Monday, December 7, 2009

Bookkeeping: Weekly Changes to Fund Positions Year 3, Week 18

Year 3, Week 18 Major Position Changes

To see historic weekly fund changes click here OR the label at the bottom of this entry entitled 'fund positions'.

Cash: 74.9% (v 82.9% last week)
24 long bias: 20.6% (v 12.5% last week) 
4 short bias: 4.5% (v 4.6% last week) [includes 1 option position]

28 positions (vs 27 last week)

Weekly thoughts
An action pack week that started with Dubai (who?) and ended with a monthly labor report gives away to what appears to be a much quieter affair.  The economic calender is very light, we are a month away from next earnings season, and holidays soon approach.   Other than a Ben Beranke speech Monday, there is a complete economic news void, aside from discussions of how much money will be spent creating jobs by government - until Friday.  Retail sales, and consumer sentiment will drive trading Friday but until then we most likely will be beholden to technical trading in this computer operated market.

Looking at our key charts, we remain in "the box"... now approaching a month worth of trading sessions.  This box has been roughly S&P 1085 to 1112, although top side levels were broken through late last week on an intraday basis (but NOT a closing basis)

S&P 1120 is a 50% retracement of the entire move down from October 2007 to March 2009 so it has predictably been the next headwind.   I will repeat what I've been saying the past 5-7 days... the longer the base the bigger the eventual move.  A month long base is creating conditions for a doozy of a move; now we must see what direction said move will be.  Bulls hold the cards until proven otherwise, as we are consolidating over all major moving averages.

The Russell 2000 (reflecting smaller cap stocks) has been the laggard and remains range bound as well, although at the top of its recent range.  Bulls would like to see this rally to broaden to capture these names as well.

The only chart that matters, finally showed some life Friday.... but a move over $76 that holds would be a necessary component for any counter trend rally.  

And the most crowded trade on Earth took a hit Friday as hedge funds all scrambled out the door at the same time.  Having sold almost all holdings of gold and silver about a week and a half ago, we'd like to begin layering back in on weakness.  Any move below the 50 day moving average (near $1100) for gold would however.... be interesting. 

Let us note - 2 of our leadership stocks, Apple (AAPL) and Goldman Sachs (GS) have struggled a bit of late.....

... but perhaps the baton has been passed onto (AMZN) - although even that bullet proof issue was hurt Friday.

Frankly I am bit confused the indexes hold up when you have lost much of the small cap universe, plus 2 of your leadership stocks... 

Other than that more of the same... Tim Geithner pledges he wants a strong dollar while he and Ben Bernanke do everything in their power to crush it.  Congress, after wasting untold US treasure on stimulus #1 through 78, now is coming to the realization elections are next year and the minor issue of jobs requires stimulus #79.  Plus the next round of state and city bailouts i.e. public workers -  is key. (votes!)  Every computer on Earth is set to trade at 4/1000ths of a second versus the US dollar chart, and fundamentals essentially mean nothing.  This will continue until it stops... 

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