For Thursday October 10, 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 barely changed but did advance 0.06% on Wednesday with volume just above Tuesday’s volume and higher than the 30 day moving average.  Wednesday was a strong-volume up-day, but our automated market forecast remains for a decline.  It would take more strong-volume up-days to change our forecast.  A change of our forecast from decline to an uncertain trend could occur any day.

Subjective Comments:

The S&P 500 was virtually unchanged, although it and the Dow both closed up a fraction while the Nasdaq was down 0.46%.  As expected, Janet Yellen was announced to be Obama’s nomination for the next Fed Head.  Since this was expected it had little impact on the stock market.  The possibility of a default on US Treasuries continues to spook the market, so any political breakthrough that resolves the government shutdown and debt ceiling “crisis” will likely result in an upward jump in US markets.  When the “crisis” is resolved any upward movement in stocks is highly likely to be short lived.  The underlying economic fundamentals remain unchanged.  Last year the US M2 money supply grew over 9% and since then the growth rate has slowed.  The accelerated growth last year is why US markets advanced into the third calendar quarter of 2013.  The slowed money supply growth rate is why US markets must crash.  The only way a crash can be delayed at this point is if the US M2 money supply starts growing extremely fast, and there is no evidence this is happening.  We continue to think US markets will crash this month.

If you haven’t yet invested in a short position, do not wait any longer.  There are EFT funds that go up when US markets go down.  This makes investing in a short position very easy.  If you are unable to take the risk associated with a short investment, then at least move your wealth out of US stock markets ASAP.  Tell your friends and family, and do not delay.

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