For Monday March 03, 2014, We Recommend Against Equity Investing


Investment Recommendations:

Sell US equity positions and hold cash, but be prepared to move investment funds back into US markets.  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 bond scheme from the Feds.  Ignore the propaganda.

Technical Comments:

The S&P 500 advanced 0.28% on Friday with volume above Thursday and higher than the 30-day moving average, resulting in the 3rd strong-volume up-day for the week.  Friday was another record high close for the market.  There are still no predictive patterns forming right now.  If the S&P 500 were to decline about 19 points on Monday (-1.3%) our stop-loss algorithm could trigger and change our automated market forecast to an uncertain trend.

Subjective Comments:

The geopolitical drama with Russia, Ukraine and the US might have some impact on markets.  It is difficult to guess what could occur.  The growing US money supply appears to be providing ample fuel for a continued bubble-boom, but it is not clear from recent trends if the money supply will continue to grow or not.  For a good discussion on how the money supply affects asset prices and creates bubbles, we recommend this article.

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