For Wednesday May 08, 2013, We Recommend Against Investing

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Investment Recommendations:

Avoid US stock markets right now, but be prepared to move available cash into leveraged index funds that grow with US markets.  Price inflation hedges remain good long-term investments.  Continue to avoid all bond investments.

 Technical Comments:

The S&P 500 advanced 0.5% on volume higher than Monday but below the 30 day moving average.  The S&P 500 and the Dow both achieved new record close values on Tuesday, and it was a strong-volume up-day for the S&P 500.  So far this week is producing daily market data with patterns consistent with market growth, building upon similar patterns that have been present for the past 2 weeks.  There is still not the complete formation of a pattern with predictive value, but it remains very interesting to see a consistent market pattern develop.  Should the S&P 500 decline about 47 points on Wednesday (-2.9%) then our automated forecast would likely change to an uncertain trend.

Subjective Comments:

Continue to watch the daily market data in the US and the weekly update to US money supply statistics.  If the money supply growth continues to accelerate and strong-volume up-days continue to occur, it will be time to move investments into leveraged index funds that grow with US markets.  It is not yet time to invest, but conditions continue to show an opportunity is coming.  Be prepared by moving your investable cash into your brokerage accounts.  Remember, the accelerating growth of the money supply not only will cause the bubble-boom in the US economy and stock market to continue, but it will also continue to fuel price inflation.  Part of your portfolio should be positioned in hedges to preserve wealth when price inflation heats up.

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