For Thursday January 24, 2013, We Recommend Investing in US Markets

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Technical Comment:

The S&P 500 advanced 0.15% on volume below Tuesday but above the 30 day moving average.  Our pattern recognition software does not consider Wednesday to have been a strong-volume up-day, but the fact remains the S&P 500 index did advance and volume was above the average.  There continues to be a low occurrence of strong-volume down-days as well.  These daily patterns in the market data are consistent with a growing market.  Should the S&P 500 decline about 12 points on Thursday (-0.8%) our automated forecast could change to an uncertain trend.

Subjective Comment:

We have repeatedly stated the growing US money supply is driving the boom in the US economy and stock market.  If the boom does not appear obvious, that is because it is just starting.  Money printing will lead to price inflation as well.  This is why we encourage leverage to grow your investments faster and hopefully stay ahead of the degrading purchasing power of the US Dollar.  ZeroHedge.com posted an article on the high price of understated inflation that’s worth reading.  Official Consumer Price Index (CPI) has been changed multiple times over the years with the net result being that it now seriously underreports actual rates of price inflation.  ShadowStats.com discusses the history of CPI changes at length.  ShadowStats.com also provides the official CPI published by the US Bureau of Labor Statistics with their “SGS Alternate CPI” on the same chart.  The alternate CPI is using the official method from 1980 without all the changes over the years.  We encourage you to read these articles to learn more about inflation of the money supply and resulting price inflation.  For an excellent discussion on how money printing creates price inflation we recommend Henry Hazlitt’s book The Inflation Crisis and how to Resolve It.  Money printing and fractional reserve bank lending grow the money supply, and when the growth rate accelerates the business cycle is created.  The accelerated money supply growth is why now is the opportunity to invest in US markets (using leverage).

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