Equity Comment
The third trading day in September turned down - about on schedule.
This puts in a double top for the S&P after a trough to peak move since October 2005 of over 13%. This wasn't a large move relative to the 51% move from October 2002 to March 2004, but it was nevertheless significant. Other indexes captured investor's focus more over this recent 10 month period and experienced better returns: the Russell 2000 Index was up 27%, MSCI EAFE Index up 29% and the Emerging Market Index up 48% trough to peak. These three are well below the May highs - so some negative divergence is apparent. Sure, equities may reverse and head higher again but the risk/reward favors some caution.
Strategy Update: Dynamic US Equity added a small position in an inverse S&P Fund (about half of what is permitted) on yesterday's close and eliminated long positions in Biotech and a couple of small-cap ETFs. We continue to nibble at oil and commodities in the Dynamic Global Macro and Dynamic Commodity Strategies, but overall commodities exposure remains low/moderate.
This puts in a double top for the S&P after a trough to peak move since October 2005 of over 13%. This wasn't a large move relative to the 51% move from October 2002 to March 2004, but it was nevertheless significant. Other indexes captured investor's focus more over this recent 10 month period and experienced better returns: the Russell 2000 Index was up 27%, MSCI EAFE Index up 29% and the Emerging Market Index up 48% trough to peak. These three are well below the May highs - so some negative divergence is apparent. Sure, equities may reverse and head higher again but the risk/reward favors some caution.
Strategy Update: Dynamic US Equity added a small position in an inverse S&P Fund (about half of what is permitted) on yesterday's close and eliminated long positions in Biotech and a couple of small-cap ETFs. We continue to nibble at oil and commodities in the Dynamic Global Macro and Dynamic Commodity Strategies, but overall commodities exposure remains low/moderate.
posted by WRA Strategy Group at 2:41 PM
0 Comments:
Post a Comment
<< Home