For Monday December 16, 2013, We Recommend Against Investing

Investment Recommendations:

Avoid US markets and watch closely to see what trend develops.  Cash positions (including some currency outside of bank accounts) 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 for a few weeks.

Technical Comments:

The S&P 500 barely declined at all on Friday, closing down 0.18 points or 0.01%.  Volume was below Thursday and lighter than the 30-day moving average.  Friday was a light-volume down-day.  If the S&P 500 were to advance about 3 to 4 points on Monday (+0.2%) our market forecast could return to a growth trend.

Subjective Comments:

The current daily data for the S&P 500 is building a negative pattern that could develop into a prediction of market decline, although we think it is more likely a 50/50 pattern could develop.  A 50/50 pattern identifies periods where there are equal odds the market could go up or down.  This is the current negative data we see.  Yesterday we posted a long description of the US M2 money supply trends and banking reserves.  The money supply and banking reserves are showing signs that a bubble-boom could resume.  If you have not read this post we encourage you to do so.  We are turning bullish on US markets and could issue a subjective opinion recommending investing in the coming weeks.

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