For Friday November 29, 2013, We Recommend Against Investing


Investment Recommendations:

Avoid US markets and watch closely to see what trend develops.  Cash positions (including currency) and price inflation hedges are still recommended.  There is too much uncertainty in US markets right now to make an investment recommendation, although it is probably safe to hold any currently owned equities through the end of the year.

Technical Comments:

The S&P 500 advanced 0.25% on Wednesday with volume below Tuesday and much below the 30 day moving average.  Low volume is common before a holiday.  If the S&P 500 were to decline about 53 points on Friday (- 3.0%) our automated market forecast would likely change to an uncertain trend.

Subjective Comments:

According to the Farm Bureau Federation, “The Voice of Agriculture” in the US, the price of a traditional Thanksgiving dinner has gone down slightly in 2013 compared to 2012, including a $0.47 decline in the price of a 16 pound turkey.  Well, the FB is an organization that promotes the interests of agriculture, and it is in their interest to convince folks to purchase agriculture products.  Their “informal survey” clearly isn’t seeing the same price inflation everyone else is feeling.  The Bureau of Labor Statistics reports whole frozen turkeys are at record highs since they started keeping stats in 1980.  Contributing to the increase in the cost of the Turkey is a nearly 200% increase in the cost of corn (i.e. Turkey Feed).  Another report from indicated the supply of 16 pound turkeys in the US was down around 25%.  With supply down, Consumer Price Index above 8% all year and over $1 Trillion Dollars of money printed by the Fed, we think it’s much more likely prices are up and the Farm Bureau is serving up a bunch of bull.

US markets are closed Thursday for the Thanksgiving holiday.  Markets are open for a short session on Friday.  Our next update will be late Sunday.  Happy Thanksgiving!

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