For Tuesday, Oct 11, 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:

On Monday the S&P 500 closed up 3.4% on volume lower than Friday and below the 30-day moving average volume. For the stop-loss algorithm of our forecast to switch back to uncertain, Tuesday the S&P 500 would have to drop about 63 points, or 5.2%.

Subjective Comment:

The very large up-day for US markets was on light volume. It would be a more bullish indicator to see such a large up-day on higher volume, but the magnitude (3.4%) is still notably large. News over the weekend and on Monday from Europe suggests officials are attempting to setup a bailout mechanism to prevent a Greek default from spreading to the banking system and other countries. Greece will default. If market participants believe the European Central Bank (ECB) will print Euros as needed to avoid bank failures and contain the default to only Greek bonds, the downward pressure in the Eurozone will abate. The large up-day on Monday appears to indicate some market participants think this is the case.

It is difficult to guess if the crisis in Europe is easing. The Dollar swaps in October, November and December from the US Federal Reserve will help in recapitalizing banks. It also appears European banks might be partially (or fully) nationalized if necessary. None of this will solve the debt problems in Europe in the long term, but in the short term it could stop the European markets from declining further. If the new ECB President cuts interest rates in early November, this will also ease downward pressure from Europe. Our hypothesis has been and continues to be that the downward pressure from Europe has been holding US equities back from growing. If this pressure eases, US markets will grow rapidly and strongly, fueled by the rapidly expanding money supply. We advise following our automatic forecast and investing in leveraged US index funds.

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