For Tuesday April 01, 2014, We Recommend Against Equity Investing

Hold_Recommendation

Investment Recommendations:

We have changed our subjective investment recommendation to risk-off. 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 0.8% on Monday with volume above last Friday but below the 30-day moving average, making Monday a strong-volume up-day. There are no predictive patterns fully formed in the daily market data, but a market decline pattern is forming after all the strong-volume down-days last week. If the S&P 500 were to decline about 21 points on Tuesday (-1.1%) our automated market forecast would likely change to an uncertain trend.

Subjective Comments:

The new Fed Head gave remarks this morning that were interpreted by market participants to mean additional money printing will occur. This is the most likely cause for Monday’s advance in US markets. Do not listen to what these liars say! Watch what the money supply actually does. That’s what matters. With a proper understanding of Austrian Business Cycle Theory you will understand how changes in the money supply growth rate will affect the economy and stock markets. It is not clear if the US money supply will keep growing or not, but there are little incentives for banks to lend and the Fed is tapering. It is more likely the money supply growth will slow and increase the risk of a market crash in the near future. Avoid long positions in US markets. We recommend risk-off as it is too soon to suggest shorting US markets.

Wind Down of Daily Blog Posts:

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. 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.

These recommendations will serve you well as we continue to wind down our daily commentary.

2 Responses to For Tuesday April 01, 2014, We Recommend Against Equity Investing

  1. Bill says:

    I have noticed that you have been recommending “price inflation hedges”. Could give a couple of examples of of what these might be? Also, I enjoy reading your newsletter and will miss the perspective you give that is not usually seen anywhere else.
    Thanks,Bill

    • Thanks for the complement, Bill.
      Commodities are examples of price inflation hedges, such as precious metals, oil, agricultural products, etc. Land can also be a price inflation hedge, but like all investments it makes sense to evaluate their pros and cons relative to your specific situation. Farm land, residential real estate, commercial real estate and other forms of land are all different from an investment perspective. Diversity among a few hedges makes sense.