For Friday, Sep 9, the market forecast is for growth

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

Here are some options:

2x Leveraged ETFs



Russell 2000

S&P 500




3x Leveraged ETFs


Russell 2000

S&P 500




Technical Comment:

The S&P 500 declined 1.1% on Thursday with volume that was higher than Wednesday but lower than the 30-day moving average volume.  One day of a market decline on higher volume sometimes precedes downward trends, but our automated forecast remains for growth.  A decline of about 7 points in the S&P 500 on Friday would likely trigger the stop-loss algorithm and switch the forecast to uncertain.

Subjective Comment:

The Bank of England and the European Central Bank (ECB) both announced on Thursday they will leave their interest rates unchanged.  This means they are not going to be printing more Pounds and Euros in the near future. Printing money is always bad for economies, and the European markets will continue to decline as they recover from the prior money supply inflation.  This will exert downward pressure on US markets.  However, both the Bank of England and the ECB might resume money printing in the near future.  Business leaders in the United Kingdom are calling for more “central bank stimulus” to aid their economy.  Out-going ECB President Jean-Claude Trichet gave remarks today stating threats to the Eurozone have worsened.  These comments suggest the new ECB President may resume printing Euros as early as November.  Should the UK and ECB resume printing money the downward pressure on US markets from European markets will ease.  This will cause markets to rise, but in the long run this would be highly inflationary and bad for the economies involved.

The US Federal Reserve continues its near-zero interest rate policy, and the excess reserves from the Dollar printing from the past 3 years are expanding the US money supply via the fractional reserve money multiplier.  There is no need for the Fed to resume printing via Quantitative Easing, nor from any other program with a less contentious name.  Unfortunately, several members of the Fed’s board of governors gave speeches on Wednesday indicating they are in favor of turning the printing presses back on.  The president of the Chicago Fed, Charles Evans, said “the Fed should seriously consider actions that would add very significant amounts of policy accommodation.”  Fed Chairman Bernanke spoke to the Economic Club of Minnesota in Minneapolis on Thursday.  His comments were consistent with the possibility of future monetary expansion.  If the Fed were to resume printing Dollars, it would be doing so on top of current M2 annualized growth rates of 10.2% (Non-Seasonally Adjusted) and 15.6% (Seasonally Adjusted).  M2 growth rates are accelerating and are already very high.  Inflation, as measured by, is over 11%.  This will eventually overcome downward pressure from European markets, causing US markets to experience a growth trend.  Additional action by the Fed at the next FOMC meeting (Sep 20-21) will only make US market growth stronger, along with more serious price inflation. We continue to believe the expanding Dollar supply will drive US markets upward, eventually overtaking the downward pressure from Europe.

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