Weekly Risk Report 11/06/2009
Looking back over the last 12 months with political, economic and market activity all being remarkable, I find the situation relatively pleasant. Market risk is higher now than a year ago, yet only in the mid-Average Risk range by historically standards. Last year at this time the measured risk was falling as fast as the market indicies. Eventually we saw new record low risk values near the end of November, 2008 and again in early 2009. Currently, we have one component Bullish, two now Neutral and one Bearish for an overall reading in the average risk range. A rise in the Divergence measure offset a decline in Speculation. The other two components balance each other as well.
In the last two weeks we’ve seen the markets move mostly sideways even while daily volatility has remained very high. Due to the sideway movement, our trade activity in our portfolios has slowed significantly. For instance, this week there was only one sell triggered - the Precious Metals ETF in our Global Signal portfolio. Most portfolioscomponents remain much closer to their respective selling signals than their buying points. The cash reserve has acted as a buffer for the accounts adding desirable stability.
