For Thursday, July 12, 2012, We Recommend Against Investing

We recommend selling your equity positions or hedging for a risk-neutral position.

Technical Comment:

The S&P 500 declined 0.00% (-0.02 points) on Wednesday with volume below both Tuesday and the 30-day moving average volume.  If the S&P declines another 8 points on Thursday (-0.6%) our automated forecast will likely change to an uncertain trend.

Subjective Comment:

Wednesday was another down-day for the market on light volume.  By itself Wednesday was not typical of market weakness, but it did mark the 5th straight trading session with a decline.  Within the overall weak pattern that has persisted for many weeks, the daily market data remains unsupportive of growth.  Our technical interpretation remains for a sideways market with high volatility likely in the very near term with a decline in the not too distant future.  This is also our interpretation given the state of the US money supply.  Our investing recommendation remains unchanged.  Tomorrow we will again analyze the weekly US M2 money supply data.

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