Some Carryover Anxiety….with update at 2:31 PM
Investors around the world are waiting for someone else to start initiating value trades. So be patient here, our conservative portfolio remains in cash and is up 13.5 percent for the year. Our regular portfolio (aggressive decision model) is 100 percent long and as of this morning when the market is down 2 percent from Fridays’s close is up 34 percent for the past 12 months. We guage our position risk levels based on 12 month profits (usually we will risk about 25 percent of 12 month profits on any one cycle trade).
This again is technically a situation where the long term signals (which are long) are ahead of short-term signals which remain short. While unusual in a larger sense, it is common situation in panic based markets. We will put on leverage (go above 100 percent long) when the short-term technical signals turn long.
The strength of the dollar is impressive and we are at breakout levels to the upside with the dollar this week. If the dollar can hold this breakout level, we should see a further 12 to 15 percent up. This is bearish on gold and commodities and will bring value investors into US stocks. Gold is a in a safe haven hold early today, but is probably a short later this morning. We will keep you updated.
8:07 AM CDT
2:31 PM Update
We now have the short-term buy signal at 1049 on the S&P 500. Fear is still everywhere, but we are moving up to 110 percent long in this area.