My market models remain
Bearish along with the recommended Asset Allocation range at 25% Long and 75%
Cash. The Alpha One Model Portfolio
holds only 11 positions currently with three of those $SAVE, $SM and $TRN having
Opinion downgrades as of Fridays close and subject to sale in the coming week.
Last week saw the positions in $TRW and
$URI closed as the result in Opinion downgrades. The portfolio gains once again came from hedging day trades on the
$SPY.
The general markets gain Friday
wasn’t enough to make up all the losses from earlier this week, but it did help
to keep the longer term uptrend intact. The DJIA reclaimed its 50-day moving
average while the S&P 500 climbed back above its 100-day moving average.
Since November 2012, every time the S&P 500 broke below its 100-day moving
average, the index spent no more than 2 sessions underneath before a “V” shape
rally took it to new highs.
The question now is that
whether the broader market index can do that again this time. The answer
probably lies within the small caps. Although the S&P 500 set fresh records
in September, the Russell 2000 didn’t. The small cap index has been in a
downtrend since reaching its record close on July 3. It continued to lag even
in Friday’s broad-based rally. It will likely continue to weigh on the
larger-cap indexes. With that said, today’s jobs report will motivate dip
buyers to step in on pullbacks, keeping near term downside limited.
The following articles by
FactSet Insight warrant reading in my opinion as we prepare to enter the
final Earnings period of this year. No, I
do not write for the firm nor do I have any financial interest it, however I do
find their work to be well done and timely.
For those of you who were
with me as this year rolled out you may remember that my forecast for the
S&P 500 was a High of 2082.65.
I remain confident in that number at this time.
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