Weekly Risk Report 05/11/2009
For several weeks now I’ve mentioned concern in the rising level of Speculation in the broad markets. The last three weeks have seen it surge all the way from its bullish area to being into its bearish zone. While much of the last quarter of ’08 and the 1st of ’09 showed very low speculative activity, the turn in the markets since the March lows changed all that.
The other components remain bullish with only slight rises in risk profile. Overall the i-Wave is still mildly bullish even with the Speculation increase. The markets will consolidate this recent activity and afterward we’ll still have a moderately priced market.
So, with the inflow of investing dollars, what has happened? Many of our various portfolios have risen enough to generate some selling activity. Here’s an example of an income component:
The moderate cash reserves have been reused several times to capture small gains for the portfolio since last fall.
A similar picture can be seen in many of the domestic business sectors and in the international arena as well. These markets were hit hard during the decline but have started coming back nicely.
While the short term looks a bit overheated, the longer term prospects remain good. The very low risk levels seen over the last two quarters allowed the SignalPoint process to work on its “accumulation” side. We’re now just beginning to see it “distribute” a small amount of the added inventory.
