For Wednesday, December 5, 2012, We Recommend Against Investing


Technical Comment:

The S&P 500 declined 0.2% on Tuesday with volume higher than Monday but below the 30 day moving average.  If the S&P 500 declines about 12 points on Wednesday (-0.9%) the stop loss algorithm in our process could trigger and change our forecast to an uncertain trend.

Subjective Comment:

Tuesday’s decline was classified as a strong-volume down-day.  A fully formed pattern with predictive value still has not developed.  US markets appear to be reacting to news regarding political uncertainty regarding US taxes and the “fiscal cliff”, as well as news regarding the Eurozone debt crisis.  Selling pressure will exist for the rest of December as some people choose to sell and avoid higher capital gain tax rates in 2013.  We continue to recommend avoiding all Eurozone markets, bonds and stocks.  Also avoid all US bonds at all levels.  Be prepared to invest in US equities in the near future but do not do so yet.  The potential for volatility and some downward action in December remains high.  Things could change quickly, so continue to monitor the US Money Supply and any monetary policy changes from the Federal Reserve.

Comments are closed.