Week in Review #41, 2010

October 10, 2010 by Bill Cara Bookmark and Share

[2:44pm ET Sunday] I have returned after a two week hiatus to attend a mining show as well as time for vacation and travel. When I last published the Week In Review (Sept 19) I acknowledged that equity traders were getting concerned over bearish looking technical indicators, but I was reluctant to sell because of Quantitative Easing programs of some key central banks, and the impact that would likely have on a lower US Dollar.

So in that last WIR, I stated:

A weaker US Dollar and long maturity US Bonds plus Bank of Japan intervention that softened the Yen combined to lift equity and precious metals prices this week. Crude Oil did lose -3.1% W/W to close at 74.47, but the price of most commodities was on the rise… In the same couple weeks that traders turned from bearish to bullish, the American consumer has done just the opposite, and is now talking deflation. Judging from the action on Friday, traders did not miss the point… Let’s not make too big a deal of this yet, but the Daily RSI-7 data has turned south and almost given a SELL Alert. Almost. What happens next depends very much on the currency markets… At this point, the currency markets happen to be caught in a power play between central bankers in Japan, Europe, UK and the US. Their mission in each case seems to be to weaken their own currency in order to facilitate greater exports and hence relieve the pressure of domestic unemployment. A currency war – even a series of battles – usually leads to higher commodity prices, and that’s what has been happening in the past four weeks. On Friday Aug 22, the $CRB closed at 267.01 and today this index stands at 279.65.

Let’s look at what the prices were at the week ending Friday April 23 vs Sept 19 prices (round brackets) vs latest prices [square brackets] and the change since I last published the WIR three weeks ago:

$SPX 1217.28 (1125.59) [1165.15] = +3.51% up

$CRB 279.05 (279.65)[295.11] = +5.53% up sharply

$WTIC 85.12 (74.47) [82.89]= +11.31% up sharply

$GOLD 1157.60 (1274.40) [1347.20]= +5.71% up sharply

$COPPER 353.05 (352.20) [377.45]= +7.17% up sharply

TLT 90.11 (101.67) [104.22]= +2.51% up

TIP 104.68 (107.39) [111.54]= +3.86% up

$USD 81.40 (81.41) [77.18]= -5.20% down sharply

$XEU 133.83 (130.35) [139.27]= +6.84% up sharply

$XBP 153.79 (156.20) [159.55]= +2.14% up

$XYJ 106.42 (116.54) [121.83]= +4.54% up sharply

$CDW 100.10 (96.96) [98.88]= +1.98% up

On Sept 19, I opined:

I believe that politicians and bankers in Europe and the US are pressuring the ECB and Fed to weaken their currencies, especially with the US mid-term elections coming up November 2, so what I expect is that the $USD contract will stay relatively flat here and that the Euro, Canadian and Australian Dollars will lift, and Crude Oil and Gold prices will also lift for the next few weeks, at least until the outcome of the US election is apparent in the polls. Then I think all systems will reverse. The $USD and bonds will rise, the Euro, Loonie and Aussie will fall, and prices of Crude Oil, Gold and other commodities will fall along with the S&P 500. If the S&P 500 does in fact drop in October, I think the move could be an extreme one, but of short duration, similar to October 19, 1987. Despite the fundamental values of companies that exist today, some shock like Black Monday will be needed to move capital presently in bonds and cash into equities… In my own trading, except for increasing the portfolio weightings in the precious metals, which I still like, I may have been a tad early by selling the other equities. But, as you know, the miners are last ones off the dance floor. So, if, as and when I see evidence of that, then I’ll expect to see equity prices, in unison, heading south.

This week the big story was all about the crashing Dollar and the meeting in Washington by the world’s monetary authorities and political leaders to assess the situation.

With the cheaper Dollar, the miners are still dancing. When the Dollar plunges, they like to party all night. Equity prices in the broad market are also continuing to lift as they too like a softer Dollar.

But this enthusiasm is all very short term. Longer out there are very serious problems still to be worked out and the Dollar will rebound.

As you may be aware, this weekend the G-20 monetary authorities have been in conference in Washington with the World Bank and International Monetary Fund. Currency war leading to inevitable trade war is the issue. Nothing is likely to be decided unless and until there is agreement on a process to bring in line the value of securitized debt on real property with the market value of that property. Until then, the private sector will not take sufficient risk to drive the economic engine of the world, leaving governments to make whatever decisions they must to support the social needs of their people. Sadly, crime and corruption are on the rise as the working class as well as the unemployed and less fortunate of the world is struggling for survival.

Look where we’ve come. Not very pleasant, is it? The only solution offered by governments and monetary authorities is to intervene and disrupt the natural flows of capital in free capital markets, all the time seeing their friends and family escape the perils faced by most people and in fact get wealthier by the month.

When I started to write this blog in April 2004, I called it a Discussion of Capital Markets and Social Equity. I tried to teach people how to go about investing/trading capital markets, which was my strength, while at the same time argue the unfairness and stupidity of a society that is driven by greed and material possessions, pushed to the limit by bankers, dealers and packagers of financial products, which I saw as society’s weakness.

Will it get better? I think so; but first we need all the air taken out of the debt bubble. Then we need government to get out of the face of the corporate world. Intervention only leads to more intervention because these organizations are not wealth creators, and are not solutions but a burden on those who create wealth.

In my experience over the past 50 years, the political jurisdictions of Singapore and Hong Kong have been the best business models in terms of the proper balance between public and private sectors. As for the private sector, there is, despite its flaws, no capital market in the world comparable to America’s. Now if we could only get government to downsize and to cut back on spending, allowing the private sector to do its job.

That’s enough of the big picture of which we are all painfully aware. Let’s now get into the details of what happened in the capital market this week, including the macro-economic, foreign and domestic equities, bonds, commodities, currencies and precious metals.

As I say, you have to get your head around all of it before you can make an effective trading plan.

Global Economics Review

Weekly International Economic Report from Econoday.

Summary: “The Bank of Japan surprisingly started the ball rolling Tuesday when it reintroduced its zero interest rate policy and expanded its already substantial quantitative easing programs. Equities celebrated and the yen, instead of falling as expected, climbed and is still climbing to new 15 year highs. The cacophony for the Federal Reserve to invoke QE2 grew in the buildup to Friday’s employment report, a report which didn’t quiet the rhetoric or investors’ bets. Market players think that an aggressive push by the Federal Reserve to revive the U.S. economy could drive up inflation, with Treasury bond markets pricing in the effects of a return to emergency monetary easing next month. As stocks tumbled over the summer, many investors feared the U.S. could suffer a prolonged bout of Japanese-style deflation. The Fed’s message that it is determined to avoid this has led to the recalibration of inflation expectations… The Reserve Bank of Australia, Bank of England and European Central Bank all left their policy interest rates unchanged at 4.5%, 0.5% and 1.0% respectively. Only the RBA intimated that further interest rate increases could be in its future… The International Monetary Fund, as prelude to its fall meetings in Washington DC, released its latest world economic outlook. The IMF predicted that global GDP should expand by 4.8% this year — slower than in the boom before the financial crisis but well above the world’s underlying speed limit of around 4%. But the data hide a serious gap between the vitality of the big emerging economies, some of which have been sprinting along at close to 10%, and the sluggishness of many rich ones. Macroeconomic policy is also weirdly skewed. Many emerging economies are loath to let their currencies rise to reflect their vigor, even as fragile rich ones are embarking on austerity programs… The G20/G7 is meeting as I write. On the table is the so called ‘currency wars’ where countries, in often unannounced intervention, try to force their currencies lower to be more competitive. Without any help, the U.S. dollar seems to be sinking the most. Some are pushing for a Plaza like accord that took place on September 22, 1985 between the Group of Five. At that time, there was an agreement between the governments of France, West Germany, Japan, the United States and the United Kingdom to depreciate the U.S. dollar in relation to the Japanese yen and German Deutsche Mark by intervening in currency markets. But conditions are vastly different now given the number of countries involved and not to mention today’s technology that allows transactions at warp speed.”

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

US Factory Orders for August. Following release of the data on 10/4/2010 10:00:00 AM ET, Econoday reported, “Factory orders fell back in August but were skewed by a month-to-month dip for aircraft which, based on a run of order announcements from Boeing, looks to swing higher in September. Factory orders fell 0.5% in August yet were up 0.9% excluding transportation, which is the category that includes aircraft. Details show a 1.5% decline in durable goods (revised from minus 1.3%) with the first reading on non-durables up 0.3% on strength in chemicals… The inventory build eased in August, to plus 0.1% from July’s 0.9% jump. The headline masks a build in durable goods, up 0.4% yet a gain that is slower than the 0.6% build in July and the 1.2% build in June. Inventories on the non-durable side fell 0.3% reflecting a swing lower in the price sensitive petroleum component… Unfilled orders show no change for a second month which is bad news for jobs. Yet this report definitely offers signs of strength for a manufacturing sector that may be slowing but is still growing. Next data on the industrial sector will be the Industrial Production report on Monday, October 18.”

US Pending Home Sales Index for August. Following release of the data on 10/4/2010 10:00:00 AM ET, Econoday reported, “Evidence is building that the housing sector is moving up from its deep post-stimulus bottom. The Pending Home Sales Index jumped more than four% for a second straight month, to 82.3 in August (2001 = 100). The prior month was revised to 78.9, shaving July’s gain to 4.5%. The readings point to a second straight jump for existing home sales which surged nearly eight% in August.”

US Employment Report for Sept. Following release of the data on 10/8/2010 8:30:00 AM ET, Econoday reported, “The private sector is doing its best to offset weakness in the government sector. But Census layoffs and state and local government cut backs have been more than offsetting. Payroll employment in September declined 95,000, following a revised 57,000 dip in August and a 66,000 decrease in July. The September fall was significantly more negative than the median forecast for an 8,000 decrease. The July and August revisions were net down a slight 15,000… The Census Bureau layoffs of temporary workers continued to damp overall jobs. Government payrolls declined 159,000 after decreasing 150,000 in August. A drop in federal government employment was due to the loss of 77,000 temporary Census 2010 jobs. As of September, about 6,000 temporary decennial census workers remained on the federal government payroll, down from a peak of 564,000 in May. Employment in local government decreased by 76,000 in September with job losses in both education and non-education… But on the positive side, private nonfarm employment continued to rise, advancing 64,000 in September, following a revised increase of 93,000 the prior month. The median market forecast was for an 85,000 boost for private payrolls… Private service-providing jobs gained 86,000 after an 83,000 increase in August. The rise was led by a 38,000 boost in leisure & hospitality jobs. Other increases were scattered by category. Temp help services advanced another 17,000 after gaining 18,000 in August. This category typically is a leading indicator for permanent job hires or layoffs but companies are still more skittish than usual about adding permanent positions… Goods-producing jobs fell 22,000 after a 10,000 increase in August. Manufacturing slipped 6,000 while construction jobs dropped 21,000. Mining rose 6,000… Average hourly earnings were unchanged in September after rising 0.3% in August. The September figure fell short of the market estimate for a 0.1% gain. The average workweek for all workers was steady at 34.2 hours in September, matching expectations… On a year-ago basis, overall payroll jobs improved up to 0.3% in September from up 0.2% the month before… Turning to the household survey, the unemployment rate was unchanged at 9.6%, coming in a little lower than the market forecast was for a 9.7%… Overall, business demand for labor is sluggish. Discounting the loss of temporary Census workers, the recovery continues but at a soft pace… On the news, Treasury yields and equity futures were little changed. The dollar declined.”

US Wholesale Trade for August. Following release of the data on 10/8/2010 at 10:00:00 AM ET, Econoday reported, “The inventory build at the wholesale level continues yet is slowing, up 0.8% in August and down from the 1.5% build in July (revised from plus 1.3%). Durable inventories rose 0.6% at the wholesale level, again down from July’s 1.1% build. Non-durables rose 1.2%, also down from the prior month which was 2.2%… The stocks-to-sales ratio is unchanged in the month at 1.16, indicating that the inventory build, which had picked up pace in the summer, is not in excess to underlying sales which rose 0.5%. Inventories at the factory level, data released on Monday in the Factory Orders report, also showed an easing in build. Overall demand in the economy is sluggish, pointing to a continuing slowdown in inventories. Retail inventories will be released next Friday with the Business Inventories report.”

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

US Treasury Budget for Sept. Before release of the data on 10/13/2010 at 2:00:00 PM ET, Econoday reported, “The U.S. Treasury monthly budget report showed a $90.5 billion for a fiscal year-to-date deficit of $1.26 trillion vs. $1.38 trillion a year ago. Year-to-date receipts, at $1.92 trillion, were up 1.6% while outlays, at $3.18 trillion, are down 2.5%. Looking ahead, the month of September typically shows a moderate surplus for the month. Over the past 10 years, the average surplus for the month of September has been $39.9 billion and $41.0 billion over the past 5 years. The September 2009 figure, however, came in at a deficit of $45.2 billion.”

US International Trade data for August. Before release of the data on 10/14/2010 8:30:00 AM ET, Econoday reported, “The U.S. international trade gap in July narrowed to $42.8 billion from $49.8 billion in June. Exports rebounded 1.8%, following a 1.3% decline in June. Overall imports declined 2.1% after increasing 3.1% the prior month. Nonoil imports fell 3.0%, following a 4.6% jump in June. The improvement in the trade gap was largely seen in the nonpetroleum deficit which shrank to $33.2 billion in July from $39.7 billion the prior month. The petroleum goods gap also improved, narrowing to $20.9 billion from $21.3 billion in June.”

US Producer Price Index for Sept. Following release of the data on 10/14/2010 8:30:00 AM ET, Econoday reported, “The producer price index accelerated to a 0.4% gain in August from 0.2% in July. In contrast, at the core level the PPI eased to a 0.1% gain from a 0.3% boost in July. Looking at key broad components, energy surged 2.2% after a 0.9% decrease the month before. Meanwhile, food prices eased, declining 0.3%, following a 0.7% jump in July. Outside of energy, PPI inflation is tame.”

US Jobless Claims for Week Ending Oct. 9. Before release of the data on 10/14/2010 at 8:30:00 AM ET, Econoday reported, “Initial jobless claims for the October 2 week fell 11,000 to 445,000. The four-week average is down to 455,750 for a sixth straight decrease. Those receiving continuing benefits fell for a fourth straight week, down 48,000 to 4.462 million.”

US Consumer Price Index for Sept. Before release of the data on 10/15/2010 8:30:00 AM ET, Econoday reported, “The consumer price index in August posted a relatively strong 0.3% rise, equaling the boost in July. Excluding food and energy, CPI inflation slowed to no change. Playing a key role in softening the core rate was flat number for the shelter index. The upward pressure at the headline level came mainly from energy which jumped 2.3%, following a 2.6% boost in July. Food prices rebounded 0.2% after dipping 0.1% in July. Overall, price pressures are nearly nonexistent outside of energy.”

US Retail Sales for Sept. Before release of the data on 10/15/2010 8:30:00 AM ET, Econoday reported, “Retail sales in August continued to improve, gaining 0.4%, following a 0.3% rebound in July. Excluding autos, sales increased 0.6%, following a 0.1% rise in July. Sales excluding autos and gasoline jumped 0.5%, following a 0.1% dip in July. The rebound in July was led by a 1.9% gain in gasoline station sales with food & beverages up 1.3% and clothing up 1.2%. Also showing increases were health & personal care, sporting goods & hobby stores, general merchandise, nonstore retailers, and food services & drinking places. Looking ahead, we may see further improvement in September as unit new motor vehicle sales rose 2.5% for the month and chain stores surprised a little on the upside for the most part.”

US Empire State Manufacturing Survey for Oct. Before release of the data on 10/15/2010 at 8:30:00 AM ET, Econoday reported, “The Empire State manufacturing index eased in September to 4.14 from 7.10 in August. But there may be improvement ahead for October as the new orders index jumped to plus 4.33 from minus 2.71 in August.”

US Consumer Sentiment for Oct. Prior to release of the data on 10/15/2010 9:55:00 AM ET, Econoday reported, “The Reuter’s/University of Michigan’s Consumer sentiment index rose to 68.2 for the final September reading from a mid-month figure of 66.6 making for an implied 69.8 reading for the last half (based on about half of the total responses being from the first half of the month). The improvement was slightly concentrated in the leading expectations component. Looking ahead, solid gains in equities and a dip in initial jobless claims could nudge the index up for preliminary October. But consumers are still worried about the lack of healthy hiring, so expect a still weak number.”

US Business Inventories for August. Prior to release of the data on 10/15/2010 at 10:00:00 AM ET, Econoday reported, “Business inventories rose 1.0% in July. The build was broad, up 1.3% at wholesalers, up 1.0% at manufacturers, up 0.7% at retailers. The gain for retailers was skewed by a second straight giant restocking effort by auto dealers. More recently, factory inventories rose a modest 0.1% in August, indicating that inventory accumulation is slowing.”

International Equity Markets Review

Markets were almost all green again this week. Only India’s Sensex BSE 30 (-1.0%) and Thailand’s SET (-1.6%) took losses and those were small. The strongest were Shanghai China (+3.1% W/W) and Philippines (+3.0%). Most equity markets lifted from +1.0% to +2.0%.

wir_41.1.gif

As I wrote in this space in WIR 37 (Sept 10):

That’s a long base pattern that has persisted now for a year. A break-out to higher prices would be a salute to Quantitative Easing and a lower $USD. A break-down could be a sell-off or a brief period of consolidation, followed by a snap-back. We have to watch volume to see which way it’s taking prices.

Obviously, the story has been Quantitative Easing and a lower $USD.

The $USD is now over-sold, however, and traders are watching for a reversal, probably within a month, that would likely have a quick and sharp impact on markets like Brazil.

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

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

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

Brazilian Bovespa stockcharts.com chart

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

Toronto 300 stockcharts.com chart

Toronto CDNX stockcharts.com chart

Europe

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

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

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 Swiss market index. Swiss Market Index stockcharts.com chart

Asia-Pacific

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

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

Tokyo Nikkei 225 Index stockcharts.com chart

Here is the latest chart for the Singapore index .

Singapore Straits Times Index stockcharts.com chart

Here is the latest chart for the Shanghai Composite index .

Shanghai Composite Index stockcharts.com chart

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

Hong Kong Hang Seng stockcharts.com chart

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

Mumbai BSE 30 Sensex Index stockcharts.com chart

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

Sydney All Ordinaries Index stockcharts.com chart

Russia (RTS) stockcharts.com chart

ETFs Review for International equity market

All 16 USD-denominated country ETFs trading in NY were up W/W. On Friday all 16 were up as well, but most of the larger moves were earlier in the week.

Even the Bank of Japan has turned to buying ETF’s in order to push prices higher. An interesting question is what happens when they want to sell. Will they tell the world the market is over-priced at that point, or will they pump and dump?

The question is why are central banks and/or governments buying equities in the market anyway? This, in my view, is just another form of control and manipulation by government, benefitting friends of government.

Just remember the idiom: Power corrupts; absolute power corrupts absolutely.

We need a free capital market. Absolutely.

Table 14: International equities via an ETF perspective (in $USD)

Sorted by 1-Week Price Performance Symbol Close 1Day
Change 1Day
%Change 1W
%Change 2W
%Change 4W
%Change YTD
%Change 3M
%Change 6M
%Change 12M
%Change IFN 38.43 0.68 1.80% 4.17% 5.20% 9.89% 23.57% 24.81% 17.92% 29.39% EWA 24.86 0.39 1.59% 3.63% 3.80% 9.52% 4.81% 22.16% 1.10% 5.88% EWJ 10.23 0.05 0.49% 3.33% 3.65% 4.39% 2.40% 5.90% -3.58% 2.81% EWQ 24.94 0.07 0.28% 3.27% 3.14% 11.34% -6.84% 16.87% -0.44% -4.70% EWW 55.41 0.96 1.76% 2.80% 4.23% 9.79% 8.65% 11.35% 2.06% 21.33% EWH 18.82 0.27 1.46% 2.73% 4.79% 11.56% 17.19% 23.73% 13.44% 20.10% RSX 34.06 0.27 0.80% 2.44% 6.30% 6.74% 4.54% 16.01% -3.68% 14.49% GXC 78.73 0.87 1.11% 2.39% 3.25% 8.66% 6.60% 14.71% 4.77% 13.32% EWY 55.68 0.21 0.38% 2.28% 5.51% 9.35% 12.83% 19.74% 6.93% 21.39% EWG 22.69 0.13 0.58% 2.16% 3.00% 11.06% -0.92% 14.31% 3.75% 0.84% EWC 28.91 0.36 1.26% 2.05% 3.99% 6.13% 7.39% 12.71% 1.58% 10.98% EWU 16.97 0.11 0.65% 2.04% 2.17% 7.07% 2.79% 17.44% 2.72% 8.99% ILF 51.66 0.95 1.87% 1.19% 6.01% 9.13% 4.68% 16.56% 4.49% 15.26% EWZ 79.03 1.45 1.87% 1.16% 6.94% 11.45% 2.38% 18.65% 4.94% 10.24% EWS 13.54 0.01 0.07% 0.89% 2.73% 6.28% 15.23% 15.04% 14.75% 25.49% EWT 13.71 0.03 0.26% 0.55% 2.28% 8.25% 2.74% 14.59% 5.99% 11.15%

Japanese equity market ETF: EWJ

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

Interactive EWJ Monthly data:

Interactive EWJ Weekly data:

Weekly EWJ

Interactive EWJ Daily data:

Daily EWJ

U.K. equity market ETF

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

Interactive EWU Monthly data:

Interactive EWU Weekly data:

Weekly EWU Data

Interactive EWU Daily data:

EWU Daily data: Daily EWU Data

Canada’s equity market

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

Interactive EWC Monthly data:

Interactive EWC Weekly data:

Weekly EWC Data

Interactive EWC Daily data:

Daily EWC Data

Taiwan’s equity market

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

Interactive EWT Monthly data:

Interactive EWT Weekly data:

Interactive EWT Daily data:

Indonesia equity market ETF

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

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

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

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

Interactive IF Monthly data:

Interactive IF Weekly data:

Interactive IF Daily data:

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

Group 1:

(list one)

(list two)

(list three)

Group 2:

(list one)

(list two)

(list three)

US Equity Markets Review

September and October’s S&P trading volume has picked up marginally from August, but is well down from June and July. Improved volume this week was seen in Pepsi (PEP), Procter & Gamble (PG), Bank of America (BAC) and of course Apple (AAPL). But Goldman Sachs (GS), General Electric (GE), IBM (IBM), Hewlett-Packard (HPQ), Microsoft (MSFT), Cisco (CSCO), Intel (INTC), Wal-Mart (WMT), Pfizer (PFE), and Johnson and Johnson (JNJ) attracted very little interest this week.

But GE +4.7%, AAPL +4.1% and GS +3.4% were big winners on price this week.

The S&P 500 and Dow 30 were both up +1.6%, while the NASDAQ lifted +1.3% this week.

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

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

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

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

Monthly Nasdaq Composite Data

Monthly S&P 500 Data

Monthly Dow 30 Data

Monthly Russell 2000 Data

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

Weekly Nasdaq Composite Data

Weekly S&P 500 Data

Weekly Dow 30 Data

Weekly Russell 2000 Data

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

Daily Nasdaq Composite Data

Daily S&P 500 Data

Daily Dow 30 Data

Daily Russell 2000 Data

Dow 30 Stocks Review

This week, 25 of the 30 Dow stocks closed higher.

The best of the list were Alcoa (AA +5.4%), General Electric (GE +4.7%), and DuPont (DD +4.0%). The worst were American Express (AXP -9.1%) and AT&T (T -2.1%).

Although price was up, the relative volume (vs 3-month and 12-month averages) was weak.

Table 16: Dow 30 List

Sorted by 1-Week Price Performance Symbol Close 1Day
Change 1Day
%Change 1W
%Change 2W
%Change 4W
%Change YTD
%Change 3M
%Change 6M
%Change 12M
%Change AA 12.89 0.69 5.66% 5.40% 5.66% 15.40% -22.58% 20.24% -13.32% -10.17% GE 17.12 0.07 0.41% 4.65% 2.76% 7.13% 10.81% 15.44% -7.76% 5.55% DD 46.66 0.43 0.93% 4.04% 2.37% 10.33% 36.19% 28.58% 19.21% 43.13% BA 69.23 0.77 1.12% 3.59% 7.17% 8.44% 23.23% 6.95% -4.22% 32.37% DIS 34.51 0.60 1.77% 3.51% 2.77% 1.05% 7.61% 3.51% -3.25% 20.37% XOM 64.38 0.53 0.83% 2.94% 4.26% 5.20% 4.99% 0.00% 0.00% 0.00% PG 61.86 1.06 1.74% 2.83% 0.36% 2.42% 1.21% -0.15% -1.12% 7.30% CAT 80.37 1.63 2.07% 2.75% 0.80% 12.78% 37.27% 27.23% 24.64% 51.38% CSCO 22.48 0.09 0.40% 2.60% 1.77% 9.02% -8.95% -0.31% -14.46% -5.03% UTX 72.91 0.13 0.18% 2.50% 1.97% 5.84% 1.79% 8.45% -1.07% 18.02% CVX 83.94 0.42 0.50% 2.43% 4.77% 6.50% 6.17% 19.22% 8.09% 17.48% JNJ 63.23 0.01 0.02% 2.40% 1.75% 5.42% -2.24% 3.01% -2.62% 3.76% IBM 138.85 0.13 0.09% 2.37% 3.53% 8.49% 4.83% 8.50% 8.81% 13.54% WMT 54.41 0.05 0.09% 1.97% 0.61% 4.70% 0.33% 10.63% -1.75% 9.39% MMM 89.16 0.26 0.29% 1.76% 2.53% 6.22% 7.40% 9.78% 7.49% 19.63% PFE 17.46 0.08 0.46% 1.63% 0.34% 2.77% -7.77% 17.81% 1.87% 4.55% MCD 76.10 0.24 0.32% 1.58% 1.33% 1.45% 21.22% 10.26% 10.67% 33.81% TRV 52.81 0.20 0.38% 1.32% -0.58% 5.49% 6.02% 5.43% 1.05% 9.22% JPM 39.31 -0.21 -0.53% 1.29% -1.11% -1.13% -8.26% 3.01% -14.10% -13.22% INTC 19.52 0.12 0.62% 1.04% 0.51% 8.63% -6.51% -2.89% -12.51% -1.81% HPQ 41.15 0.34 0.83% 0.93% 0.41% 7.50% -21.54% -9.52% -23.27% -11.43% MRK 36.91 0.20 0.54% 0.85% -1.15% 0.71% -0.27% 2.93% 0.35% 13.81% MSFT 24.57 0.04 0.16% 0.78% -0.81% 3.02% -20.61% 0.66% -17.88% -4.29% KO 59.41 -0.03 -0.05% 0.49% 1.35% 1.52% 4.15% 13.33% 10.51% 8.83% HD 31.89 0.15 0.47% 0.22% 0.79% 7.45% 11.23% 13.29% -3.28% 18.59% VZ 32.83 -0.10 -0.30% -0.18% 0.58% 6.52% -1.35% 22.59% 8.85% 12.59% KFT 30.93 -0.26 -0.83% -0.90% -3.19% 0.49% 12.76% 6.54% 2.66% 18.46% BAC 13.18 -0.13 -0.98% -0.90% -3.09% -2.73% -16.00% -11.31% -29.33% -23.95% T 28.22 -0.03 -0.11% -2.05% -1.26% 1.40% -1.26% 14.86% 8.46% 8.79% AXP 37.99 0.17 0.45% -9.07% -11.92% -5.47% -7.16% -9.81% -13.05% 8.60% You can do this table yourself by entering the following string into the Summaries window at http://www.investertech.com and then clicking on the link for Performance.

Here are the links to interactive Dow charts from Investertech.com that I broke into groups of ten, which you can add technical indicators for as well.

(list one)

(list two)

(list three)

For those of you who are relatively new at trading, or to this blog, why not pull the ten (10) Cara 100 companies out of the DJIA 30 list, and study the links for just these stocks? Keep a hard copy of the Value Line quarterly report plus a record of the Daily-Weekly-Monthly RSI-7 technical indicator. Study up on what the RSI is so you know it and have confidence that it is just like a football game yardstick that shows you how much risk your team is facing when trying to score points.

The Cara 100 high-quality company list has the following ten DJIA components:

Wal-Mart (WMT), Disney (DIS), Johnson & Johnson (JNJ), McDonalds (MCD), Exxon (XOM), Boeing (BA), Procter & Gamble (PG), IBM (IBM), Intel (INTC), and United Technologies (UTX)

There is no rocket science to these high-quality companies. In your typical week, you shopped at Wal-Mart and along the aisles, mostly the personal consumer products were from Procter & Gamble, except for maybe the baby powder from Johnson & Johnson. On the way there, you may have filled-up at an Exxon gas station, and on the way home, maybe you stopped for a Big Mac or a salad at McDonalds. Overhead, you watched airplanes from Boeing. If you were in a high-rise building, you probably rode in an Otis elevator from United Technologies. Maybe you no longer have an IBM PC, but you do know the company, and your present PC is likely powered by Intel. Every parent’s kids want you to take them to Disney… All in all, this is just life we’re talking about here. If you are alive, you know these companies like your children. You probably even see more of them… So, just quickly read those Value Line reports – one per company every 13 weeks – and keep an eye on the RSI (momentum) and MACD (trend)… Those guys on Wall Street may be worth a gazillion dollars, but they didn’t do it the way you and I have to do it. So, stop listening to their stories that financial engineering and out-sourcing is what’s making America strong. That is such a crock. Instead, live life, use common sense, do only what you understand, feel comfortable, and you’ll be surprised at how quickly you can take control and free yourself of the shackles of HB&B.

This paragraph continues to run because, over time, it works.

Value Line Report(s) this past Friday

This week in the WIR 2- 15-28-41 series, Value Line reported on three DJIA components: Hewlett-Packard (HPQ), IBM (IBM), and Intel (INTC). The latter two are Cara 100’s.

Hewlett-Packard [GICS 45, Dow 30]
(HPQ: Google Finance file)
(HPQ: Yahoo Finance file)
(HPQ: StockChart chart)
(HPQ: Billcara2 chart)
(HPQ: ADVFN Financial Data)
(HPQ: Value Line Report Oct. 8: next one is due Jan. 7)

IBM [GICS 45, Dow 30, Cara 100]
(IBM: Google Finance file)
(IBM: Yahoo Finance file)
(IBM: StockChart chart)
(IBM: Billcara2 chart)
(IBM: ADVFN Financial Data)
(IBM: Value Line Report Oct. 8: next one is due Jan. 7)

Intel [GICS 45, Dow 30, Cara 100]
(INTC: Google Finance file)
(INTC: Yahoo Finance file)
(INTC: StockChart chart)
(INTC: Billcara2 chart)
(INTC: ADVFN Financial Data)
(INTC: Value Line Report Oct. 8: next one is due Jan. 7)

Always before I study a company, I take a quick look at the Monthly-Weekly- and Daily charts. I also look back at my previous notes in the WIR.

Here are my notes from WIR #41, October 11, 2009:

(The situation with) Hewlett-Packard is a bit of a joke. Earnings for the Jul 31 quarter came in at $0.67 vs the estimate of $0.65, and the analyst has already dropped the Oct 31 quarter estimate from $1.00 to $0.98 to compensate. Meanwhile revenues for the quarter fell from $28.03 bil to $27.45 bil and the next quarter estimate is to fall from $33.60 bil to $29.65 bil. So where’s the improvement that lifted the total capitalization of the company by +27.2% or $24 billion in the past 13 weeks?

What’s happened here, I think, is smart accounting to take operating losses and put them into restructuring costs (ie, non-operating losses).

Does that mean I don’t like this company? Not at all. Real earnings are rising, and the company is using lots of cash to buy in their excess stock from the EDS deal.

The next four quarters earnings are likely to be reported at $3.40 and the stock is today at $47.38, which is only a 14 multiple. During the 2001 recession, HPQ hit a low of ~$12.50 and earned in the fwd four quarters about $0.80, which was a multiple of about 15.6.

Is there a risk? Yes.

How many IT departments and Moms & Pops are gearing up spending for computers in 2010 to put them back to 2008 levels? I guess, like Steve Wynn believes, the Chinese are the answer.

The fact is, according to Value Line, that growth in revenues, cash flow and earnings for the current five year period will be at about half the rate for the past five years. But maybe that’s going to be par for the course.

If I was flat every night with all positions (ha ha), HPQ would be one that I’d buy the dips.

So would IBM.

Actually, IBM is in the Cara 100 because, regardless of what some customers and some (ex-) staff have represented to me, I happen to think it’s a very well managed company. Just like McDonald’s (MCD) made a strategic shift about five years ago to go away from company-owned stores in favor of lessees, IBM shifted out of low margin businesses in order to focus on high margin ones and ones where they had pricing power. Management then plowed their profitable operations into balance sheet restructuring. Consequently, if you look at the Value Line table 5- and 10-year annual rates of growth in revenues, cash flow, earnings and dividends, you will see a significant increase in the past five years, which means that the earlier five years was much less.

How the balance sheet has driven per share earnings was noted by VL analyst Theresa Brophy – five stars for that – when she reported that one-third of the year over year increase was due to share repurchases. The common shares outstanding for 2008 are shown as 1.339 billion and for 2009 as 1.275 billion (est), so Brophy says that $0.11 per share of the June quarter (say $0.44/year) was attributable for fewer shares. Since the per-share earnings have grown Y/Y from $8.11 to $9.35, which is $1.24, which is one-third. Meanwhile the share price has been driven by substantially increased dividends, from $0.78, $1.10, $1.50 and $1.90 from 2005-2008. That explains why the stock price ($125.93) is almost back to a 9-year high ($130.90).

Value Line estimates that total shares will drop this year from 1.275 billion to 1.200 billion, or about 75 million shares. If they pay an average of $105, that’s ~$7.875 billion, which explains the drop in cash, and the June quarter reduction in quarterly dividend growth ($0.50 to $0.55), which is +10%, which is less than half the past five year’s growth rate of +20.5%.

Of course, declining revenues, from $103.63 billion in 2008 to $94.85 billion estimated for 2009, is having an impact too. Still, the 2010 estimate is for revenues to fill in to $97.50 billion, and per-share earnings to be about $10.50, which is mid-range the company guidance of $10 to $11.

So, with $10.50 earnings and say 14x-15x for 2010, I anticipate an average price of $147 to $157, say $152. But with a volatility factor of say plus or minus 12%, say $18, the 2010 high low could fall in the $134 to $170 range.

Let’s say the stock moves from $125 to $152, the +$27 gain plus the next four quarters dividend of ~$2.32 would be a return of say $29.32 on $125, which would be an Annualized Total Return of +23.5%. Obviously squeezing a few points out of the purchase price, say $120 or $115 is so important, especially if you can still get that average $152 exit price. You see, at $120, the return of $34.32 = +28.6%, and at $115, the return of $39.32 = +34.2%.

Money management, even when day trading, is a key to success. In this regard, the options market can help you get your price, once you have made the commitment.

In any case, IBM is a high quality company – its operating margins are ~23% and Return on Shareholder Equity almost 60% — and its fortunes are improving. Whenever there is a dip in the stock, I think buying is advisable.

Note to self: don’t miss the next entry point with purchases and short puts, and hang in longer by managing positions with some long puts and covered call writing, always maintaining a position.

But also, keep your expectations under control. Just because IBM has had a Bull run of +24.9% over the past 13 weeks, that kind of gain happens very seldom in a company with $164 billion market cap, and may not happen again for many years.

Intel (INTC) is another Cara 100 company. In the past 13 weeks, INTC soared +32.0%. I missed it.

So did Value Line. Analyst Alan House had projected a gain of $0.10 for Intel’s June quarter and the actual number was a loss of -$0.07. Yet, the stock soared +32.0% from $16.04 to $20.17. Makes you wonder.

Well, actually the stock is lifting because the company’s operating picture is getting better. That loss was due to a $1.45 billion fine ($0.25/share) from the European Union for anti-trust dealings. So, without the fine, the per-share earnings would have been $0.18. Going back to the VL analyst July 10 report, the 6 quarter earnings projections from this quarter on were $1.24/share and now the estimate is $1.81.

In fact, Alan House is projecting a phenomenal earnings year in 2010, surpassed only by the years 2000 and 2005. $1.20/share is pretty optimistic. But you know, the technology is running into a growth phase at the same time that the economy is turning up and Microsoft and others are coming out with advanced software, so Intel’s fortunes are rapidly improving.

The operating margins are ~42%, so any growth in revenue ought to be a bottom line event. The 2010 revenue projections are set at $36.75 billion, up from $33.58 billion estimated for 2009. As the number of shares outstanding is expected to remain level, and excess cash to be used for productive R&D and for (presumably earnings accretive) acquisitions, this company is earning it the old fashioned way, buy it as well as build it.

I like the story, and will now focus on when to buy the stock. I will announce it when I do.

At $20.17, the stock is moderately under-priced on the basis of the projected next four quarters earnings of $1.05 and the average annual PE ratio of 20x. But the following four quarters ought to result in earnings of $1.30, which would take the average share price target to say $26. Plus or minus 25%, the share price for the next two years could fall in the range of say $19.50 to $32.50.

The RSI-7 for the Daily and Weekly is presently 69.7 and 68.3, which is relatively high. It could go higher as it was in July and again in August, but if the broad market takes a rest soon (soon??), INTC could fall back into an Accumulation Zone, at which point I’d be a buyer.

Notes for WIR#2 Jan 10, 2010

Look at the charts for HPQ ($52.59 1/08 close; up +$47.38 10/9 close; up +11.0% in qtr):

At 1/08, the RSI-7 for the Monthly/Weekly/Daily for HPQ is 78.1 (nosebleed bull) / 71.4 (falling) / 58.4 (falling).

At 10/09, the RSI-7 for the Monthly/Weekly/Daily was 69.3 (presently bull) / 74.7 (a bull with a nosebleed) / 61.5 (could be AC-DC).

Our automated RSI-7 signal system gave a Daily-based SELL Alert @ $51.51 on 12/31 and again a couple days before that at $52.50, which is about where the stock is today. There could be a Weekly-based SELL Alert this week also. With the Monthly RSI-7 presently at the extreme height of 78.1, if there is a SELL Alert given on the Weekly, I’d be out and possibly short.

As for Value Line, the analyst Theresa Brophy raised the Timeliness [Strong Buy] on Jan 1, 2010, saying that “In spite of the run-up in the share price since early calendar 2009, the issue has worthwhile appreciation potential to 2012-2014.” So, you can see we differ in outlook.

VL says that after a decline in revenues of close to -4% in 2009, sales this year ought to be back to 2007 levels. Also, after a drop in earnings per share from $3.25 in 2007 to $3.14 in 2009, this coming year ought to be $3.70. That will come from the lift in sales and also a higher profit margin. But it is also due to the company’s share buy-back program.

VL says that the 5-year outlook for metrics like sales, cash flow, earnings, dividends and book value should be higher than for the past ten years, which comes from a management change several years ago now following the departure of Carly Fiorina and arrival of Mark Hurd.

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

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

I had been skeptical at first, but now, because of the results he’s obtained, I believe that Hurd is the better CEO.

After the take-over of Compaq and Digital Equipment, many years ago, this was a dog’s breakfast. But, although I don’t care for the low and flat (for many years now) dividend, I like the company enough to possibly add it to the Cara 100.

As I see it, Hewlett-Packard is as good a company as IBM. Just as many years ago, International Business Machines changed its name to IBM, I’d like to see Hewlett-Packard become something like HP Digital. Get with it for Pete’s sake. As it stands all I can think about is an old car manufacturer that died 50 years ago.

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

Look at the charts for IBM ($130.85 1/08 close vs $125.93 10/9 close; up +3.9% over qtr):

At 1/08, the RSI-7 for the Monthly/Weekly/Daily for IBM is 67.1 (still rising) / 66.2 (falling) / 64.7 (falling).

At 10/09, the RSI-7 for the Monthly/Weekly/Daily was 63.7 / 68.3 / 69.7, where I opined, “It could go higher as it was in July and again in August, but if the broad market takes a rest soon (soon??), INTC could fall back into an Accumulation Zone, at which point I’d be a buyer.”

Our automated RSI-7 signal system gave a Daily-based SELL Alert @ $130.90 on 12/31, which is precisely where the stock is today. There could be a Weekly-based SELL Alert this week also. With the Monthly RSI-7 presently at the extreme height of 78.2, if there is a SELL Alert given on the Weekly, I’d be out and possibly short IBM as well as HPQ.

As for IBM, this one has outstanding investor relations. Their Doug Shelton is sure to send me all the latest, and points to the “interesting” stuff etc, which makes it easy for lazy business editors to regurgitate. But, the proof is in the pudding; this is a company people gave up for dead for 25 years until 1995. It’s kinda like McDonalds in my mind. They once held the whole market, then lost it, then had a total change in planning and execution, and now voila the results are there.

Many people don’t like the style over substance, but this is a stock that was $10.50 in July 1993, and then it boomed 12x through mid-1999. Then, after getting killed along with the Internet crash through to mid-2002, the stock started soaring again. Well, it’s not a rocket ship, but for one of the largest technology companies in the world, you can’t expect the law of big numbers to help.

Here again is why I say that its important to watch the CEO, especially a new one. IBM fortunes changes immediately after Sam Palmisano took the reins.

http://en.wikipedia.org/wiki/Samuel_J._Palmisano

Ford Motor under Alan Mulally is another.

Do you recall how I would rail about GM’s Rick Wagoner? Now even a Hubble telescope couldn’t help you find that guy’s name in the GM literature. New GM Chairman and interim CEO Ed Whitacre is doing a terrific job and, while he says he’s in no hurray to make a change, I’m sure he’ll hire the right person to replace himself with.

http://en.wikipedia.org/wiki/Edward_Whitacre,_Jr.

The job that Whitacre did at AT&T was another example of outstanding corporate leadership. And of course you know I like Boeing’s Jim McNerney a lot too.

Final point about IBM, the real story here is that some day, and maybe not a long time coming, this company will have less than a billion shares outstanding, and that in itself is outstanding.

Here are the charts for INTC ($20.83 1/08 vs $20.17 10/9 close; up +3.3% qtr):

The stock was up +3.27% this quarter vs +32.0% one quarter previously.

At 1/08, the RSI-7 for the Monthly/Weekly/Daily for INTC is 67.1 (still rising) / 66.2 (falling) / 64.7 (falling).

At 10/09, the RSI-7 for the Monthly/Weekly/Daily was 63.7 / 68.3 / 69.7, where I opined, “It could go higher as it was in July and again in August, but if the broad market takes a rest soon (soon??), INTC could fall back into an Accumulation Zone, at which point I’d be a buyer.” Hence, with the small gain and large risk, I was right to avoid it this past 13 weeks.

Our automated RSI-7 signal system amazingly gave a Monthly-based BUY Alert exactly one year ago 1/08/2009 @ $14.07. , which is precisely where the stock is today. There could be some further buying presently, but the stock gave a DAILY-based SELL Alert 1/06 @20.80. The Weekly RSI-7 (and Monthly as well) is still rising and could reverse any time soon, so I would continue to avoid and look for a decent entry in an Accumulation Zone somewhere below 30 on the Weekly.

As to the VL write-up of Intel, the analyst had to publish right before the earnings are due on Thursday after the close. Intel is expected to report a quarterly profit of $0.31 per share versus just 4 cents a year ago. The company is also expected to report a +23% rise in quarterly revenue.

Recently there has been a flurry of public relations efforts to cover up the bad press from bad management practices that were probably illegal, like price fixing, patent theft maybe, and all that. But as to its ability to perform, proof will be in the pudding from quarterly beats over comparables for the next several years that I anticipate. This 800-pound gorilla is back! It would not be a surprise for 2010 (brand new chip announced this week) to bring in all-time record high sales, cash flow and earnings per share.

Buy this one on (extreme) weakness. You will never see the lows of 2008-2009 again. I do think you’ll see a $30 to $40 stock in a couple years with a dividend of $0.80 in 2012. At this point, the RSI-7 for M-W-D is still too high and I think the Semi-conductor stocks (SMH) have had a bit too much of a run and need to chill.

Notes for WIR#15 Apr 11, 2010

Look at the charts for HPQ ($53.87 4/09 close; up +2.4% in 1Q2010. Previously $52.59 1/08 close; up from $47.38 10/9 close; up +11.0% in 4Q2009):

At 4/09/2010, the RSI-7 for the Monthly/Weekly/Daily for HPQ was 71.5 (down from 78.1 13 weeks ago, but now rising a tad) / 72.7 (rising but stable) / 65.3 (stable).

There was a 52-week high on 4/06 at $53.97. The 52-week low was back on May 8 at $33.40.

Interesting is that we had a Monthly SELL in January, but then the stock started higher. But this week, there was a Daily data SELL Alert on Wed Apr 7 at $53.29. The Weekly data shows a Distribution Zone with a rising RSI, but it wouldn’t take much to see a sell signal. Also the Monthly data is now close to the weekly data and signal. So, if HPQ does weaken (RSI however was rising Friday), then I expect to see a SELL on both the Weekly and Monthly as well. So this one is borderline. On balance, I anticipate it to drop from here.

Look at the charts for IBM ($128.76 4/09 close; down -$2.09 (-1.60%) from $130.85 1/08 close 13 weeks ago, which was up +3.9% over the prior qtr vs the $125.93 10/9 close;):
http://billcara2.com/tkchart/tkchart.asp?stkname=IBM&ind=rsi&wt=3
http://billcara2.com/tkchart/tkchart.asp?stkname=IBM&ind=rsi&wt=1
http://billcara2.com/tkchart/tkchart.asp?stkname=IBM&ind=rsi&wt=0

At 4/09, the RSI-7 for the Monthly/Weekly/Daily for IBM was 67.1 / 59.4 / 53.8 versus the comparative 67.1 (still rising) / 66.2 (falling) / 64.7 (falling) at 1/08.

My proprietary system gave SELL Alerts through the first quarter, and the share price has fallen a bit. There was a Daily SELL Alert on Mar 02 at $127.42. That did not work out but was not a bad signal. There was a Weekly SELL Alert on Jan 05 at $130.85, which was a real good one because the IBM soon afterward sank to below 122 before the end of Jan and through the middle of Feb. Finally there was a Monthly data SELL Alert on Feb 08 at $121.88 that was a disaster in that the stock soon afterward shot ahead to over 130.

But, the message is clear: technically IBM is not strong.

Look at the charts for INTC ($22.55 4/09 close, up +$1.72 (+8.26%) from its close at $20.83 13 weeks ago on 1/08, which was up +3.3% vs $20.17 at the 10/9 close;):

At 4/09, the RSI-7 for the Monthly/Weekly/Daily for INTC was 71.9 (hot) / 78.8 (danger zone) / 63.2 (blip up on Friday).

INTC looks to me like it could set a new 52-week high this week, but I wouldn’t be flirting with danger. Raise your stops. There was a Daily data SELL Alert on Apr 06 at $22.40, and Friday was up +$0.31 (+1.10%), so we’ll have to see how this one plays out. There were Distribution Zone signals on the Weekly data at 3/18 at 22.20 and 4/09 Friday on the Monthly data at 22.55.

With regard to the Value Line studies of these companies, I have to say I don’t like what Theresa Brophy is trying to pull off with both Hewlett-Packard and IBM. She concludes that both are solid or worthwhile selections with relatively good ‘2’ and ‘3’ rankings respectively. She fails to say that in the current quarter she dropped the rankings from ‘1’ to ‘2’ for HPQ and from ‘2’ to ‘3’ for IBM. I don’t like the omission.

Brophy also goes on to say both companies are going to benefit because corporations “will replace aging computer hardware” and productivity measures will soon help, yada yada. Please, spare us that nonsense. What she needs to be doing is telling us how these two companies have significantly improved their balance sheets in recent years or how they are going to improve their margins on hardware, etc. She also missed telling us that her data shows us that HPQ plans to use its growing cash bundle to buy back shares and increase dividends +7.5% annually although there hasn’t been an increase since 1999???. The indicated share buyback is not a small one. The reduction from 2.345 billion shares in 2008 to 2.050 billion by 2015 is a big one. That’s 300 million shares at an average price of maybe $80 is roughly $24 billion in the next 5 years. That’s doable but I’d like to know if that really is the plan, and I’d like to know about any plans for a dividend increase, because it would really change the metrics one way or the other.

Anyway, Hewlett-Packard is doing well – a borderline Cara 100. As for IBM, you know I like the metrics. I just wonder why the PE multiple is so low.

After a rough four quarters ending 3Q2009, Intel (INTC) has been looking up. All the important metrics have been improving. The balance sheet is better than Triple-A. If you happen to read the news ticker one day that this company is going to raise its dividend or buy back shares, you ought to hit the BUY button, close your eyes and think about all the money you’re going to make. In that scenario, the dividend yield for such a high quality growth stock would be outstanding.

But re-read my note above that my system generated a Daily data SELL Alert on Tuesday this week. That can be corrected by time elapsing or a share price pull-back. There is no need to chase this one, as good as it is in my book.

Notes for WIR#28 July 11, 2010

Notes for WIR#28 July 11, 2010

These charts show that IBM had the quickest start off the mark a few days ago, and that IBM has dropped only -0.62% in the previous 13 weeks (qtr year), while INTC is down -10.24% and HPQ is down -16.00%.

Sometimes, it’s best to compare peer group stocks together in charts over the same time periods, as I did above and sometimes it’s best to look at a single stock over various time periods, as I do below.

All in all, for the stocks of these three companies, I best like the upside at INTC. I particularly like the long base pattern over the past number of years. Also, their financial strength is next to none.

If you go to the Value Line analyst reports and look near the top left corner, you will see the VL Annual Total Return projection, as a high and low. The hi-lo for each: INTC is +30%-+24%; IBM is +19%-+14%; and HPQ is +22%-+17%. So VL likes the upside here too.

The analyst reports of these three companies are quite positive. Although the Timeliness (potential for a price move in the next 12 months) and Technical (same but for 6 months) is a ‘3’ (average) for all, the Timeliness is now a ‘2’ (better than average) for INTC. I think VL has it right.

Let’s look at each company separately.

First up is Hewlett-Packard (HPQ), a company that seems to either have it going really good or really not so good.

Here are the charts for HPQ ($45.25 7/09 close; down -16.00% in 2Q2010 (Previously: $53.87 4/09 close; up +2.4% in 1Q2010 and $52.59 1/08 close; up from $47.38 10/9 close; up +11.0% in 4Q2009):
http://billcara2.com/tkchart/tkchart.asp?stkname=HPQ&ind=rsi&wt=3
http://billcara2.com/tkchart/tkchart.asp?stkname=HPQ&ind=rsi&wt=1
http://billcara2.com/tkchart/tkchart.asp?stkname=HPQ&ind=rsi&wt=0

As for my projection for HPQ as at the last quarter: “On balance, I anticipate it to drop from here”. It dropped -16.00%. The company has been going through a period of rapid restructuring after acquiring EDS in Aug 2008, a period of economic weakness.

The rough patch might be over. After 2008 earnings of $3.25 dropped to $3.14 in 2009, there is a rebound in 2010 with earnings expected to come in at a record $3.55, with a further bump in 2011 to $4.20.

As for the stock at 7/09, the RSI-7 for the Monthly/Weekly/Daily for HPQ was 46.9 (rising) / 39.6 (rising) / 53.5 (rising). Clearly, momentum is on the rise.

As for the data or the Value Line analyst’s comments on HPQ, there is nothing I could argue one way or the other. The stock is down and likely to lift. Business has been soft, but getting much better. Hewlett-Packard makes good products and offers good services, so in the long run, you shouldn’t fear the stock.

In the short run, you cannot overlook the -16% dip as a buying opportunity. If your objective is to buy low and sell high, then now is a pretty good time to buy.

Next is Big Blue; big performer, IBM (IBM).

Here are the charts for IBM ($127.96 7/09 close; down -0.62% in 2Q2010 (Previously: $128.76 4/09 close; down -$2.09 (-1.60%) from $130.85 1/08 close 13 weeks before that, which was up +3.9% over the prior qtr vs the $125.93 10/9 close;):
http://billcara2.com/tkchart/tkchart.asp?stkname=IBM&ind=rsi&wt=3
http://billcara2.com/tkchart/tkchart.asp?stkname=IBM&ind=rsi&wt=1
http://billcara2.com/tkchart/tkchart.asp?stkname=IBM&ind=rsi&wt=0

At 7/09, the RSI-7 for the Monthly/Weekly/Daily for IBM was 62.0 (falling) / 52.6 (falling) / 59.2 (rising).

At 4/09, the RSI-7 for the Monthly/Weekly/Daily for IBM had been 67.1 (stalled) / 59.4 (falling) / 53.8 (falling).

At 1/08, the RSI-7 for the Monthly/Weekly/Daily for IBM had been 67.1 (still rising) / 66.2 (falling) / 64.7 (falling).

In the past quarter, I opined: “But, the message is clear: technically IBM is not strong.” Given the surge in the past week, I was wrong if you are looking Q/Q. The company is in better financial shape than it was at the end of 2008. Operationally, the Big Blue machine is clicking. Earnings per share have been smoothly increasing from $7.18 in 2007, $8.93 in 2008 and $10.01 in 2009. So where’s the recession. This year, the EPS are expected to be $11.20 and $12.35 is the VL forecast for next year.

Maybe I am wrong again at this point, but of these three companies, I’d pick the IBM stock 3rd for price performance over the next Q. I cannot overlook the recent price run-up. Also, there is nothing in the data or the VL write-up for operations that shows me that IBM has a leg up over the other two in this quarter or next, so I have to base a comparative decision on the charts.

Having said that; both the VL analyst and myself like IBM a lot. It’s in fact a Cara 100 company.

I saved the best for last: Intel (INTC).

Here are the charts for INTC ($20.24 7/09 close; down -10.24% in 2Q2010 (Previously: $22.55 4/09 close, up +$1.72 (+8.26%) from its close at $20.83 13 weeks prior to that on 1/08, which was up +3.3% vs $20.17 at the 10/9 close;):
http://billcara2.com/tkchart/tkchart.asp?stkname=INTC&ind=rsi&wt=3
http://billcara2.com/tkchart/tkchart.asp?stkname=INTC&ind=rsi&wt=1
http://billcara2.com/tkchart/tkchart.asp?stkname=INTC&ind=rsi&wt=0

At 7/09, the RSI-7 for the Monthly/Weekly/Daily for INTC was 51.3 (has fallen a lot) / 43.3 (has fallen a lot) / 54.8 (down a bit from 4/09, but rising).

At 4/09, the RSI-7 for the Monthly/Weekly/Daily for INTC had 71.9 (hot) / 78.8 (danger zone) / 63.2 (blip up on Friday). That was a strong heads-up I gave you 13 weeks ago. In fact, how about the call that I made on 4/09 with the price at $22.55:

INTC looks to me like it could set a new 52-week high this week, but I wouldn’t be flirting with danger. Raise your stops. There was a Daily data SELL Alert on Apr 06 at $22.40, and Friday was up +$0.31 (+1.10%), so we’ll have to see how this one plays out. There were Distribution Zone signals on the Weekly data at 3/18 at 22.20 and 4/09 Friday on the Monthly data at 22.55.

There was in fact a 52-week high for Intel on 4/15 (i.e., the next week) at $24.37. Then my danger-alert proved timely as well as the stock closed this week at $20.24, with a low of $18.96 on July 2.

As I said, the balance sheet strength of Intel is second to none. Operationally, there has been a big turnaround. From a loss in 2Q2009 of 7 cents per share, there is likely to be a profit of about $0.43 this quarter, and big Q/Q improvements in the next couple quarters. Earnings momentum then is the name of the game here.

So now I’ll put the semi in forward gear, and tell you I like it here and for the immediate term (say nine months) and for the longer term (say a couple years out). In the short-term however, i.e., from say sometime in August into Oct-Nov, I am worried about the oncoming traffic on the NASDAQ highway. The broad market might pull back in late summer. If that were to happen, it’ll be hard for INTC to move against the flow, so this one might require a gut check for some of you. But if your disposition is rather long-term, I’d buy a little here and write some puts, which will allow you either to lower your cost base or take on a bit more stock at lower prices. Don’t be shy.

In summary, if the equity market does turn out to be a bummer this summer and fall, I’d be waiting for capitulation day and buy, buy, buy all three stocks. But my favorite would be Intel. The world at times may have economic problems but it will always need computer chips and this company is the world’s 800-pound gorilla in the chip space.

Now tell me; after you see my enthusiasm for these three Big Tech companies plus later on Research In Motion, why would you throw those four stocks away a week ago during the tail end of a crash? Makes no sense to me, but then again I’m not a Wall Street Titan.

Stick with the program: Buy low and sell high.

Notes for WIR#41 October 11, 2010

Here are the comparative charts:

Monthly: http://billcara2.com/tkchart/tkchart.asp?stkname=INTC,IBM,HPQ&prt=0&ind=rsi

Weekly: http://billcara2.com/tkchart/tkchart.asp?stkname=INTC,IBM,HPQ&ind=rsi&wt=1

Daily: http://billcara2.com/tkchart/tkchart.asp?stkname=INTC,IBM,HPQ&ind=rsi&wt=0

The top and bottom line prospects of all three companies appear on the rise. Hewlett-Packard has replaced its CEO and made a couple acquisitions. Intel too has made a couple strategic acquisitions. IBM has introduced new servers and systems.

While previously I have been favoring INTC, the economic recovery has been slower than anticipated in the consumer segment, which affects Intel more than the other two companies. IBM has clearly been the best performer.

My previous notes still apply. I do like all three companies (IBM and Intel are Cara 100’s for Quality Growth) and would buy them during cycle lows for the Monthly, Weekly and/or Daily price series, depending on your time horizon.

In the 3rd week of September, IBM broke out an extended range pattern, and is a bit over-extended here. INTC needs improvement in the consumer computer market to attract institutional investor interest, but otherwise I think the important metrics are in place for a substantial run to higher levels.

As I am somewhat time constrained today, I’ll move on.

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

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

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

Merck [GICS 35, Dow 30]
(MRK: Google Finance file)
(MRK: Yahoo Finance file)
(MRK: StockChart chart)
(MRK: Billcara2 chart)
(MRK: ADVFN Financial Data)
(MRK: Value Line Report Jul. 16: next one is due Oct. 15)

Pfizer [GICS 35, Dow 30]
(PFE: Google Finance file)
(PFE: Yahoo Finance file)
(PFE: StockChart chart)
(PFE: Billcara2 chart)
(PFE: ADVFN Financial Data)
(PFE: Value Line Report Jul. 16: next one is due Oct. 15)

General Electric [GICS 20, Dow 30, ex-Cara 100]
(GE: Google Finance file)
(GE: Yahoo Finance file)
(GE: StockChart chart)
(GE: Billcara2 chart)
(GE: ADVFN Financial Data)
(GE: Value Line Report Jul. 23: next one is due Oct. 22)

United Technologies [GICS 20, Dow 30, Cara 100]
(UTX: Google Finance file)
(UTX: Yahoo Finance file)
(UTX: StockChart chart)
(UTX: Billcara2 chart)
(UTX: ADVFN Financial Data)
(UTX: Value Line Report Jul. 23: next one is due Oct. 22)

Caterpillar [GICS 20, Dow 30]
(CAT: Google Finance file)
(CAT: Yahoo Finance file)
(CAT: StockChart chart)
(CAT: Billcara2 chart)
(CAT: ADVFN Financial Data)
(CAT: Value Line Report Jul. 23: next one is due Oct. 22)

Coca Cola [GICS 30, Dow 30, Cara 100]
(KO: Google Finance file)
(KO: Yahoo Finance file)
(KO: StockChart chart)
(KO: Billcara2 chart)
(KO: ADVFN Financial Data)
(KO: Value Line Report Jul 30: next one is due Oct 29)

Kraft Foods [GICS 30, Dow 30]
(KFT: Google Finance file)
(KFT: Yahoo Finance file)
(KFT: StockChart chart)
(KFT: Billcara2 chart)
(KFT: ADVFN Financial Data)
(KFT: Value Line Report Jul 30: next one is due Oct 29)

Wal-Mart [GICS 30, Dow 30, Cara 100]
(WMT: Google Finance file)
(WMT: Yahoo Finance file)
(WMT: StockChart chart)
(WMT: Billcara2 chart)
(WMT: ADVFN Financial Data)
(WMT: Value Line Report Aug 6: next one is due Nov 5)

Disney [GICS 25, Dow 30, Cara 100]
(DIS: Google Finance file)
(DIS: Yahoo Finance file)
(DIS: StockChart chart)
(DIS: Billcara2 chart)
(DIS: ADVFN Financial Data)
(DIS: Value Line Report Aug 13: next one is due Nov 12)

3M Company [GICS 20, Dow 30, Cara US 100 June 25-06]
(MMM: Google Finance file)
(MMM: Yahoo Finance file)
(MMM: StockChart chart)
(MMM: Billcara2 chart)
(MMM: ADVFN Financial Data)
(MMM: Value Line Report Aug 13: next one is due Nov 12)

American Express [GICS 40, Dow 30]
(AXP: Google Finance file)
(AXP: Yahoo Finance file)
(AXP: StockChart chart)
(AXP: Billcara2 chart)
(AXP: ADVFN Financial Data)
(AXP: Value Line Report Aug. 20: next one is due Nov. 19)

Bank of America [GICS 40, Dow 30]
(BAC: Google Finance file)
(BAC: Yahoo Finance file)
(BAC: StockChart chart)
(BAC: Billcara2 chart)
(BAC: ADVFN Financial Data)
(BAC: Value Line Report Aug. 20: next one is due Nov. 19)

JP Morgan [GICS 40, Dow 30]
(JPM: Google Finance file)
(JPM: Yahoo Finance file)
(JPM: StockChart chart)
(JPM: Billcara2 chart)
(JPM: ADVFN Financial Data)
(JPM: Value Line Report Aug. 20: next one is due Nov. 19)

Microsoft [GICS 45, Dow 30]
(MSFT: Google Finance file)
(MSFT: Yahoo Finance file)
(MSFT: StockChart chart)
(MSFT: Billcara2 chart)
(MSFT: ADVFN Financial Data)
(MSFT: Value Line Report Aug. 20: next one is due Nov. 19)

Johnson & Johnson [GICS 35, Dow 30, Cara 100]
(JNJ: Google Finance file)
(JNJ: Yahoo Finance file)
(JNJ: StockChart chart)
(JNJ: Billcara2 chart)
(JNJ: ADVFN Financial Data)
(JNJ: Value Line Report Aug 27: next one is due Nov 26)

McDonalds [GICS 30, Dow 30, Cara 100]
(MCD: Google Finance file)
(MCD: Yahoo Finance file)
(MCD: StockChart chart)
(MCD: Billcara2 chart)
(MCD: ADVFN Financial Data)
(MCD: Value Line Report Sept. 3: next one is due Dec. 3)

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

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

Boeing Co [GICS 20, Dow 30. Cara 100]
(BA: Google Finance file)
(BA: Yahoo Finance file)
(BA: StockChart chart)
(BA: Billcara2 chart)
(BA: ADVFN Financial Data)
(BA: Value Line Report Sep. 17: next one is due Dec. 17)

Travelers Co [GICS 40, Dow 30]
(TRV: Google Finance file)
(TRV: Yahoo Finance file)
(TRV: StockChart chart)
(TRV: Billcara2 chart)
(TRV: ADVFN Financial Data)
(TRV: Value Line Report Sep. 17: next one is due Dec. 17)

AT&T [GICS 50, Dow 30]
(T: Google Finance file)
(T: Yahoo Finance file)
(T: StockChart chart)
(T: Billcara2 chart)
(T: ADVFN Financial Data)
(T: Value Line Report Sept. 24: next one is due Dec. 24)

Verizon [GICS 50, Dow 30]
(VZ: Google Finance file)
(VZ: Yahoo Finance file)
(VZ: StockChart chart)
(VZ: Billcara2 chart)
(VZ: ADVFN Financial Data)
(VZ: Value Line Report Sept. 24: next one is due Dec. 24)

Cisco Systems [GICS 45, Dow 30, Cara 100]
(CSCO: Google Finance file)
(CSCO: Yahoo Finance file)
(CSCO: StockChart chart)
(CSCO: Billcara2 chart)
(CSCO: ADVFN Financial Data)
(CSCO: Value Line Report Sept. 24: next one is due Dec. 24)

Procter & Gamble Co. [GICS 30, Dow 30, Cara 100]
(PG: Google Finance file)
(PG: Yahoo Finance file)
(PG: StockChart chart)
(PG: Billcara2 chart)
(PG: ADVFN Financial Data)
(PG: Value Line Report Oct. 1: next one is due Dec. 31)

Home Depot [GICS 25, Dow 30]
(HD: Google Finance file)
(HD: Yahoo Finance file)
(HD: StockChart chart)
(HD: Billcara2 chart)
(HD: ADVFN Financial Data)
(HD: Value Line Report Oct. 1: next one is due Dec. 31)

Hewlett-Packard [GICS 45, Dow 30]
(HPQ: Google Finance file)
(HPQ: Yahoo Finance file)
(HPQ: StockChart chart)
(HPQ: Billcara2 chart)
(HPQ: ADVFN Financial Data)
(HPQ: Value Line Report Oct. 8: next one is due Jan. 7)

IBM [GICS 45, Dow 30, Cara 100]
(IBM: Google Finance file)
(IBM: Yahoo Finance file)
(IBM: StockChart chart)
(IBM: Billcara2 chart)
(IBM: ADVFN Financial Data)
(IBM: Value Line Report Oct. 8: next one is due Jan. 7)

Intel [GICS 45, Dow 30, Cara 100]
(INTC: Google Finance file)
(INTC: Yahoo Finance file)
(INTC: StockChart chart)
(INTC: Billcara2 chart)
(INTC: ADVFN Financial Data)
(INTC: Value Line Report Oct. 8: next one is due Jan. 7)

Sector ETF Summary for the US equity market

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.

This week, 9 of the 10 sectors put in higher prices, both Week over Week and for Friday. The three commodity-price sensitive and heavy industry sectors, Basic Materials, Energy and Industrials, were the three strongest this week. Consumer Discretionary was also strong. All were up between +2.72% and +3.10% W/W. The only loser, and a small one at that, was Telecom (IYZ -0.23% W/W).

Table 1: Cara ETF List is sorted by price performance Week over Week (W/W), i.e. 1W%N. Sorted by 1-Week Price Performance Symbol Close 1Day
Change 1Day
%Change 1W
%Change 2W
%Change 4W
%Change YTD
%Change 3M
%Change 6M
%Change 12M
%Change XLB 34.24 0.66 1.97% 3.10% 2.64% 4.33% 0.65% 15.36% -1.75% 8.80% XLI 32.20 0.26 0.83% 2.83% 2.40% 5.90% 13.68% 13.52% 1.88% 21.58% XLE 58.36 0.72 1.25% 2.73% 5.59% 7.04% -0.77% 11.48% -1.42% 3.82% XLY 34.36 0.35 1.03% 2.72% 1.96% 6.41% 14.53% 14.08% 1.90% 23.55% SMH 28.33 0.31 1.11% 2.24% 2.87% 12.87% -0.28% 5.12% 0.93% 12.91% SPY 116.54 0.65 0.56% 1.68% 1.50% 4.54% 2.83% 8.75% -1.88% 9.31% XLF 14.70 0.04 0.27% 1.38% 0.68% 1.17% 0.07% 2.73% -10.80% -2.71% XLK 23.31 0.13 0.56% 1.22% 0.82% 7.22% 0.17% 9.54% 0.04% 11.64% XLU 31.85 0.10 0.31% 0.95% 1.24% 1.30% 2.48% 7.60% 6.10% 9.56% XLP 28.19 0.06 0.21% 0.93% 0.53% 2.43% 5.70% 6.46% 1.08% 9.01% IYH 63.80 0.21 0.33% 0.89% 0.50% 3.69% -1.36% 6.94% -3.41% 8.71% IYZ 21.87 -0.02 -0.09% -0.23% 0.74% 4.04% 6.42% 13.14% 7.42% 18.15%

You can do this table yourself by entering the following string into the Summary window at Investertech.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 ETFs – up to 30 in total. For a list of components to many ETFs, go to the AMEX.com and NYSE.com web sites, and click on ETFs.

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

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

SPY Monthly data: SPY Monthly Data

SPY Weekly data: SPY Weekly Data

SPY Daily data: SPY Daily Data

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

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

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

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

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

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

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

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

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

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

Individual 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 Monthly Data

XLE Weekly data: XLE Weekly Data

XLE Daily data: XLE Daily Data

Table 2: Senior oil & gas equities

Sorted by 1-Week Price Performance Symbol Close 1Day
Change 1Day
%Change 1W
%Change 2W
%Change 4W
%Change YTD
%Change 3M
%Change 6M
%Change 12M
%Change CEO 209.61 1.82 0.88% 6.73% 10.35% 15.41% 29.93% 24.77% 18.71% 45.02% PTR 123.96 1.90 1.56% 5.45% 7.59% 12.64% 1.23% 10.97% 2.70% 2.10% SU 34.61 1.10 3.28% 3.93% 10.26% 5.20% -5.85% 10.08% -1.82% -3.22% CNQ 37.54 0.66 1.79% 3.85% 13.45% 13.76% 1.79% 6.71% -4.41% 8.06% APA 101.53 1.88 1.89% 3.31% 3.46% 8.32% -4.10% 16.17% -4.48% 1.00% XOM 64.38 0.53 0.83% 2.94% 4.26% 5.20% 4.99% 0.00% 0.00% 0.00% IMO 39.25 0.54 1.39% 2.64% 4.56% 3.24% -0.51% 5.40% -4.62% -0.93% CVX 83.94 0.42 0.50% 2.43% 4.77% 6.50% 6.17% 19.22% 8.09% 17.48% TOT 53.70 0.07 0.13% 1.92% 4.72% 8.31% -18.49% 10.54% -8.28% -9.28% SLB 63.56 0.57 0.90% 1.81% 4.82% 7.17% -5.29% 8.58% -4.59% 1.45% RIG 62.98 0.94 1.52% -2.13% 4.86% 7.07% -27.43% 20.95% -27.81% -31.63% PBR 34.68 0.79 2.33% -4.88% -0.69% -3.24% -28.79% -3.99% -23.63% -26.90%

The Oiler stocks ETF (XLE) lifted +2.73% W/W to close at 58.36. There was a gain on Friday of +1.25%, helped along by a much weaker $USD.

The Crude Oil price ($WTIC) gained +$1.01/bbl (+1.23%) to $82.89. A high price for about six months was reached on Thursday.

China National Offshore (CEO) gained +6.7% W/W and is now up +10.4% over 2-weeks, +15.4% over 4-weeks and +24.8% over 13-weeks.

PetroChina (PTR) was this week’s 2nd biggest winner, lifting +5.5%, and is now up +12.6% over 4-weeks.

The big loser this week was the one that did a monster placement of shares, PetroBrazil (PBR -4.9%). PBR did have a solid +2.3% gain on Friday.

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 Monthly Data

XLB Weekly data:

XLB Weekly Data
XLB Daily Data

Table 3: Senior Basic Materials:
XLB Daily data:

Sorted by 1-Week Price Performance Symbol Close 1Day
Change 1Day
%Change 1W
%Change 2W
%Change 4W
%Change YTD
%Change 3M
%Change 6M
%Change 12M
%Change DOW 30.03 0.88 3.02% 7.71% 6.98% 15.54% 2.91% 20.17% -2.28% 15.95% TS 41.17 1.31 3.29% 5.67% 7.94% 13.67% -7.13% 8.17% -7.15% 13.10% AA 12.89 0.69 5.66% 5.40% 5.66% 15.40% -22.58% 20.24% -13.32% -10.17% BHP 81.56 1.78 2.23% 4.98% 7.39% 15.46% 2.50% 22.19% 0.25% 17.54% RTP 62.78 1.20 1.95% 4.93% 6.97% 15.79% 12.05% 32.78% 3.61% 37.58% TCK 44.50 1.42 3.30% 4.78% 13.12% 17.41% 18.86% 34.60% -1.40% 44.01% MT 34.83 0.91 2.68% 4.00% 4.66% 8.44% -27.50% 17.27% -23.94% -8.00% PKX 120.14 -0.01 -0.01% 3.01% 8.37% 11.73% -11.48% 15.91% -3.73% 14.98% NUE 39.92 0.93 2.39% 2.70% 6.06% -0.42% -16.47% 2.07% -15.94% -12.32% VALE 32.18 -0.01 -0.03% 1.51% 7.12% 17.32% 6.38% 25.12% -4.43% 28.87% FBR 17.34 0.32 1.88% -1.08% 0.99% 0.87% -25.71% 17.80% -20.28% 0.00% GGB 13.34 0.20 1.52% -2.41% -0.45% -8.00% -23.73% -4.17% -25.01% -10.41%

The Basic Materials (XLB) sector ETF gained +3.10% W/W, including a gain of +1.97% on Friday, closing the week at 34.24. This is what happens when the $USD is plunging as it did from Tuesday through Friday. XLB was the 31 sector performer this week.

Dow Chemical (DOW) was up +7.7% to $33.03. Zacks Research likes the Diversified Chemicals: http://www.businesswire.com/news/home/20100923005819/en

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

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

XLI Monthly data: XLI Monthly Data

XLI Weekly data: XLI Weekly Data

XLI Daily data: XLI Daily Data

Table 4: Senior capital goods makers and transportation:

Sorted by 1-Week Price Performance Symbol Close 1Day
Change 1Day
%Change 1W
%Change 2W
%Change 4W
%Change YTD
%Change 3M
%Change 6M
%Change 12M
%Change GE 17.12 0.07 0.41% 4.65% 2.76% 7.13% 10.81% 15.44% -7.76% 5.55% FLR 52.66 0.32 0.61% 4.59% 7.67% 8.38% 14.45% 16.50% 5.87% 8.11% TXT 21.62 0.41 1.93% 4.19% 4.24% 14.39% 13.55% 26.88% -2.48% 11.56% HON 45.75 0.27 0.59% 3.62% 2.90% 6.87% 13.38% 12.33% 0.57% 24.19% BA 69.23 0.77 1.12% 3.59% 7.17% 8.44% 23.23% 6.95% -4.22% 32.37% FDX 88.69 1.95 2.25% 3.56% 5.30% 5.38% 6.28% 20.37% -2.24% 13.46% CAT 80.37 1.63 2.07% 2.75% 0.80% 12.78% 37.27% 27.23% 24.64% 51.38% UTX 72.91 0.13 0.18% 2.50% 1.97% 5.84% 1.79% 8.45% -1.07% 18.02% ABB 21.79 0.00 0.00% 1.87% 3.22% 6.97% 10.95% 16.77% -0.64% 5.67% MMM 89.16 0.26 0.29% 1.76% 2.53% 6.22% 7.40% 9.78% 7.49% 19.63% UPS 67.53 0.16 0.24% 1.64% 0.39% -0.34% 16.07% 12.63% 5.07% 19.88% ERJ 28.63 0.39 1.38% 0.85% -0.35% 6.39% 23.25% 33.79% 19.04% 23.25%

The Industrials ETF (XLI) gained +2.83% W/W closing at 32.20. That was the 2nd best sector performer.

There were no losers on my Industrials monitor this week or on Friday. The leader of the troops was in fact General Electric (GE +4.65% to 17.12).

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

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

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

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

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

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

XLY Monthly data: XLY Monthly Data

XLY Weekly data: XLY Weekly Data

XLY Daily data: XLY Daily Data

Table 5: Senior consumer discretionary equities

Sorted by 1-Week Price Performance Symbol Close 1Day
Change 1Day
%Change 1W
%Change 2W
%Change 4W
%Change YTD
%Change 3M
%Change 6M
%Change 12M
%Change JCP 32.49 0.85 2.69% 18.40% 27.16% 53.62% 19.62% 39.80% 4.87% -7.59% LVS 37.30 1.52 4.25% 6.00% 10.58% 17.96% 124.43% 62.46% 53.94% 104.05% CCL 40.28 0.16 0.40% 4.92% 6.59% 14.17% 25.64% 27.55% 4.38% 21.11% TTM 26.69 0.09 0.34% 4.30% 9.97% 17.32% 48.03% 51.99% 42.42% 107.06% DIS 34.51 0.60 1.77% 3.51% 2.77% 1.05% 7.61% 3.51% -3.25% 20.37% WHR 82.77 2.21 2.74% 3.20% 4.56% 13.29% 1.00% -8.33% -10.09% 18.91% BC 15.82 0.37 2.39% 3.20% 9.41% 10.86% 18.06% 21.97% -4.64% 35.68% NKE 82.04 1.05 1.30% 2.23% 3.10% 11.24% 25.54% 16.73% 10.88% 28.15% TGT 54.20 -0.12 -0.22% 1.37% -1.54% 2.15% 11.64% 8.36% -2.59% 9.85% EBAY 24.61 -0.14 -0.57% 0.61% -0.53% 2.12% 2.97% 23.73% -6.99% -0.81% TM 71.07 -0.08 -0.11% -1.02% -2.72% 0.67% -16.47% -0.20% -10.58% -9.82% BBBY 42.87 -0.10 -0.23% -1.22% -1.94% 6.25% 9.84% 15.74% -7.77% 14.63%

Consumer Discretionary (XLY) gained +2.72% W/W to close at 34.36, the 4th strongest sector performer.

JC Penny (JCP) gained +18.4% W/W and is now up +27.2% over 2-weeks and +53.6% over 4-weeks. This is a remarkable surge because over six months JPM is up only +4.9%.

wir_41.3.gif

Next strongest was Las Vegas Sands (LVS +6.00% W/W).

Bed, Bath & Beyond (BBBY -1.22%) and Tata Motors (TM -1.02%) were losers this week for the second week in a row.

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

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

XLP Monthly data: XLP Monthly Data

XLP Weekly data: XLP Weekly Data

XLP Daily data: XLP Daily Data

Table 6: Senior consumer staples equities

Sorted by 1-Week Price Performance Symbol Close 1Day
Change 1Day
%Change 1W
%Change 2W
%Change 4W
%Change YTD
%Change 3M
%Change 6M
%Change 12M
%Change ABV 132.66 2.72 2.09% 6.17% 10.70% 15.02% 26.55% 25.66% 42.49% 46.63% PG 61.86 1.06 1.74% 2.83% 0.36% 2.42% 1.21% -0.15% -1.12% 7.30% KMB 66.45 0.37 0.56% 2.18% 0.61% 0.29% 3.39% 7.33% 8.35% 12.51% WMT 54.41 0.05 0.09% 1.97% 0.61% 4.70% 0.33% 10.63% -1.75% 9.39% DEO 70.80 0.45 0.64% 1.01% 1.72% 4.44% 1.91% 7.06% 2.56% 14.66% WAG 33.98 0.11 0.32% 0.89% 11.92% 17.33% -8.90% 20.84% -7.79% -14.28% SBUX 26.07 0.00 0.00% 0.50% -0.23% 2.64% 13.10% 4.95% 4.99% 27.36% KO 59.41 -0.03 -0.05% 0.49% 1.35% 1.52% 4.15% 13.33% 10.51% 8.83% KFT 30.93 -0.26 -0.83% -0.90% -3.19% 0.49% 12.76% 6.54% 2.66% 18.46% PEP 65.75 -0.35 -0.53% -1.87% -0.57% -0.99% 7.36% 2.73% -0.33% 8.88% KR 21.29 -0.03 -0.14% -1.98% -3.62% 0.19% 3.96% 3.75% -4.87% -1.75% WFMI 34.57 -0.65 -1.85% -6.74% -6.74% -2.54% 24.13% -5.98% -7.57% 10.10%

Consumer Staples (XLP) gained +0.93% W/W to 28.19, which was not bad considering XLP is a defensive sector that almost always underperforms when the $USD is as week as it was this week.

The week’s big winner was Ambev (ABV +6.17%). The big loser was Whole Foods (WFMI -6.74%).

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

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

IYH Monthly data: IYH Monthly Data

IYH Weekly data: IYH Weekly Data

IYH Daily data: IYH Daily Data

Table 7: Senior healthcare equities

Sorted by 1-Week Price Performance Symbol Close 1Day
Change 1Day
%Change 1W
%Change 2W
%Change 4W
%Change YTD
%Change 3M
%Change 6M
%Change 12M
%Change GSK 41.66 0.47 1.14% 4.70% 2.94% 5.63% -3.05% 19.34% 7.21% 5.26% BAX 49.16 0.38 0.78% 3.17% 2.37% 14.14% -15.66% 13.30% -14.80% -14.58% MYGN 16.95 0.47 2.85% 2.79% 3.35% 5.15% -36.42% 7.96% -27.19% -37.43% GENZ 72.75 0.39 0.54% 2.64% 1.61% 2.77% 47.42% 37.24% 38.92% 30.35% JNJ 63.23 0.01 0.02% 2.40% 1.75% 5.42% -2.24% 3.01% -2.62% 3.76% BIIB 57.59 0.35 0.61% 1.88% 2.07% -0.16% 7.36% 13.25% 2.06% 18.50% NVS 58.17 0.29 0.50% 1.82% 1.09% 6.89% 10.57% 17.00% 11.39% 16.11% PFE 17.46 0.08 0.46% 1.63% 0.34% 2.77% -7.77% 17.81% 1.87% 4.55% GILD 36.33 0.07 0.19% 1.59% -0.60% 5.64% -16.10% 4.34% -20.71% -19.66% AMGN 56.39 0.43 0.77% 1.59% 0.12% 3.75% -2.30% 7.96% -6.82% -4.25% NVO 100.36 0.56 0.56% 1.10% 4.44% 8.99% 52.89% 19.22% 26.65% 60.29% MRK 36.91 0.20 0.54% 0.85% -1.15% 0.71% -0.27% 2.93% 0.35% 13.81% BMY 27.16 -0.14 -0.51% -0.44% -1.67% 0.41% 5.97% 6.18% 3.78% 21.58% CELG 57.83 0.30 0.52% -0.46% -1.08% 4.29% 3.75% 15.54% -8.38% 6.03% MDT 33.45 0.07 0.21% -0.54% -1.15% 0.33% -23.80% -9.57% -25.47% -9.37% AET 30.69 0.01 0.03% -1.63% -0.81% 2.54% -7.00% 11.03% -8.85% 18.68% WLP 55.01 -0.05 -0.09% -1.96% -2.96% 0.33% -7.93% 10.31% -11.40% 23.01% UNH 34.35 0.01 0.03% -3.05% -3.86% -0.41% 8.94% 15.73% 5.30% 42.18%

The healthcare sector (IYH) lifted +0.89% W/W to close at 63.80.

Baxter (BAX +3.17% W/W to 49.16) recovered from the previous week’s loss and is now up +14.14% over 4-weeks. Btw, BAX got smashed about 4 or 5 weeks ago on a nasty SELL downgrade from Citi, claiming the business environment was negative. Just goes to show that sometimes analysts get it wrong – at least for the short run. Of course, those people are thinking longer term.

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

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

XLF Monthly data: XLF Monthly Data

XLF Weekly data: XLF Weekly Data

XLF Daily data: XLF Daily Data

Table 8: Senior financial company equities

Sorted by 1-Week Price Performance Symbol Close 1Day
Change 1Day
%Change 1W
%Change 2W
%Change 4W
%Change YTD
%Change 3M
%Change 6M
%Change 12M
%Change BBD 21.71 0.66 3.14% 4.48% 12.60% 18.12% -2.78% 16.10% 13.55% 5.90% GS 152.66 1.55 1.03% 3.36% 3.65% 1.51% -11.80% 12.70% -14.95% -18.87% UBS 17.67 -0.03 -0.17% 3.21% -0.79% -1.06% 10.30% 22.71% 9.01% -0.45% RY 54.15 0.15 0.28% 2.77% 3.93% 4.88% -0.13% 6.45% -7.85% 1.90% C 4.1900 0.0100 0.24% 2.44% 7.44% 7.16% 23.24% 5.54% -6.26% -9.89% DB 56.46 -0.17 -0.30% 2.43% 1.35% -6.68% -22.90% -10.07% -25.76% -28.24% TD 73.90 0.62 0.85% 2.18% 1.79% 2.03% 17.47% 8.88% 0.11% 18.60% CS 44.02 -0.70 -1.57% 1.80% -0.95% -2.50% -15.33% 4.09% -11.25% -23.12% WFC 25.95 -0.05 -0.19% 1.53% 1.41% 0.78% -5.01% -2.59% -19.48% -10.67% JPM 39.31 -0.21 -0.53% 1.29% -1.11% -1.13% -8.26% 3.01% -14.10% -13.22% IBN 51.51 0.42 0.82% 1.24% 4.61% 12.86% 32.89% 38.65% 16.94% 30.70% HBC 52.46 -0.09 -0.17% 1.24% -0.29% 3.15% -10.05% 10.47% 1.02% -8.21% BNS 54.00 0.12 0.22% 1.20% 2.66% 6.11% 15.29% 13.21% 7.81% 20.37% MS 25.32 0.25 1.00% 1.20% 0.68% -6.88% -18.08% 4.63% -18.01% -20.73% HDB 187.23 0.06 0.03% -0.23% 1.68% 11.08% 40.29% 28.37% 29.68% 57.07% BAC 13.18 -0.13 -0.98% -0.90% -3.09% -2.73% -16.00% -11.31% -29.33% -23.95%

The Financials (XLF) gained +1.38% W/W to close at 14.70, which is almost no move at all over 4-weeks (+1.17%) or YTD (+0.07%).

up from 14.53, which in turn had been up from 14.52. No action, terrible Relative Volume (RV).

I hope you learn from these pages. When I last published the WIR on Sept 19, here’s what I wrote in this space about XLF and the action of the previous week:

Here’s what I find interesting: the top two Dow 30 stocks this week were JP Morgan (JPM +7.02% W/W and up +2.65% on Friday) and Bank of America (BAC +6.80% W/W and up +1.66% on Friday), but where was the volume. Friday’s relative volume (compared to the 3-month average in these two stocks) was just 0.88% and 0.95% respectively… In order for me to believe the Bull (stuff), I want to see a Rel Vol of 1.30, not some wimpy 0.9%, when the stocks are up that much… As I see it then, these price increases have been caused by hot money – the stuff that can cool out in a week or two.

(Then on Sept 19 I added) This Friday, JPM had a loss of -2.27% on the day, giving it a small gain W/W. BAC dropped -1.11% on Friday, which resulted in a loss for the week of -1.11%… No follow-through. No volume.

Bullish action requires both price and volume increases in order to be sustainable. If it’s there, you hold a stock through the pull-backs; but if not, you shorten your time horizon, selling into strength (i.e., the pumping action) before other traders dump it.

Goldman Sachs (GS +3.36% to 152.66) enjoyed a good week, but has done little to nothing for 2-weeks, 4-weeks, 26-weeks and YTD.

Bank of America (BAC -0.90% W/W to 13.18) was weakest on my monitor.

Daily charts of electronic brokers and exchanges

Weekly charts of electronic brokers and exchanges

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

The Tech sector ETF (XLK) gained +1.22% W/W to close at 23.31. Meanwhile, the Semiconductors (SMH +2.24% to 28.33) were a bit stronger.

Dell (DELL +4.98%) and Apple (AAPL +4.09%) were tech leaders this week. Of the 17 stocks on my tech monitor, DELL is the best performer over 4 weeks (+13.52%). Of course, there are several semi-conductors that beat that performance.

The big tech loser was First Solar (FSLR -6.53% W/W), but I think this company will be ok from what I read at Credit Suisse.

In the semi’s this week, the winner was SanDisk (SNDK +6.72%).

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

SMH Monthly data: SMH Monthly Data

SMH Weekly data: SMH Weekly Data

SMH Daily data: SMH Daily Data

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

XLK Monthly data: XLK Monthly Data

XLK Weekly data: XLK Weekly Data

XLK Daily data: XLK Daily Data

Table 9: Senior technology equities

Sorted by 1-Week Price Performance Symbol Close 1Day
Change 1Day
%Change 1W
%Change 2W
%Change 4W
%Change YTD
%Change 3M
%Change 6M
%Change 12M
%Change DELL 13.69 0.42 3.17% 4.98% 8.22% 13.52% -5.85% 7.12% -13.13% -13.46% AAPL 294.07 4.85 1.68% 4.09% 0.60% 11.64% 37.41% 13.94% 22.55% 55.37% JNPR 31.47 0.10 0.32% 3.86% 5.67% 11.28% 15.78% 23.75% -0.06% 16.13% ORCL 28.00 0.31 1.12% 2.79% 3.86% 11.78% 12.68% 20.59% 8.40% 34.62% ADBE 26.99 -1.70 -5.93% 2.74% 0.41% -16.18% -27.23% 0.52% -22.75% -21.38% CSCO 22.48 0.09 0.40% 2.60% 1.77% 9.02% -8.95% -0.31% -14.46% -5.03% IBM 138.85 0.13 0.09% 2.37% 3.53% 8.49% 4.83% 8.50% 8.81% 13.54% SAP 51.36 0.37 0.73% 2.15% 3.30% 12.93% 9.02% 9.53% 6.09% 1.24% GOOG 536.35 6.34 1.20% 2.04% 1.72% 12.65% -14.42% 17.48% -5.49% 4.31% QCOM 44.76 0.21 0.47% 1.13% 0.47% 10.74% -4.64% 31.92% 5.57% 7.99% HPQ 41.15 0.34 0.83% 0.93% 0.41% 7.50% -21.54% -9.52% -23.27% -11.43% INFY 69.49 0.64 0.93% -1.46% 3.90% 11.49% 22.43% 13.29% 15.22% 40.44% RIMM 49.36 1.44 3.01% -1.69% 1.00% 11.88% -25.13% -0.20% -29.16% -28.11% STP 9.050 0.130 1.46% -2.16% -4.74% 0.89% -47.48% -17.28% -39.87% -39.46% EMC 19.87 0.26 1.33% -2.31% -8.18% -0.55% 11.01% 2.58% 7.99% 11.63% CTSH 64.20 -0.10 -0.16% -2.43% -0.03% 2.62% 37.18% 21.73% 26.15% 64.62% FSLR 137.62 -2.94 -2.09% -6.53% -6.44% -0.57% 1.59% 5.33% 9.01% -12.19%

Sorted by 1-Week Price Performance Symbol Close 1Day
Change 1Day
%Change 1W
%Change 2W
%Change 4W
%Change YTD
%Change 3M
%Change 6M
%Change 12M
%Change SNDK 39.52 2.27 6.09% 6.72% 10.24% 6.98% 30.04% -9.23% 10.92% 86.06% TXN 28.73 0.59 2.10% 5.43% 6.68% 21.22% 10.46% 18.62% 16.22% 27.52% ATML 8.270 0.080 0.98% 4.95% 6.57% 27.23% 70.87% 70.52% 60.89% 103.69% MU 7.590 0.480 6.75% 4.12% 5.42% 16.59% -30.05% -12.66% -28.26% -7.66% UMC 2.8900 0.1200 4.33% 3.21% 7.04% 12.02% -26.46% -5.56% -25.52% -18.13% LLTC 30.96 0.13 0.42% 3.06% -1.43% 3.27% 0.06% 4.38% 8.40% 15.18% ADI 32.34 0.43 1.35% 3.03% 4.76% 15.79% 2.12% 11.21% 11.56% 22.64% BRCM 35.74 0.32 0.90% 2.94% 5.52% 5.55% 10.86% -1.27% 6.05% 25.23% NSM 13.03 0.25 1.96% 1.80% 2.52% 7.86% -15.06% -7.39% -10.69% -4.75% TSM 10.36 0.08 0.78% 1.07% 3.81% 9.28% -10.54% 2.68% -2.45% 4.44% INTC 19.52 0.12 0.62% 1.04% 0.51% 8.63% -6.51% -2.89% -12.51% -1.81% AMAT 11.82 0.09 0.77% 0.94% 1.63% 10.67% -17.34% -2.39% -11.39% -9.63% LSI 4.5500 0.0900 2.02% 0.00% 1.79% 8.85% -25.16% -5.41% -26.14% -16.36% AMD 7.050 0.180 2.62% 0.00% 3.07% 21.34% -27.32% -4.34% -25.16% 27.95% XLNX 26.08 0.15 0.58% -1.02% -1.73% 5.72% 2.76% -3.48% -0.53% 15.55% STM 7.510 -0.030 -0.40% -1.18% -2.21% 8.37% -19.16% -11.02% -24.52% -20.28% TER 10.95 -0.22 -1.97% -1.35% -0.90% 14.78% -0.09% 9.72% -1.88% 10.94% KLAC 34.45 -0.55 -1.57% -1.60% 2.99% 21.17% -6.69% 20.03% 10.81% -3.47% ALTR 29.34 -0.17 -0.58% -2.49% 0.79% 11.94% 27.57% 9.31% 18.21% 45.61% NVLS 25.78 -0.73 -2.75% -2.50% -2.90% 9.66% 8.78% -2.13% 3.53% 26.81%

Sector 50 (telecom: IYZ, VOX and IXP)

This week, the telecom sector (IYZ) lost -0.23% to 21.87, which was the only losing sector. This is surprising since most of the stocks were up a lot, like Nokia (NOK +5.04%) and Telefonica (TEF +4.54%). Of course, AT&T (T -2.05% W/W) and Verizon (VZ -0.18%) were soft. T was actually the 2nd worst Dow 30 performer this week.

Table 14: Telecom

Sorted by 1-Week Price Performance Symbol Close 1Day
Change 1Day
%Change 1W
%Change 2W
%Change 4W
%Change YTD
%Change 3M
%Change 6M
%Change 12M
%Change NOK 10.83 0.12 1.12% 5.04% 7.65% 8.95% -18.88% 26.22% -28.18% -24.79% TEF 78.54 0.36 0.46% 4.54% 5.42% 14.41% -8.30% 26.13% 11.09% -7.85% CHL 53.10 -0.07 -0.13% 3.03% 2.06% 9.33% 12.74% 5.17% 5.15% 5.90% MICC 98.73 1.67 1.72% 2.74% -1.27% 0.49% 26.48% 16.65% 11.11% 37.13% VOD 25.88 0.04 0.15% 2.29% 0.74% 4.44% 11.60% 18.07% 12.91% 20.20% AMX 55.38 0.94 1.73% 2.16% 4.67% 12.95% 13.46% 12.13% 10.01% 18.23% FTE 22.38 0.00 0.00% 2.05% 2.61% 7.65% -13.62% 16.62% -4.60% -16.12% SI 107.28 0.76 0.71% 1.26% 0.30% 11.49% 13.76% 13.61% 7.40% 12.91% VZ 32.83 -0.10 -0.30% -0.18% 0.58% 6.52% -1.35% 22.59% 8.85% 12.59% DCM 16.82 -0.22 -1.29% -0.24% -2.04% -2.55% 18.95% 5.52% 7.13% 9.36% T 28.22 -0.03 -0.11% -2.05% -1.26% 1.40% -1.26% 14.86% 8.46% 8.79%

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

IYZ Monthly data: IYZ Monthly Data

IYZ Weekly data: IYZ Weekly Data

IYZ Daily data: IYZ Daily Data

The Utilities sector ETF (XLU) gained +0.95% to close at 31.85.

This sector along with Consumer Staples, Healthcare and to an extent the Telecoms are defensive and not expected to out-perform when the US Dollar is so weak as it was this week.

Table 12: US Utilities

Sorted by 1-Week Price Performance. Symbol Close 1Day
Change 1Day
%Change 1W
%Change 2W
%Change 4W
%Change YTD
%Change 3M
%Change 6M
%Change 12M
%Change NGG 45.43 0.08 0.18% 5.16% 5.26% 4.56% -16.98% 17.69% -8.50% -6.46% PCG 46.78 0.29 0.62% 2.32% 2.10% 5.81% 5.12% 9.94% 10.15% 14.38% SO 37.71 -0.08 -0.21% 1.53% 0.59% 1.62% 13.41% 9.24% 12.53% 18.51% D 44.68 0.17 0.38% 1.48% 1.02% 3.21% 14.68% 9.64% 7.74% 30.53% PEG 33.51 0.11 0.33% 1.30% 1.95% 4.98% -0.36% 1.06% 9.94% 8.03% TRP 37.86 0.23 0.61% 1.01% 1.42% 2.49% 9.36% 7.56% 0.83% 18.31% EXC 43.20 0.28 0.65% 0.40% 0.51% 0.89% -11.62% 6.69% -2.77% -11.78% AEP 36.19 0.14 0.39% -0.08% -0.85% -1.20% 3.58% 4.08% 6.57% 18.46% ED 48.27 0.10 0.21% -0.12% -1.07% 1.22% 6.37% 6.51% 8.45% 17.99% DUK 17.64 0.01 0.06% -1.07% -1.95% 0.63% 3.95% 5.50% 8.62% 13.15% FE 38.47 0.01 0.03% -1.08% 0.97% 2.86% -17.75% 5.66% -2.48% -15.25%

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

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

XLU Monthly data: XLU Monthly Data

XLU Weekly data: XLU Weekly Data

XLU Daily data: XLU Daily Data

http://investertech.com/markets/mkview.asp?qte=ss&ty=tk&qt=AEP+D+DUK+ED+…

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

AEP D DUK ED EXC FE 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.

Bonds & Yields Review

Table 10: US Treasury Yields

US Treasury Bonds Maturity Yield Yesterday Last Week Last Month 3 Month 0.10 0.10 0.13 0.11 6 Month 0.15 0.15 0.18 0.17 2 Year 0.26 0.27 0.40 0.51 3 Year 0.52 0.48 0.62 0.77 5 Year 1.10 1.10 1.26 1.45 10 Year 2.39 2.37 2.51 2.65 30 Year 3.75 3.70 3.72 3.73 Municipal Bonds Maturity Yield Yesterday Last Week Last Month 2yr AA 0.76 0.70 0.71 0.56 2yr AAA 0.77 0.75 0.63 0.47 2yr A 1.11 1.09 1.04 0.90 5yr AAA 1.43 1.32 1.42 1.12 5yr AA 1.43 1.42 1.42 1.30 5yr A 2.01 2.03 1.85 1.89 10yr AAA 2.65 2.61 2.77 2.43 10yr AA 2.56 2.63 2.65 2.47 10yr A 2.51 2.43 2.79 2.85 20yr AAA 3.92 4.05 4.38 4.33 20yr AA 4.01 4.05 4.08 3.90 20yr A 3.72 3.41 3.62 3.89 Corporate Bonds Maturity Yield Yesterday Last Week Last Month 2yr AA 0.92 0.86 0.93 1.05 2yr A 1.02 1.01 1.13 1.34 5yr AAA 1.47 1.49 1.60 1.71 5yr AA 1.86 1.85 1.95 2.18 5yr A 2.53 2.56 2.65 2.81 10yr AAA 2.71 2.69 2.81 2.80 10yr AA 3.77 3.82 4.05 4.07 10yr A 3.71 3.71 3.97 4.22 20yr AAA N/A N/A N/A N/A 20yr AA 4.13 N/A N/A N/A 20yr A 5.48 5.50 5.67 5.60

Over the past month, the yields for the 2-, 5-, and 10-year Treasuries dropped –from -0.25% (0.51 to 0.26), -0.35% (1.45 to 1.10) and -0.26% (2.65 to 2.39) respectively. These are significant declines in yield and represent much higher principal prices as traders are moving capital into bonds, fearing a sudden pull-back in equities, one that has not yet happened.

The yields on T-Bills and on the long bond were almost unchanged from a month ago.

This week, the 20-year Treasury Bond ETF (TLT –0.37% W/W) dropped to 104.22, but the loss happened on Friday when TLT dropped -0.44% as yield popped as the G-20 were about to start meetings to discuss a co-coordinated program of Quantitative Easing that would avoid a currency war from unfolding.

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

Interest rates and bond yields.

TNX0X Weekly Data

IRX0X Weekly Data

Interactive Daily data charts:

TNX0X Daily Data

IRX0X Daily Data

Interactive Chart of Interest rates and bond yields.

US Bond Funds — Interactive Monthly Data Charts SHY Monthly data series chart:

US Bond Funds - Monthly Data For SHY

IEF Monthly data series chart:

US Bond Funds - Monthly Data For IEF

TLT Monthly data series chart:

US Bond Funds - Monthly Data For TLT

AGG Monthly data series chart:

US Bond Funds - Monthly Data For AGG

LQD Monthly data series chart:

US Bond Funds - Monthly Data For LQD

TIP Monthly data series chart:

US Bond Funds - Monthly Data For TIP

US Bond Funds — Interactive Weekly Data Charts SHY Weekly data series chart:

US Bond Funds - Weekly Data For SHY

IEF Weekly data series chart:

US Bond Funds - Weekly Data For IEF

TLT Weekly data series chart:

US Bond Funds - Weekly Data For TLT

AGG Weekly data series chart:

US Bond Funds - Weekly Data For AGG

LQD Weekly data series chart:

US Bond Funds - Weekly Data For LQD

TIP Weekly data series chart:

US Bond Funds - Weekly Data For TIP

US Bond Funds — Interactive Daily Data Charts

SHY Daily data series chart:

US Bond Funds - Daily Data For SHY

IEF Daily data series chart:

US Bond Funds - Daily Data For IEF

TLT Daily data series chart:

US Bond Funds - Daily Data For TLT

AGG Daily data series chart:

US Bond Funds - Daily Data For AGG

LQD Daily data series chart:

US Bond Funds - Daily Data For LQD

TIP Daily data series chart:

US Bond Funds - Daily Data For TIP

Table 11: Interest-sensitive securities

Sorted by 1-Week Price Performance. Symbol Close 1Day
Change 1Day
%Change 1W
%Change 2W
%Change 4W
%Change YTD
%Change 3M
%Change 6M
%Change 12M
%Change DRE 12.10 0.11 0.92% 2.98% 1.42% 1.51% -0.08% 13.62% -6.92% 0.33% TIP 111.54 0.73 0.66% 2.12% 2.60% 3.73% 7.07% 5.57% 7.51% 7.96% EQR 48.63 0.12 0.25% 1.69% -1.28% 2.10% 45.60% 12.28% 19.90% 63.13% NLY 17.71 0.01 0.06% 1.43% -3.75% 0.68% 1.72% -1.23% 2.97% 1.08% IEF 99.98 0.04 0.04% 1.16% 1.73% 3.31% 12.56% 5.34% 12.37% 7.84% AVB 105.76 1.25 1.20% 0.60% -1.07% -1.24% 30.25% 8.26% 15.98% 44.34% AGG 108.82 0.22 0.20% 0.52% 0.63% 1.23% 5.33% 1.80% 4.97% 3.75% SHY 84.45 0.00 0.00% 0.15% 0.13% 0.43% 1.66% 0.51% 1.50% 0.54% TLT 104.22 -0.46 -0.44% -0.37% 0.70% 1.86% 16.04% 4.44% 17.40% 6.18%

Commodities Review

This week, commodity prices ($CRB) gained +3.30% W/W to close at 295.11. The biggest gain was on Friday (+2.72%).

There had been a Point & Figure “Triple Top Breakout” on Sept 27. That was the result of the US Dollar getting softer, and this week there was more softness.

Although I use the $CRB (Reuters/Jeffries Index), principally because it’s the oldest, there are many commodity indexes: http://www.crbtrader.com/crbindex/ • Astmax Commodity Index(AMCI) • Commin Commodity Index • Dow Jones-AIG Commodity Index • Goldman Sachs Commodity Index • Reuters/Jefferies CRB Index • Rogers International Commodity Index • Standard & Poor’s Commodity Index • NCDEX Commodity Index • Deutsche Bank Liquid Commodity Index (DBLCI) • UBS Bloomberg Constant Maturity Commodity Index (CMCI)

Here is a link to an article that discusses the major ones that have been around for a while: http://www.rogersrawmaterials.com/overviewandanalysis.PDF

Here is a current price summary of the heaviest weighted commodities contracts: http://money.cnn.com/data/commodities/

These indexes change their component weightings perhaps annually or even monthly, for example: http://www.seekingalpha.com/article/43586-the-new-generation-of-diversif… http://tinyurl.com/a5myfj

$CRB Index

Open Futures Contracts

Interactive Chart of Weekly CRB Commodities Index:

CRB Commodities Index - Weekly Chart

Interactive Chart of Daily CRB Commodities Index:

CRB Commodities Index - Daily Chart

Oil Review

This week, the $WTIC lifted +$1.22/bbl (+1.49% W/W) to close at 82.89. The gain on Friday was +1.23%. On Thursday there was an intra-day high of $84.62. The low of the past two months was set three weeks ago at $73.58, so the price is presently on the high side as traders are watching G-20 monetary authorities closely this week for additional support for Quantitative Easing.

The price has been in a narrow trading range for over a year and reasonably flat for about five months. A price in the $85 range would signal a possible break-out, but that is likely only if the over-sold US Dollar encounters a second short-term cycle failure and fails to lift.

For $WTIC, the 50-day MA is now 77.16 and rising, although not quickly.

The 200-d MA is at 78.15, which is also rising but not much at all.

The narrow and flat-lining 200-d MA and 50-d MA is still a technically undecided picture.

As I pointed out in this space three weeks ago with oil in the mid-70’s: “But with currencies presently at war, the oil market could be on the edge.”

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

Interactive Chart of Weekly Crude Oil:

Crude Oil- Weekly Chart

Interactive Chart of Daily Crude Oil:

Crude Oil- Daily Chart

Gold & Precious Metals Review

For my last WIR write-up, I had a similar comment for Gold:

Same thing here; with currencies presently at war, the gold market could also be on the edge… This week, precious metal prices picked up steam, closing the week with a gain of +$28.80/oz (+2.26%) at $1274.40. There was a near month contract high of $1282.70 on Friday… Higher Dollar could mean lower $GOLD and vice versa… As I saw the market turning, I jumped back in, high-risk buy and all… The problem when you are trading oil and gold is that high-risk buys and sells can quickly zoom. You have to hit the trade button and watch with bated breath…

In the present case, there is a technical break-out. Analysts at many of the major broker-dealers are calling for $1350 gold. While that might not seem to be a big percentage price difference, such a result would have enormous implications to the re-pricing of asset values of the miners. With $1350 gold, many analysts would lift their economic models to price the gold at say $1250, and that would mean cut-off grades would be lower and hence total reserve calculations would be higher. That’s a double pump – price and quantity…

But what is striking here is the cash flow increase of the miners with such increases in price as all the miners produce they will quickly sell if that is their intent. Most of the goldminers are already cash rich and hold almost no debt. So the extra cash will lower the risk and hence lower the discount rates used by the analysts in those economic models, which is a third pump. I tell you, don’t overlook what’s going on here; it happens infrequently.

Yes, these are high-risk times, but you need to take advantage. I believe that even if $GOLD pops further to say $1350, and then falls back, the drop will be short and relatively shallow if you call a quick loss of -12% or more a small one. But, it’s the longer term outlook I find very promising. Governments around the world are unable to stop spending and the added debt leads to central bankers having to print more money. As the quantity of money falls behind the incremental value of the global economy, and interest rates stay well below long-term norms, the price of $GOLD will rise…

Early this week I could see that buyers wanted to take the market even higher. The pull-back was too brief to fully consolidate a base, so I call this move a high-risk buy. I think we might soon see $1350 or a tad higher, but then the over-bought conditions would be ripe for a more significant reversal. All this depends on how the currency market plays out…

A week ago I stated: “It’s the present I am concerned about… Once the short-term picture works out, taking time to work through an over-bought condition, I think the gold market will go on a tear. I wouldn’t stay short overnight.”

Pretty good summation and advice I think. After hitting a high of $1364.70 early on Thursday this week, prices got hit hard, $GOLD recovered on Friday, closing the week with a gain of +$28.20/oz (+2.14%) at $1347.20, a gain of +5.71% from the price three weeks ago ($1274.40).

To repeat what I stated here three weeks ago:

What we’re seeing is that the world is now in agreement that gold is money. With so many problems with the US Dollar, the Yen and the Euro, it would not surprise me to see Gold become the world’s de facto reserve currency with all other currencies priced relative to an ounce of gold. That way we have an honest market. Today, the so-called Morgan Dollar ($USD) is just an outdated index that is only of academic interest. The component weightings no longer make any sense. But, Gold has meaning to people in every country and they will buy and sell it based on the strengths, weaknesses, opportunities and threats to their own wealth and investment circumstances.

http://investertech.com/tkchart/tkchart.asp?stkname=gld&cht=Tech+Chart&p…

http://investertech.com/tkchart/tkchart.asp?stkname=gld&cht=Tech+Chart&p…

http://investertech.com/tkchart/tkchart.asp?stkname=gld&cht=Tech+Chart&p…

The $GOLD 50-day Moving Average is now at 1254.42, up quite a bit from the 1217.98 of just three weeks ago.

The 200d MA is 1181.57, up from 1168.33 in three weeks.

This is a bullish long-term picture. Frankly the charts are not showing signs yet of a pull-back. I still think we may see $1400 gold in the next couple weeks. Then after a pull-back of at least $100/oz, I think the annual seasonal buying pattern will continue to lift the precious metals into late February or longer before we encounter larger selling spurts.

If you are a newbie to gold trading, you might want to review the info package put together by Stockhouse. Here are the links:

Gold As An Investment
http://www.stockhousefeatures.com/precious-metals/index.php/2010/09/gold…

Silver 101
http://www.stockhousefeatures.com/precious-metals/index.php/2010/09/silv…

Is Silver Money? (Revisited)
http://www.stockhousefeatures.com/precious-metals/index.php/2010/09/is-s…

History of Silver Mining
http://www.stockhousefeatures.com/precious-metals/index.php/2010/09/hist…

Palladium 101
http://www.stockhousefeatures.com/precious-metals/index.php/2010/09/pall…

Platinum 101
http://www.stockhousefeatures.com/precious-metals/index.php/2010/09/plat…

Basics of Silver Investing: Chapter 1
http://www.stockhousefeatures.com/precious-metals/index.php/2010/09/basi…

Basics of Silver Investing: Chapter 2 – Silver ETFs
http://www.stockhousefeatures.com/precious-metals/index.php/2010/09/chap…

Basics of Silver Investing: Chapter 3 – Physical Silver
http://www.stockhousefeatures.com/precious-metals/index.php/2010/09/chap…

Spot gold chart for the week

Interactive Chart of Weekly Gold EOD Continuous Contract Index:

GOLD EOD Continuous Contract Index - Weekly Chart

Interactive Chart of Daily Gold EOD Continuous Contract Index:

GOLD EOD Continuous Contract Index- Daily Chart

Interactive chart of recent trading for the Gold Bullion index.

Spot silver chart for the week

Interactive daily data

This week $SILVER had a gain of +$1.12/oz (+5.07%) to close at $23.22.

Three weeks ago, $SILVER closed at $20.74, and the AGQ (2x long) lifted from $69.60 to $75.77. I wrote: “A week ago I reported: “I’m mostly in cash and didn’t do much if any trades this week.” I definitely got active this week. If you do, keep a close eye on AGQ and GDXJ.”

This week AGQ closed at $94.13 after hitting a high of $94.25 on Thursday. GDXJ closed at $35.15 with a high on Thursday of $35.41

http://stockcharts.com/charts/gallery.html?s=$silver
http://tinyurl.com/y8k8ud4

For $SILVER, the 50d MA is now 18.67, which is well up from 18.41, 18.32, 18.26, 18.24, 18.21, 18.25, and 18.18, which had been trending down several weeks from 18.30, 18.38, 18.39, and 18.41, after lifting for many weeks: 18.37, 18.33, 18.27, 18.16, 18.07, 17.98, 17.87, 17.63, 17.44, 17.18, 16.91, 16.73 and 16.68.

The long-term 200d MA is 17.90, up from 17.85, 17.82, 17.79, 17.76, 17.72, 17.69 and 17.67, which had been flat a week after rising through 17.65, 17.60, 17.58, 17.55, 17.48, 17.39, 17.29, 17.21, 17.12, 17.02, 16.89, 16.77, 16.64, 16.52, 16.41, 16.31, 16.24, 16.20, 16.16, 16.10, 16.03, 15.97, 15.92, 15.85, 15.75, and 15.65 over 33 weeks.

A week ago I opined: “Whatever direction the PM’s take, I do anticipate $SILVER will be the leader of $GOLD.” These MA’s have clearly broken to the upside.

Interactive Chart of Weekly Silver EOD Continuous Contract Index:

SILVER EOD Continuous Contract Index - Weekly Chart

Interactive Chart of Daily Silver EOD Continuous Contract Index:

SILVER EOD Continuous Contract Index- Daily Chart

Interactive chart of the Silver Bullion index.

$PLAT was up +$26.00/oz this week (+1.55% W/W) to close at $1706.00/oz.

Note for all traders who doubt gold could trade at $1700/oz: if $PLAT did it, so can $GOLD.

http://stockcharts.com/charts/gallery.html?s=$plat
http://tinyurl.com/ydwz4pn

The 50d MA for $PLAT is now at 1583.68, which is well up from 1544.14 on Sept 19.

The 200d MA is at 1585.55, which is well up from 1568.94 on Sept 19.

I don’t trade plat or pall, but I study them as part of the precious metals trading I do.

Spot platinum chart for the week

Interactive Chart of Weekly Platinum EOD Continuous Contract Index:

PLAT EOD Continuous Contract Index - Weekly Chart

Interactive Chart of Daily Platinum EOD Continuous Contract Index:

PLAT EOD Continuous Contract Index- Daily Chart

Interactive chart of the Platinum metal index.

This week, $PALL gained +$12.70/oz (+2.20% W/W) to close at 589.10.

http://stockcharts.com/charts/gallery.html?s=$pall
http://tinyurl.com/yenr5rj

The 50d MA is now at 523.30, which is well up from 491.63 on Sept 19.

The 200d MA is at 479.38, which is up from 464.83 on sept 19.

I do anticipate further upside in the near-term, but then a stronger $USD would likely snuff out an over-bought condition.

Spot palladium chart for the week

Interactive Chart of Weekly Palladium EOD Continuous Contract Index:

PALL EOD Continuous Contract Index - Weekly Chart

Interactive Chart of Daily Palladium EOD Continuous Contract Index:

PALL EOD Continuous Contract Index- Daily Chart

Interactive chart of the Palladium metal index.

This week, $COPPER gained +$8.40 (+2.28%) to close at 377.45. $COPPER continues to lift well in excess of my expectations, but then again the US Dollar has fallen more quickly than I had figured.

I’m not wrong in the sense that in my last WIR on Sept 19 I clearly opined:

I anticipate higher copper prices, near-term, but mostly based on a weaker US Dollar. The April price at this level was the cycle high. Really, this is a currency play. The global economic demand is not so hot. Based on reality, and any strength in the Dollar, I could see a lower price for copper, down in the next couple months to $3.20-$3.25.

I still see that lower price happening – sometime after the US Dollar rebounds. The $USD is quite oversold at this point. What I am implying then is that $COPPER is quite over-bought here.

We’ll see. That’s what I like about markets: we’ll all get to see as nobody truly knows.

Not even Glencore/Xstrata. 🙂

http://stockcharts.com/charts/gallery.html?s=$copper
http://tinyurl.com/ybgnb7f

For $COPPER, the 50d MA is at 345.99, well up from 329.55 on Sept 19.

The 200d MA is at 328.71, up a tad from 325.15 of Sept 19.

As stated since late July, “the copper price is bullish. This pattern is in a Bull market at this point because the price is above a rising 50-day MA and 200-day MA”.

For those who are keen to study the industrial metals like copper, aluminum and zinc, why not look at the Powershares DBB, which trades on the NYSE.
http://finance.google.com/finance?q=NYSE:DBB

Freeport McMoRan (FCX) lifted +7.16% W/W to close at $95.51. The gain on Friday was +4.50%. When I last wrote this up on Sept 19, the price was $81.72 and I remarked that “Those who bought 16 sessions ago made a very solid gain.” Well, add three weeks and the gains have been remarkable – from a low of $65.71 in late August to $95.51.

Be wary of a Dollar rebound though. The past month FCX has been over 75 on the RSI-7.

wir_41.2.gif

Interactive Daily data

Interactive Weekly data

Interactive Chart of Weekly Copper EOD Continuous Contract Index:

COPPER EOD Continuous Contract Index - Weekly Chart

Interactive Chart of Daily Copper EOD Continuous Contract Index:

COPPER EOD Continuous Contract Index- Daily Chart

Interactive chart of the Copper metal index.

Table 12: Senior gold equities

Sorted by 1-Week Price Performance Symbol Close 1Day
Change 1Day
%Change 1W
%Change 2W
%Change 4W
%Change YTD
%Change 3M
%Change 6M
%Change 12M
%Change SSRI 21.99 0.37 1.71% 7.74% 8.65% 18.86% -3.38% 34.09% 12.54% -2.74% HL 6.690 0.280 4.37% 4.86% 7.04% 15.34% 3.40% 35.70% 11.13% 33.27% NG 9.250 0.090 0.98% 4.05% 6.44% 20.92% 46.36% 47.29% 19.05% 67.88% BVN 48.32 0.64 1.34% 3.85% 15.46% 19.37% 38.25% 26.33% 40.30% 25.51% ABX 48.57 0.89 1.87% 3.32% 4.74% 8.61% 20.25% 14.07% 18.61% 22.93% UXG 5.120 0.070 1.39% 2.81% 2.61% 0.59% 97.68% 6.89% 64.10% 69.54% GDXJ 35.09 0.74 2.15% 2.63% 3.94% 9.08% 46.51% 35.12% 25.82% 0.00% GFI 15.67 0.16 1.03% 2.62% 4.05% 6.45% 15.05% 21.10% 19.62% 4.54% SVM 8.470 0.150 1.80% 1.93% 0.95% 7.76% 22.40% 32.55% 15.55% 63.20% AEM 72.58 1.18 1.65% 1.84% 4.85% 12.14% 29.12% 27.31% 20.85% 1.13% HMY 11.48 0.07 0.61% 1.41% 0.53% 3.70% 9.54% 9.33% 14.23% -2.79% GDX 57.30 0.72 1.27% 1.24% 2.93% 8.03% 20.10% 16.04% 18.90% 17.68% AUY 11.54 0.07 0.61% 0.79% 3.96% 13.81% -2.12% 19.96% 9.70% -5.72% GG 44.05 0.37 0.85% 0.75% 0.55% 6.27% 8.28% 8.47% 9.58% 3.92% KGC 19.00 0.06 0.32% 0.53% 0.00% 12.69% 0.64% 20.03% 3.37% -16.92% EGO 18.54 0.18 0.98% 0.49% 1.59% -2.32% 26.21% 13.12% 34.64% 52.84% LIHR 39.25 -0.14 -0.36% 0.15% 3.43% 5.97% 28.35% 15.00% 62.80% 69.40% AU 46.99 0.49 1.05% -0.15% 3.87% 6.10% 11.46% 15.54% 15.45% 4.40% SLW 26.63 0.59 2.27% -0.15% 0.11% 11.47% 68.65% 41.95% 54.20% 93.39% PAAS 29.88 0.68 2.33% -0.40% 2.08% 12.67% 20.87% 24.19% 21.36% 15.28% IAG 17.57 0.16 0.92% -0.57% 0.23% 1.50% 9.00% 7.07% 13.94% 18.16% CDE 19.85 0.35 1.79% -1.19% 1.22% 11.33% 5.92% 31.89% 15.81% -13.85% NEM 62.89 -0.14 -0.22% -1.24% -0.80% 3.64% 29.80% 4.23% 16.68% 33.78% ANV 26.56 0.05 0.19% -2.82% -3.42% 6.45% 66.31% 42.03% 58.95% 141.89%

Interesting that this week with the $USD collapsing, there were 7 of the 24 gold and silver miners in my monitor that were losers on the week. It seems that traders are worried the price of gold will also collapse. For that to happen, the $USD must reverse course and do a moonshot I think.

The goldminer indexes and ETF’s were firm this week despite a bit of a bump on Thursday. The $XAU gained +2.28% W/W to 204.82, including a gain of +1.75% on Friday.

The GDX gained +1.24% to 57.30.

The key points I think many traders are missing today when they are looking at goldminers are:
(i)A price breakout in $GOLD, as has occurred recently increases the cash flow of the producers plus the valuation AND the size of the resource. The latter happens because the cut-off grades used in calculations are lowered.
(ii)The producers are throwing off so much cash they are both acquiring smaller companies and also starting to dividend the excess cash not required for operations, and I can foresee a time when the North American majors become high dividend yield investments like the South African goldminers used to be.
(iii)Key employees of the major miners have made so much personal wealth in the past few years that, already bitten by the gold bug, they are starting up junior companies. These new penny stocks are not your dad’s penny mining stocks.
(iv)Major broker-dealer research teams are now covering the new penny stocks, and researching them with on site visits, and running competent investment analysis, whereas in the past only the newsletter writers stuck close to these penny stocks and mostly because they were being paid to do so.

The gold business has arrived. Make no mistake about it. Governments all around the world are shuddering at the thought that the fiat money they are printing on paper is not as valuable as the hard money being produced from natural resources in the ground. Gold (and silver) is money!

I don’t have any further comments in this area this week as my time today is short. But as my trading is now focused entirely on precious metals and the miners and explorers you can rest assured I will be on the job.

To watch the moves in precious metal miners, you will have to monitor the individual stock charts, preferably in real-time, as follows: NEM ABX AU GFI GG HMY AUY KGC BVN

Interactive Daily data

Interactive Weekly data

LIHR IAG EGO RGLD GOLD TSE_AGI GSS NG NGD AEM

Interactive Daily data

Interactive Weekly data

Here are the key Silver miners and the SLV ETF: SLV SIL SVM CDE HL PAAS SSRI SLW MGN

Interactive Daily data

Interactive Weekly data

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

Interactive Chart of Weekly US Goldminers Index:

Weekly US Goldminers Index - Weekly Chart

Interactive Chart of Daily US Goldminers Index:

Daily US Goldminers Index - Daily Chart

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

Here are the US Goldminer ETF (GDX) index Weekly and Daily data charts:

GDX Weekly data:

GDX Weekly Data Chart

GDX Daily data:

GDX Daily Data Chart

The Toronto Exchange-listed goldminer iUnits S&P/TSX Capped Gold Index ETF trades under the ticker symbol TSE:XGD.

Just like GDX on the AMEX, you can trade XGD on Toronto. Canadian Dollar fluctuations will impact XGD vs GDX.

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

Interactive Chart of XGD Weekly data:

XGD Weekly Data Chart

Interactive Chart of XGD Daily data:

XGD Daily Data Chart

Forex Review

The $USD is a trade-weighted US Dollar index, we used to call the Morgan Dollar.

As commodities are priced in $USD you need to study forex price trends and cycles.

The Forex market is a four trillion dollar a day marketplace, which dwarfs the size of the stock and bond markets. In this market, the Euro/USD is the highest volume trader, and London is the center of the universe.

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

I don’t understand why the Yuan is not a factor, or the Mexican peso or Brazilian real, and why the krona is so important, but admitting it shows my ignorance. Recently I opined that the $USD no longer meets the needs of a globalized world with respect to a reserve currency benchmark. I have suggested that Gold may be the de facto benchmark.

The ETF that tracks the G-10 currencies is the Powershares DBV. http://tinyurl.com/ltxpk4

Regarding currencies, I find the ADVFN.com service (with inexpensive real-time price feed) to be quite useful. I have set up a monitor (one of 150-some tickers) for currencies, which you can do as well.

Click on: http://www.advfn.com/p.php?pid=m_tools

Into the window for stocks, enter the following string:

FX:EURUSD, FX:AUDUSD, FX:GBPUSD, FX:EURGBP, FX:EURCHF, FX:EURCAD, FX:USDCAD, FX:EURJPY, FX:USDJPY, FX:AUDJPY, FX:EURAUD

When you call up the stocks, you’ll see they are interactive, which means they update in real-time (if you paid the $10/mo for this data) or 15-20-minute delayed prices (free), and can be displayed with indicators and overlays.

Here are some of the charts I keep on a screen AT ALL TIMES, which one can access via the link under the stock name beside the ticker symbol:

US Dollar to Cdn Dollar:
http://www.advfn.com/p.php?pid=fxcharts&symbol=FX^USDCAD&period=1&freq=3

US Dollar to Aussie Dollar:
http://www.advfn.com/p.php?pid=fxcharts&symbol=FX^USDAUD&period=1&freq=4

UK Pound Sterling to US Dollar:
http://www.advfn.com/p.php?pid=fxcharts&symbol=FX%5eGBPUSD&period=1&freq=3

Euro to US Dollar:
http://www.advfn.com/p.php?pid=fxcharts&symbol=FX%5eEURUSD&period=1&freq=3

If you are new to this; think about it that in any pair, if the latest trend line is up, the first ticker is the one that is rising. So EURUSD, which is the way the contract is traded, the trend line is up, meaning the Euro is in rally mode against the US Dollar. The symbol USD in any pair is the denomination versus $USD, which is the trade-weighted US Dollar index (i.e., multiple currencies as described above).

A chart of the Euro vs Dollar (i.e., EURUSD) with an overlay of currencies (GBP, AUD and CAD in this case) will show you if, as, and the point when, currencies are impacting capital markets. We are looking for commonality in trend direction of the currencies in their trading against the US Dollar.

This week the so-called trade-weighted US Dollar index ($USD) dropped -1.17% to close at 77.18. There was a loss of -0.26% on Friday.

http://stockcharts.com/charts/gallery.html?s=$usd
http://tinyurl.com/y9c3sr4

The 50-day MA of the $USD is now at 81.14, down from 82.28 on Sept 19.

The 200-day MA is 81.87, a bit higher than 81.72 on Sept 19.

More equity and bond traders today are focused on the USD, and trading currencies in general, as they should be. More have clued in over the past year or two. In doing so, they recognize the power of monetary authority intervention in all capital markets.

The world has to make an important decision: Do we want free markets or will we allow ourselves to be trading at the mercy of government? So far we have to concede that we are marching to slavery, and many of us don’t like it one bit. Years ago I saw this happening and moved to The Bahamas where the fiscal system here is pay-as-you-go. There is no income tax system here.

This is a cash economy – the way it should be! Got Gold?

Weekly US Dollar Index - Weekly Chart

Interactive Chart of Daily US US Dollar Index:

Daily US Dollar Index - Weekly Chart

This week the Euro contract gained +1.09% W/W to close at 139.27. Friday was flat.

Just three weeks ago, when I last published the WIR, the Euro closed that week at 130.55, and the move that week was almost +3%. I reported at the time: “(This) is a huge move, facilitated of course by the Bank of Japan’s intervention to weaken the Yen, but not make the $USD so strong as to turtle the equity market… Two weeks ago in this space, I noted that “There is going to be resistance at just over 129, but the probabilities are higher for a gain in the Euro to the 133 to 136 levels in the next week or two. I think market interventionists would like to use a weaker US Dollar to support equity prices ahead of the November federal elections in the US.” At that point, the Euro was 128.94, and it then dropped to 127.09 a week ago before the moon-shot this week… I expect Euro rocket booster #2 to follow on fairly soon or else the equity market is set to fall. Part of my reasoning is that precious metals are now in the limelight and people everywhere are getting interested. Many have to sell Dollars to buy gold and silver, so I’m looking at a bit of that until the Gold and Euro rockets burn out. I’m not sure how many traders want to be faced off against the BoJ, so after a couple interventions this past week or two, I’m expecting the market to back off buying Yen until the equity market starts to cave. There are many traders who believe that the equity market will just keep on lifting though year-end, and that in itself will take the pressure off the Yen, and put it under the Euro.”

I think I got it right.

http://stockcharts.com/charts/gallery.html?s=$xeu
http://tinyurl.com/ydekjtk

The 50d MA for the Euro futures are now at 130.99, well up from 128.81 on Sept 19.

The 200d MA is at 132.08. down a bit from 132.86 on Sept 19.

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

Weekly Euro Dollar Index - Priced in USD

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

Daily Euro Dollar Index - Priced in USD

The Pound contract gained +0.76% W/W to close at 159.55. The gain on Friday was a huge +0.50%.

http://stockcharts.com/charts/gallery.html?s=$xbp
http://tinyurl.com/yasdzc2

The 50d MA of the Pound is at 156.47, up from 155.11 on Sept 19.

The 200d MA is 153.72, down from 154.10 on Sept 19.

Weekly British Pound Index:

Weekly British Pound - Weekly Chart

Daily British Pound Index:

Daily British Pound Index - Daily Chart

Weekly Japanese Yen Index:

This week, the Yen soared +1.50% to close at 121.83 viz the Dollar. The Bank of Japan wants it weaker. They want a higher Euro and US Dollar to help out their export market.

The Yen’s 50-day MA is now 118.10, up in three weeks from 116.56.

The 200-day MA is now at 112.08, up from 111.51 in three weeks.

As I pointed out in this space four weeks ago:

The BOJ is trying to talk down the Yen and are pretty much backed into a corner with overnight lending rates to the commercial banks almost at zero. Any quantitative easing here would lift equity, commodity and precious metal prices, but the Japanese may have no alternative… More QE by the BoJ would help push Gold higher.

Weekly Japanese Yen - Weekly Chart

Daily Japanese Yen Index:

Daily Japanese Yen Index - Daily Chart

This week the Cdn Loonie gained +0.89% to 98.88, up in three weeks from 96.96. There was a large gain of +0.58% on Friday.

I wrote in this space three weeks ago:

As the Loonie, Aussie and Euro lift, the price of Gold is expected to lift.

I think there could be a Cdn Dollar at par with the US Dollar soon, then after a small pull-back, I expect it to move to a premium for a very long time. The Cdn economy and major banks are in fine shape relatively speaking. The nation has always been a tad more conservative than America, which has put its finances in better shape to face the music of global recession.

A stronger Loonie, of course, will help facilitate Canadian traders/investors to visit my future conferences in Freeport or just to pay me a visit to possibly consider all the value-based properties and business opportunities I know exist on Grand Bahama Island.

http://stockcharts.com/charts/gallery.html?s=$cdw
http://tinyurl.com/ycx58us

The Loonie is now almost at par.

The 50-day MA is now at 96.67, up in 3 weeks from 96.24.

The 200d MA is at 96.58, almost flat with the 50day MA.

Weekly Canadian Dollar Index:

Weekly Canadian Dollar - Weekly Chart

Daily Canadian Dollar Index:

Daily Canadian Dollar Index - Daily Chart

Here is the China Yuan (CNY) chart.

Wrap-up:

I cannot begin to tell you the challenges I faced in getting back in the trading chair after a couple weeks off. I know people who plan for a year when moving from island to island in The Bahamas. Obviously it’s taking longer than even I expected.

But, no problem mon. Everything cool.

I may decide to stay in Nassau though.

Fittingly on this Columbus Day weekend, some friends whose families hundreds of years ago settled the little island of San Salvador where Columbus discovered the New World in The Bahamas in 1492 are trying to attract my interest as a real estate developer. While I have not yet travelled to that particular island, I know enough about the place, with Club Med and all, to believe it is quite beautiful.

Since returning to Nassau two weeks ago and preparing my move to Freeport, I must have touched a nerve in the locals who are now showing me deal after deal, wanting me to stay. Developing a Traders Village was in my plans a few years ago, and that interests me.

As for the rest; we’ll see.

Hopefully, next week’s WIR will be easier to produce.

In summary though, I cannot over emphasize the importance of this weekend’s G-20 meetings in Washington. Even the World Bank and the International Monetary Fund are involved. Decisions may be made to stabilize currencies. That’s not to say the $USD will rise or fall, but if it would trade with less volatility, with less intervention by those persons who are in the Washington meetings, traders might relax a bit and get back to fundamentals.

The biggest issue though is the massive amount of real estate related debt that has dubious value, certainly no where near the values reported by the financial institutions holding them. Assets must come in line with liabilities, and for that to happen, there can be pressure put on at both ends. Liabilities can be written down and assets can be reflated. Bankers don’t want the write-downs, but frankly the only alternative will be Gold priced at $2000, $3000, maybe $5000 an ounce, and with it the price of land and housing will never be affordable to the majority of people in the world.

As always, compromise is needed. The games must stop; the real work must begin. The people have to stop suffering. Life isn’t just a matter of getting rich via capital markets; it’s also about social equity.

Enjoy your holiday weekend.

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