For Tuesday December 31, 2013, We Recommend Investing in US Markets


Investment Recommendations:

We recently changed our investment recommendation.  It is time to invest in US stock markets.  Price inflation hedges should be held for the long term and remain a good idea as we expect price inflation to accelerate in 2014.  Avoid all bonds.

Technical Comments:

The S&P 500 declined 0.02% on Monday, which was another very small index decline similar to last Friday.  At the time of this posting the daily S&P 500 volume was unavailable.  The data published indicated a volume of ZERO, which is obviously a data error that we assume will be corrected tomorrow.  Regardless, the current status of the S&P 500 is such that no pattern would form regardless of Monday’s volume.  If the S&P 500 should decline about 39 points on Tuesday our automated market forecast could change to an uncertain trend based on the current setting of our stop loss algorithm.

Subjective Comments:

It appears stock market volumes are remaining very small as most people are not trading but instead enjoying the holidays.  Even though market volume data for Monday was not available, the small index change was essentially no change at all.  The intraday high and low was a very small range as well, further indicating small trading volumes.  When traders return after the holidays we expect the current bubble-boom to resume during January.  We also think price inflation hedges will do well in 2014.  Bonds prices will drop as price inflation accelerates, so avoid all bonds and bond funds.  If you own any bonds our advice is to sell all of them right away.

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