A Day to Step to the Plate……With Update at 11:14 AM…and More at 1:30 PM
Unless something new developes in the next hour, we in our aggressive model portfolio are going to step up our long positions to 70 percent long this morning from the current 38 percent long (the conservative traditional portfolio has been in cash (t-bills) since 5/19/08 when the S&P was at 1440). Technically the market did what we wanted yesterday and a trading bounce should develope from here. We will try to be buyers at S&P levels of 1127 or lower but may have to pay higher. By Monday’s close we should be able to calculate a possible objective. Keep in mind that bad news is everywhere but we feel the market says for now this is enough.
As to the debate performance of Palin, she remains polarizing but was no disaster. To me this means that the Republican worry about her will be shelved and she will continue. Her presentation, however, is so 80’s and early 90’s, Ron Reagan and Bill Clinton come to mind, folksy and glib with little content. This is a new generation that demands more. From an economics perspective this leaves a weaker ticket than if Romney would have been brought aboard.
7:52 AM CDT
11:14 AM CDT Update
The tradeable buy area basis the S&P 500 this morning was 1130 to 1135, 1127 was not reached. We did our buying and increased our long positions up to 70 percent and still have the short bond position. We believe long-term interest rates will push higher as the rescue is triggered. Keep in mind this wiil be a Counter-Trend rally within the Macro Downtrend. Counter-trend investing/trading is always a nail biter as everything is against you other than short-term momentum. If you are looking for something beyond technical reasons, a couple of fundamental positives have evolved this week, Warren Buffett and Wells Fargo seeing value for very long-term investments. They no doubt are looking beyond the upcoming valley over the next couple of years.
Update at 1:38 PM
Sometimes we like to go for Home Runs, so we are moving to 100 Percent Long, S&P 500 at 1115. We like who is selling, ie they can be beat as yesterday was the day to sell the news, there really is no news today, just naysayers.