For Monday December 17, 2012, We Recommend Against Investing

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Technical Comment:

The S&P 500 dropped 0.4% on volume below Thursday and lighter than the 30 day moving average.  The decline was almost enough to trigger our stop loss algorithm and change our forecast to an uncertain trend.  If the S&P declines about 1 point on Monday the stop loss could trigger.  Even if our automated forecast were to change it is very interesting that this past week the market advanced on higher volumes and declined on smaller volumes.  Our pattern detection software hasn’t identified anything of predictive value, but the changing patterns are beginning to appear and suggest US markets are strengthening.

Subjective Comment:

If you haven’t had the opportunity to read our post about the new monetary policy recently announced by the Federal Reserve, or our post about the most recent money supply statistics, we encourage you to read both of them.  Peter Schiff published commentary about the money printing coming from the Federal Reserve.  His views are consistent with our recent postings and we hope you’ll read his comments (hat tip EconomicPolicyJournal.com).  Another good article to read is available at the Ludwig von Mises institute.  It explains how the Federal Reserve inflates the money supply by creating new bank deposits, and then allowing commercial banks to grow the money supply further via fractional reserve lending.  We hope you will take the time to read and understand these articles, and we also encourage you to learn more about Austrian Economics.  Our subjective investment recommendations are largely influenced by this information with the added benefit of our automated algorithms that help refine the timing of our market forecasts.  Continue to hold price inflation hedges, avoid all bonds and prepare to invest part of your portfolio in leveraged index funds that grow with US markets.  In the near term you can take advantage of the money printing to try and preserve and grow your wealth.  In the long term you’ll need to grow your wealth to get through the financial destruction that is the inevitable result of the Federal Reserve’s misguided monetary policies.

Feedback Request:

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