Opposing Forces

The stock market seems to be settling into a trading range with the forces of recession battling the forces of stimulus.  The range we are working with is 940 to 1060 on the S&P.  1000 is the swing-point which the market approached yesterday and today is retreating .  970 and 1030 are levels of intermediate support and resistance within the range.  Within this range and above 1030 we will cut back our leverage to 0.33  on the Aggressive portfolio and all cash on the Conservative Portfolio.

Money supply is increasing and there continues to be long Gold and Silver sentiment, but the general deflationary environment makes a sustained upward move unlikely for the time being and a downside target which we won’t be short for, but which nevertheless exists is the $ 550 area on Gold.  T-bonds appear to have reached short-term support at the 114 level and we will get out of short positions here, with plans to reinstate at 118 level.  The long Dollar positions will be held, if Obama wins, Volker will be a behind the scenes player and that is good for the dollar.

8:13 AM CDT