Weekly Risk Report 05/18/2009
Since last week’s edition we’ve seen a variety of information coming to the markets all burdened with a heavy lacing of noise. Our SignalPoint process is designed to help filter out the noise so we can concentrate on the signal. Labor statistics were taken as both positive and negative. The same is true of housing starts. The diversity of opinion is shown in investment newsletters ranging from “Dow 2000?” to “Dow 10,000 by Year’s End.” No wonder so many investors are confused.
Following our inventory control process and our market risk indicator we continued to decrease inventory incrementally. Sales were realized in Industrials, Telecommunications, Info Tech and Basic Materials.
In our CurrencyPoint portfolio we sold a portion of our Australian Dollar fund. The U.S. Dollar continues to cycle up and down against various foreign currencies as the trichotomy of “inflation vs. deflation vs. stagflation” gets daily air time on the business news channels.
The CurrencyPoint portfolio was modeled for three quarters of ’06, all of ’07 and ’08 and the first quarter of ’09. The actual portfolio was first funded in late 2008. CurrencyPoint’s objective is moderate income, portfolio stability and profitable currency trend capture over time. This portfolio is made up of exchange traded funds representing short term government treasuries of 10 non-U.S countries.
Finally, our i-Wave Market Risk indicator fell slightly for the week. Two components remain unchanged and bullish while one rose and one fell. Only one component is currently bearish: Speculation. The speculation indicator declined modestly this week, but still shows speculative activity is high right now. The markets typically consolidate such rapid gains with reasonable poise.
