The WSJ reported the economy is slowing to a crawl as consumers cut back spending on big-ticket items and businesses curtailed investments, fueling fears that the US could sink to stall-speed this year. I investors continued to pull money out of equity mutual funds in the first half of this year at a high pace relative to the two previous years. At the same time the equities market has become more illiquid and cannot support rapid in or out flows without massive volatility. The Investment Company Institute said $55 billion exited in the first six months this year, compared to $24.6 billion in the first six months of 2010, and $13.6 billion the first six months last year. We are warning that we have been in a bear market since August 2011.

Thursday the bull trap remained open all the way.

Amazon.com suffered a 96% plunge in second-quarter earnings amid acquisition charges and disappointing sales growth.

JPMorgan Chase, which is reeling from the fallout of a big trading loss at one of its divisions, announced a broad reshuffling of its top management on Friday.

Investors wiped $10 billion off the value of Facebook Inc on Friday.  Facebook continues to show no earnings growth and share prices were down over 30% now since the IPO. It will take a few years to completely dissipate the $100 Billion people threw into the Facebook pit. The joke is they the investors believe they have good management. The IPO was nothing but a Ponzi scheme where sales were restricted so that demand could only drive prices through the roof. Ponzi schemes all require that investors buy and sales of investors are restricted. Facebook was a Ponzi scheme where to get into the deal you had to agree not to sell until they told you that you could.

The FED is running a Ponzi scheme with American banks right now. In this case the FED guarantees a profit if the Banks take low interest loans from the FED and agree to use that borrowed money to buy FED debt given the. So the Banks get small guaranteed profit from the difference in what they pay the fed to borrow debt and what interest the FED pays them for using the borrowed money to buy American Treasury debt. Profit has no risk as long as public purchase of the debt continues at low interest rates (as long as the Ponzi scheme runs) and the FED has virtually unlimited borrowing at about 0% inflation adjusted interest rates. That allows theoretically infinite US FED debt until the world catches on that this is a Ponzi scheme as long as no one wants his or her money back. But as soon as investors realize US Treasuries are pumped up via a Ponzi scheme and want to get out of the Ponzi Scheme the scheme collapses and the cost of US Treasury debt will soar over 7% interest rate. The value of treasuries then plummet relative to precious metals or real estate, as the interest rates on US Treasuries soar as the value of the US Dollar and Treasuries heads towards zero. That is what awaits seniors and union pension funds that are primarily in fixed rate or controlled rate securities.

Apple still has about 30% to 50% to fall over the next year as they rapidly lose to competition now that Steve Jobs is gone. The employees all know it is happening and have been selling their stock as fast as they can for over a past year because they know it is overpriced at half the current price.
http://finance.yahoo.com/q/it?s=AAPL+Insider+Transactions

The Rasmussen Reports daily Presidential Tracking Poll shows Mitt Romney stuck in a 47% to 45%dead heat with Obama. http://www.rasmussenreports.com/public_content/politics/obama_administration/daily_presidential_tracking_poll

World market this week
Economic confidence in the 17-nation euro area fell to 87.9 from 89.9 in June… more than economists forecast to the lowest in almost three years in July, suggesting the economy’s slump extended into the third quarter as governments struggled to tame the debt crisis.

European treasuries were little changed amid speculation the European Central Bank will purchase euro-region bonds to reduce their yields and stabilize the debt crisis with the same Ponzi scheme Obama –Bernanke-Geithner are using.

China’s volatility indexes are increasing according to Bloomberg who tracks US and other market volatility. That is a sign that the bull trap is beginning to close on all world stock markets and the bears know Obama-Bernanke are running a Ponzi scheme.

Gu Kailai, wife of ousted Politburo member Bo Xilai, was accused of “intentional homicide” by poisoning British citizen Neil Heywood in a case that’s shaken the Communist Party months before the recent leadership transition.

The glut in the shipping fleet has pushed new vessel prices to eight-year lows and caused a 49 percent plunge in first-half orders at China’s more than 1,500 shipbuilders. It’s also put smaller yards into bankruptcy and hit earnings at larger players.

Emerging markets faltered at recent high which is well blow the March level which is well below the high of 2012. All world markets will suffer now 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 below the recent high which is well blow the March level which is well below the high of 2012: 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 Market is testing moving averages. It gave a sell signal last year. It is at a new high for 2012 but well below the 2011 high.
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
When the FED Ponzi scheme is recognized US interest rates will soar and pension funds and conservative investor cash holdings will drop in double digits. There could also be a run on the dollar that will wipe out cash that corporations are holding. If a socialist is in office he will enjoy the crisis and use it to expand socialization by nationalizing major sectors starting with the US Banks. We expect bank stocks will quickly become worthless. That is what socialists in Britain have done in the past. Years later conservative Prime Minister Margaret Thacher privatized British banks again but the people who lost everything got nothing back. America has never faced a socialist government before and Americans do not realize that socialists make their gains by creating and claiming they are managing the crisis when in reality they maintain the crisis and claim they had to because free enterprise has failed. But in America’s 230-year history free enterprise has never gone bankrupt. But just as Obama blames Bush for everything the socialists always blame capitalism for the revolution and destruction the socialists create. The USSR survived and oppressed their citizens for about 70 years. The most popular and successful leaders were Yeltsin and Gorbachev who ended the rule of the socialists and broke up the USSR.

FHFA Housing Price Index May 0.8% same as last months 0.8%

The Commerce Department said Wednesday that sales of new homes fell 8.4% last month from May’s 369k rate to a 350K rate in Jun

MBA Mortgage Index 07/21 was 0.9% down sharply from 16.9% last month.

Crude Inventories 07/21 rose 2.717M even as prices plummet due to a world economic slowdown.

Yesterday
Initial Claims 07/21 355K down from 386K good

Continuing Claims 07/14 3304K up from 3300K bad

Durable Orders Jun 1.6% unchanged from 1.6%

Durable Orders - ex Transportation Jun -1.1% way down from 0.8% very bad

Pending Home Sales Jun -1.4% way down from 5.9% very bad

GDP-Adv. Q2 1.5% adjusted down from Obama’s original 2%+ estimate

Chain Deflator-Adv. Q2 1.6% which is higher than the growth rate that says the recession continues.

Michigan Sentiment - Final Jul 72.3 up slightly from 72.0 last month.

This Week Jul 31 8:30 AM Personal Income Jun

Jul 31 8:30 AM Personal Spending Jun

Jul 31 8:30 AM PCE Prices - Core Jun

Jul 31 8:30 AM Employment Cost Index Q2

Jul 31 9:00 AM Case-Shiller 20-city Index May

Jul 31 9:45 AM Chicago PMI Jul

Jul 31 10:00 AM Consumer Confidence Jul

Aug 1 7:00 AM MBA Mortgage Index 07/28

Aug 1 8:15 AM ADP Employment Change Jul

Aug 1 10:00 AM ISM Index Jul

Aug 1 10:00 AM Construction Spending Jun

Aug 1 10:30 AM Crude Inventories 07/28

Aug 1 2:00 PM Auto Sales Jul

Aug 1 2:00 PM Truck Sales Jul

Aug 1 2:15 PM FOMC Rate Decision Jul

Aug 2 7:30 AM Challenger Job Cuts Jul

Aug 2 8:30 AM Initial Claims 07/28

Aug 2 8:30 AM Continuing Claims 07/21

Aug 2 10:00 AM Factory Orders Jun

Aug 3 8:30 AM Nonfarm Payrolls Jul

Aug 3 8:30 AM Nonfarm Private Payrolls July

Aug 3 8:30 AM Unemployment Rate Jul

Aug 3 8:30 AM Hourly Earnings Jul

Aug 3 8:30 AM Average Workweek Jul

Aug 3 10:00 AM ISM Services Jul


Market outlook July 30, 2012
The DJI is the last “safe” place bulls go to reduce risk before the entire stock market collapses. The DJI bull trap opened all the way on Friday. Yesterday wasn’t a breakout of even the NYSE March high much less the 2011 high.

Cash and precious metals are a better choice than being fully invested in stocks right now until it is abundantly evident Obama and Holder will be out of office. Corporations are cash rich because they are hoarding cash.

Examine the last 5 years of the NYSE. It shows that Obama may be taking America into a profoundly deeper 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 again to meet even the last shoulder of the head and shoulder sell signal.  So the DOW sell signal remains in place.
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. Notice that yesterday wasn’t even a breakout.
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 now showing the bear market has started but the VIX indicates the market still has a long way to go until the VIX rises above 30 where bear markets normally end.
http://finance.yahoo.com/q/bc?s=%5EVIX&t=5y&l=on&z=l&q=l&c=

The Baltic Dry Index is already anemic and now is falling again. World trade has now almost completely collapsed with just having Obama around, 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 gangster 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 up last night. China down -0.9%, Hong Kong up 1.6%, Japan up 0.8%.

European markets were up half way through their day in a range of +0% to 0.9%

American market futures are down about -0.2% in after-hour trading at 7 AM EST.