For Friday, Oct 21, 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:

US markets closed on Thursday mixed with the Dow and S&P 500 up and the Nasdaq down.  The S&P 500 closed up 0.46% on volume higher than Wednesday and higher than the 30-day moving average volume.  The technical resistance on the S&P 500 of 1216 to 1226 has yet to be overcome as todays upward movement on higher volume did not move above this range.  The S&P 500 would have to drop about 26 points on Friday (2.2%) to trigger our stop-loss algorithm and shift our forecast to uncertain.

Subjective Comment:

For part of the day Thursday US markets were down, but after European markets closed US markets climbed to finish mixed.  European markets were down between 1.2% (London) to 2.5% (Germany).  The strong downward motion in Europe had a mild downward influence on the US, followed by upward US movement after European markets closed.  This is evidence the US and Europe are starting to diverge as we have been discussing.  Europe is crashing because of the tightening of the Euro supply, and the US is entering the boom phase because of the rapidly expanding Dollar supply.

US companies are reporting their quarterly earnings and economic indicators are being released.  We expect the earning and indicators will all suggest the US economy is strengthening.  This is what the Austrian Business Cycle Theory (ABCT) predicts.  As more data points are published that show economic growth it will start to become more obvious.  We recommend investing now so you can capture more of the growth that will come in the US markets.  As the economic data continue to come in stronger, more people will realize the economy is growing.  They will take action and invest, causing the growing market to grow faster.  There is still risk the Eurozone crisis might cause additional stress and influence US markets downward.  We expect sometime in November or December the European Central Bank (ECB) will resume printing Euros.  As US banks continue to lend at a frenzied pace, the expanding Dollar supply will put so much upward pressure on US markets that continued problems in Europe will not matter.  If (when) the ECB expands the Euro supply, Eurozone resistance on US markets will ease and US growth will be even stronger.

The coming bull market and economic boom in the US will come with high consumer price inflation.  This is already showing up even though official statistics and comments from Federal Reserve Officials will try to convince the public inflation is not a problem.  General prices change in response to changes in the money supply, changes in labor productivity and changes in the cash balances people choose to hold.  There has been so much money created that no amount of labor productivity will offset its inflationary pressure.  As prices rise, people will accelerate purchasing before prices go up further, and this will only make price inflation worse.  This is why we recommend leveraged index funds.  Your investments must grow faster than the rate of inflation for your purchasing power to grow.

ABCT describes how the growing money supply induces an artificial boom in the economy and stock market.  ABCT also clearly shows any such artificial boom must end in a bust.  This knowledge provides a rock solid foundation for explaining what will happen and why, but the precise timing is impossible to know as there are too many decisions made by human choices influencing the economy.  Our forecasting algorithm only analyzes market data for patterns that have historically appeared prior to turning points.  While our forecast is not perfect, it is very good at identifying these turning points and will help improve the odds of adjusting your investments profitably.  We hope you continue to find our forecast and commentary useful.  Please let us know what you think.

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