For Wednesday, May 2, 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 advanced 0.57% on Tuesday with volume higher than Monday and above the 30-day moving average volume.  The S&P 500 is unlikely to decline enough on Wednesday to trigger our stop-loss algorithm.  It would take a decline of about 33 points (-2.4%) to cause our automated process to change from growth to an uncertain trend.

Subjective Comment:

Tuesday was another strong-volume up-day for the market.  This continues the formation of bullish market patterns as it combines with the strong-volume up-days from last week.  Enough such days in a short span can predict additional market growth.  The bullish pattern is not fully formed.  As strong-volume up-days continue without strong-volume down-days our subjective opinion about the market direction will become more bullish.  For now we remain cautious for all the reasons we outlined in our post yesterday.  The current situation of the US money supply is difficult to interpret.  There has certainly been a lot of money added to the supply and it could fuel the bubble-boom a while longer.  If the money supply growth rate does not accelerate, then the market will stagnate.  Until we see the complete formation of a predictive pattern, subjectively we’re inclined to advise a risk-off position.  Please read yesterday’s post if you haven’t already done so for a full description of our current thinking.  Also, please keep checking our daily publication as a bullish pattern is developing and could complete its formation soon.

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