A First Comment

The rally yesterday was impressive, what one does from here will now be the difficult part.  To us there is no question that the 838 S&P low of October 10th 2008 looms as the big barrier at the moment.  That low was the end of the momentum move down from the bull market highs of a year before. Since then the market has gyrated around with some new lows and rallys to 1006 on November 4th, 935 on January 6th, and 823 yesterday.

For us, our Conservative and Aggressive Marketocracy Tracking Portfolios tell a story. We have been long at some level in both portfolios since the October 10th momentum low and the NAV numbers basically tell a story of how leverage is the prime factor for us in getting and maintaining returns during this bottoming period.  Obviously we could have had some astounding numbers if we had sold out completely at each of those highs.

                                                  Conservative       Aggressive    S&P

                                                       NAV                     NAV          Price

November 4, 2008 Rally           2284                    2436          1006

January 6, 2009 Rally               2192                    2630            935

March 23, 2009 Rally                2276                    2724            823

Both Portfolios started at 1000 in June 2002.  It can be seen that during this bottoming phase a series of lower lows on the S&P, down 18 percent from November 4th 2008 through yesterday, yet the Conservative Portfolio has essentially maintained its value and the Aggressive Portfolio is up 12 percent by primarily varying leverage ratios at various levels. Yesterdays level on the Aggressive Portfolio is an all-time high.

Gold needs to be watched also. This morning gold has dropped through a support level at 930.  We are still short gold and are watching the 890 and 1010 levels on the Gold futures market to see if something outside the trading range develops.

The EMA ETF Fund NAV was 1001 at yesterdays close.

We will probably have more comments later today.

8:22 AM CDT

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