Key Category Trend Lines for August 14, 2009

Here are the simple moving average directions and linear regression slopes for 200-days and 100-days for representative funds or indexes for twenty-seven key asset categories that we follow closely.

click image to enlarge

Overall, we find this data encouraging.

Of course, this information doesn’t say they will be no retracement, but certainly a preponderance of upward trends is more encouraging than a preponderance of downward trends.

The fear factor has clearly receded (down trend in Treasuries and the Dollar are good examples of that), and the risk appetite has clearly returned for now (strong performance of below investment grade bonds relative to investment grade bonds, and strong performance of emerging market debt, are good examples of that). The inter-market indications merely support the obvious, which is that a broad spectrum of stock indexes are no longer trending down.

We are fully invested at this time in all but our real asset and commodities allocations, having gone through a staged re-risking process after exiting the markets in July of 2008. We are partially reinvested in commodities and real assets at this time. We seek to limit catastrophic risk with persistent trailing stop loss orders on each position.

Comments

[BullnBear:]

I like the data direction and timelines, very interesting.

I'm somewhat perplexed with the dollar/crude oil data as it seems to be conflicting with the current oil strength based on weak dollar idea which is something that I'm trying to trade around at the moment.

I suppose you can also throw the commodity and gold data into the mix as well but I'm not sure if the market has decided to price in deflation or inflation yet. I have read several theories eluding that the market increase is based on inflation fears but I'm not so sure that we are at that point yet and of course only time will tell.

Aug 14 02:06 AM