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Heads Up

Just a heads up. Our measures of the economy have been negative all week long and it appears they’ll end that way on Friday. If they stay negative into Friday afternoon we’ll be raising 20% cash in the long/cash portfolios (will be 80% long and 20% cash) and going 90% long and 10% short in the hedged portfolio. I give the warning so you can evaluate your positions and determine which stocks would fair worst or you’d be uncomfortable holding if the market turns down over the next several weeks. As always, I can’t see the future and as a result make allocations based on the odds. I’ll do a post on Friday before the close to let you know if the measures of the economy are still negative.

As a side note, all of our other indicators are still positive and mostly moving up. The only dark cloud would be our market risk indicator hasn’t cleared one of its components and the others have turned down this week. It appears that market participants are getting concerned. Nothing to worry about yet, but something I’ll be watching closely.

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