Game Changer or Not
The G-8 meeting has the potential for being a road-map changer. The biggest obstacle is now the German people, not their leader. Europeans will meet in the next few days to put a captstone on the changes.
As such we will increase our long stock positions this week ( we came in to this week long stocks equal to 25 percent of equity and long gold equal to 25 percent of equity). At the end of the day we expect to be long stocks equal to 75 percent of our equity, our gold position will remain at 25 percent of our equity.
I want to emphasize that I am not bearish or bullish at this point, I think we are in the early stages of a trading market. On the bull side we have the CNBC crowd kind of bearish, even bearish on Facebook, that makes our view a little more contrarian. Probably the biggest reason to try the long side with more ammo is the fact that stock indexes are near the annual swing point and that will be supportive to a bounce here. The S&P has a 3 month trading range expected of 1286 to 1354 with the 1265 area looming as an extreme value area on a quick clean-out.