Once refiners are up and running demand for crude will fall to normal levels and a temporary glut of refined fuels like gasoline will hit the market.

Once refiners are up and running demand for crude will fall to normal levels and a temporary glut of refined fuels like gasoline will hit the market. Note that much of the crude price increase is due to refiners opening up facilities and accumulating new supply inventories over the short run. That may be starting soon.

Small investors got back in at the top these past three weeks. Flow into mutual funds from individual investors was negative for twenty weeks following the flash crash last May 2010. For the past three weeks of January small investors got in right back in at the highs of the current rally. We would be prepared to buy stocks on the next significant dip.

Judge Roger Vinson, in Pensacola, Fla., ruled that as a result of the unconstitutionality of the "individual mandate" that requires people to buy insurance, the entire law must be declared void. "I must reluctantly conclude that Congress exceeded the bounds of its authority in passing the act with the individual mandate."

The dollar strengthens and gold falls in price as the world discovers the best inflation adjusted returns are found in the USA. The Net long-term TIC Flows for November show a sharp trend reversal as the world buys US dollars and treasuries for a safe higher rate of return like the USA banks have enjoyed at 0.25% cost for the last two years.
With a 0.25% cost and a guaranteed 1.88% return banks make money. While investors are forcing European governments from Greece to Ireland to cut spending as governments prepare to sell $1.1 trillion of bonds this year, demand at Treasury auctions has been the highest on record. The precious metals trend line is now down steeply

World Markets:
 National Institute for Economic and Social Research said the Bank of England will raise interest rates three times this year to curb inflation. U.K. government bonds fell for a second day and the pound surged against gold.
 As politicians, executives and financiers networked at parties and panels last week in Davos, Switzerland, Barrie Wilkinson was in a nearby hotel, warning that a 2015 financial catastrophe may be looming.
 The number of Britons who expect house prices to rise this year decreased in the last three months as concerns about the economy mounted,
 Irish Central Bank Cuts 2011 Growth Forecast on Fiscal Squeeze
 Egypt's Military Leaders Tighten Six-Decade Government Grip Amid Protests

Business trends
Yesterday
Jan 31 8:30 AM Personal Income Dec was up 0.4% as last month. Good
Jan 31 8:30 AM Personal Spending Dec was up 0.7% compared with 0.4% last month. Good for economy
Jan 31 8:30 AM PCE Prices - Core Dec core producer prices unchanged after being up 0.1% last month. Still deflationary Japanese style.
Jan 31 9:45 AM Chicago PMI Jan at 68.8 vs 68.6 last month. Manufacturing is stable and good.
Yesterday
Construction seasonal adjusted Spending Dec plunged -2.5% after being up 0.4% November.
Feb 1 10:00 AM ISM Index Jan rose to 60.8 from 57.0 in Dec
Auto Sales U.S. up 17% on big pickup, new model demand from Dec 2010
Truck Sales up over 20% from Dec 2010
MBA Mortgage Purchase Index 01/28 improved 11.3% almost canceling the decline last month of -12.9%
Challenger Job Cuts Jan show job cuts -46.1% even worst than December's -29.0%, Obama policy still not creating jobs.
ADP Employment Change Jan job creation 187K slowed considerably from last months 297K. This statistic ignores overall workers receiving unemployment checks or off the lists after 2 years unemployed.
Crude Inventories 01/29 2.59M still high but down from last week's 4.84M. Note that much of the crude price increase is due to refiners opening up facilities and accumulating new inventories over the short run. Once they are up and running demand for crude will fall to normal levels and a temporary glut of refined fuels like gasoline will hit the market. That may be starting soon.

Today
Feb 3 8:30 AM Productivity-Prel Q4
Feb 3 8:30 AM Unit Labor Costs Q4
Feb 3 8:30 AM Initial Claims 01/29
Feb 3 8:30 AM Continuing Claims 01/29
Feb 3 10:00 AM Factory Orders Dec
Feb 3 10:00 AM ISM Services Jan
This week
Feb 4 8:30 AM Nonfarm Payrolls Jan
Feb 4 8:30 AM Nonfarm Private Payrolls Jan
Feb 4 8:30 AM Unemployment Rate Jan
Feb 4 8:30 AM Average Workweek Jan
Feb 4 8:30 AM Hourly Earnings Jan


Market Outlook Feb 3, 2011
We would be prepared to buy stocks on the next significant dip.
Flow into mutual funds from individual investors was down for twenty weeks following the flash crash last May 2010. For the past three weeks of January small investors got in right back in at the highs of the current rally. This means the end of each month probably will see an increase fund flow as 401 plans put money back into the market.

There is $1 Trillion of corporate cash sitting ready to buy up corporations if American corporations sense the socialists in office will all be thrown out in 2012. If Obamacare and the other socialist BS is declared unconstitutional the extreme Leftists will abandon Obama and the Democrat-socialist party and it may become a democratic organization again. Obama socialism in America will be declared an unconstitutional autocratic power grab. Next Obama would be demanding absolute power and no term limits like the banana republic socialists Fidel, Ortega, and the socialist mass murderers Stalin, and Hitler did.

Economic news is relatively good this week with the exception that prices are increasing well below the FED desired rate of 2.5% inflation. The FED is afraid we could have 20 years of deflation and stagnation as Japan has had unless we can get prices moving upward at 2.5% per year.

World Markets
Many agencies are reporting the last index changes whish were last week. That is misleading because many exchanges are closed for Chinese New Year holidays. Asian markets were up last night. China's holiday, Hong Kong India closed, Jakarta closed and Japan down -0.3%,

European markets are down this morning in a range of about -0.3% to -1.1% half way through their day.

US pre-market futures are flat about -0.06 % at 8:00 AM EST.