For Monday September 23, 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 declined 0.72% on Friday with volume above Thursday and above the 30 day moving average.  Friday volume is typically weak, but this past Friday S&P 500 volume was over 5 Billion shares traded for the day.  Friday was the strongest volume in the past 3 months, and it was a strong-volume down-day.  Or software has not identified any patterns yet, but Friday does destroy the formation of a growth pattern that had been developing.  Our market forecast remains for growth but could change to an uncertain trend if the S&P 500 were to decline about 51 points (-3%) on Monday.

Subjective Comments:

The most recent pattern identified by our software was a 50% chance for growth or decline.  Our automated forecast for growth is based on the recent reversal of our stop loss algorithm and not on any other technical indication supporting market growth.  The very high volume on Friday is interesting and we will be watching to see what develops.  The surprise by the Fed this past Wednesday caused the market to shoot upwards from 1704.76 last Tuesday to peak at 1725.52.  Since peaking last Wednesday the S&P 500 closed the week at 1709.91, very close to where it was before the “no taper” surprise by the Fed.  We see this as further indication that the spike upwards last Wednesday was just a reaction to the Fed and not any sort of enduring market rally.

Welcome to all of our new readers!  We’re excited to have you following our blog.  We post every day when US markets are open.  Over the weekend, such as the case for this past weekend, sometimes our posts are delayed.  While our weekend posts are sometimes Friday evenings and sometimes Saturday or Sunday, they will always be posted before markets open on Monday morning.

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