For Thursday February 13, 2014, We Recommend Against Equity Investing


Investment Recommendations:

Sell US equity positions and hold cash.  Price inflation hedges should be held or accumulated for the long term as price inflation is starting to accelerate.  Avoid all bonds, including the new MyRA bonds announced recently.

Technical Comments:

The S&P 500 declined a tiny fraction of 0.03% on Wednesday with volume below Tuesday and below the 30-day moving average.  After a month of above average volume, there have been two days this week with below average volume.  This could indicate that a new volume level has been reached, but by itself this is not at all significant nor of predictive value.  Wednesday was a light-volume down-day.  Currently there are no predictive patterns that are obviously forming, but last week’s market decline continues to preclude the development of a growth pattern right now.  If the S&P 500 were to decline about 43 points on Thursday (-2.6%) our stop-loss algorithm could trigger and change our automated market forecast to an uncertain trend.

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