For Tuesday March 25, 2014, We Recommend Investing in US Markets

Investment Recommendations:

Begin accumulating investments that grow with 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 0.49% Monday with volume below last Friday and lighter than the 30-day moving average, making Monday a light-volume down-day. Monday’s decline was almost enough to trigger our stop-loss algorithm. There are currently no predictive patterns present in the daily market data, but negative patterns are forming. Should the S&P 500 decline again on Tuesday our automated market forecast will likely change to an uncertain trend.

Subjective Comments:

Be cautious adding positions to investments that grow with US markets. We have changed our subjective investment to “Invest for Growth” recently, but with the caveat that positions should be accumulated slowly and not to go all-in. We continue to recommend this as it is not clear what direction the US money supply will go. If growth continues to accelerate, then we are poised for another bubble-boom. The Yield Curve is at its shallowest point since 2009, and this provides a disincentive for US banks to lend. With the Fed tapering further and Banks less likely to lend, our call to invest for growth could be wrong.

World geopolitical tensions are high, but we seriously doubt a conflict will break out over Russia’s annexation of Crimea. Poland is calling up Army reservists, while Russia is cutting back on the energy supply to Europe. Tit-for-tat travel bans are being implemented, but it just doesn’t seem like there is support for a conflict. For example, 54% of Germans believe the US and EU should accept the annexation. Still, logic can often go out the window where state actions are involved. When economic conditions deteriorate because of state action, the state usually looks for scapegoats or starts a conflict to distract the population. Geopolitical tensions would likely have unpredictable impacts on markets. Let’s pray for peace and prosperity, and an expansion of trade among nations.

We will continue to post about US markets through the end of March. We are planning on suspending daily posts in early April. We will continue to update our market signals at TimerTrac.com for our readers interested in tracking our automated and subjective market recommendations. The commentary is what we are going to suspend. For interested readers, we have the following recommendations for finding excellent commentary:

Best Economic Blog: EconomicPolicyJournal.com

The editor of EconomicPolicyJournal.com is Robert Wenzel, and he offers a daily email subscription that is absolutely fantastic! You can subscribe at this link. We highly recommend this subscription. You will continue to get great commentary and analysis on the US money supply growth rate using Austrian Business Cycle Theory.

We also suggest ZeroHedge.com, although the blog posts there tend to be a bit snarky and often use terminology that can be difficult for the average reader to follow. ZeroHedge.com is intended for professional traders. There is a larger staff at ZeroHedge.com, so you will find it updated more frequently than EconomicPolicyJournal.com, but that’s not always a good thing.

We hope these recommendations will serve you well as we continue to wind down our daily commentary.

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