For Thursday August 29, 2013, We Recommend Against Investing

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Investment Recommendations:

No Change: 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 advanced 0.27% on Wednesday with volume below Tuesday and lighter than the 30 day moving average.  Wednesday was a light-volume down-day, and August 2013 is on track to be the lowest trading volume month of August in the past 16 years.  Our pattern recognition software has not detected anything suggesting markets will advance.  Our forecast for growth reflects the reversal of our stop loss trigger.  A decline of the S&P 500 on Thursday of about 10 points (-0.6%) would likely be enough to trigger the stop loss algorithm and change our market forecast to an uncertain trend.

Subjective Comments:

We’re keeping our comments short this week.  Nothing we have seen has changed our opinion that US markets are going to decline in the near future.  The pending war with Syria is likely to spook some investors, but the real reason US markets are going to drop is the slow-down in the US money supply growth since the beginning of the year.  Avoid all bonds and stay out of US markets.  Cash and price inflation hedges are where we recommend placing your investable funds.

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