For Thursday September 26, 2013, We Recommend Against Investing


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 0.27% on Wednesday with volume below Tuesday but above the 30 day moving average.  Our pattern detection software classified Wednesday as a light-volume down-day.  However, the past 5 trading sessions have all been down-days and have all been on above average volume.  This is the first time in 2013 the S&P 500 has had 5 consecutive down-days.  Should the S&P 500 decline about 26 points on Thursday (-1.5%) our market forecast could change to an uncertain trend based on the current settings of our stop loss algorithm.

Subjective Comments:

While our technical analysis does not use above-average volume for the identification of strong-volume down-days, it is still very interesting to see 5 consecutive down-days on above average volume.  Considering that much of the S&P 500 volume has been below average for the prior month, the above average trend is a notable difference.  We continue to watch the market data closely for indications of a change.  All of the conditions for a market crash are present per Austrian Business Cycle Theory and the past 18+ months of M2 money supply growth trends.  Our pattern detection software has not found a predictive pattern yet, but the changes in the daily data suggest a pattern could develop.  We still expect the market to crash soon.

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