Bank of England Halts flooding of their money supply via over used Bond Purchase Program

The annual inflation rate in Britain has risen above the central bank’s 2 percent target. Faced with rising inflation the Bank of England announced that it would not extend its massive buying spree of government bonds that was intended as an economic stimulus.

The bank said that their past purchases, together with the current low level of bank rate, would continue to impart a substantial monetary stimulus to the economy for some time to come.


World Outlook

Stocks rose this week on very low volume and declined on lower volume that generally means the investors are not optimistic. China continues to show signs of a fracturing façade. They are acting hostile over The US sales of defensive weapons to Taiwan. A few of their banks were downgraded by rating agencies. Some of their stocks have been tumbling.

All US stocks dependent on China will likely be much more adversely affected by China's cooling off period than China itself will be effected. Asian markets were down sharply last night

Coming Week of Market Reports:
Date Time (ET) Statistic When Actual Forecast MktExpects Last RevisedFrom
Feb 1 8:30 AM Personal Income Dec 0.4% 0.2% 0.3% 0.5% 0.4%
Feb 1 8:30 AM Personal Spending Dec 0.2% 0.0% 0.3% 0.7% 0.5%
Feb 1 10:00 AM Constr Spend Dec -1.2% -0.5% -0.5% -0.6%- -0.6%
Feb 1 10:00 AM ISM Index Jan 58.4 56.1 55.5 55.9
Feb 2 10:00 AM Pend Hm Sales Dec 1.0% -3.2% 1.1% -16.4% -16.0%
Half the small improvement in pending home sales was accomplished by revising the last report down 0.4%

Feb 3 7:30 AM Challeng Job Cuts Jan -70.9% 72.9%
Feb 3 8:15 AM ADP Employ Cng Jan -22K -60K -40K -84K
Good news- Companies in the U.S. cut an estimated 22,000 jobs in January, in line with forecasts, according to data from a private report based on payrolls.

Feb 3 10:00 AM ISM Services Jan 50.5 52.1 51.0 49.8
Feb 3 10:30 AM Crude Inventories 1/29 2.32M -3.89M -3.89M

The service job market improved less than expected and oil inventories have increased putting a downward pressure on commodities.

Feb 4 8:30 AM Initial Claims 01/30 460K 454K 470K
Feb 4 8:30 AM Continuing Claims 01/30 4550K 4600K 4602K
Feb 4 8:30 AM Productivity-Prel Q4 6.2% 6.0% 8.1%
Feb 4 8:30 AM Unit Labor Costs - Q4 -2.0% -2.5% -2.5%
Feb 4 10:00 AM Factory Orders Dec 0.1% 0.6% 1.1%
Feb 5 8:30 AM Nonfarm Payrolls Jan -40K 13K -85K
Feb 5 8:30 AM Unemploy Rate Jan 10.1% 10.0% 10.0%
Feb 5 8:30 AM Avg Workweek Jan 33.2 33.2 33.2
Feb 5 8:30 AM Hourly Earnings Jan 0.2% 0.2% 0.2%
Feb 5 3:00 PM Consumer Credit Dec -$12.3B -$9.5B -$17.5B -


Market forces Feb 4, 2010
Commercial real estate failures seem to be about ready to surge. The Wall Street Journal ran a story this week showing an example of how investors lost everything in a commercial real estate investment.
We remain 65% out of the market but are setting price targets for buying. Our corrected NYSE index already gave its sell signal on Jan 29 when the NYSE (corrected for trading volume) broke through the neckline of a head and shoulders sell signal. The raw NYSE (not corrected for trading volume) still has a potential 4.3% to fall before giving a sell signal. For that reason we expect the market to decline soon but not by the full 4.3% so that the uncorrected stock indices will be optimistic and not give a sell signal in the next week. That low will be a buying opportunity and the uncorrected indices will still likely be optimistic.

Then we expect a rally close to or slightly exceeding previous index highs and thus again misleading most investors into thinking that the selling pressure is over. At those levels our volume-corrected index will likely show a lower cascading high. That would be in a few weeks and would be the next profit taking opportunity. Then we expect a deeper decline where all the US indices give a head-and-shoulders sell signal. That will likely be a better buying opportunity. And then we expect a lateral trading range with a small net decline for the year through November elections. This is still a trading and short-term investors market. The socialists can still wreak havoc on the American economy with their short attention span and frenzied approach to destroying free enterprise and traditional American liberties.

Asian markets were down sharply over night; Shanghai down -0.3%, Hong Kong down -1.8%, India down -1.6, and Japan down -0.5%.

European markets are down sharply with the average in a range from -0.7% to -1.3% this morning about half way through their day.

US pre-market futures are down about -0.6% today at 8:45 AM EST.