For Monday April 22, 2013, We Recommend Against Investing

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Investment Recommendations:

Avoid US stock markets right now.  Price inflation hedges remain good long-term investments despite Monday’s drop in the price of precious metals.  Continue to avoid all bond investments.

 Technical Comments:

The S&P 500 advanced Friday 0.9% on volume below Thursday but above the 30 day moving average.  We see Friday as a weak-volume up-day.  As such the entire week saw daily market data more consistent with a market more likely to stagnate or decline than a market that will continue to grow.  Friday’s advance was not quite enough to reverse our stop loss trigger.  If the S&P 500 advances about 1 to 2 points on Monday (+0.1%) our automated market forecast is likely to return to a growth trend.

Subjective Comments:

A week ago we saw potential evidence that US markets might be moving up.  With the action in the past week it seems much more likely US markets will not continue an upward trajectory.  Instead the probability of a decline appears to be increasing.  We discussed the US money supply and US banking reserves extensively in this post and encourage you to read it if you haven’t already.  The US money supply is still growing, so price inflation will continue to accelerate (see MIT’s Billion Prices Project).  The growth of the money supply does not appear to be fast enough to sustain the current bubble-boom, and that is why we are urging our readers to avoid US stocks right now.  There are likely some stocks that are good investments as a hedge against price inflation.  If you are aware of any please follow your best judgment.  All other stocks and US stock market index funds should be avoided.

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