For Tuesday, March 20, 2012, the market forecast is a growth-trend

We recommend any leveraged Exchange Traded Fund (ETF) that grows with the US market.

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 advanced 0.4% on Monday with volume below Friday but above the 30-day moving average volume.  If the S&P declines about 20 points (-1.4%) on Tuesday our forecast could change to an uncertain-trend.

Subjective Comment:

Welcome back from spring break!

The daily market data continues to show signs of strength following last week.  Monday’s advance was on above-average volume and follows a strong week of solid and sustained gains.  The expanding money supply is lifting the economy and stock market now and will continue to do so for some time.  Investing now in leveraged index funds will allow you to grow your portfolio faster than the rate of price inflation and stay ahead of capital gain taxes.  US markets are going up.  Economic indicators are continuing to show strength, including this new restaurant index.

Price inflation is also advancing, and There Is No Such Thing as Harmless Price Inflation.  We provide a daily forecast on US stock markets and commentary based on Austrian Economics.  We advise investing in stocks now as the business cycle in the US is beginning its boom-phase.  For more insight on price inflation and some suggestions regarding how to hedge against it we suggest this article at The Daily Capitalist.  The expanding money supply courtesy of the Federal Reserve is the driving force behind the bubble-boom and price inflation, and the Fed continues its digital printing.  This past Friday Chicago Fed President Charles Evans said the Fed needs to keep borrowing costs low.  In other words, he’s advocating for more money printing.  The chief commodity trader at Citigroup thinks gasoline will go over $5.00 per gallon.  There are lots of factors that impact the supply and demand for oil and gasoline, but money printing is the largest factor driving the price up right now.

If you want to understand even more about monetary inflation and how it negatively impacts the economy we suggest the following books:

Another good book by Henry Hazlitt is Economics in One Lesson, which can be downloaded in pdf format for free at this link.  Chapter 22 of this book is about inflation and is a good place to start.  Mr. Hazlitt was a professional journalist and author so we think you will find his writing enjoyable and comprehensible.

Our investment advice is summarized as follows:

  • Sell all your bonds, including TIPS
  • Hedge against price inflation
  • Invest in leveraged index funds tied to US stock markets and keep reading our daily forecast

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