For Tuesday October 22, 2013, We Recommend Against Investing

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Investment Recommendations:

Avoid US markets and watching closely to see if an up-trend develops before investing.  Cash positions (including currency) and price inflation hedges are recommended right now.

Technical Comments:

The S&P 500 advanced 0.01% on volume below last Friday and lighter than the 30 day moving average, making Monday a light-volume up-day.  Overall US markets were very little changed with the Dow down 0.05% and the Nasdaq up 0.15%.  Our market forecast changed to growth a few days ago and remains there.  Our stop loss algorithm will have a new baseline tomorrow.

Subjective Comments:

We are watching US markets very carefully to see if our technical forecast change to a growth trend is something to follow or ignore.  Monday was a light-volume day, so Monday’s data does not suggest market strength right now.  Several days of data are needed to draw any conclusion and we will evaluate Thursday’s money supply data carefully before changing our subjective recommendation.  For now we remain cautious about investing in US markets and advise against it.  Price inflation hedges remain a good idea for part of your portfolio, but we suggest only investing in such hedges a portion of your wealth that can be left invested for a long time.

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