The model score today is -11.  This means that the market is still deteriorating internally, with price. The market is digesting its losses and awaiting earnings. Most people have done their hedging and if the market is going to rotate higher, it will do it soon.


I want to remind you that our positioning longs in SPY are now trading longs and will be sold should the market close over 3% lower than the “purchase price”, 5% higher, or, in any case, after 15 days of purchase if neither condition has been met.  We will, at some stage within the next 15 days be in a “risk off” position, most likely.  Today the market came close to triggering the -3% stop rule.


Owners of EOG, PGR, CXO, NEE & HII should examine whether it is worth holding these stocks, as the position is rapidly deteriorating in those names.


Our asset allocation is unchanged today, but we will definitely make use of any rally to reduce equity allocations and increase cash.