For Tuesday, December 27, the market forecast is for growth

If you choose to invest now 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:

The S&P 500 finished the week up 0.9% on Friday and 3.75% for the week.  Volume on Friday was very light, below Thursday and far below the 30-day moving average volume.  On Tuesday the S&P 500 would have to drop about 3.2% (41 points) to cause the stop-loss algorithm of our automated process to switch the forecast to uncertain.

Subjective Comment:

With the holiday weekend approaching it is not surprising the market volume on Friday was very light.  It should be pointed out that the strong up-trend for the week all occurred on light volume.  The continuing up-trend has extinguished the pattern that had been forming that could have predicted a decline, but the daily market data still has not shown the serious strength of a strong rally.  This could be the beginning of a sustained rally, but only time will tell.

Nothing occurred on Friday to change the outlook we have been discussing this week.  Please review our prior posts for much of the details.  The key for US markets to grow from here is the European Central Bank’s decision regarding how fast they will print money.  If Euros provided by the new 3-year LTRO continue to be sterilized and the Euro growth rate remains small, the Eurozone economies and markets will limp along.  If money printing accelerates there will be a bubble-boom in the Eurozone.  Should Euro printing stabilize the European banks, US banks will likely resume aggressive lending at rates similar to this past summer.  If US banks do that, there will quickly be a rally in US markets and a bubble-boom in the US economy.  Should US banks continue to lend at a more subdued rate, then US markets could take a little longer to rally.  Aggressive investors who think the ECB will begin printing massive amounts of Euros should invest now.  More cautious investors should probably wait until early January for more market and money supply data before making a move out of cash.

US markets are closed on Monday to observe the holiday.

Merry Christmas!

Comments are closed.