MDM - Model sticks toe in water again and switches to buy on July 13, 2011

Published : July 13 2011 at 10:09 ET
All focus is on quantitative easing in the US and abroad over in Europe.

Price/volume in stocks surged as Bernanke just went on record to say that QE3 is back on the table.

Gold broke out of its consolidation on July 12 due to concerns over debt issues in Italy as well as being spurred higher by the FOMC minutes which shows some members advocating further quantitative easing. In the short run, the market could be choppy as issues in Europe knock the market down while the growing promise of more quantitative easing which pushes the market higher. That said, the issues in Europe will ultimately will lead to higher prices in commodities which include precious metals and in stocks since the issues in Europe should lead to more quantitative easing.

 

Given the trendless nature of 2011, a pyramiding strategy into any suggested ETFs is suggested so that you add to your position only on a price basis, which should keep your average cost under where the ETF is trading.

Suggested ETFs:

1-times

IWM (Russell 2000)

SPY (S&P 500)


2-times

UWM (Russell 2000)

SSO (S&P 500)


3-times

TNA (Russell 2000)

UPRO (S&P 500)


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