WOW!!! It has been on hell of year this year and the last few weeks have been no exception.
Prior to the big rally we had sold our 2% short position in (SH) and bought (IWN) small cap value. When we had a look at the asset class it was down roughly 16% from peak and other asset classes had not even come close. Granted it was only a 2% position again. We wanted to leave room to pick up a bit more on the down side, which, given the look of yesterday's market and today’s futures might just happen.
In fact as the market sells down we are starting to move the portfolio back into an aggressive stance… Slowly. We are still holding on to our commodity positions. Currently, there are a host of new ETF’s that cover the field and we are reviewing them.
Our new theme is that economic growth will slow and that we don’t want to be around oil here in the near term. We see a short term correction on the horizon. We are waiting for oil to move back into the $96-$98 range and we are out…no matter what.
However, grains, cattle and basic food stuffs are a different story. We would like to own them specifically. As such, we are watching (EEM) very closely for a continued slide. This is an area we want to be in, which would also indicate a desire to be back in hard & liquid commodities after a correction.
As such, we have 11% cash in the max growth portfolio and are to the upside of all major market indexes! (i.e. S&P 500, Russell 2000, Russell 3000). Let’s keep hoping this market continues to sell off before December. We would love to jump in feet first before the new year.