For Thursday November 07, 2013, We Recommend Against Investing

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Investment Recommendations:

Avoid US markets and watch closely to see what trend develops.  Cash positions (including currency) and price inflation hedges are still recommended.  Subjectively we hold a neutral market opinion that has been turning bullish recently, but there is too much uncertainty in US markets right now to make an investment recommendation.

Technical Comments:

The S&P 500 advanced 0.43% Wednesday with volume below Tuesday but above the 30 day moving average.  Our technical analysis classified Wednesday a light-volume up-day.  As such it does not contribute to any pattern or trends.  If the S&P 500 declines about 57 points (-3.2%) on Thursday our stop loss algorithm would likely trigger and change our market forecast to an uncertain trend.

Subjective Comments:

The daily market data continues to show a lack of strong-volume up-days.  We have been watching to see if these types of days continue to occur in short order.  A few days ago we explained in detail why we are going to watch the daily market data and US money supply data closely this week and next before making a subjective assessment of the developing trend in US markets.  So far we have seen a lack of evidence that the recent accelerated growth of the US money supply is continuing to lift US markets.  We are concerned the money growth might be a very short term blip that will not persist.  Tomorrow we get the next money supply update from the Fed.

If you’re interested in a good post about price inflation hedges, check out what Peter Schiff published recently.

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