My daily, weekly, monthly, and quarterly forecasts are all positive. My annual forecast is marginally negative. Positive/negative implies that the forecast is significant enough in magnitude to suggest a likely daily trend. Under usual circumstances, I’d be invested in the index at a leverage factor of 3. However, these aren’t usual circumstances.
- Political uncertainty is fostering high volatility both up and down. When leveraged, this can result in losing money in a market trending flat. Leverage works best when there is a reasonably steady up or downwards trend.
- Upwards forecast should be taken with a grain of salt. My recession indicator is based on the Sahm rule, so it’s not weighing heavily on forecasts currently, but the probability of both high future inflation and a recession are up due to tariffs, chaotic government changes, etc.
For these reasons, I’m long the index, but without leverage. As always, invest at your own risk, especially now.