It is Friday the 13 and the trap has been set for investors. The hook is 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 them 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 is hooked on himself.


Wells Fargo, the nation's largest home mortgage lender, was coerced by the Obamuh-Holduh regime to pay at least $175 million to settle accusations that its independent brokers discriminated against black borrowers during the housing boom when they cut “Barney Frank” mandated liar loans. Banks are increasingly placing homes with unpaid mortgages on a countdown that could deliver a swell of new foreclosed properties onto the market by early next year, potentially weighing further on home values.

Obama has created a fiscal cliff we will hit in January if he is still around. The stock market is generally a 6-month leading indicator for the economy. Unfortunately a sharp stock market decline apparently is needed so that Americans smarten up and throw Obama’s socialist bums and Holder’s drug cartel gun runners out of office.

Stocks are declining on poor quarterly earnings reports and the Federal Reserve failure to signal action to avoid a collapse in January if Obama is re-elected. Fitch Ratings said the US outlook remains negative as a result of the Obama’s inability to show leadership on how to cut the budget deficit. Consumer confidence has fallen seven points just since last Friday's disappointing jobs report. At 80.6, the Rasmussen Consumer Index shows confidence is now just two points above the 2012 low. It typically takes up to a week before the impact of a jobs report on confidence is fully captured.

Uncertainty is an economic and jobs killer. Risk is something businesses and economies can hedge and deal with. But Obama’s corruption of using stimulation funds for crony capitalism and racist redistribution, his Obamascare, and his coming January financial cliff are major uncertainties. Crony capitalism stimulation and liar-loan corruption are Obama’s key economic policies and they lead to a fiscal cliff in January. America cannot afford socialism.

Obamascare is also a scary uncertainty because it takes 40 million indigents who squandered all they have and puts them in the doctor’s office in front of you and they are demanding their entitlement to squander health care on their chosen lifestyle diseases and addictions. It places no limits whatsoever on how much of your healthcare payments they can also squander.

The Rasmussen Reports daily Presidential Tracking Poll for Wednesday shows Mitt Romney stuck at 46% 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
Moody’s lowered Italy’s rating to Baa2 from A3 and said further cuts are possible because the nation’s economic outlook has “deteriorated,” and contagion is spreading according to their statement released in Frankfurt. The new rating is two levels above junk and one grade higher than Spain’s rating. Italy’s 10-year bonds fell for a second day, pushing the their costs above 6 percent.

Poland’s central banker Andrzej Bratkowski hinted it might make the largest cut in its interest rates since 2009 to fight its recent economic slump.

Billionaire co-chairmen of Hong Kong’s biggest developer, Sun Hung Kai Properties Ltd. and Hong Kong’s recently fired No.2 government official were charged with bribery and corruption by the city’s anti-graft agency.

PSA 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.

Emerging-market stocks fell for a eighth day. Brazil’s wave of optimism in 2010 has stalled and is instead forecast at 2 percent in 2012, the slowest among the BRIC nations of Brazil, Russia, India and China.

Of course China is much worse off but then they cook-the-books like Obama to shape opinion not correctly manage growth. China’s registered urban unemployment has reportedly moved up from under 4 percent during the last decade, while electricity consumption growth has slowed much faster than announced growth in official GDP when electrical growth should move consistent with economic growth. That has stirred the belief that GDP figures are cooked and are being skewed upward to hide the failure of the Communist government to add any value. Chinese Prime Minister Wen Jiabao said the nation’s economy faces large downward pressure. Imports fell as the economy contracted offsetting falling exports. But if trade is falling it means China’s economy is imploding not just slowing. While the Shanghai Composite Index had been up as much as 12 percent this year, it is now negative and falling.

Portugal is considering giving foreign investors a haircut like Greece did. With Portugal’s 10-year bond yield above 10 percent, returning to the markets next year may be untenable, requiring more international aid despite the premier’s insistence he won’t seek further concessions.

Japan’s machinery orders, an indication of capital spending, fell 14.8 percent in May from the previous month, the biggest drop since 2001 and worse than when the nuclear accident occurred. Japan’s factory orders dropped and their current-account surplus is the smallest since 1985.

Emerging markets falter.
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
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.
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
Earlier this 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.

Yesterday
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

This Week
Jul 13 8:30 AM PPI Jun

Jul 13 8:30 AM Core PPI Jun

Jul 13 9:55 AM Mich Sentiment Jul

Market outlook July 13, 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 announce America was in a Great Depression. To get out of the Obama socialist economic death spiral it is necessary to throw him out and begin to raise interest rates and give businesses an incentive to find ways to increase profits. With the coming worst profit quarter in a few years the US markets are soon likely to fall like a knife for at least one month of the slump. If Obama is re-elected we predict a full-blown economic depression and chaos in the world. There very likely will be another major war and we can expect if Obama is still in office... Israel will likely be the victim.

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. It 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 is beginning to move again and says the market is still complacent but is getting ready to panic and extremely dangerous.
http://finance.yahoo.com/q/bc?s=%5EVIX&t=2y&l=on&z=m&q=l&c=

The Baltic Dry Index is already anemic and now is turning worse 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
and
http://www.bloomberg.com/quote/BDIY:IND/chart

Stock market update:
Asian markets were flat last night. China 0%, Hong Kong +0.4%, Taiwan down –0.4%, Japan 0%.

European markets were up half way through their day in a range of +0.4% to +1.1%

American market futures are up about 0.4% in after-hour trading at 7:30 AM EST.