Volume fell 21% as stock prices rose indicating selling pressure mounting

Market forces September 4
Recent high volume market declines and low volume advances have driven our Market Cash Flow Index very close to the first sell signal since its March buy signal. That will be a significant event if it occurs in the next few days. On the other hand, if Obama announces next week that he is withdrawing "socialized medicine" and keeping America's current system and introducing tort reform to reduce costs, then that alone could cause a rally. If the market continues to decline, the Re-spiral indicator is within four days of confirming the MACD sell signal.

Oil dropped under $70 per barrel as we predicted but a sudden incorrectly perceived weakness of the dollar has catapulted Gold to earlier highs. GE/MSNBC/Pravda seems to be unstable and are leading the gold surge while expressing fear about a possible 20% stock market decline this month. That is very unusual for them. They seem to be slowly turning against this socialist administration.

Market Outlook

Business pessimism at GE/MSNBC/Pravda has reached a new high and it is fun to watch because they are so extreme (and unstable) while Fox and Bloomberg Business News are so stable. The four 50% run-up was caused by all the brutal short covering of hedge fund shorts.

Market leadership is wavering. Now Oracle is being sued by the EU WTO and the leadership of the banks and real estate are weak.

Jim Cramer now defends the fact that his "long term" investment advice changes about once a month. Once a month is par with long term investing for Jim. His intermediate investment advice probably changes by the end of his show.

Asian markets were mixed last night, China up 0.6%, Japan down -0.3%, and India up 1.9%.

European markets are currently up in a range from 0.6% to +1.4% this morning about half way through their day.

US market futures are slightly higher by about 0.3% at 8:30 AM EST before the opening today.

After an 80% run-up, the stocks of communist China have dropped over 25% in the past month and Jim Cramer and GE/MSNBC/Pravda considered them a leading indicator for the economic recovery in the world. We warned that corruption and fraud could be expected to run rampant with the Chinese socialist experiment unleashing free enterprise. Socialism pays the indolent and incompetent and heavily taxes the people who try and do well. Aside from pet food that kills and building materials that poison people and corrode electrical wiring in new homes, communist China distorts the world economy by maintaining an underpaid slave society so that the government bureaucrats can live in high style like their ancient emperor's. They trade human health and slave labor for a budget surplus.

A sharp decline is now possible because many leveraged funds are fully invested, have hair-trigger stop sell orders in at about -3%, and the market was down about 2.2% this week. The market makers are doing their best to avoid triggering the selling by keeping the daily declines small. Our strategy now is to continue to take profits and wait for future buying opportunities. Market volume has increased on declines and the FED should have more difficulty now supporting the stock market if the -3% sell triggers are hit.