The Easy Part is Behind Us…..Update/Testing the Water…Gold update 2 & 3

The 150 point bounce off the 740 area in the S&P was easy. It was mostly short covering coupled with a few long-term buyers who are looking down the road.  The Key question is whether the short sellers will put all their positions back on, we think not.  While it seems that many advisory firms since the 740 low have been telling their clients to  ” stand aside, it is too dangerous” the long-term investors will continue to take up the slack. 

The real action will start when the market closes above 900.  That will start to bring in the sold-out bulls. This week we are trading with a S&P  840 to 960 range in mind.

9:00 AM CST

Update at 9:49 AM

We are testing the water to see what the sellof is made of, as such we have doubled our short T-bond position and gone to 2 percent long gold.  It may just be a losing daytrade or we may hang on to it for a long-term position as the levels are good.

Update 2 at 1:53 PM 

Added to new long gold positions, now up to 9 percent long gold, holding all other positions. All of thes trades today are in the aggressive portfolio. 

Update 3 at 2:03 PM

We may be wrong short-term on the short bond trade, but for now we are going to handle this inflection point by dumping our long dollar positions which have worked well for a long time