Weekly Risk Report 11/25/2009
Each week recently there’s been more and more discussion about whether the U.S. Dollar is going to continue to decline against foreign currencies or whether it’s just another speculative excess. Last week we mentioned how this has been positively affecting our Precious Metals, TIPS inflation bonds and currency exchange funds. The trend continued this week.
The Telecommunications sector rose this week signaling a 5% inventory reduction in some of our portfolios. That sector has lagged many of the others with which we work. It appears it is now catching up a bit.
Of our market risk measures, two rose and two declined in risk posture. There are now two bullish and two neutral. The overall reading is currently slightly into the bullish area of our database. The Divergence component may be locked into a statistically bullish posture for a while, since it was just about a year ago that the markets hit their first bottom. It becomes difficult to post “new 52 week lows” after such an event. This component will become more useful again sometime after March of 2010. For now it would appear that the majority of market participants see a steady continuation of “recovery.”
