For Wednesday, Oct 12, 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 Tuesday the S&P 500 closed up 0.05% on volume just below Monday’s volume and below the 30-day moving average volume. The Dow was slightly down and the Nasdaq closed up 0.66%. This was basically a flat day for US markets. European markets were also mixed but effectively closed unchanged on Tuesday. The S&P 500 would have to drop about 53 points (4.5%) on Wednesday to switch our forecast from growth to uncertain.

Subjective Comment:

After Monday’s very large single day increase in the S&P 500, Tuesday’s hold on the gains could be considered technically bullish. We have yet to see a strong up-day on large volume. That would be a very bullish indicator. The absence of down-days on higher volume in the past few trading sessions has degraded the formation of a bearish pattern that had been forming. August 5th the S&P 500 fell below 1200 and a few times has risen back to just above the 1200 level, only to fall again. If the index were to go above 1216 on strong volume and stay above that level, it would be a bullish sign of breaking above a level that has shown resistance.

The rapidly expanding US money supply is going to cause a false-boom in the economy and inflate prices, including equities. As the Eurozone crisis abates the downward pressure Europe has had on US markets will unleash the upward force from the expanding money supply and cause stocks to rise. There continues to be some news from Europe causing a little uncertainty. Specifically, Slovakia failed to ratify the current bailout plan. This drama will eventually subside when Slovakia votes again, likely approving the plan. Greece will get another bailout payment in November, and perhaps in December. European politicians and bureaucrats think they have a plan to allow Greece to default on their bonds without causing failure of multiple banks and contagion of default to other countries. At least, this is what they hope to pull off. The Dollar swaps from the Fed during the fourth quarter and a possible interest rate cut by the European Central Bank in November could temporarily convince some market participants this is actually possible. If the market thinks this will work, downward pressure in Europe will ease and US markets will rise as a result. In the long run none of this will work and the economies (and markets) of US and Eurozone members will crash again. With the massive amounts of money printing, it is hard to guess how long the false-boom will last. The purpose of market timing is to catch this manipulated up-trend in the market, use leveraged index funds to stay ahead of inflation, and later exit before the crash. Attempting to catch the beginning of the up-trend sometimes results in catching false-starts. It is looking like the multiple false starts over the past several months may be coming to an end. If you are still cautious, consider waiting until the S&P 500 shoots above 1216 before investing. If you can tolerate a little more risk, then now is your opportunity to invest in leveraged index funds.

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