For Thursday, April 19, 2012, the market forecast is a growth-trend

We recommend any leveraged Exchange Traded Fund (ETF) that grows with the US market, but please read our comments below before investing as our subjective opinion differs from our automated forecast.

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 dropped 0.4% on Wednesday with volume just barely above Tuesday but below the 30-day moving average volume.  The market remains above the stop-loss trigger in our forecasting process, but a decline on Thursday of around 15 points on the S&P 500 would likely be enough to change our forecast back to uncertain.

Subjective Comment:

The S&P 500 volume was light but ever so slightly above Tuesday’s volume.  Since it was a down-day for the index our forecasting process evaluated Wednesday as a strong-volume down-day.  Declining markets on stronger volume and advancing markets on lighter volume is indicative of weakness and suggests continued market decline.  Wednesday’s market action combined with the very recent strong-volume down-days has formed another pattern indicating the chances of growth or decline from here are 50/50.  When patterns appear in the daily market data it is common for the patterns to emerge several times in a short period.  Last week and now this week the 50/50 pattern has fully developed.  Our automated forecast is for growth but subjectively we continue to advise a risk-off position.  For a full description of our current opinion please see our post from April 17th if you haven’t already read it.

Tomorrow the Spanish 10-year bond auction results will likely influence European markets, which will likely carry over into US trading.  The Federal Reserve will also publish the weekly US money supply statistics, so there will be more information to evaluate.  Remember to avoid money market funds as they have exposure to European sovereign default risk.

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