ROBERT D. MCHUGH, JR., Ph.D. -- Weekend Market Newsletter

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ROBERT D. MCHUGH, JR., Ph.D.
Weekend Market Newsletter
A Publication of Main Line Investors, Inc.
P.O. Box 1026 Issue No. 1645 Email Address:
Kimberton, PA 19442 Friday, August 12th, 2011



http://static.safehaven.com/pdfs/mchugh_2011_08_13.pdf

Dow Theory: Another interesting observation about this pattern is that there is now a Dow
Theory Primary Trend Sell Signal. The upside new closing high in Trannies in July was a new alltime
high in Trannies, above their 2007 all-time high, but was not confirmed by the Industrials. The
Industrials did not rise to new all-time highs, above their 2007 highs, in fact, the Industrials could
not even confirm the higher secondary closing high in Trannies, the July 2011 closing high in Trannies.
Then both Trannies and the Industrials fell below their March 2011 secondary closing lows,
triggering a new Sell Signal. These new lower lows from the recent stock market crash are now confirmed
lower lows by both Trannies and the Industrials, triggering a new Dow Theory Primary Trend
Sell Signal. Trannies hit their all-time closing high on June 5th, 2008 at 5,492.95. They closed on July
7th, 2011 at 5,618.25, a new closing high. This was an insurmountable Dow Theory upside nonconfirmation,
as the Industrials remained 1,800 points below their all-time closing high. The new Dow
Theory Primary Trend Sell Signal now fits in with the massive topping patterns that have just finished
in major averages, all warning 2012 could usher in terrible economic calamity. The August Crash is
quite a kickoff to this coming calamity.

The U.S. Dollar is being devalued by the Federal Reserve. It is headed for 54ish, per the target
from the above pattern.

QE2 was nothing more than devaluation of the Dollar for the benefit of only Wall Street
Money Center banks. This is a fraud on the American people who got nothing from QE2, no jobs, no
reduction of their debts, no increase in the value of their homes, no reduction of taxes, no cash,
nothing. QE2 was also responsible at least in part for massive food and energy inflation which is
damaging global economic growth. How? Because Wall Street found itself with too much cash after
selling fixed income Treasury and garbage securities to the Fed, and bid up commodity prices with
this cash as it sought trading profits from commodity purchases with this newfound cash. Bernanke
will one day be known as the man who was a key catalyst driving global economies into the abyss.

"Jesus said to them, "I am the bread of life; he who comes to Me
shall not hunger, and he who believes in Me shall never thirst.
For I have come down from heaven,
For this is the will of My Father, that everyone who beholds
the Son and believes in Him, may have eternal life;
and I Myself will raise him up on the last day."
John 6: 35, 38, 40