The below is just a portion of Mark’sVRTrader. Much more analysis contained every day in Mark’sVRTrader Silver or Platinum Service

Mark Leibovit’s Special Trial Offer: Use this month to kick our tires. Pay 50% for the first 30 days (No refund) and sample our Silver or Platinum service and then decide what works best for you. If you aren’t 100% ready to move forward, simply email us to cancel one week before your 30 day 50% off trial subscription ends and it will be canceled and you will not be charged ANY FURTHER, no questions asked. Just send an email to mark.vrtrader@gmail.com or call 928-282-1275 to cancel. You will receive an emailed confirmation of your cancellation at that time.

Stocks – NEUTRAL

With the exception of the Dow Transports which posted new bear market lows on Friday, other major indexes are testing their August 9 lows, including the S&P 500 which touched 1123.53 on Friday versus the August 9 low of 1101.54. As I told you, I was very disappointed the S&P 500 only rallied to 1208.47 versus the 1230 level where I prepared to get short once again using inverse ETFs. Despite that, I see no reason why we will not see new lows in the weeks ahead. In the S&P 500 under the 1101 SPX low look for 1090, 1060, 1040 and 1030, 1015 and 1000 as all next theoretical downside targets.

A Gallup poll reveals that 71% disapprove of Obama on the Economy and 76% of Americans think it will get worse! The answer? It’s housing, stupid! For most Americans, the biggest asset they own is their homes, and after an unrelenting 5-year slide, there are still few signs of stability or recovery. Consumer confidence was shaken by the renewed -5% slide in the S&P Home Price Index from Dec ’10 through March ’11, which has further limited their access to home equity lines of credit, and led to a greater sense of loss of wealth. Many consumers have felt their wages devoured by high gasoline and food prices, and they are pinching pennies. In June, US-consumers reduced spending for the first time in 20-months. The latest drop in stock prices could also slow spending by upper-income Americans. Eighty percent of US-stocks belong to the richest 10% of Americans. And the richest 20% of Americans account for about 40% of consumer spending. Until home prices turn higher and/or the government offers homeowners the same deal given the banks – 0% interest, I do not hold much hope for the sector and for the nation. Unemployment has remained high; it’s actually about twice the official 9% level, if it was calculated the same way it was 30 years ago. The government has no choice but to keep interest rates lows because of its significant debt problem. In other words the debt is so large, paying higher interest rates could one or more trillion dollars to the deficit. Traders are rightfully concerned about Europe’s failing economy and the inability of its leaders to find a solution. There may be none. Banks may have to collapse much as we may see Bank of American collapse here in the U.S. Couldn’t happen to a nicer group of guys, I say! As I mentioned, social unrest remains a risk everywhere including the U.S. Ultimately, I also expect to see riots in this country. It’s going to get ugly. Obama is helping fuel the fires of class warfare, defending illegal aliens, and pointing fingers rather than proposing solutions. If you can afford a refuge, get one!

The chances are high that we’ve entered a bear market. Some bear markets have lasted as long as five years, i.e. 1937-1942 and 1977-1982. And, others have lasted as short as four months to six months; i.e. August to December 1987 and January to July 1984. If I’m wrong and this washout is only just another cyclical sell-off which we often see this time of year, my work would sooner or later generate broad-based Leibovit Positive Volume Reversals and we would again begin to tenaciously trade above the 200 day moving average. After all, the Plunge Protection Team is very real and so is a Presidential election next year. What kind of rabbits could they possibly pull out of their hats? Could it be a war?

Gold – BULL

Bonds – NEUTRAL

The above is just a portion of Mark’sVRTrader. Much more analysis contained every day in Mark’sVRTrader Silver or Platinum Service

Mark Leibovit’s Special Trial Offer: Use this month to kick our tires. Pay 50% for the first 30 days (No refund) and sample our Silver or Platinum service and then decide what works best for you. If you aren’t 100% ready to move forward, simply email us to cancel one week before your 30 day 50% off trial subscription ends and it will be canceled and you will not be charged ANY FURTHER, no questions asked. Just send an email to mark.vrtrader@gmail.com or call 928-282-1275 to cancel. You will receive an emailed confirmation of your cancellation at that time.

08/19/11 Poitou, France – Wow…another whack.

Wall Street got whacked hard yesterday. It had begun to look as though things were getting back to normal. Then…whammo!

Yesterday, the Dow took a 419 point hit. Gold rose $28 to close decisively above $1,800.

We keep an eye on stocks and gold. Stocks measure the value of America’s businesses. Gold measures the value of America’s – and the world’s – money. What are these measures telling us?

That we’re on the road to Hell!

Of the two measures, gold is harder to figure out.

Stocks are obvious. America’s businesses aren’t worth 20 times earnings. They’re not worth that much because we’re in a Great Correction. And after the action of last week…and yesterday…it is becoming clear that this correction will probably last a long time.

Layoffs are increasing. Home sales are falling. And consumer prices are rising at a 6% annual rate. The New York Times:

The Philadelphia Federal Reserve Bank’s business activity index fell to minus 30.7 in August, the lowest level since March 2009 when the economy was in recession, from 3.2 in July.

Separate data from the Labor Department showed initial claims for state unemployment benefits increased 9,000, to 408,000. Another report from the department showed the Consumer Price Index increased 0.5 percent in July, the largest gain since March, after falling 0.2 percent in June.

So don’t expect most businesses to increase sales. And don’t expect profits to go up. Businesses have already done a very good job of squeezing costs in order to survive the downturn. That helps keep up profit margins. But it’s murder on the economy. One business’s costs are another business’s revenues. While profits rise, revenues fall. Not good for the long term.

The biggest single expense for most businesses is the payroll. People are expensive. So, if you’re a good businessman, you try to get rid of as many people as possible – and not hire more of them. Even when you think business is improving, you try to service the new sales with the same staff. A little more over-time…streamlining administration…making the enterprise more efficient.

In that regard, computers and modern communications technology have been helpful. They make it easy to fire people! But they don’t seem to lead to the kind of GDP boosts that you need to create jobs and increase standards of living.

That’s why the 10 million or so jobs that disappeared in this downturn won’t come back. And it’s why the real unemployment rate in the US hasn’t been this high since the Great Depression.

If that weren’t enough, there are other reasons to expect stock prices to go down. The main reason is because that’s what stock prices do. They go up. Then, they go down. Sure, they have a lot of reasons. But people usually only find the ‘reasons’ after the fact. Like commentators and analysts this morning…struggling to find the ‘reasons’ for yesterday’s 419-point drop.

The only thing we really know is that markets go up and down. And yesterday, Mr. Market wanted to go down.

Here at The Daily Reckoning we’ve been expecting lower stock prices for a long time. Wall Street has never completed its ‘rendezvous with disaster’ that began in January 2000. As we see it, stocks began a bear market almost 12 years ago, after an 18-year bull market. But the bear market was never allowed to fully express itself. Instead, the feds came in – like rap stars into a late-night party. They turned up the music. They poured drinks for everyone. They brought drugs and hookers. And pretty soon, the party was going louder and wilder than ever.

But now the party’s over. The feds are still opening bottles. But nobody’s drinking.

The bear market is back. By our reckoning, the Dow should fall below 5,000 before it is over. Most likely, it will not be a short, quick collapse. Instead, it will be a long battle…stretched over many years…with the feds fighting over every inch.

Anyhow, that’s our story. That’s been our story for many years. Seeing no reason to change it, we’ll stick with it.

But what about gold? There…well, we admit to a certain feeling of ‘I told you so.’ But it was one thing to tell Dear Readers to buy gold when it was selling for $300. It’s another thing to suggest it at $1,800. Gold was a steal at $300. At $1,800, it’s probably close to fair value.

That doesn’t mean it won’t go higher. In fact, we think it will go much higher. But it’s a rare bull market that makes it so easy for investors. But gold is harder to figure out.

If the economy is really in a Great Correction…

…and if it will be in a funk for years…a Japan-like slump…

…and if investors are fleeing stocks and buying dollars and dollar-based bonds…

…then, why is gold going up?

Are investors really looking ahead to the feds’ reaction to a double-dip recession? Are they thinking that Bernanke et al will panic…and print more money? Are they worried about higher rates of inflation?

Or maybe investors figure – with interest rates so low – they might as well hold their money in gold. Who knows what could happen? Who knows what the feds will do? Who knows anything?

At least gold is something you know won’t go away.

Possibly. But we don’t think investors are that smart. Or that forward-looking.

Zombie, zombie in the night…

Ah, modern technology comes to the aid of looters. Right in our home state, too. Here’s the report:

(CNN) – A “flash mob” believed to have been organized on the Internet robbed a Maryland convenience store in less than a minute, police said Tuesday, and now authorities are using the same tool to identify participants in the crime.

Although investigators have said they ‘“can’t confirm how this (robbery) was organized,” Starks does believe the Internet was involved.

Regards,

Bill Bonner,
for The Daily Reckoning

Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America’s most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning.

Dice Have No Memory: Big Bets & Bad Economics from Paris to the Pampas, the new book from Bill Bonner, is now available for purchase. It is the definitive compendium of Bill’s daily reckonings from more than a decade: 1999-2010. Whether you’re new to these Daily Reckonings, or one of Bill’s “long suffering” readers, this is one you surely won’t want to miss.

Special Report: Forget QE3 – America’s Going Bust, on the Road to Bankrupt Hell- If America had a credit card, it would get mercilessly cut up and thrown back in her face. The country’s basically broke and isn’t paying its debts. Harsh, but true. All of that – and how it could affect your family and your retirement – is revealed in this urgent video report. Don’t wait, watch now.