For Thursday, July 26, 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 a fraction of a point on Wednesday (-0.03%) with volume higher than the 30-day moving average but below Tuesday’s volume.  A decline of about 5 points on Thursday (-0.4%) would likely be enough to change our automatic forecast to an uncertain trend.

Subjective Comment:

US Markets closed Wednesday mixed.  The Dow was up but the S&P 500 and NASDAQ were both down.  All markets were above and below Tuesday’s close before the trading session on Wednesday ended.  There continues to be no predictive pattern formation in the most recent daily market data.  The general trend of strong volume on down-days combined with light volume on up-days remains in place and suggests market weakness is to be expected.  Our opinion of a market decline in the near future remains unchanged.  Continue to accumulate and hold cash, avoid all bonds and US equities and hold your price inflation hedges for the long term.  If you want to add to your price inflation hedges be sure to do additional research first.

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