For Thursday, February 2, 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:

After 4 consecutive trading sessions of declines, the S&P 500 index closed up strongly on Wednesday with a gain of 0.9%.  Wednesday’s trading volume was higher than Tuesday’s and above the 30-day moving average volume.  On Thursday the S&P 500 would have to decline about 1% to change our automated forecast to uncertain.

Subjective Comment:

The market increase on Wednesday was almost enough to recapture all the losses of the prior 4 trading sessions and was on strong volume.  While this is encouraging, it is not uncommon for a strong up-day to occur within the development of negative patterns.  Continued scrutiny of the daily market data is necessary.  We think it remains best to hold current your current position and not accumulate more long-investments in the US markets.  We also recommend selling bonds as price inflation is a very likely to get stronger this calendar year.  Incredibly, an economist at the New York Times called for a price inflation target of 4% to 5% today.  This is a suggestion that the Federal Reserve print more money faster as if the $1.5 Trillion Dollars of excess reserves in the US banking system is not enough after the previous periods of Quantitative Easing.  If the Fed does embark on stronger inflationary policies the stock market will go up and bond prices will go down.

Economic news continues to be mixed and subject to interpretation.  After a long period of depression or a long period of a boom it is common for many publicized opinions to express the belief current conditions will persist.  Subjectively identifying the turning points can be difficult.  The best economic theory for predicting the future direction of the economy and stock markets is the Austrian Business Cycle Theory, especially in an economy with a central bank and legalized fractional reserve lending.  This is why we are currently cautious.  The US M2 growth rate has been just above 4% for the past 19 months with the exception of June and July of last year when a rapid growth spurt occurred from bank lending.  That growth has fueled a mini-boom in the US that will eventually end.  It will end sooner if the M2 growth rate remains in the 4% range.  This is why we watch the daily market data and the weekly money supply statistics.  We have not changed our opinion that US and European banks are hoarding their excess cash as a contingency against the uncertainty surrounding the Eurozone debt crisis.  Tomorrow we will analyze and report on the updated money supply statistics.

2 Responses to For Thursday, February 2, the market forecast is for growth

  1. Narendra says:

    If it’s low share of the makret you have to ask yourself why there are no competitors or if your Market research is correct.