For Wednesday, Aug 10, the market forecast is for growth

We recommend any leveraged ETF that grows with the US market.

Here are some options:

2x Leveraged ETFs

NASDAQ 100

Russell 2000

S&P 500

QLD

UWM

SSO

3x Leveraged ETFs

NASDAQ 100

Russell 2000

S&P 500

TQQQ

URTY

UPRO

Technical Comment:
By the end of Tuesday the S&P 500 closed up 4.7% for the day, which is a big move in the index. However, the movement was on light volume, both lighter than the previous day and about half of the 30-day average volume. The upward movement was sufficient to change our forecast to growth.

Subjective Comment:
Upward market movement on high volume is usually more bullish than the weak volume shown today. The Federal Reserve’s FOMC announcement did have an impact during the trading on Tuesday. The first half of the day the market was up a lot, followed by a drop into negative territory immediately following the FOMC announcement. We think the absence of additional Quantitative Easing initially frightened market participants. Later as the FOMC statement was analyzed, the market began to realize the Fed is more likely to continue money printing, resulting in the upward movement that caused the market to close at the highest point of the day.

It is very difficult to guess what will happen on Wednesday. More time will be spent analyzing the FOMC statement and articles will be published opining what it means. The people expecting more Quantitative Easing have already begun to suggest the QE3 announcement might come in about 3 weeks when Ben Bernanke will be at Jackson Hole for the Fed’s annual gathering there. It was in Jackson Hole last year that QE2 was announced.

Our forecast shifted to growth on the large increase in the S&P 500 index. Should the S&P 500 close down around 35 points on Wednesday, it is likely our forecast could return to uncertain. Our formal recommendation is to invest into the US Market as this could be the start of the up-trend we’ve been expecting. We want you to know about the possibility of our forecast returning to uncertain should a large drop happen on Wednesday. The large swings in the market might not be over. Turning points in market trends tend to be volatile periods with large changes day-to-day. If a down-trend resumes until the Jackson Hole meeting, our algorithm’s stop-loss feature will cause a shift back to an uncertain forecast. Caution is warranted because of the light volume experienced on Monday and Tuesday, so please keep checking our forecast every day. You can also follow us on Twitter. We only tweet on days when our forecast changes.

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