April 13, 2014
We have changed our subjective investment recommendation to risk-off. Price inflation hedges should be held or accumulated for the long term as price inflation is starting to accelerate. Avoid all bonds, including the new MyRA bond scheme from the Feds. Ignore the propaganda.
The S&P 500 declined again Friday by 0.95% on volume below Thursday but above the 30-day moving average. The overall daily data from the market continues to be consistent with a market that will continue to decline, but a predictive pattern has not formed. Our stop-loss algorithm remains triggered so our automated market forecast is currently an “uncertain trend”. The S&P 500 would have to advance about 21 points on Monday to reverse the trigger and change our forecast back to a growth trend.
Even if our automated forecast were to return to a growth trend after Monday’s trading session, we would not recommend investing in US markets right now. The daily data shows too many strong-volume down-days and we think a negative pattern is becoming more likely. The US money supply growth is not strong enough to continue the bubble-boom that has been in progress. If the money growth were to accelerate, the bubble-boom could resume. However, all indications are that US banks have slowed lending and have little incentive to change path. The Fed has tapered. The sources of accelerated money growth do not appear present, so we expect money growth to slow even more in the near future. We are not yet at the point of recommending a short position, so stay out of US markets for now.
End of Daily Blog Posts:
We will continue to update our market signals at TimerTrac.com for our readers interested in tracking our automated and subjective market recommendations:
This is our automated forecast. We don’t always recommend investing per the output of this forecast, but whatever our forecast does will be published at TimerTrac.com and available from this link.
We evaluate the growth of the money supply using Austrian Business Cycle Theory and consider the status of our automatic forecast when making our subjective investment recommendation. We will update our subjective forecast at TimerTrac.com from this alternative link.
Our Recommendations for Excellent Commentary:
Best Economic Blog: EconomicPolicyJournal.com
The editor of EconomicPolicyJournal.com is Robert Wenzel, and he offers a daily email subscription that is absolutely fantastic! You can subscribe at this link. We highly recommend this subscription. You will continue to get great commentary and analysis on the US money supply growth rate using Austrian Business Cycle Theory.
We also suggest ZeroHedge.com, although the blog posts there tend to be a bit snarky and often use terminology that can be difficult for the average reader to follow. ZeroHedge.com is intended for professional traders. There is a larger staff at ZeroHedge.com, so you will find it updated more frequently than EconomicPolicyJournal.com, but that’s not always a good thing.