For Thursday, Sep 1, 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:
On Wednesday the S&P 500 closed up 0.5% on volume higher than Tuesday and a higher than the 30-day moving average. This is the second day in a row the market closed up on higher volume.

Subjective Comment:
We continue to be encouraged by the up-trend on higher volume. This is a bullish pattern. A lot of financial news websites and blogs have been debating the market action, but few seem to be discussing the accelerating growth of the US money supply. The excess reserves from the previous Quantitative Easing (money printing) by the Federal Reserve are entering the economy. Through the fractional reserve money multiplier, the $1.6 Trillion of excess reserves can grow to over $15 Trillion in new money over time. The current US money supply (M2) is just over $9 Trillion. Without any more action by the Fed, US banks can more than double the M2 money supply! This is astounding, unprecedented in US history, and dangerous. The Fed might announce more money printing via QE3 after the next FOMC meeting on September 21st. We hope they don’t; it certainly is not necessary. We have been discussing this reality for the past several weeks. Today at Mises.org there is an article by Frank Shostak that covers the economics of this in more detail. The coming price inflation will erode the purchasing power of US dollars. Leveraged investing in US stock index funds remains a key to our forecasting strategy and a means of staying ahead of price inflation, at least for now. Should hyperinflation come, stocks would go up in nominal dollars but not as fast as price hyperinflation.
In addition the next FOMC meeting, keep watching what the European Central Bank (ECB) does with its monetary policy. Outgoing ECB President Jean-Claude Trichet has said he does not intend to begin printing Euros, although the ECB has hinted they may stop raising interest rates as they have been doing for several months. There is also speculation that Mario Draghi will begin printing Euros when he becomes the ECB President on October 31st. Should the ECB reverse its current monetary policy and fire up the printing press, the European markets would reverse their downward trend, removing their downward influence on US markets. As European banks struggle with the sovereign debts of the Eurozone, political pressure will mount on the ECB to print Euros.

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