For Thursday, Oct 6, the market forecast is for growth

We recommend any leveraged ETF that grows with the US market, but please read our comments before investing.

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 up 1.8% on Wednesday.  Volume was lower than Tuesday and much lower than the 30-day moving average volume.  In fact, Wednesday’s volume was almost half of the 30-day moving average volume.  The S&P 500 would have to drop about 30 points (2.6%) on Thursday to trigger the stop-loss algorithm and flip our forecast back to uncertain.

Subjective Comment:

The large upward movement in US markets on Tuesday and Wednesday was on decreasing volume.  This is not a bullish indicator.  Unlike Tuesday, European markets were up a large amount (London +3.2%, Germany +4.9% and France +4.3%).  This shows the up and down movement of European markets continues to heavily influence the US markets.  Headline rumors continue to flow.  An official from the International Monetary Fund, Antonio Borges,  suggested the IMF might begin buying bonds from several bankrupt countries.  Less than a day later he reversed himself.  In France there is a report the government may have a plan to partially nationalize 2 or 3 banks.  The proper thing for Europe is to write down the unplayable levels of debt and restructure payments on the reduced principle.  As long as attempts are made to avoid default and force all debts to be paid in full and on time the crisis will continue.

Our opinion regarding US markets remains the same.  The rapidly expanding US money supply will drive serious price inflation and cause US stock markets to rise in the near future.  This will be another unsustainable bubble-boom in the economy.  We’re not sure when this will happen, but it will occur.  Our automated forecast will likely continue to switch between growth and uncertain as the high volatility continues.  Growth on light volume does not give us confidence we are yet at the point where US markets will decouple from the downward pressure from Europe.  Caution continues to be the best advice when considering US market index funds.

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