Here’s another sight you might see if you visit San Diego.
This past week saw our core market health indicators falling again, however, none of them fell far enough to raise more cash or add any further hedges to our portfolios. We’re currently 40% long and 60% cash in both of our Long/Cash portfolios. Our hedged portfolio is 70% long stocks we believe will outperform the market and 30% short the S&P 500 Index. Market Positives This is a market that continues to shake off bad news. That in itself is the most positive sign of current conditions. Our measures of risk are still indicating that most investors aren’t concerned about a large decline in the market. Our market stability index is also confirming complacency. We did however see both of these indicators deteriorate last week telling us that the wide swings in price are starting to build awareness of rising risk. Our measures of market strength are still above zero, but just barely. As the market continues to stall we’re seeing market strength fall. Any further weakness in market strength
Here’s a quick peek at a few Twitter sentiment charts that I’ve noticed lately. Google (GOOG) is starting to warn after a good rally that started in November. Twitter sentiment has been diverging from price for three weeks and has now broken the the confirming uptrend line. Please note that this signal is against the trend so it is merely a warning that the stock may pause not a prediction of a top. If you’re long GOOG keep in mind that other holders of the stock are becoming less bullish as the stock pushes higher so it may need a rest. Ford Motor (F) is showing a positive divergence with Twitter sentiment. This is happening after a straight up run and a correction nearly back to its uptrend line from July. Keep an eye on how the stock trades near the trend line because sentiment is showing buyers as the stock falls. Facebook (FB) continues to show weak sentiment on Twitter as the price falls. It had its first divergence