I'm just not sold that the big results from retail this weekend will have a lasting impact on the U.S. market.

The market took a nosedive yesterday, directly to 1197 support. In addition to the plummet, and sadly for the bulls, volume was high.

If volume is an indicator of confidence then the numbers over the past few months are screaming utter indecision.

The real question remains: "What happens to the dollar when they inevitably raise the debt ceiling?" Well, we already know the answer...

It's almost as if the EU and the U.S. Congress are in a contest to see which group can do the most damage to the global economy.

After Congressional Republicans sent Fed Chief Bernanke a letter that politely demanded the Fed cease on desist on all stimulus activities, I half expected Bernanke to drop a liquidity bomb on the market yesterday.

Government debt is likely the biggest problem for the stock market these days.

Now that an actual, much-needed, $450 billion American jobs bill is here, it will be interesting to see how it's treated in Congress.

Today I'd like to show you a chart which should explain everything you need to know about inflation, commodities and why prices for just about everything are rising today and are likely to rise still further tomorrow.

I'm sure we're all glad to put the month of August behind us. If it wasn't the most volatile month on record, it was right up there with the best of 'em. I wish I could say there won't be more periods where we see such wild swings in the stock market but that would be naïve.

Investors should always look to take some profits on rallies and have cash available to take advantage of extreme lows.

This is a big week for economic data. And so far, it's been coming in OK. ADP payrolls wasn't a disaster. Manufacturing data was actually better than expected. And new unemployment claims declined slightly.

When the Federal Reserve announced last week that it would keep interest rates low until mid-2013, it did so despite the dissension of three Fed governors.

Yesterday, one of the dissenting governors, the Philadelphia Fed President Charles Plosser told Bloomberg radio that the Fed's decision to keep rates low for another two years was "the inappropriate policy at an inappropriate time."

I was kind of surprised by this type of strong statement from a sitting Fed president. Most of the time, Fed insiders wait until they're not inside the Fed before they start throwing mud.

Investors have been acting as if there is a financial bogey-man lurking out there, ready to confirm the sum of all our financial fears. Is it U.S. recession? Is it European debt? Is it the U.S. debt downgrade? Congressional dysfunction?

Of course, the combination of worrisome events is enough to push investor anxiety into overdrive. But at the heart of the fear in the financial markets is European debt.

Again, yesterday we discussed the rumors that were swirling around France's bank, Societe General...

By now, you've no doubt heard that Standard & Poor's has downgraded the U.S. credit rating one notch.

Let's first understand that this downgrade is more a political statement than a financial one. And it's not likely to affect U.S. Treasury yields much.

I think we all agree that the level of debt the U.S. has taken on is not sustainable. Spending cuts are necessary, and that will need to include the so-called entitlement programs.

The debt deal in Congress is as good as passed. And yet stocks sold off hard yesterday. And today isn't shaping up to be much better. The reason, in my opinion, has to do with government spending cuts, austerity and what that means for economic growth.

Yesterday, I asked the question "where will new demand come from?" And I recently received a reader question that hits the same theme...

Well, well. Congress did it. And more than a full day ahead of Treasury Secretary Geithner's absolute deadline on Tuesday, August 2. I will admit, I'm surprised. Not that they reached a deal -- after all, I playfully wagered my entire business that a deal would get done with High Yield Wealth editor Steve Mausy. But I figured it would be a midnight deal.

Of course, nothing is signed, sealed and delivered just yet. I expect that may not happen until this evening. But the rhetoric from Congressional leaders and the president suggest the signatures are a formality.

The stock market recovered from Wednesday's sharp drop. The major indices traded higher for most of the day, before a late sell-off drove them in onto the red. The S&P 500 closed less than a half-point form support at 1,301.

But while investors seem to be feeling at least slightly better about a budget deal getting done before Tuesday, another negative catalyst has reared its head -- weak economic data.

I've spent most of this week railing about Congress' inability to realistically deal with 2011 budget and the looming collision between government spending and the debt ceiling.

The situation is made significantly worse by the threat of a debt rating downgrade. A debt downgrade would raise borrowing costs by $100 billion a year as Treasury bond prices fall and interest rates rise. That, in turn, would make home and auto loans more expensive.

That's clearly not the best outcome...

We're in the heart of the summer movie blockbuster season.

My son Beckett is only 3 months old, so I'm not headed to too many movies this summer - although if there's anyone in the central Vermont area this week, my wife and I would love it if you could babysit so we can see the last Harry Potter movie.

Anyway, there's an aspect of cinema that I think sort of applies to what's happening to the gold market right now.

You've probably heard of the notion of "suspension of disbelief."

The game of "debt ceiling chicken" continues as Congress delayed a vote on Speaker Boehner's latest plan until tomorrow. Apparently, the GOP doesn't have the votes to pass it, which would lead to the adoption of Senate Leader Reid's plan.

I suppose this is par for the course at this point. But let's not make the mistake of thinking that Congress is trying to do what's right. They are laying politics to push the agendas of their biggest campaign donors.

For instance, Rep. Eric Cantor has been perhaps the most vocal member about not raising taxes, or closing loopholes that would result in a net gain in tax revenues. But yesterday, the Washington Post reported that Cantor has taken in $2 million in campaign contributions from hedge funds and private equity firms who don't want to see their taxes raised by the Obama administration.

Another day, and still no agreement on a 2011 budget in Congress. Surprisingly though, the stock market is not really being affected by the impasse. Sure, the major indices are down slightly again today, but I think we can all imagine that it could be much worse.

Treasury bond prices have been choppy, with big $3 price swings on the chart of the iShares Barclays 20+ Year Treasury Bond ETF (TLT) in July. But overall, bonds are holding up well, and this tells us clearly that no one expects the U.S. government to default on its bond payments.

Congress and the Obama administration are at it again. Talks broke down over the weekend, which is a familiar development. The impasse is certainly weighing on the stock market.

Precious metals are rallying, bonds and stocks are down. Of these assets, it's the move in bonds that are most telling. Bond prices are falling, and yields are rising, because failure to pass a budget opens the door for a downgrade of U.S. debt from the ratings agencies. That, in turn, raises borrowing costs (interest rates) because repayment is suddenly less certain.

Earnings season continued at a torrid pace, with large cap stocks beating on revenues and/or earnings per share. The EU finalized a bailout plan, and reports seem encouraging that Congress will reach a budget deal soon.

We've had to suffer through a perfect storm of bad news since May. Now, we seem to be getting a perfect storm of good news. Even the most recent housing construction data was better than expected.

Unemployment, however, continues to lag. And as we've discussed at length, there's no reason to expect hiring to improve significantly, especially with spending cuts coming at the federal level.

China's got a heck of a nerve. Yesterday, CNN reported that the Chinese government's State Administration of Foreign Exchange published the following statement on its website:

"We hope the U.S. government will take responsible policies and measures to boost global financial market confidence and respect and protect the interests and investors..."

And even went so far as to say that the debt issue is a "... reflection of the credibility of the U.S. government..."

Now, I know none of us are happy with the way Congress and the administration has approached our debt issues so far. But China's sitting in its own glass house.

JP Morgan (NYSE:JPM) turned in a very solid second quarter earnings report this morning. Revenue was $2 billion better than expected, at $27.4 billion. And earnings were $0.06 better than expected, at $1.27 a share. This was the 11th consecutive quarter that JP Morgan has beaten.

You'd think analysts would be able to adjust their estimates to account for the consistent out-performance at JP Morgan. And truth be told, they probably are.

But there are so many little things the company can do to get its quarterly numbers that analysts have little chance of nailing it.

For over a year now, I’ve casually mentioned that the leadership in the West, including the United States and Europe is not just unwilling to take the steps needed to nurse the economy back to health, but that they’re increasingly incapable of understanding what needs to be done.

Case in point: you can’t turn on your TV, open your email or look at a newspaper today without seeing headlines about the impending United States Federal Government shutdown.

But as I’ve noted, the amounts of money being quibbled over are pretty insignificant.

You can do the math for yourself. The total outstanding Federal deficit is now over $14 trillion.

Divide $33 billion or $40 billion by $14 trillion and you get 0.0023 or 0.0028. Multiply those decimals by 100 to get the percentage.

So, $33 billion and $40 billion amounts to 0.23% and 0.28% of the total Federal deficit. Even with these cuts, the deficit will grow because they’re not even close to the amount of spending reduction we need to actually put the Feds back in the black.

Whew! What a week. Mid-term elections, quantitative easing, and a fantastic non-farm payroll number this morning.

Rather than dig into the specifics of each of these catalysts, let’s simply look at them in terms of removing uncertainty.

The elections are forcing the administration to make concessions on tax cuts. The Fed has reiterated its commitment to backstopping asset prices. And the payroll numbers show that the economic recovery is starting to add jobs.

The Bloomberg headline reads Fed Bond Buying May Risk Price Rise Similar to 2004. Let's remember that between 2004 and 2007, the S&P 500 rose around 40%, from approximately 1,100 to 1,550.

I think we would all be pretty pleased with a move like that.

Of course, the rise in the S&P 500 coincided with the housing bubble and the proliferation of sub-prime mortgages that led to the financial crisis of 2008-2009.

Is anyone else getting tired of talking about QE2?

I know I'm getting a little tired of writing about it. But the Fed's actions are unprecedented. It's already added $1.7 trillion in assets to its balance sheet. The potential for another $1 or $2 trillion is more than newsworthy.

And the thing is, there's a growing camp that's expecting the Fed's next action to be a disappointment. Bank of America/Merrill Lynch is among those that think there's a "sell the news" risk.

I realize I opened a can of worms yesterday with my comments about Congress and the suggestion that members of both parties are now more beholden to corporate interests (via campaign contributions) than they ever have been.

Don't worry, I'm not going to back away from that statement. In fact, I plan to pursue it because it is of critical importance right now.

But first, I must acknowledge several comments I received from Daily Profit readers taking me to task for griping about corporate campaign contributions but ignoring campaign contributions from unions and other special interest groups.

It's always an education to look at the other side of the argument.

In a July 10^th article on Seeking Alpha, I found what can only be called a complicated chart which is supposed to illuminate the technical reasons why silver is due for a fall in the near-term.

Here's the chart, for the masochists in my readership:

If you've been looking for a dip to buy, your opportunity may be coming soon.

Stocks got whacked yesterday, and the S&P 500 dropped below an important support point at 1,188. Aside from the past few weeks, that support level hasn't come into play since September 2008, when the stock market was crashing. Before that, you'd have to go back to the October 2005 lows to find when 1,188 was in play. 

There were several catalysts for yesterday's drop. Debt problems with Greece and Portugal are weighing on investors. And Goldman Sachs testimony before Congress didn't help either.

It's been revealed that Deutsche Bank (NYSE:DB) has been informed by the SEC that it, too, is being investigated for mortgage-related fraud. It appears that no charges are pending at this time, but this gives investors another thing to worry about.