equal liabilities. Today, those assets have been found to be (i) worthless securitized mortgages, car loans, student loans, and so forth, (ii) US Dollars, (iii) US Treasury bills, and (iv) the gold that is supposedly in Ft. Knox.

But (i) nobody wants to buy the securitized debt instruments unless they are discounted 80% or more, (ii) except for a brief period of $USD rally in a panic move to find a safe haven since July of this year, the value of the $USD dropped from 120 to start March 2002 to just over 70 just six years later, which is another way of saying that traders have fundamental reasons for not wanting to hold $USD, (iii) as of July of this year, when the $USD rallied, US T-Bill yields collapsed and are now paying zero, which is the only reason the $USD is strong, and as soon as T-Bill yields start reverting to a normal say +1.50% to 1.75%, the $USD will fall back from the current 86-87 range to 70 or even lower, and (iv) gold prices will soar.

To put a cap on this discussion, traders do not believe that gold futures contracts that are short will deliver this month. Nobody can buy the physical bullion, and the miners have stopped de-hedging, ie, they are holding onto production and neither selling it forward nor using it to pay down debts. Bankers are in a quandary. Guess who is short the gold?

So, all of this is to say that (i) the equity market rally is not going on forever (unfortunately there will be another test of the lows), (ii) financials, bonds and the $USD are in for a tough time, (iii) gold prices are going much higher, soon, along with oil prices, and (iv) Canadian equity prices, which are based on oil, gold and financially prudent bankers (who avoided this CDS problem), are, like the Cdn Loonie, going to outperform US equity prices and the $USD over the next few months.

Blame it on the bankers, and if you are looking for names, don’t look past Paulson, Dimon, Rubin…

I suspect that until the January Inauguration of President-elect Obama and the work-out plans of Tim Geithner in Treasury get announced, and the Q4 earnings reports are in (and the damage done), equity prices can only side-track at best – except for Energy, Basic Materials and Industrials. Of course there is a bit more fuel in the Obama rocket -- as long as he can keep those meaning news conferences rolling.

In the Oils, I like most of the high-quality names. In Basic Materials, I like the metals and precious metals, but the steels will do well too. In the Industrials, I like the major US exporters that enjoy pricing power as the $USD falls.

Some of those exporters are in the Tech industry as well.

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

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

SMH Monthly data:

SMH Weekly data:

SMH Daily data:

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

XLK Monthly data:

XLK Weekly data:

XLK Daily data:

Table 9: Senior technology equities

Tech (XLK +15.62% W/W to 15.25) and Semi-conductors (SMH +13.13% W/W to 16.63) were stronger, although both were down on Friday (along with Energy) despite the big rally.

What happened there was that the $USD was very strong on Friday. A lower $USD will push these prices higher.

In a fundamentally sound (ie long run) rally, the Semi-conductors should be leading the Techs higher.

A week ago I wrote, “STP -43.7%, SNDK -21.3% and FLSR -20.5% were all hammered. Anything to do with chips got smashed.” This week, however, STP +58.4%, SNDK +50.4% and FLSR +43.1% were the biggest winners. Panic out, panic in.

Actually, I think a lot of the volatility has to do with Wall Street programmed trading gaming the system. Here’s the likely story on that: hedge funds are closing all over the street. Investors have been pulling out. In a move to save their bacon, hedge fund managers have frozen liquidations and are using the remaining Assets Under Management (AUM) to shoot for the fences. Wall Street has become Casino City only the players are using Other People’s Money (OPM). They are also breaking contracts with their investors and I suspect are going to have their asses sued for their indiscretions.

Wall Street is out of control. The regulators are stunned, and have stopped working. Henry Paulson is no longer doing the job. The Fed had no money and is just waiting on Paulson to help it out, which is the reason Paulson changes his plans as fast as his underwear. The SEC is sitting with a lame duck chairman, seeming disinterested in getting involved in the ‘failure to settle’ and ‘illegal naked shorts’ problem. Congress has gone home.

Knock, knock. Anybody home? Obama’s home. He’s showing leadership by giving news conferences every day, which is helping. God helps us when Paulson speaks.

How ironic is it that bankers have marched the US citizenry into slavery and a black man is leading them back to freedom. Yes, there is hope for social equity and free capital markets after all.

Last week, I extended the Tech chart to 25 companies. In my own work, I box these into peer groups. Another way of looking at groups is via correlation studies. Enter INTC into the correlation tracker for 6 months and see the numbers of stocks that run 98-99% correlation.

What you should do if you day-trade is to run the Fast Stochastic overlays. You’ll see all these stocks move up and down together. You might even box the trades so that a single key stroke gives you a basket of say six stocks on the buy or sell. It’s like running your own little mutual fund.

Sector 50 (telecom: IYZ, VOX and IXP)

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

IYZ Monthly data:

IYZ Weekly data:

IYZ Daily data:

Telecom (IYZ +29.09% W/W) closed at 16.53.

Verizon (VZ +23.2%) and AT&T (T +16.5%) performed quite ‘bullishly’. I suppose the zero income from T-Bills and the +0.99% annual yield return on the 2-year Treasuries or the +1.90% return on the 5-year Treasury doesn’t quite stack up against the +6.46% ($1.84/28.47) and +6.35% ($1.60/25.19) dividend yields that existed on VZ and T at the start of this week.

Does anybody truly believe they are going to get a smaller return say two, three or four years out in these Big Telcos vs Treasuries? Panic in; panic out. Sometime in the next couple years there will be normality returning to capital markets.

But, look into the bigger picture and see that bonds are soon going to be headed south, and yields up, which will at some point soon be competitive with yields from the telcos. That’s why it pays to tighten your stops on long positions in the telcos, and have your finger ready on the Sell button. That’s why I say I prefer the commodity price-sensitive equities like Energy and metals/precious metals in this upcoming period.

Two weeks ago, I wrote, “… the bond market can gain for one of two reasons, (i) hot money leaving equities for a safer place, or (ii) because bonds represent sustainable long-term fixed income. The latter case does not apply because ultimately with G-20 governments reflating to kick-start the business and economic cycle the interest rate cycle has to also kick into gear (at some point soon). The only thing that will hold it down would be the combination of disinflation and wealth creation, which would keep interest rates low while corporations would be able to offer a higher yield to attract capital as a preference to issuing more common stock… I’d be nervous making that assumption. In addition the governments of the world will be crowding out the corporate bond market because they need to keep rolling over the debt they are issuing today for their economic stimulus programs. That will not be healthy for the bond market.”

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

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

XLU Monthly data:

XLU Weekly data:

XLU Daily data:

Utilities (XLU +14.92% to 30.12) went from sector performer #1 to #8.

Two weeks ago, I wrote, “I am starting to get more interested in the utilities on account of the massive spending I think the G-20’s are going to do in rebuilding infrastructure… When you read this white paper by Citigroup regarding infrastructure, you will see the importance they place on the deed to more fully develop the regulated utilities. I agree with it, and I also noted that in the past two years there have been major plays in California and Texas by private equity to take control of large utility corporations.”

That’s a Big Picture argument.

Here is the list of North American Utilities that I follow closely:

AEP D DUK ED EXC FE FPL NGG PCG PEG SO TRP

For study purposes, there is a good mix of electric (AEP, D, DUK, FE, FPL and SO), gas (NGG, TRP) and diversified (ED, EXC, PCG, PEG) utilities.

Table 12: US Utilities

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

Bonds & Yields Review

Table 10: US Treasury Yields

The 20-year Treasury ETF (TLT) did zip over five sessions until Friday when it gained +1.24% to 105.72.

For those who missed them, here are some additional videos about the history of debt and the HB&B. As you know, I think that as people go into debt to the banks, they become chattels of those same bankers. People need to downsize their lifestyle (ie, cut their high levels of consumption and start saving) to get themselves out of the trap.

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

Here are the charts of the US debt market that I consider to be the important ones. The spreads between the corporate bonds and the US Treasuries is so incredibly high that it cannot be sustained. Credit markets must be made to work for corporations or else there will be an extended recession, possibly depression.

What I think is happening here is that bankers are squeezing so hard that capital is being forced into US Treasury debt – right before the axe falls in the form of debt monetization. If the US is now such a massive debtor nation, it will be foreigners who suffer most. Today’s debts will be repaid in something like 50 cent dollars. Americans will be forced to live a lower standard of living, particularly if they did not hedge their $USD with gold or if they did not repay their bank and credit card loans.

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

Interest rates and bond yields.

Interactive Daily data charts:

Interactive Chart of Interest rates and bond yields.

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

US Bond Funds -- Interactive Monthly Data Charts

SHY Monthly data series chart:

IEF Monthly data series chart:

TLT Monthly data series chart:

AGG Monthly data series chart:

LQD Monthly data series chart:

TIP Monthly data series chart:

US Bond Funds -- Interactive Weekly Data Charts

SHY Weekly data series chart:

IEF Weekly data series chart:

TLT Weekly data series chart:

AGG Weekly data series chart:

LQD Weekly data series chart:

TIP Weekly data series chart:

US Bond Funds -- Interactive Daily Data Charts

SHY Daily data series chart:

IEF Daily data series chart:

TLT Daily data series chart:

AGG Daily data series chart:

LQD Daily data series chart:

TIP Daily data series chart:

Table 11: Interest-sensitive securities

When I say that appetite for risk returned to markets this week, nowhere more so than Fannie (FNM) and Freddie (FRE) does it show. This week FNM gained +251.5% and FRE gained +140.8%.

Both stocks are now above the low water mark of $1/share where the NYSE is supposed to delist stocks if they cannot manage within a few weeks to pop back.

A week ago I wrote, “I say that if Fannie and Freddie were pushed into bankruptcy and a NuFanny and NuFreddie were floated to take their place, except entirely in the private sector, life as we know it would go on. ARMS would be rolled over. New mortgages would be written… When Fannie and Freddie are resuscitated, what do you think the ultimate cost will be to the US taxpayer? A trillion dollars or more? Why do you think this bail-out is going on?... Just like the insurance company AIG, the US Treasury must rescue Fannie & Freddie in order to save the banks. This is all about saving the banks, and by that I mean the present shareholders, bondholders and senior executive contracts and their pensions… Regardless of rolling the bail-out package into various economic stimuli packages, this bail-out is not about saving the US economy or trying to stop foreclosures or whatever.”

Consumer Finance -USA -- Interactive Weekly Data Charts

Consumer Finance -USA -- Interactive Daily Data Charts

Commodities Review

After eight losing weeks of big losses in the past nine, the $CRB index finally had a bullish move (+4.68%) to 242.20. In early July, the $CRB hit a high of 493.97.

The 50-day MA for $CRB is 283.11 and the 200-day MA is 380.30.

This index is largely about Oil, which this week had a bounce of +9.01%.

$CRB Index

Open Futures Contracts

Interactive Chart of Weekly CRB Commodities Index:

Interactive Chart of Daily CRB Commodities Index:

Oil Review

$WTIC gained +$4.50/bbl (+9.01%W/W) to 54.43. That was a significant move, which could be a precursor to a lower $USD in the weeks ahead.

As the oil price dropped from a high of about $147/bbl, economists were saying it was a macro-economic thing. The traders of the hedge funds and mutual funds, on the other hand, are saying they have been forced to sell, and, accordingly, have lost their appetite for risk. Yes, I say that falling oil prices had more to do with Banks than anything in the oil industry.

For $WTIC, the 50d MA is now 73.95, and the 200d MA is 107.18. The price in mid-July hit a record high of $149.90.

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

Interactive Chart of Weekly Crude Oil:

Gold & Precious Metals Review

$GOLD gained +$27.20/oz this week to close at 819.00.

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

Here are the charts of $GOLD (819 up +$83/oz from 736 at TOG or +11.3% ) and $XAU (101.59 up +29.16 from 72.43 at TOG or +40.3%.)

I watch as many relevant market relationships as possible, like the precious metal miners and explorers, the base metal miners, the physical metal prices, the various currency pairs, the Treasury market, the aggressive vs defensive stocks, futures vs spot prices, a range of commodity prices, the country exchange indexes and ETF’s, and in particular the technical and quant indicators of all these data series. So, prices are what I watch, but I also listen to corporate and political leaders talk to see which vested interests are being protected. I try to avoid the media and the newsletters because I don’t know if they have any competence or if they are working for somebody behind the scenes, but I will listen to trusted financial advisors and others who do comment privately on industry research they found meaningful, and I have several research analysts (technical, quant and fundamental) who are on Team Cara who I listen to. I then bounce my ideas/opinions off the pro traders who take direction from me and they tell me the strength and weakness they are seeing in the market.

At the end of the day I call it like I see it, hoping to be right about 75% of the time, knowing I can let my profits run and cut losses short. Most of the time it works out because I have no axe to grind -- no pressures to buy or sell this or that.

I know the market is a dance, and it’s not about me. It’s about people, so I study people, how they act and react. I cannot explain it better than that. Even when I’m wrong, I say the same thing.

For $GOLD, the 50d MA is now 798.33, so the current 819 price may represent a break-through. The 200d MA is 875.05. However, there are issues to be resolved.

The palladium, platinum, silver and copper prices did kick into gear this week, which supports the move in gold. But, I also need to see bond yields rise a bit and the $USD to fall before I am really convinced that the initial seven-session rally is sustainable into a two or three month one.

Eventually – say within a year or two – I expect that the global reflation programs will help drive the gold price to double what it was this week, but as a trader I need to stay focused on the day to day prices.

So we just need to watch. The TOG was a home-run, but you ought to know that I am a singles and doubles hitter. Billy Ball is my game.

Interactive Chart of Weekly Gold EOD Continuous Contract Index:

Interactive Chart of Daily Gold EOD Continuous Contract Index:

Interactive chart of recent trading for the Gold Bullion index.

Interactive Chart of Daily Silver EOD Continuous Contract Index:

Interactive daily data

$SILVER gained +$0.72/oz (+7.63% W/W) to 10.23. On Friday there was a loss of -1.25%.

For $SILVER, the 50d MA is now 10.54, and the 200d MA is 15.26.

Interactive Chart of Weekly Silver EOD Continuous Contract Index:

Interactive chart of the Silver Bullion index.

$PLAT (+$56.60/oz +6.85%) closed at 882.30. The price on the prior Friday also gained +$35.60/oz on the day (+4.51%). That’s quite a move after the TOG.

The 50-day MA dropped all the way from 1047.19 to 989.45 to 947.92 and now to 928.29 in the past three weeks. The 200-day MA has fallen from 1711.39 to 1690.15 to 1661.38, down this week to 1646.07.

I watch these prices and do a gap analysis, closely watching momentum strengthen or weaken as the case may be.

Spot platinum chart for the week

Interactive Chart of Weekly Platinum EOD Continuous Contract Index:

Interactive Chart of Daily Platinum EOD Continuous Contract Index:

Interactive chart of the Platinum metal index.

$PALL lifted +$11.55/oz (+6.46%) to 190.40 on Nov. 26. The data I look at is unreliable for $PALL. All data has its differences and switching from one vendor will cause you to miss the nuances. Better to stay with the same vendor and just drop the investigation during periods where the data is unreliable.

Spot palladium chart for the week

Interactive Chart of Weekly Palladium EOD Continuous Contract Index:

Interactive Chart of Daily Palladium EOD Continuous Contract Index:

Interactive chart of the Palladium metal index.

$COPPER gained +12.00 to 164.95. Two months ago it was 307.45.

The 50-day MA for $COPPER is 217.32 (243.73 two weeks ago), and the 200-day MA is 329.48 (vs 337.58 two weeks ago). The price dropped right through the 50-day MA, which is sliding, so it may take a while to return to the 50d MA, which may be a resistance level.

Interactive Chart of Weekly Copper EOD Continuous Contract Index:

Interactive Chart of Daily Copper EOD Continuous Contract Index:

Interactive chart of the Copper metal index.

Table 12: Senior gold equities

This week, the results for the gold miner indexes and ETFs were $XAU +12.79%; GDX +15.37%; and XGD +9.84%. The break-out happened right after November 19 when I issued a Buy, referring to it as the Trade of the Generation (ie, 20 years).

The five-session gainers among the goldminers in NY were: AUY +61.4%, BVN +59.3%, AU +55.7%, HMY +54.8%, GFI +54.2%, LIHR +51.1% and GG +41.7%.

Goldminers ($XAU +0.84%) closed Friday at 101.59 in NY at the 1:00pm close, but the Toronto stocks were much stronger with the 4pm ET close. In fact, Goldcorp (GG) closed up +0.67% in NY, but up +4.17% (for G.TO) in Toronto three hours later.

As always, we need to watch prices by the minute, by the hour. It will be interesting to see if the $USD falls here, which would sustain the goldminer rally, or whether the $USD pops up and the goldminers are collared.

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

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

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

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

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

Here are the key Silver miners and the SLV ETF:

SLV SIL CDE HL PAAS SSRI SLW MGN

Interactive Daily data
Interactive Weekly data

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

Weekly U.S. Goldminers Index:

Interactive Chart of Weekly U.S. Goldminers Index:

Interactive Chart of Daily U.S. Goldminers Index:

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

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

GDX Weekly data:

GDX Daily data:

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

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

Interactive Chart of XGD Weekly data:

Interactive Chart of XGD Daily data:

Forex Review

You cannot trade commodities that are priced in $USD without studying forex movement. The Forex market is a multi-trillion dollar marketplace every day, which dwarfs the size of the stock and bond markets. In this market, the Euro/USD is the highest volume trader. The $USD is a trade-weighted US Dollar index, we used to call the Morgan Dollar.

The current value of $USD is a mean value of rate fluctuations of six world currencies (Japanese yen, Euro, British pound, Canadian dollar, Swiss franc and Swedish krona) that each trade against the USD.

This week the $USD lost -1.44% W/W to close at 86.54 despite gaining +1.09% on Friday.

The 50-day MA for the $USD is 83.42 and the 200-day MA is 76.22, both of which are on the rise since the $USD has been in rally mode since mid-July.

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

Interactive Chart of Weekly U.S. Dollar Index:

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

The Euro ($XEU) gained +0.83% this week to close at 126.94. There was a big loss (-1.40%) on Friday, however.

The Euro 50day MA is 1.32.70 and the 200day MA is 1.4846.

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

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

The Pound had plunged -5.80% two weeks ago and last week rebounded +1.31%. This week, the Pound rallied +3.05% to 1.53.87.

The 50-day MA and 200-day MA are at 1.65.16 and 1.8751.

Weekly British Pound Index:

Daily British Pound Index:

Weekly Japanese Yen Index:

The Japanese Yen ($XJY) gained +0.28% this week to close at 104.55.

The Yen’s 50-day MA is 100.31 and the 200-day MA is 96.25.

Daily Japanese Yen Index:

The Loonie (Cdn Dollar) plunged -3.88% two weeks ago and again last week, falling -2.33%. I wrote, “There was, however, a gain of +2.07% on Friday. Typically the Cdn dollar tracks gold and oil, but maybe not day to day.” This week, there was a gain of +2.39% W/W to close at 80.84. That move was consistent with the bump in metal, precious metal and oil prices.

The Loonie traded as high as 110.17 American in 3Q07. I do expect to see it back there some day unless the government relents by spending more on economic stimulus packages for Ontario and Quebec, and helps the US inbound tourism sector across the country. Interestingly, with a 110 Loonie, the govt will not have to bail out the Cdn NHL teams, but if it keeps dropping, the teams, which pay all salaries and their US travel expenses in USD, will be begging the league for financial help. Oh Canada!

Speaking of the NHL, the Toronto Maple Leafs played Andre Deveaux, the league’s first Bahamas-born player, for his second game, this time at home where the fans watched the big guy get into a fight in the first period, but was a plus 1 and skated a reasonable 8:37 ice time. In paying their respects to Toronto, the center of the hockey world, and home of Leaf Nation, the City of Freeport will have to name a street for him.

I hope the kid’s paid in USD. That would make his B$ worth 1.2650 Canadian. A B$ btw is a Bahamian Dollar, which is pegged to the USD. Tourism from Canada (and Europe) drops off here when the $USD gains. With the state of the US economy, even though the B$ is at par with the $USD, in-bound tourism from there is down as well.

The Loonie 50-day MA and 200-day MA is at 85.64 and 95.00, respectively.

Weekly Canadian Dollar Index:

Daily Canadian Dollar Index:

Here is the China Yuan (CNY) chart.

International Equity Markets Review

Equity market prices this week plummeted through Thursday Nov 20, which happened to be the day following the Trade of the Generation. Then the prices on that Friday took off, but not nearly enough to save the week. This week was more of the previous Friday’s bullish action.

Look at the volatility over the past four weeks:

UK FTSE, after moving from 4377.3 to 4365.0 to 4233.0 to 3777.3, popped to 4288.0

German DAX, after moving from 4988.0 to 4938.5 to 4710.2 to 4127.4, popped to 4669.4

Aussie All-Ords, after moving from 3982.7 to 4006.6 to 3726.0 to 3386.9, popped to 3672.7

HK Hang Seng, after moving from 13968.7 to 14243.4 to 13542.7 to 12659.2, popped to 13888.2

India’s BSE 30, after moving from 9788.1 to 9964.3 to 9385.4 to 8915.2, popped to 9092.7

Japan’s Nikkei 225, after moving from 8577.0 to 8853.0 to 8462.4 to 7910.8, popped to 8512.3

Brazil’s Bovespa, after moving from 37256.8 to 36665.1 to 35777.2 to 31238.6, popped to 36595.9.

I feel that, in the absence of the terrorist attack on the Mumbai financial center, the BSE 30 would have climbed back another +200 points. We’ll have to watch the impact on international capital flows that terrorism has there.

Well-financed and planned, terrorist action by a few people can result in huge economic damage to any economy as the US discovered on Sept 11, 2001. Global leaders must re-think (i) the need for diplomacy, and (ii) punitive damages for extremists who finance and carry out attacks against the general population.

Forty years ago, Canada had a Prime Minister who was disliked intensely by many, including me, but who was years ahead of his time. Pierre Trudeau expressed the words “reason before passion”. He also opined during the height of the Cold War between the US and the USSR that the problems were not east to west, but north to south, meaning of course that globalization would expose great social inequities that would become the issues facing the world today.

Are there really country risks or are the risks caused by tyrants and people who are ignorant of the needs of other people?

I have met people from every part of the world – I’m going to a BBQ in a few minutes invited by a man from Colombia – who has certainly seen more conflict in his young life than I have in mine. But, you know, he is having a baby shower for his pregnant young wife – a girl from St. Louis – and, regardless of where he’s from, he cares about people. “Please don’t bring a gift; just bring yourself.” Would he be a different person if he had come here from Venezuela or Cuba or Iran or India or Pakistan?

People are people; it’s the tyrants and bullies in our society who have to be rooted out and grounded – some even in our midst.

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

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

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

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

Brazilian Bovespa stockcharts.com chart

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

Toronto 300 stockcharts.com chart

Toronto CDNX stockcharts.com chart

Europe

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

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

FTSE 100 stockcharts.com chart

Here is the latest session data for the German DAX.

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 Milan Italy stock exchange MIBTEL.

Italian Milan Index stockcharts.com chart

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

Swiss Market Index stockcharts.com chart

Asia-Pacific

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

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

Tokyo Nikkei 225 Index stockcharts.com chart