The American economy continues to sag. Today the Obama fines imposed on Catholic institutions goes into effect as Obama violates the American constitution forcing church hospitals to perform abortions and provide contraceptives. This is not just Obama withholding payments for regular services… this is fining them as well (per day and per hospital employee) and putting all private charitable organizations out of business. Only Christian church organizations are being harassed by Obama as he puts thousands of IRS agents calling and continuously harassing Christian organizations that either do not support abortion or do not support gay marriage. It is becoming apparent now that the Catholic Church will sue Obama all the way to the Supreme Court. Black Christian Churches warned Obama yesterday that they would not support him if his administration harassment continues.

Obama’s stagflation index is now over 14%.


In America’s 230-year history free enterprise has never gone bankrupt. Free enterprise erases failed ideas like socialism in a regenerative creative process. Just as Obama blames Bush for everything… the socialists always blame capitalism for the destruction the socialists spread. The USSR survived and oppressed their citizens for about 70 years. The USSR’s most popular and successful leaders were Yeltsin and Gorbachev who put an end to the rule of the socialists and broke up their “evil empire.”

DreamWorks second-quarter earnings slumped 63%.

Shares of Facebook slid 6.2% Tuesday as investors continue to worry about decelerating user growth, lackluster earnings and its ability to sustain its rich valuation.

Electronic posted a deeper first-quarter loss on an adjusted basis than it did the year before, an adjusted loss of $130 million, or 41 cents a share.

The WSJ Morning MarketBeat Monday said, “Nobody thought earnings season would be quite this bad, and if companies are struggling, it will likely be another blow for an already weak jobs market.”

The U.S. Fed and European Central Bank face a critical test this week amid heightened expectations that they are moving toward new coordinated Ponzi schemes to tackle fragility in the global economy with their usual unintended Ponzi consequence of a complete collapse.

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.

The Rasmussen Reports daily Presidential Tracking Poll shows Mitt Romney stuck in a 47% to 44%dead heat with Obama. http://www.rasmussenreports.com/public_content/politics/obama_administration/daily_presidential_tracking_poll

World market this week
Bloomberg said gold seen gaining in London on speculation about monetary easing accelerating stagflation.

Indonesia’s stagflation quickened to over 10% for a second month in July, as its neighbors lower interest rates even as declining exports threaten growth. Stagflation is the sum of inflation and unemployment.

U.K. manufacturing shrank the most in more than three years in July as export orders slumped, indicating the economy’s recession continued to deepen at the start of the third quarter.

BMW the world’s biggest maker of luxury cars reported its first drop in quarterly operating profit (-19%) in three years as the world economy slumps.

Indian stocks swung between from gains to losses as Goldman Sachs cut its growth forecast for the second time in two months. Half of India was under an electricity blackout for several days due to lack of infrastructure.

Signs of economic weakness are emerging out of Asian tigers South Korea and Taiwan as the slowdown in key trading partner China takes a toll on the export-driven nations.

Toshiba Corp. reported Tuesday that it swung into a net loss in the fiscal first quarter as restructuring costs and the high yen outweighed growth in its energy-related infrastructure business.

UBS said it would start legal proceedings against exchange operator Nasdaq OMX Group after the Swiss bank's second quarter was hit by a big loss from the Facebook stock-market debut

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. The Euro fell to $1.22.

China’s volatility indexes are increasing according to Bloomberg which 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.

In spite of miss reporting by MSNBC that Emerging markets recovered the faltered at recent highs which are well below 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
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% (6.4%/yr) which is higher than the growth rate that says the recession continues. Obama Stagflation = 6.4 +8.2 = 14.6%

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

Yesterday
Personal Income Jun rose 0.5% or at a 6% annual rate- does anyone actually believe this Obama report. If 10 % of Americans got a raise this past year they would have gotten a 60% raise to make it a 6% raise for the entire US population. We would expect personal spending to go up about 0.5% too.

Personal Spending Jun was flat at 0.0% after a -0.1% decline in May. That makes no sense if the average American had a 0.5% increase in income.

PCE Prices - Core producer prices Jun rose 0.2% after rising 0.1% in May indicating the Fed goal of almost 2.5% annual inflation.

Employment Cost Index Q2 up 0.5% on top of a 0.4% in Q1

Case-Shiller 20-city price Index May down -0.7% after down -1.9% in April. The Obama news said home prices rose when in truth they dropped again.

Chicago PMI Jul at 53.7 up from 52.9 indicating manufacturing may be recovering from the recent decline.

Consumer Confidence Jul rose to 65.9 from the recent low of 62.7

Today
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

This Week
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 August 1, 2012
It appears that the stock market will drop in 2012 starting roughly the same week that it dropped 10+% last year. Compare what GLD did when stocks dropped last August. To do that, right click and change the date range from “200 days” to “Past Year” and see what gold did. This is a good way to plot your stocks together.
http://stockcharts.com/freecharts/perf.html?DTD,EXT,EPS,EES,EZY,ROI,GLD

People forget that the DJI is not the stock market signal. The DJR must confirm the DJI for there to be a buy signal. The DJI and DJR confirmed a sell signal together last August and the DJR remains confirming that sell signal today. 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’s wasn’t a breakout of even the March high much less the 2011 high. The DJ Rails continues to say sell even as people seek the safety of the DJ Industrials.
http://finance.yahoo.com/echarts?s=%5EDJT+Interactive#symbol=^djt;range=6m;compare=^dji;indicator=;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined;

Cash and precious metals are a better choice now than being fully invested in stocks until it is abundantly evident Obama and Holder will be out of office. Obama, Geithner, and Bernanke are running a Federal Ponzi Scheme now to make Treasuries appear attractive so they can finance a $1.2Trillion per year debt which will bankrupt the USA if they are not thrown out in November. Corporations are cash rich now because they are hoarding cash because the collapse of the US treasuries will leave America without any cash. There is only credit, gold, and silver available in America because few people hold cash today. And in fact most corporations do not actually have any cash, they just have a cash balance in a bank account of a bank which will be bankrupt when this Obama, Geithner, and Bernanke Ponzi scheme collapses.

The NYSE is much more representative of the US economy than is the DOW anything. 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.
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 mixed last night. China up 0.9%, Hong Kong up 0.1%, Japan down -0.6%.

European markets were mixed half way through their day in a range of +0.5% to -1.4%

American market futures are up about 0.3% in after-hour trading at 7 AM EST. This indicator does not statistically correlate with anything.