For Thursday, January 5, 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 moved up less than a point on Wednesday on volume lighter than Tuesday and below the 30-day moving average volume.  The S&P 500 would have to drop about 17 points (1.3%) on Thursday to cause the stop-loss safety net in our automated process to change our forecast to uncertain.

Subjective Comment:

The continued light volume in the daily S&P 500 data suggests most market participants are remaining on the sidelines while waiting to see if the Eurozone debt crisis will ease or intensify.  As we have been writing, this all hinges on the growth rate of the Eurozone money supply accelerating, which will be driven by European bank lending.  There were stories today about Greece needing their next €130 Billion Euro loan in March to avoid defaulting on bonds coming due that month.  A Greek default is a sure thing, but the timing is uncertain and when it happens there could be problems.  How far those problems spread depends on how fast unsterilized money printing by the European Central Bank can increase bank capitalization.  If banks fear losses from a Greek default, they are less likely to lend, in turn the European money supply will not grow very fast, and the Eurozone economies would remain in their state of stagnation.  This would in turn influence the decisions of US banks to keep their rate of new loan originations low, which risks stagnation in the US economy and markets.  Tomorrow the Federal Reserve will update the weekly money supply numbers.  If you haven’t done so, we recommend reading our posts from last week and yesterday.

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