For Monday, November 5, 2012, We Recommend Against Investing

Technical Comment:

The S&P 500 declined 0.9% on Friday with volume below Thursday but above the 30 day moving average.  The drop was sufficient to again trigger our stop loss algorithm and change our automatic forecast to an uncertain trend.  If the S&P 500 advances about 8 points on Monday (+0.5%), our forecast could change again to a growth trend.

Subjective Comment:

The strong drop in US markets on Friday occurred with volume above the 30 day moving average.  This is a negative sign although it does not contribute to the formation of any of the patterns our software is designed to detect.  News from the Eurozone debt crisis will continue to put some downward pressure on US stocks.  With the US elections on Tuesday, anything could cause investors to react in unpredictable ways.  The money supply growth is the most important thing to watch.  We think US M2 growth will accelerate and there will be an opportunity in the near future to invest as US markets enter another bubble boom.  We are not yet advising our readers to invest in US equities for reasons discussed at length following the last money supply update.  Investments in hedges against price inflation remain wise right now.  Avoid all bonds and hold off a while longer before investing in index funds that track US stock markets.

One Response to For Monday, November 5, 2012, We Recommend Against Investing

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