For Tuesday October 08, 2013, We Recommend Shorting US Markets

Short_Recommendation Decline_Image_v02

Investment Recommendations:

Our automated forecast is predicting a decline for US markets!  It is time to invest in leveraged index funds that grow when US markets decline.  If you’re going to short US markets, take action ASAP, otherwise be sure to move to a risk off position with your investment portfolio.

Here are some inverse leveraged index funds if you want to short the market: SDS and SPXU, as well as others.

Technical Comments:

The S&P 500 declined 0.85% on Monday with volume below last Friday and lighter than the 30 day moving average.  Monday was a light-volume down-day.  Our market forecast continues to predict a decline.  Our market forecast might return to an uncertain trend any day, but it will not return to a growth trend tomorrow.

Subjective Comments:

If you are still invested in US markets with positions that grow when the market grows, we strongly urge you to liquidate those positions and go to cash or otherwise establish a risk-off position.  US markets are going to decline soon.  We don’t know exactly when and we will not guess by how much they will fall, but they are going to go down.  Austrian Business Cycle Theory (ABCT) explains how the boom-bust cycle occurs, and the money supply conditions are consistent with a pending crash.  Economic data is anecdotally consistent with the expected sequence of events leading to an ABCT predicted decline.  Additionally, last week our technical analysis identified a pattern that predicts a market decline as a result of a rapid succession of strong-volume down-days in a short period of time.  Monday was a light-volume down-day, so it did not contribute to the formation of additional predictive patterns.  The most likely reason US markets declined Monday was the increase of margin requirements for Microcap stocks.  Anytime margin requirements are increased by the exchanges there will be some investors who are forced to sell some of their investments to meet the new regulation.  Our forecast of a market decline occurred last Thursday, so the market should decline soon.  We still think the decline will happen this month.  If you want to take advantage of the decline and invest in a short position, do not wait.  Invest in your short positions ASAP.  Otherwise, move to a risk-off position and preserve your wealth.

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