Emerging markets faltered. News falsely reported today that they just had a six-week run-up and you can see they went down again in that time period. However, they will still do better than American stocks unless Obama is given the heave-ho.

On Friday the 13 and the trap was been set for investors. The hook is now bated. Each day the lure is lowered and then it goes back up and many investors miss the daily worm. Then one day they know they figured it out. Investors decide to buy when it by 10:45 Am and prices are low and sell by 3:45 and they make 0.8% in one day. Then they are hooked. A few days later they do the same thing but their particular stock goes down 25% and the people who sold you it short it and it loses 80% before they get out. But that isn’t you is it? Well you better be sure because that is now happening with many stocks like Cummins that Jim Crammer got hooked on himself.

The Rasmussen Reports daily Presidential Tracking Poll for Wednesday shows Mitt Romney stuck at 45% of the vote, while President Obama earns support from 45%.
http://www.rasmussenreports.com/public_content/politics/obama_administration/daily_presidential_tracking_poll

World market this week
London home sellers cut prices by a record 3.6 percent for the month of July from June as an increase in supply added to pressure on the property market during the traditional summer lull.

Peugeot Citroen plunged to a new 23-year low over concerns that socialist Holland will interfere after they announced plans to close a factory and cut some jobs to save the company.

Chancellor Angela Merkel gave no ground on Germany’s demands for more central bank control over euro member states in return for joint burden-sharing as the region struggles to contain the debt crisis. The Federal Constitutional Court in Karlsruhe will issue its ruling on Sept. 12 the bids to halt Germany’s participation in the European Stability and the fiscal treaty. That’s a delay of more than two months.

The Australian government set their minimum wage to about $15.30 USD, more than double the federal minimum wage in the United States. Most people who earn minimum wage are young, unskilled workers. How are they doing in Australia? In June, Australia's unemployment rate for workers age 15 to 19 was 16.5%. Since last December, 63% of all jobs lost were jobs for young, unskilled Australians. The minimum wage becomes the wage for which indigents will not work because they lose self-esteem with the minimum wage. That is the real problem. But the minimum wage also results in greater unemployment for the young and inexperienced. But the rise in indigents is a greater problem.

Emerging markets faltered. News falsely reported today that they just had a six-week run-up and you can see they went down again in that time period. However, they will still do better than American stocks unless Obama is given the heave-ho.
http://finance.yahoo.com/echarts?s=^BVSP+Interactive#chart1:symbol=^bvsp;range=2y;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefine

Germany faltering and 7% below the recent high but 20% higher than last year’s low: Choose 2 or 5 years. The DAX can’t even keep up with the DJI!
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 Markets are now faltering too but are better than the DOW industrials. All gave a sell signal last year. Remember a Dow signal requires a Rails confirmation. Last year the Dow set a new high but the Rails did not confirm so it is still a sell signal.
http://finance.yahoo.com/echarts?s=%5ESSMI+Interactive#chart1:symbol=^ssmi;range=2y;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

American Economy
Three American cities went bankrupt last week.

Squawk Box said hedge funds are rife with Ponzi schemes again that will go bankrupt soon.

J.P. Morgan 2Q Profit fell and reported earnings that were down 9% from a year ago, as it struggles to bounce back from a multibillion loss on a bad hedging bet.

Crude Oil Futures Drop From One-Week High

Last week
Consumer Credit more than doubled in May to $17.1B from $6.5B with little indication of economic improvement.

The trade deficit in the US narrowed in May as falling crude oil prices and weakening demand for consumer goods trimmed the import bill.

MBA Mortgage Index 07/07 declined another -2.1% as “Obama Liar loans” continues to destroy the housing industry.

Trade Balance May was down -$48.7B with imports slowing a little faster than exports slumped. World trade is contracting.

Wholesale Inventories in May rose 0.3% and rising wholesale inventories are always a sign of further weakening.

Crude Inventories 07/07fell another -4.696M indicating gasoline and heating fuel price increases will soon kick in.

Friday
Initial Claims 07/07 350K very high.

Continuing Claims 06/30 3304K barely changed from 3306K

Export Prices ex-ag. Jun -1.4% dropped faster from -0.5% last month and hurt profits

Import Prices ex-oil Jun -0.3% not dropping much -0.1% increasing the trade gap.

Treasury Budget gap Jun -$59.7B up from -$43.1B in May

Producer price index PPI Jun increased only 0.1% after decreasing -1.0%last month.

The Core PPI Jun increased 0.2% more the same as last month. The core did not reflect the lower energy costs.

Mich Sentiment Jul dropped to 72.0 from 73.2 last month

This Week

Jul 16 8:30 AM Retail Sales Jun

Jul 16 8:30 AM Retail Sales ex-auto Jun

Jul 16 8:30 AM Empire Manufacturing Jul

Jul 16 10:00 AM Business Inventories May

Jul 17 8:30 AM CPI Jun

Jul 17 8:30 AM Core CPI Jun

Jul 17 9:00 AM Net long-term TIC Flows May

Jul 17 9:15 AM Industrial Production Jun

Jul 17 9:15 AM Capacity Utilization Jun

Jul 17 10:00 AM NAHB Housing Market Index Jul

Jul 18 7:00 AM MBA Mortgage Index 07/14

Jul 18 8:30 AM Housing Starts Jun

Jul 18 8:30 AM Building Permits Jun

Jul 18 10:30 AM Crude Inventories 07/14

Jul 18 2:00 PM Fed's Beige Book Jun

Jul 19 8:30 AM Initial Claims 07/14

Jul 19 8:30 AM Continuing Claims 07/07

Jul 19 10:00 AM Existing Home Sales Jun

Jul 19 10:00 AM Philadelphia Fed Jul

Jul 19 10:00 AM Leading Indicators Jun


Market outlook July 16, 2012
Beware of the hooks lowered each morning into the market. One morning the folks who are nibbling will see hooks in their mouths and losses of 20% in one day. Then the whole market will tank 10% to 15%.

We now expect the stock market will soon slump for at least two months or more. The market will likely continue to slump further if Obama is re-elected. It is too close to call just how bad it will be. It could get worse than in September of 2008 when Obama was first elected after he announces America was in a Great Depression.

Examine the last 5 years of the NYSE. Obama could easily be taking America into a profoundly deep depression breaking 2009 lows if he is re-elected.
http://finance.yahoo.com/echarts?s=%5ENYA+Interactive#symbol=^nya;range=5y;compare=;indicator=ema(200,100)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

The Dow Theory Industrials and Rails sell signal of August 2, 2011 still holds. The Rails failed to meet even the last shoulder of the head and shoulder sell signal.
http://finance.yahoo.com/echarts?s=%5EDJT+Interactive#symbol=^djt;range=5y;compare=^dji;indicator=;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined;

The market sell signal is also seen in 3-month market cyclic data.
http://finance.yahoo.com/echarts?s=%5ENYA+Interactive#symbol=^nya;range=2y;compare=;indicator=ema(200,100)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=off;source=undefined

The VIX says the market is still complacent and extremely dangerous.
http://finance.yahoo.com/q/bc?s=%5EVIX&t=5y&l=on&z=m&q=l&c=

The Baltic Dry Index is already anemic and now is turning lower again. World trade has now almost completely collapsed with just Obama, without tariffs that were the blame for the collapse during FDR’s socialist experimentation that resulted in the last Great Depression. Clearly it is the corruption of socialism and its crony capitalism, not rigorous free enterprise, that always ends in collapse of production and then economic depression.
http://www.bloomberg.com/quote/BDIY:IND/chart

Stock market update:
Asian markets were down last night. China down –1.7%, Hong Kong +0.1%, India down –0.6%, Taiwan down –0.2%, Japan closed.
European markets were mixed half way through their day in a range of +0.4% to –0.3%
American market futures are down about -0.3% in after-hour trading at 7 AM EST.