August 1, 2012The RITE Report Summary

The RITE Report generates indices from the monthly compilation of corporate, business, economic, & political news snippets from the Wall Street Journal.

Summary As of: 07/31/2012:

1) Stocks: 1) The RITE Index has four declines in a row from 59.4% to 52.2% to 50.6% to 48.3% yet the market is slowly moving upward. Now would be a good time to take profits and sit on the sidelines. The upside potential is small and the downside potential is huge.

2) The Percentage of Negative WSJ Economic and General Business Data Snippets is up to a dangerously high level of 71%.

3) The negative Snippets of European news are clearly forecasting recession in Europe, and soon its influence will hit the corporate profit picture here.

4) Further, the Bush tax cuts will expire in January and the ObamaCare tax increases (20+ of them) are on their way, and it is not clear if this will be rectified, if at all, after the election.

Thus, we advise not to be in the stock market presently.

Therefore, we advise taking profits; or, at the very least, decrease your exposure to less than 50% and against your long positions initiate a hedge for the possible contraction. For example, a possible strategy is to put a bear spread in place to help hedge any long positions.

2) Gold: Going sideways. If you followed this Report’s advise and took your profits, then now is a good time to re-establish. The world’s governments like to print money. Over the long run we are still bullish on gold.

3) Oil: We have been on the sidelines on oil. Let’s stay there for now. There are too many pressures, both upward and downward. If you must do something, then a straddle is the only play here.

4) The U.S. Dollar: We still do not call any directional trend in the USD Index.

5) Latest TV/Podcast: Relationship of Government Expenditures & Taxes to Jobs

http://www.youtube.com/watch?v=PHUSUXFewS8&feature=plcphttp://www.youtube.com/user/philosophypublishing/

CUSTOM RESEARCH: Please note that custom economic and/or macro investment research and advisory services are available on request.

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August 1, 2012The RITE REPORT

The following RITE Report generates indices from the monthly compilation of corporate, business, economic, & political news snippets from the Wall Street Journal.

RITE ReportChris Angle, Editor19 Topledge Road (P.O. Box 708)Redding, CT 06896Tel. 203/253-2008Fax. 203/286-2356Email: chrisangle1@gmail.comhttp://www.stock-market-direction.net/

CONTENTS

PART 1 - STOCKS

1) Business News Compilation Index2) Political & Macro Economic Events Indices3) Indicators for Technical Analysis4) Overall Investment Strategy Index5) Summary

PART 2 - HEDGING

1) Hedging and Inflation Snippets2) Hedging Summary

PART 1 - STOCKS

1) Business News Compilation - From The Wall Street Journal

Part A - Negative WSJ Corporate News Snippets

07/02- Ford Shares Fall on Profit Warning- Nike's Profit Falls 7.6%07/03- Microsoft's Web Woes to Wipe Out Profit07/05- Kohl's Tamps Down Profit Expectations- Temasek's Net Falls 16%- Tullow Takes $440 Million Hit07/06- Dynegy Files for Bankruptcy- HTC's Profit Falls 58%- Uniqlo Operator Lowers Profit Outlook- Peugeot Denies Seeking State Aid as Sales Dive07/10- Alcoa Pinched by Low Prices07/11- Levi's Profit Falls 38%07/12- Infosys Profit Disappoints07/13- J.P. Morgan Chase's Markets Revenue Fell 15%07/16- ZTE Slumps on Weak Earnings Guidance- Advertising Slips at Gannett: second-quarter earnings fell 21% amid an ongoing slide in print ad revenue and lower circulation.- Citi Profit Falls 12%- J.P. Morgan Chase's Markets Revenue Fell 15%07/17- M&T Bank Profit Drops 28%- Goldman Profit Falls 11% but Tops Estimates: Goldman Sachs's second-quarter profit fell 11% as sluggish demand for deal making put a damper on investment-banking revenue …

- TD Ameritrade Earnings Slip- Alcatel-Lucent Warns on 2012 Profit- Charges, Exchange Rates Hit J&J07/18- Poor Profit Margins Hit Ericsson- Abbott's Net Hit by Charges- ASML Profit Falls- BlackRock's Net Slips 11%- Yahoo's New CEO Greeted by Weak Profit- Intel's Profit Falls 4%- Bank of America Loan Growth Still Lost07/19- Nokia Loss Widens- Ericsson Profit Drops 64%- Morgan Stanley's Profit Tumbles- Dr. Reddy's Profit Misses Estimates- Problems Hit Novartis- AmEx Profit Flat as Pace of Card Spending Slows- Abbott's Net Hit by Charges- BNY Mellon Profit Falls07/20- Turbine Slowdown Dents GE- Reliance Industries Profit Drops 21%- China Brokerages Report Fall in Net Profit07/21- Xerox Blames Economy for Lower Profit, Outlook- First Horizon, SunTrust Disappoint Investors- Halliburton's Net Slips on Higher Costs07/23- AMD's Earnings Drop on Weak Demand07/24- Deutsche Bank Net Profit Tumbles- UPS Cuts Full-Year Outlook: UPS's second-quarter profit rose 2.2% as the shipping company saw a stronger performance from its U.S. package segment, offsetting weakness overseas.- Currency Headwinds Hit DuPont- Volvo to Reduce U.S. Production- KPN Slashes Dividend- DeVry to Cut Jobs Amid Weak Enrollment- Texas Instruments' Profit, Revenue Fall

- McDonald's Loses Some Momentum- Low Sales Sap Hasbro Net- Posco's Profit Falls 66%07/25- Peugeot Outlines Latest Recovery Plan: Auto maker Peugeot Citroën outlined a plan to save €1.5 billion annually by 2015, as it races to stem a cash hemorrhage triggered by falling vehicle sales- Europe Weakness Dents Ford: Ford's second-quarter net profit slid 57%- RadioShack Shares Slide: RadioShack said it would stop paying a quarterly dividend after 25 years and reported its widest quarterly loss since 1996- Telefonica Suspends Dividend, Share Buybacks- Canon Cuts Full-Year Outlook- Piper Jaffray to Exit Hong Kong Market: as mounting losses from the mid-sized brokerage's Asia operations contributed to a 36% plunge in its second-quarter profit.- Encana Posts $1.48 Billion Loss- Lower Oil Prices Hurt Conoco- Higher Costs Hurt Daimler: Daimler posted an 11% drop in quarterly profit- Arcelor Sees Tough Conditions: ArcelorMittal warned that operating conditions would remain difficult and Europe is still its chief concern as the steel titan reported lower second-quarter earnings.- PepsiCo Profit Declines; Ads Expected to Pay Off- Rising Costs Weigh on WellPoint- Delta Air Lines Posts Loss- Glaxo Misses Forecast- Netflix Profit Shrinks 91%- Eli Lilly Posts Lower Net, Ups Outlook- Patent Expirations Hurt Bristol-Myers07/26- Sprint's Loss Widens- 3M's Net Flat on Europe Weakness- United's Net Slips on Integration Costs- Lloyds Banking Posts Loss- Zynga Posts Loss, Stock Plunges 39%- United Technologies Cuts Outlook- Janus Profit Drops 44%- Unilever Warns of Worsening Economy- Statoil Results Disappoint- Santander Profit Plunges- Lazard's Profit Drops 50%

- LG Display Posts Quarterly Loss- Alcatel to Slash Jobs After Loss- SK Hynix Posts Loss on Falling Chip Prices07/27- Amazon Profit Evaporates: Amazon continued to boost sales faster than many companies in the tech sector, but razor-thin margins may finally be catching up with the online retail giant. Second-quarter profit fell 96%.- Chevron's Profit Slips- TVS Motor Profit Drops 13%- Property Woes Hit Spain's Banks- Renault Profit Slides- Kia's Profit Falls; Sales Target in Reach- Dow Chemical CEO Sees Long Slog07/28- Maruti Suzuki Reports Lower Profit- Legg Mason Swings to Loss- TransCanada Posts Net Drop,Gets Gulf Coast Permit- Europe Drags on Danone- Charge Dents Barclays Profit07/30- HSBC Hit by Provisions- CIT Group's Loss Widens- Sumitomo Mitsui's Net Profit Drops- Costs Hit Air France-KLM- Garuda Indonesia Books Loss07/31- Dendreon to Cut 41% of Staff- BP Profit Declines- Breakup Costs Hit Tyco's Results- Aetna's Net Slips on Higher Costs- Tight Corn Supplies Hurt ADM- Coach Stock Down on Disappointing U.S. Sales- Toshiba Posts Net Loss- Profit Slumps at Spain's BBVA- Mitsubishi UFJ Financial Group's quarterly net profit slid 63%- U.S. Drags on AB InBev

Negative Corporate Snippets Total = 113

Part B - Positive WSJ Corporate News Snippets

07/02- KB Home Sees Profit on Horizon07/05- Seven & i Net Profit Doubles- Aeon's Profit Doubles- Virgin America Posts $76 Million Loss07/06- Samsung Gets Boost From Smartphones07/12- SAP Defies Weak Software Sector- Commerce Bancshares' Profit Climbs- TCS Tops Forecasts- Marriott Profit Rises on North America, Europe Travel07/13- Wells Fargo Profit Up 17%07/16- Behind J.P. Morgan's Results: Lots of Gray: J.P. Morgan Chase's $4.96 billion second-quarter profit07/17- Price Increase Help Mattel- Omnicom's Net Rises 2.8%- Revenue Gains Boost Charles Schwab07/18- BofA Swings to Profit, Topping Estimates- AMR Posts Record Revenue- Wynn Resorts Profit Rises 13%- M&T, Comerica Flash Lending Strength07/19- Google's Profit Rises on Growth in Search- Verizon Wireless Posts Most Profitable Quarter- EBay's Profit Jumps- IBM Raises Profit Outlook- Qualcomm 'on Track' to Ease Chip Shortage: While reporting a 17% jump in profit- UnitedHealth Posts Higher Profit- Southwest's Net Soars- AutoNation Net Points to Car Sales Boom- Hero MotoCorp Profit Rises 10%- Hermès Sales Rise More Slowly

- Electrolux Boosts Prices, and Profit- Yum Brands' Profit Rises- Stryker Profit Rises 4.8%- St. Jude Earnings Up- Honeywell to Focus on Margins: The maker of aerospace, building-control and safety products reported an 11% rise in second-quarter profit- Northern Trust Bucks Downtrend07/21- Schlumberger, Baker Hughes Profits Surprise Street- Larsen Profit Rises 16%07/23- U.S. Sales Lift Philips- NRG to Buy GenOn for $1.7 Billion- HUL Profit More Than Doubles- Stronger Dollar Hurts McDonald's: despite stronger-than-expected same-store sales and slightly higher revenue.07/24- Higher Wireless Margins Boost AT&T's Profit- Whirlpool Swings to Profit- Regions Financial's Profit Triples- SAP Profits From the Cloud- Baidu's Profit Surges- Lockheed Raises Profit Forecast- Cairn India Tops Profit Forecast- Wipro Profit Rises 18.4%07/25- Caterpillar's Net Soars- AOL Posts Profit on Patent Sale- Revenue Up Sharply at IAC- Commercial Unit Lifts Boeing- LG Profit Jumps, but Hope Dims- ARM Profit Tops Expectations07/26- One-Time Gain Boosts Exxon- Higher Prices Prove Boon to Hershey- New York Times Loss Shrinks- Colgate Volume Sales Improve- Margins Improve at Kimberly-Clark- Nissan Sticks to Profit Target- CBS Boosts Dividend, Buyback

- MetroPCS's Net Soars 77%- Volkswagen Profit Rises07/27- KKR Earnings Surge 73%- Restructuring Costs Weigh on Merck: Merck's second-quarter earnings fell 11% as restructuring charges offset the drug maker's solid sales growth.- Porsche's 911, Cayenne Fuel Sales- ICICI Bank Profit Jumps 36%- Smartphones Lift Samsung Profit- For Exxon record global profit the company reported Thursday.- Pulte Swings to Profit- Starbucks Corp. reported a 19% rise in fiscal-third-quarter earnings as the coffee giant expanded margins and saw strong sales in its Asian business.07/28- D.R. Horton's Profit Jumps07/30- Chrysler Profits From North American Sales- Japan Tobacco Net Bounces Back- Hitachi's Profit Rises, but Still Lackluster07/31- South Korea's Kospi took the lead, rising 2.1%.- Lower Costs Boost Pfizer- Discovery Profit Rises- Goodyear's Net Nearly Doubles- Thomson Reuters's Net Rises 64%- Mizuho Financial Group's profit nearly doubled.- Honda Net Jumps; Mazda Loss Narrows- Panasonic Returns to Profit

Total of Positive Corporate News Snippets = 82

Index of Snippets

Month of Snippets % Positive % NegativeApril 09 35% 65%May 09 55% 45%June 09 56% 44%July 09 44% 56%August 09 41% 59%September 09 51% 49%

October 09 57% 43%November 09 58% 42%December 09 59% 41%January 2010 72% 28%February 2010 69% 31%March 2010 65% 35%April 2010 73% 27%May 2010 78% 22%June 2010 74% 26%July 2010 73% 27%August 2010 69% 31%September 2010 63% 37%October 2010 76% 24%November 2010 69% 31%December 2010 63% 37%2011January 63% 37%February 63% 37%March 67% 33%April 62% 38%May 64% 36%June 53% 47%July 63% 37%August 61% 39%Sept 34% 66%Oct 61% 39%Nov 43% 57%Dec 42% 58%2012Jan 41% 59%February 46% 54%March 56% 45%April 77% 44%May 52% 48%June 54% 46%July 42% 58%

2 & 3) Political Risk & Macro Economic Events/News

A) Negative WSJ Economic and General Business Data Snippets

07/02- Prices of Raw Goods Plunge on Slowdown- China Manufacturing Growth Slows- Manufacturing Slips in Asia07/03- Office Sector Shows Sluggish Growth- Profit Forecasts Feel Europe's Effect- Factory Slump Reaches U.S.: The global slowdown is hitting U.S. manufacturers hard, threatening a key pillar of the recovery and fueling fears the economy is heading for a stall.- Sluggish Economy Plagues Europe- Manufacturing Slips in Asia- Prices of Raw Goods Plunge on Slowdown- Blame Fear, Not Greed, as Firms Hoard Cash07/05- Euro-Zone Data Point to Contraction- IMF Pares Forecast for U.S. Growth07/06- IMF to Cut Global Growth Forecasts- Central Banks Take Action: Central banks in China, the euro zone, the U.K. and other countries took new steps to bolster growth amid mounting worries the global economic slowdown is worsening.- Jobs Report Revives Fears for Recovery- June Retail Sales Reflect Consumer Qualms- Tough Times for Spanish Tourism- Next Bank Woe? Home-Equity Loans07/10- China's Trade Growth Slows- New Jolt Looms for Investors: Earnings- OECD's Indicators Point to Slowdown07/11- OECD Warns on Unemployment- Fed Official Doubts Euro Fix07/12- Deeper Slowdown Suspected in China07/16- IMF Cuts Global Growth Outlook- Companies Feel China's Slower Growth: China's slowing economy is beginning to hit the corporate bottom line at a number of foreign and domestic companies, as

warnings of lower profitability set the stage for discouraging results in coming weeks.- U.S. Retail Sales Drop Again: U.S. retail sales fell for the third consecutive month in June, the first time that's happened since 2008 and the latest sign of a slowing economy.- ZTE Slumps on Weak Earnings Guidance07/17- Bernanke Strikes Negative Tone: Bernanke delivered a bleak new assessment of the U.S. economy …- Retail Sales Cap Sluggish Quarter- Companies Feel China's Slower Growth- German ZEW Index Falls Again- IMF: Doubt Weighs On Economy07/18- Dire Signs for Spanish Economy07/20- Euro Crisis Hits Emerging-Markets- Rising Risks Threaten Recovery- Vital Signs: Existing Home Sales Dip07/21- State Data Highlight Limp Job Market- Spain Bank Bailout May Not Be Enough07/23- Spain Bedevils Markets Again07/24- Europe Dims German Outlook- Euro-Zone Business Output Falls- Greek PM Sees Deeper Recession- Vietnam Inflation Eases as Demand Sags- World Bank Cuts South Africa Outlook- Spain's Economy Contracts07/25- U.K. Economy Sinks: U.K. economic output collapsed 0.7% in the second quarter, much larger than expected, heightening questions about the pace and effectiveness of the government's austerity program.- New Home Sales Dropped- Confidence Drops Across Europe07/26- South Korean Economic Growth Slows- Europe's Crisis Hits Profits

07/27- Euro-Zone Gloom Deepens: The euro-zone economy contracted at a steeper pace in July, with consumer and business confidence weakening as the fiscal and banking crises worsened.- U.S. Growth Slows in 2nd Quarter: U.S. economic growth pulled back further during the second quarter of the year as consumer spending slowed. GDP grew at a 1.5% annual rate- China's Industrial Profit Slows07/28- Restaurants Face Slump07/30- Sharp Contraction in Spain- Corporate Profit Streak Faces a Threat- Euro-Zone Confidence Weakens- Japan's Industrial Output Falls- Weak Economy Heads Lower07/31- Taiwan GDP Unexpectedly Shrinks- EU Jobless Rate Hits High- U.S. Personal Spending Flat

Total of Negative General Business and Economic News Snippets = 89

B) Positive WSJ Economic and General Business News Snippets

07/02- Profit Forecasts Feel Europe's Effect- China Home Prices Rise- Japan's Tankan Stronger Than Expected07/03- China Real-Estate Market Improves- Japan Consumer Sentiment Spikes- U.S. May Factory Orders Rose07/05- Labor Market Shows Signs of Improvement: Private-sector hiring jumped by an unexpectedly strong pace in June, according to a report Thursday.- Rents Increase as Vacancies Dry Up07/06

- Upbeat Report Makes BOJ Action Less Likely: With a report that all of the country's regional economies are improving, the Bank of Japan made it less likely that it will take additional easing measures at its meeting next week.- Canada Creates More Jobs Than Expected07/11- Draghi Signals ECB Can Do More07/12- Jobless Claims Tumble07/13- IEA Sees Rise in Global Oil Demand- China's Growth Slows to 7.6%07/16- In U.S. Economy, Only Pockets of Strength- Euro Zone Sees Rise in Exports07/17- Industrial Output Rose in June- Home Builder Confidence Takes Biggest Jump in Nearly 10 Years07/18- Housing Starts Jump07/19- Beige Book: Economy Expanding07/24- U.S. Home Prices Reflect Rebound07/26- German Consumers Still Confident- Durable Goods Rise; Jobless Claims Fall07/27- Reconstruction Boosts Japan Recovery07/30- Sweden's Economy Gathers Pace07/31- Earnings, Easing Hopes Lift Asia Markets

Total of Positive WSJ General Business and Economic News Snippets: 26

C) Merger/Acquisitions/Public Offerings Snippets From the Wall Street Journal

07/02- Dell to Buy Quest for $2.36 Billion- Budweiser, Corona Join in $20 Billion Marriage

07/03- Fortune Oil, Liu Ming Hui Raise Stake in China Gas to 17.71%- Micron to Acquire Rival Elpida- Sony Shifts Toward Streaming Games: Sony agreed to pay $380 million to buy U.S.-based Gaikai- Walgreen to Buy Drugstore Chain07/06- Yitai Coal Raises US$903 Million in Hong Kong IPO07/10- Comcast to Get $3 Billion for A&E Television Stake- WellPoint's Healthy Premium for Amerigroup- Campbell Soups It Up: Its deal to buy Bolton Farms aims at nabbing more sales from the perimeter of the grocery store.- Intel to Take Stake in ASML- Four Companies Break IPO Drought- Online travel-search engine Kayak and Palo Alto Networks began pitching IPOs to investors- Microsoft to Buy Display Maker Perceptive Pixel- Salesforce.com to Buy GoInstant07/11- Xerox Keeps Scooping up Service Businesses- Coding Start-Up Raises $100 Million07/12- IHH Healthcare Raises $2 Billion in IPO07/13- Ackman Takes Big P&G Stake07/16- Glaxo to Buy Human Genome- TPG to Buy Par Pharmaceutical- TPG Buys Taiwanese Packaging Firm HCP for $600 Million07/17- Samsung Buys Firm's Mobile Business: Samsung acquired … Cambridge Silicon Radio $310 million.- TiVo Buys Analytics Firm: TiVo said it acquired TRA07/18- EBay Acquires Start-Up Card.io to Bolster PayPal- Autodesk Pays $60 Million for Socialcam- Flash Sales Site Fab Raises $105 Million- Investors Put $2 Billion Into Suddenlink07/21

- Two Tech IPOs Shine Following Facebook: The stocks of technology companies Kayak Software and Palo Alto Networks surged in their debuts, a promising sign for an IPO market that seized up in the wake of Facebook's disappointing May offering.07/23- Cnooc to Buy Nexen for $15.1 Billion- DreamWorks Buys Classics- Sinopec Buys Stake in Talisman's North Sea Business- French TV Takeovers Approved07/24- VMWare to Buy Nicira for $1.26 Billion07/30- Oracle Continues Buying Spree: Oracle agreed to buy Xsigo- Deal Profile: Chicago Bridge & Iron's Biggest Purchase: Chicago Bridge & Iron reached a deal for its largest acquisition ever today, agreeing to buy Shaw Group for $3.04 billion in cash and stock.- ConAgra Buys Some International Flavors for the Freezer Aisle: agreeing to acquire Unilever’s North American frozen-meals portfolio for $265 million,

M & A Total: 37

Table of Positive v. Negative General Economic & Business News With Investment Banking Snippet Count

Month % Neg % Pos M & A, Public Offering Snippets2009August 09 40% 60% 12Sept 09 48% 52% 30October 09 34% 66% 24November 33% 67% 31December 38% 62% 352010January 48% 52% 25February 43% 57% 28March 34% 66% 40April 33% 67% 47May 53% 47% 38June 51% 49% 52July 50% 50% 42

August 50% 50% 49September 48% 52% 67October 48% 52% 58November 41% 59% 46December 39% 61% 552011January 31% 69% 65February 31% 69% 55March 51% 49% 45April 47% 53% 33May 46% 43% 27June 68% 32% 30July 68% 32% 38August 79% 21% 28Sept 79% 21% 21Oct 74% 19% 17Nov 69% 31% 33Dec 73% 27% 202012January 53% 47% 11February 46% 54% 11March 47% 53% 26April 51% 49% 30May 57% 43% 20June 77% 23% 22July 71% 29% 37

3) Technical Analysis Summary

Indicator TREND/COMMENT

REAL GDP Negative

UNEMPLOY-MENT RATE Increasing Negative

INDUSTRIAL PRODUCTION Increasing Positive

PURCHASING

MANAGERS INDEX Decreased Negative

RETAIL SALES Decrease Negative

CONSUMER SPENDING Neutral

CONSUMER CONFIDENCE (Conference BoardTM) Uptick Positive

HOUSING STARTS Uptick Positive

EXISTING HOME SALES Downtick Negative

TRADE DEFICIT Decreased Negative

CONFERENCE BOARD LEADING ECONOMIC INDICATORS TM Decreased

CONFERENCE BOARD COINCIDENT ECONOMIC INDEX TM Increased

HIGH YIELD BONDS (HYG) Increased Positive

SUMMARY

5 Positive7 Negative1 Neutral

4) RITE Investment Strategy Index

Scale:0 = Neutral;+10 = High Opportunity Environment; -10 = Extreme Negative Risk Miasma

EFFORT, RISK, FREEDOM, KNOWLEDGE/INFO Nov 31 COMMENTS

1) Domestic Political Risk + 5 Not bad: Political Gridlock

2) Tax Risk - 2 Risk of taxes increase approaching as current tax extension expires 01/2013 and ObamaCare kicks in although Republicans vow to repeal ObamaCare and extend the tax cuts if elected.

3) Individual Incentive - Freedom - 2 WSJ indicates loss of freedom; Regulations of Dodd-Frank et al are increasing.

4) Production of Knowledge + 3 Positive Corporate profit snippets are OK but corporate profits are shrinking. R & D outlook is probably stable.

5) Technical Analysis of the U.S. Stock Markets - 0 Sideways market.

6) Corporate Snippets - 2 Positive Snippets went from 54% to 42%

7) General Business & Economic Snippets - 5 Negative Snippet % remained high at 71%.

8) Economic Indicators - 3 Not good at 5 positive & 7 negative

9) Merger/Acquisition Activity + 3 Good at 37.

Sum of Total - 3Average of Total - 0.33Percentage of Equity Commitment 48.3%.

History of Strategy Index

Month & Year Index % DJIA Gold Oil USD Index2009Oct 1 (o) 72.2% 9,683.63Nov 2 (o) 71.6% 9,742.36

Dec 1 (o) 72.8% 10,437.122010Jan 4 (o) 71.1% 10,492.06Feb 1 (o) 73.35% 10,128.54March 1 (o) 66% 10,361.77April 1 (o) 68% 10,924.04May 1 (o) 70% 11,008.61June 1 (o) 56.1% 10,024.02June 30 56.6% 9,774.02July 30 52.8% 10,465.94 1,183.5 78.99 81.655Aug 31 55.7% 10,014.72 1,248.1 72.29 83.165Sept 30 61.1% 10,788.05 1,309.3 79.81 78.94Oct 29 77% 11,118.49 1,359.8 81.45 77.165Nov 30 70% 11,008.02 1,386.1 84.11 81.42Dec 31 74.5% 11,577.51 1,422 91.4 79.282011Jan 31 77.2% 11,891.93 1,337 91.93 77.715Feb 28 77.2% 12,226.34 1,412.6 96.94 76.93March 31 67.7% 12,319.73 1,439.9 106.72 76.335April 30 65.6% 12,810.54 1,565.8 113.73 73.18May 31 56.1% 12,569.79 1,531.5 102.89 74.55June 30 56.1% 12,414.34 1,499.8 94.74 74.77July 30 59.4% 12,143.24 1,631.2 95.70 73.895August 31 58.3% 11,613.53 1,828.8 88.72 74.255Sept 30 49.7% 10,913.38 1,626.50 78.75 79.295Oct 31 63.9% 11,955.01 1,724.00 92.83 76.31Nov 30 53.9% 12,045.68 1,745.5 100.36 78.491Dec 31 55.0% 12,217.56 1,567.0 99.06 80.532012Jan 31 54.4% 12,632.91 1,742.1 98.67 79.465Feb 29 57.2% 12,952.07 1,709.9 107.07 78.794March 31 56.7% 13,212.04 1,671.9 103.02 79.186April 30 59.4% 13,213.63 1,665.3 104.95 78.77May 31 52.2% 12,393.45 1,556.0 86.18 83.28June 30 50.6% 12,880.09 1,598.6 84.96 81.59July 31 48.3% 13,007.47 1,614.6 88.06 82.78

5) Summary

EQUITY MARKET CONCLUSION:

1) The RITE Index has four declines in a row from 59.4% to 52.2% to 50.6% to 48.3% yet the market is slowly moving upward. Now would be a good time to take profits and sit on the sidelines. The upside potential is small and the downside potential is huge.

2) The Percentage of Negative WSJ Economic and General Business Data Snippets is up to a dangerously high level of 71%.

3) The negative Snippets of European news are clearly forecasting recession in Europe, and soon its influence will hit the corporate profit picture here.

4) Further, the Bush tax cuts will expire in January and the ObamaCare tax increases (20+ of them) are on their way, and it is not clear if this will be rectified, if at all, after the election.

Thus, we advise not to be in the stock market presently.

Therefore, we advise taking profits; and at the very least, decrease your exposure to less than 50% and against your long positions initiate a hedge for the possible contraction. For example, a possible strategy is to put a bear spread in place to help hedge any long positions.

PART 2: HEDGING

1) HEDGING/INFLATION SNIPPETS FROM THE WSJ

Deflation

Inflation07/17- Higher Costs Hit Coke's Net07/23- Halliburton's Net Slips on Higher Costs07/25- Fed Moving Closer to ActionDeflation Snippets = 1Inflation Snippets = 2

DEFLATION SNIPPETS 0%

INFLATION SNIPPETS 100%

INFLATION TABLE

(Month notes RITE Report Issue Date; Statistical Data is the latest which is noted in the WSJ at the date of the RITE Report publication which is the last day of the month.)

Month Consumer Producer Inflation Infl Defl DJ UBS Prices Prices data.com Snpts Snpts Commodity Idx Annual Rate

2010Jan + 2.7% + 4.4% + 2.72% 44% 56%Feb + 2.6 + 4.6% + 2.63 % 44% 56%March + 2.1% + 4.4% + 2.14% 40% 60%April + 2.3% + 6.0% + 2.31% 29% 71%May + 2.2% + 5.5% + 2.24% 50% 50%June + 2.0% + 5.3% + 2.02% 25% 75%July + 1.1% + 2.8% + 1.05% 25% 75%Aug + 1.2% + 4.2% + 1.24% 33% 67% 130.77Sept + 1.1% + 3.1% + 1.15% 75% 25% 140.29Oct + 1.1% + 4.0% + 1.14 % 95% 5% 147.269Nov + 1.2% + 4.3% + 1.17 % 78% 22% 146.73Dec + 1.1% + 3.5% + 1.14 % 86% 14% 162.393

2011Jan + 1.5 + 4.0 + 1.50 % 91% 9% 161.29Feb + 1.6 + 3.6 + 1.63 % 100% 0% 166.14March + 2.1 + 5.6 + 2.11% 89% 11% 169.56April + 2.7 + 5.8 + 2.68% 89% 11% 175.42May + 3.2% + 6.8% + 3.16 % 14/93% 1/7% 166.54June + 3.6% + 7.3% + 3.57 % 9/100% 0/0% 158.13July + 3.6% + 7.0% + 3.56% 4/67% 2/33% 162.81August + 3.6% + 0.2% +3.63% 16/94% 1 /6% 164.43Sept + 3.8% + 6.8% +3.77% 9//100% 0/0% 140.20Oct + 3.9% + 6.9% + 3.87% 7/100% 0/0% 149.48Nov + 3.5% + 5.9% + 3.53 % 3/60% 2/40% 146.16Dec + 3.5% + 5.7% + 3.39% 5/71%; 2/29% 140.68

2012Jan 31 + 3.0% + 4.8% + 2.96% 4/80%; 1/20% 144.16Feb + 0.2% + 0.4% + 2.93% 5/100%;0/0% 148.04March + 0.4% + 0.4% + 2.87% 5/100%;0/0% 141.90April + 0.3% + 0.4% + 2.65% 5/100%;0/0% 141.29May + 0.2% + 0.2% + 2.3% 3/60%;2/40% 128.38June - 0.3% - 1.0% + 1.7% 2/67%;1/33% 135.42July - 0.0% + 0.1% + 1.66% 3/100%;0/0% 144.17

2) HEDGING SUMMARY

a) Gold: Going sideways. If you followed this Report’s advise and took your profits, then now is a good time to re-establish. The world’s governments like to print money. Over the long run we are still bullish on gold.)

b) Oil: We have been on the sidelines on oil. Let’s stay there for now. There are too many pressures, both upward and downward. If you must do something, then a straddle is the only play here. c) The U.S. Dollar: We still do not call any directional trend in the USD Index.

RITE ReportChris Angle, Editor19 Topledge Road (P.O. Box 708)Redding, CT 06896Tel. 203/253-2008Fax. 203/286-2356Email: chrisangle1@gmail.comhttp://www.stock-market-direction.net/

(The RITE Report’s name was derived from the acronym of the four variables inherent in all economic transactions; Risk, Information/Knowledge, Time, and Effort. Of course, this would be for a service, and if the product were a material good, there would be an additional factor of Material - or Land as the economist would say. See The Philosophical Equations of Economics at www.philosophypublishing.com for further info on this subject.)

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