And if that was not bad enough we have word tonight that US consumers purchased fewer cell phones in the last few months. Oh no! Now that was the last straw 

The Wall Street Journal is reporting tonight that cell phone purchases have fallen by 13% in the past quarter. How much more proof does one need in order to know the economy is in bad shape.

This mornings housing starts was a real blow to the bulls who were thinking the housing market was turning around. On the contrary, not only are builders not building but what is already out there is still not selling. Mortgage rates are inching upwards and as rates rise it reduces the purchasing power yet further of buyers who CAN get a mortgage.

 Inflation, well now that was a shocker this morning. Well a shock for those who have not been reading us

The Producer Price Index (PPI) came in with the core readings now accelerating upwards. Have to love those TV talking heads who have said for month on end “but the core is still good”. Well even they got a wakeup call this morning.

Continued financial market problems just was icing on the market today and sent it down at a pretty good clip. The S&P and the Dow Jones Industrials have broken below their recently formed wedge patterns which was a bearish predictive pattern. The Nasdaq remains trapped in a channel and needs to be watch to see if it breaks out of its lower support level.

And the Russell 2K is looking a bit ill here now with it too falling below a support level.

 What is on tap for tomorrow? We can expect some “buy the dippers” to try and go bargain hunting. Little do they know that prices will still get cheaper in time. But anyway we are likely to see some sort of attempt to buoy the market in the short term. But now that the S&P and Dow have broken below the wedge pattern it now becomes resistance. I think that the lows of July 15th are clearly in sight once again.

Talk about a hedge fund manager that has had nothing but BAD luck:

THE UK TIMES REPORTS THAT HEDGE FUND SRM REPORTEDLY LOST 85% OF ITS INVESTORS MONEY.
- The firm is down 77% in the past year.
- Investments undertaken by the firm include stakes in Northern Rock, Countrywide Financial, Bear Stearns and Cheniere Energy.

I think that fund manager better find a new occupation!