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Risk Warning Cleared

On Friday my market risk indicator cleared its warning. The core market health indicators are usually much slower to clear so they’re still mostly negative. The majority of them look like they’ll take several weeks and maybe a month or two to clear. This indicates that we’re probably in for more sideways consolidation, but not likely to decline significantly from here. The new portfolio allocations are as follows:

Long / Cash portfolio: Long 20% and Cash 80%

Long / Short portfolio: Long 60% high beta stocks and short the S&P 500 Index (SPX) 40% (or use an ETF like SH)

Volatility Hedged portfolio: Long 100%

As always, use your own risk tolerance in structuring your portfolio.

 
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