For Wednesday, February 22, 2012, the market forecast is a growth-trend

We recommend any leveraged Exchange Traded Fund (ETF) that grows with the US market.  Here are some options:

2-Times Leveraged ETFs

NASDAQ 100

Russell 2000

S&P 500

QLD

UWM

SSO

3-Times Leveraged ETFs

NASDAQ 100

Russell 2000

S&P 500

TQQQ

URTY

UPRO

Technical Comment:

US Markets were little changed on Tuesday after spending most of the day in positive territory, ending the day mixed.  The S&P 500 closed up 0.07% on volume above Friday but below the 30-day moving average volume.  If the S&P 500 drops about 10 points (-0.7%) on Wednesday our forecast could change to an uncertain trend.

Subjective Comment:

The daily S&P 500 market data shows an ongoing up-trend with no obvious signs of weakness.  There were some strong-volume down-days recently, but they are fading into the past as the bull market continues.  The Dow was briefly above 13,000 on Tuesday.  As key index levels are surpassed more people will begin moving into the market. There appears to be plenty of money to keep the bull market going from here.

Financial topics of recent interest include the on-going debt crisis in Europe and the continuing bubble-boom in the US.  The headlines from Europe are dominated by Greek bailout deal negotiations.  Greece is broke and unable to pay the bonds coming due on March 20th.  There are an unknown about of Collateral Default Swaps (CDS) contracts that have been sold as insurance against default, and these contracts will be triggered if Greece misses a payment.  There are conditions in these contracts that avoid paying the insurance if the debt is voluntarily restructured.  The European banks want the bailout to be funded so the bond payments will be made.  If this is not possible, then those same banks want the debt to be “voluntarily” restructured so the CDS contracts are not triggered.  In the meantime the Greek economy continues to crash and political institutions are collapsing.  The “bailout” will not help the Greek people who are suffering; it will only delay the day of reckoning and prolong the suffering.  Greece needs to follow Iceland’s example and default, repudiate their debt and effectively declare national bankruptcy.  Unless and until this happens, the situation in Greece will only get worse.

In the US signs of economic improvements continue to be noticed, and signals of price inflation are showing up.  These are the consequences of the manipulated bubble-boom caused by the rapid expansion of the US money supply in the summer of last year (2011).  We continue to think the bull market will continue and advise investing in leveraged index funds to grow your portfolio faster than the rate of price inflation.

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