For Monday, March 5, 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:

The S&P 500 declined on Friday 0.3% on volume lighter than Thursday and below the 30-day moving average volume.  If the S&P 500 drops about 7 points on Monday our forecast could change to an uncertain trend. 

Subjective Comment:

The S&P 500 remains in a bull market up-trend.  The past five days had some weakness but the market still advanced 0.3% for the week.  In the past 4 weeks the up-trend has slowed a little from the prior several months.  The recent weakness appears to be the typical variation common in the stock market during an up-trend.  There remain no patterns of concern in the daily data.

The most likely thing to put pressure on US markets this month is the pending default of Greek bonds on March 20th.  Politically it remains unclear if the decision will be made to bailout Greece or let the bonds default.  We think if a bailout happens it will not be finalized until just before the deadline.  This could cause enough uncertainty to add volatility to US markets.  There are plenty of Euros in the European banking system to fund the bailout, so the decision to do so is entirely political at this point.  As for the 2nd 3-year, 1% LTRO loans from the European Central Bank, almost all of it wound up deposited back in the ECB’s deposit facility just like we thought it would.

Another item with potential to make market participants nervous is the accelerating price inflation in the US, especially gasoline.  As we explained a few days ago, the rising price of oil and gasoline will not slow the current bubble-boom in the US economy and stock market.  The bubble-boom and bull market has been fueled by an incredible increase in the US money supply.  This is also the root cause of price inflation which will continue to get worse.  The many confused people who believe Keynesian economics are likely to conclude price inflation will slow economic growth.  If they act on this mistaken assumption and sell their equity positions in US stocks this could result in temporary weakness in the market.  The only thing that will cause the bull market to crash is when the growing US money supply slows its rate of growth.  We are worried about this because the growth in the money supply occurred months ago and then has been at a steady but slower rate.  We’re watching for signs of slowing in the bubble-boom, but so far we see no reason to liquidate equity positions.  Continue to add to your current positions in the US market and exit any remaining bond holdings as fast as you can.  As price inflation gets worse bond prices will fall.  Every day there is plenty of financial news and commentary, and almost all of it is influenced by the erroneous economic theories of the monetarists and Keynesians.  They have consistently missed every turn in the business cycle.  They miss the top and think the boom will continue all the way up to the crash.  They miss the bottom and agitate for government spending well after the bottom has occurred.  We are in the beginning of another up-turn in the business cycle caused by expansion of the money supply.

Our automated forecast identified the current up-trend at the end of November 2011.  There was a brief reversal of our forecast in mid-December, but otherwise our forecast has correctly identified the current growth trend.  The S&P 500 is up almost 15% since then and with 3-times leveraged investing the gains of our readers is over 40% for the past 3 months.  We sincerely hope you’ll continue to profit from our forecast and tell your friends about us.  We also suggest learning more about Austrian Economics.  A very good overview and introductory book is available by Dr. Eamonn Butler.  Austrian Economics: A Primer is available from the Ludwig von Mises Institute or from Amazon.com.  Currently it costs $19.00, so get it before price inflation gets worse!

2 Responses to For Monday, March 5, 2012, the market forecast is a growth-trend

  1. I do consider all of the ideas you’ve presented in your post. They’re very convincing and can certainly work. Nonetheless, the posts are very short for starters. May just you please prolong them a bit from next time? Thanks for the post.

    • TSP LLC says:

      Thank you for the feedback. We try to keep the daily posts brief, but we are planning to create a series of pages to provide foundational information for new readers. We will move this up on our list of priorities.