For Thursday January 10, 2013, We Recommend Investing in US Markets

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Technical Comment:

The S&P 500 advanced 0.3% on Wednesday with volume above Tuesday and higher than the 30 day moving average.  Tuesday’s strong-volume down-day has been followed by a strong-volume up-day on Wednesday.  Strong-volume down-days have been infrequent.  If such days become more frequent, then there would be reason to be concerned about the market rally that is underway.  Instead US markets advanced on even stronger volume.  The daily market data suggests continued growth.  Our pattern detection software still has not found any fully formed predictive patterns, even though the daily data is more consistent with growth.  If the S&P 500 declines about 9 points (-0.6%) on Thursday our forecast could change to an uncertain trend.

Subjective Comment:

Treasury yields are up a bit, and that means bonds prices are falling.  The accelerated growth of the US money supply is driving a classic bubble-boom as explained by Austrian Business Cycle Theory.  Price inflation will get worse as 2013 moves along, so hang on to your price inflation hedges.  US markets are going to boom from all the Fed money printing and US Bank lending.  We recommend investing part of your portfolio in leveraged index funds that grow with US markets.

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