A tax on financial transactions will significantly drop stock market volatility and the drop the high end of the PE ratio of the market.

A tax on financial transactions will significantly drop stock market volatility and the drop the high end of the PE ratio of the market. It will end high speed trading and events such as flash crashes. But it has tarketo be set lower than 0.1%. Even 0.01% would cause a significant sell off. The market is up 20% in just 4 months.

Bloomberg poll foreign participants favored Romney’s private equity experience better equips him to manage the U.S. economy from the Oval Office. Forty-five percent say it would equip him better, while 41 percent say it makes no difference. U.S. respondents place greater weight on Romney’s investment background, with almost two-thirds of them considering it an asset and the rest seeing no difference.

“To be sure that is not because the White House meant for that to happen,” said Pavel Molchanov, an analyst at Raymond James & Associates Inc. Obama has done everything he could to cripple American energy in order to sell Solyndra solar panels and electric cars that cost more energy to build than they save. And what is worse, the batteries that go with the Obama green systems are more toxic than if the homeowners burned green wood to heat their homes. Many have $60,000 subsidized solar systems in northern America where they are covered with snow and don’t work.


World markets
The EU economy could decline 0.5% this year.

France is in favor of a financial transaction tax. We think it will happen.

We expect the markets will all form head-and-shoulder sell signals after breaking their 200 DMA. World trade “Bulk Shipments” have collapsed to the lowest world bulk trade level that existed since Obama declared the USA was in a depression in one of his 2007-2008 campaign speeches. Asian markets (especially China) are failing to break out some on the second and third times at resistance levels. China’s stocks could fall 50% from here if Obama’s announced “Great Depression” spreads there too.
http://finance.yahoo.com/q/ta?s=000001.SS&t=2y&l=on&z=l&q=l&p=e200%2Ce100&a=&c=

Germany broke through the resistance levels: Choose 2 or 5 years
http://finance.yahoo.com/echarts?s=%5EGDAXI+Interactive#chart2:symbol=^gdaxi;range=2y;indicator=ema(200,100)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on

The Swiss broke through the resistance levels. Choose 2 or 5 years http://finance.yahoo.com/echarts?s=%5ESSMI+Interactive#chart1:symbol=^ssmi;range=2y;indicator=ema(200,100)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

Emerging markets show strength. Brazil broke through
http://finance.yahoo.com/echarts?s=^BVSP+Interactive#chart1:symbol=^bvsp;range=2y;indicator=ema(100,200)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

American Economy
Last Week
MBA Mortgage Index 01/21 -5.0% down from 23.1% terrible
Pending Home Sales Dec -3.5% down from 7.3% end of season
FHFA Housing Price Index Nov +1.0% up from -0.2% good
Crude Inventories 01/21 +3.56M up from -3.438M good
FOMC Rate Decision Jan 0-0.25% down from 0.25% getting dangerously like Japan
Initial Claims 01/21 377K rose from 352K Bad
Continuing Claims 01/14 3554K rose from 3432K Bad
Durable Orders Dec 3.0% down from 3.7% Bad
Durable Orders -ex Auto Dec 2.1% rose from 0.3% not meaningful
New Home Sales Dec 307K down from 315K bad
Leading Indicators Dec 0.4% down from 0.5% bad
Chain Deflator-Adv.Q4 was 2.6% probably says the growth was entirely inflation
GDP-Adv.Q4 2.8%little improved from inflation
Chain Deflator-Adv.Q4 0.4% was 2.6%makes no sense
Michigan Sentiment – Final lJan 75.0 up from 74.0

Today
Jan 30 8:30 AM Personal Income Dec
Jan 30 8:30 AM Personal Spending
Jan 30 8:30 AM PCE Prices - Core

This Week
Jan 31 8:30 AM Employment Cost Index Q4
Jan 31 9:00 AM Case-Shiller 20-city Index Nov
Jan 31 9:45 AM Chicago PMI Jan
Jan 31 10:00 AM Consumer Confidence Jan
Feb 1 7:00 AM MBA Mortgage Index 01/28
Feb 1 8:15 AM ADP Employment Change Jan
Feb 1 10:00 AM ISM Index Jan
Feb 1 10:00 AM Construction Spending
Feb 1 10:30 AM Crude Inventories 01/28
Feb 1 2:00 PM Auto Sales Jan
Feb 1 2:00 PM Truck Sales Jan
Feb 2 7:30 AM Challenger Job Cuts Jan
Feb 2 8:30 AM Initial Claims 01/28
Feb 2 8:30 AM Continuing Claims 01/21
Feb 2 8:30 AM Productivity-Prel Q4
Feb 2 8:30 AM Unit Labor Costs Q4
Feb 3 8:30 AM Nonfarm Payrolls Jan
Feb 3 8:30 AM Nonfarm Private Payrolls Jan
Feb 3 8:30 AM Unemployment Rate Jan
Feb 3 8:30 AM Hourly Earnings Jan
Feb 3 8:30 AM Average Workweek Jan
Feb 3 10:00 AM Factory Orders Dec
Feb 3 10:00 AM ISM Services Jan

Market outlook January 30, 2012
Near the end of bull markets people move to the safety of the DOW stocks and away from small caps. That is what we have been seeing in January.

The DOW is considered a safe haven so it has been passed last year’s high. The other markets still about 6% below their highs of last year.

The VIX indicates extreme complacency now. A sharp computer sell-off could end the current rally any time now and trigger stop-losses with huge losses.
http://finance.yahoo.com/q/bc?s=%5EVIX&t=2y&l=on&z=m&q=l&c=

Bulk shipments continue to fall and have already collapsed to the lowest world bulk trade level that existed since Obama declared the USA was in a depression in one of his 2007-2008 campaign speeches. It is now less than 7% of the international trade that existed just before Obama was elected.
http://www.bloomberg.com/apps/quote?ticker=BDIY:IND

Stock market update:
Asian Stock markets were mostly closed for New Years again last night. China down –1.5%, Hong Kong down –1.7% 0.3%, India down –2.2%, and Japan down –0.5%

European markets are down today in a range -0.4% to –1.1% half way through their day with Italy an outlier at –2.3%.

American market futures are down about -0.6% in after hour trading at 7:30 AM EST.

We estimate the peak will be soon in a head-and-shoulders sell signal.