For Thursday March 06, 2014, We Recommend Against Equity Investing

Hold_Recommendation

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 ended Wednesday essentially unchanged, declining 0.01% on volume below Tuesday and lighter than the 30-day moving average.  In the past 8 trading sessions every other day has been a strong-volume up-day.  There are no predictive patterns developing, but the rapid accumulation of strong-volume up-days along with new record market highs does suggest markets could continue to grow.  Should the S&P 500 decline about 20 points on Thursday (-1.2%) our automated market forecast could change to an uncertain trend.

Subjective Comments:

Despite the geopolitical nonsense with Ukraine, Russia and the rest of the world, the saber rattling does not appear to be rattling US equity markets.  The daily market data continues to produce bullish patterns, although the accumulation of strong-volume up-days has not produced a fully-formed predictive pattern.  If the US money supply continues to show accelerated growth we will turn bullish and could recommend investing in US stocks.  We still think price inflation hedges are good long-term investments and it makes sense to accumulate such positions into your portfolio.  We think the Chinese economy and stock market is about to crash hard, and the crash will likely have some spillover effects on US markets.  If the US money supply shows accelerated growth, the Chinese crash could be a buying opportunity for US equities.

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