All of our core market health indicators improved again this week. None of them rose enough to change our portfolio allocations, however, it appears that over the next few weeks we should be adding exposure and removing hedges. The only thing that we can see that would change this view would be a very sharp and substantial sell off in the market.
Our measures of risk improved substantially which continues to confirm that market participants just don’t believe the market will suffer a deep correction. Our measures of the economy, market trend, quality, and strength all rose very quickly this past week as the S&P 500 Index held firm and continued to move up after the break above 1600.