For Wednesday, Sep 7, 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:

The S&P 500 closed down just over 0.7% on Tuesday compared to the close on Friday last week.  Monday US markets were closed for the Labor Day holiday.  The S&P 500 volume was higher versus Friday and higher compared to the 30-day moving average volume.

Subjective Comment:

We have been describing the two opposing forces attempting to drive US markets over the past several weeks.  The debt problems and tightening money supply in Europe have been pushing US markets down.  The accelerating growth rate of the US money supply is driving up prices in the United States, including stock prices.  The downward forces have been winning this struggle, but the downward motion has been mitigated by the expanding US money supply as we discussed in a previous post.  Yesterday we noted the very large drops in European markets and predicted any downside in US markets would not be as large as seen in Europe, as was indeed the case.  The German DAX and French CAC 40 were both down about 6% in the past two days, while US Markets closed down less than 1% on Tuesday.  The drop in US markets was most significant at the opening, followed by an upward trend until the close.  The observed market action is consistent with the opposing-forces discussion we have been publishing.

What has been causing market turmoil in Europe is the decision of the European Central Bank (ECB) to stop expansion of the Euro supply.  There has been speculation that incoming ECB President Mario Draghi will begin printing Euros when his term begins on October 31st.  Mr. Draghi recently made remarks that his intention is to continue the current ECB monetary policy.  It would appear his comments may have triggered the European sell-off these past few days.  The downward motion in Europe continues to influence US markets.  This will not continue, but when US markets begin to move upward despite European turmoil is difficult to predict.  Continued market volatility is to be expected.

One last comment: Bank of America has been raising capital, and today two senior executives left the company.  A failure of BofA or any major US bank would likely cause a short term market decline driven by investor fear. News headlines can cause short-term reactions in the market.  Keep in mind the excess reserves in the US banking system have the potential to add around $15 Trillion to the US money supply.  That’s not a typo; the US money supply can grow by $15 Trillion based on the fractional reserve money multiplier.  This is a massive amount of new money that will drive US stocks upward along with serious price inflation.  Any short-term drops in the market will be overwhelmed by this inflationary potential.

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