For Tuesday August 6, 2013, We Recommend Against Investing

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Investment Recommendations:

Ignore our automated market forecast and avoid US stock markets right now.  Continue to avoid all bond investments. Price inflation hedges remain good long-term investments, but only invest in price inflation hedges amounts that you can leave invested for a very long time.

 Technical Comments:

The S&P 500 declined 0.15% on Monday with volume below Friday and lighter than the 30-day moving average.  Volume was very light overall as Monday was a light-volume down-day.  In the past two weeks there have been more strong-volume down-days than anything else.  With the very light volume on Monday, Tuesday will almost certainly be a strong volume day.  If Tuesday sees the S&P 500 decline again, it could be another strong-volume down day which will continue the technical trend of data consistent with a weak market.  Our pattern recognition software has still not identified a predictive pattern, but this is common.  What is noteworthy is the pattern under development is maturing and we’re close to a fully formed pattern.  If the S&P 500 declines about 26 points on Tuesday (-1.5%) our market forecast could change to an uncertain trend.

Subjective Comments:

Our opinion about the increasing risk of a market crash between now and the end of this October remains the same.  If you haven’t been reading our posts regularly, we recommend the prior three posts to get caught up.  In addition to our technical analysis, the Hindenburg Omen appeared again in the US market.  This is a technical pattern that has historically preceded market declines and has been occurring recently.  This supports our overall opinion and reinforces our recommendation to avoid all US stocks right now.

Welcome to our new readers, and thank you to everyone who has recommended us recently.  We know you’ll find our information useful and we hope you’ll continue to share our website with your friends and family.  Let them know a US market crash is coming and urge them to protect their wealth now.

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