As I noted last night, with a deal in place, the stock futures were strongly higher. I also noted that the decision not to sell into the weakness last week was so obvious it felt as if it was wrong.
But the strong gap up and the lack of follow through is concerning. Intraday reversals such as this do not give one much confidence that a new leg upwards is beginning. If anything, it is supportive of a potential topping process for the broader market.
As such, we lightened up quite a bit on a few asset classes in our core allocation portfolios now 23.5% cash. Emerging markets, smaller cap, technology stocks, and some of the most aggressive traders were worthy jettisons today.
We still have substantial US exposure, bonds, commodities, big cap and value. I’d like to wait and see how things develop before pushing more positions out the door, given the decelerating economy and the sloppy trading in equities, the risk is clearly to the downside.
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.