Our Long / Short hedging strategy is now 80% long and 20% short.  As the market consolidated above 1400 we saw improvement in most of our core indicators tracking market trend, risk, and strength.  We’re still not seeing the strength we’d like in enough of our measures of the economy and market quality. Conditions such as we’re experiencing today are most likely associated with a continuation of an up trend after a correction.  However, during a bear market these conditions occur near bear market rally highs. Our current Hedge Ratio is .25. The long portion of our portfolio continues to be stocks we want to own for the long run that we believe will out perform in an up trend.  Our 20% offsetting short is simply a short of the S&P 500 Index. The green lines are adding exposure (removing shorts and increasing longs).  Yellow lines represent increasing our hedging (reducing longs and increasing shorts).  The red line signals aggressive hedging with instruments like puts, volatility, or actively managed bear

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Our core indicators improved enough today to remove a portion of our hedges.  We added exposure by removing some of our hedge and using the money to add to our long portfolio. We are now 60% long and 40% short (using a short of the S&P 500 Index). The current hedge ratio is .67. Several of our core indicators are lagging so it’ll probably be more than a couple of weeks before we add additional exposure.  But as always, we’ll keep you updated with any changes. The green lines on the chart below represent us adding exposure to the long portion of our portfolio.  The yellow lines represent adding hedges.  The red line represents aggressive hedging.