For Tuesday March 04, 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 declined 0.75% on Monday with volume below last Friday and lighter than the 30-day moving average, making Monday a light-volume down-day.  No predictive patterns are currently developing.  The decline was enough to bring the S&P 500 index close to our stop-loss trigger.  If the S&P 500 declines around 4 to 8 points on Tuesday (-0.2%) our automated market forecast could change to an uncertain trend.

Subjective Comments:

The markets on Monday appear to have reacted mostly to news from Ukraine, although the decline was on light volume.  We continue to watch the market action carefully.  There have been several strong-volume up-days recently.  If this continues and the money supply shows additional signs of accelerated growth, then we will become more bullish on US stocks.  For now we remain cautious.

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