Jeff Miller's  Instablog

In my recent interview with Seeking Alpha I discussed how investors can use a dynamic asset allocation method to develop an ETF portfolio.  When I reposted the interview on my blog, I updated the positions to reflect our current holdings.  (In the interview, I said the positions could change in only two weeks, and that proved to be correct).

I am not going to promise regular updates of this, but I want to provide the same information to SA readers as I did on the blog.  To summarize, KOL and GDX are out;  IYR and XLY are in.  While the model asks which ETF if best for the next twelve months, it is a question we ask every day.  The makeup of the top five holdings changes fairly often.

You can see the original article (which also reflects this update) here:  seekingalpha.com/article/245293-jeff-mil...

There has been a lot of recent discussion about the scheduled expiration of the Bush-era tax cuts.  Some have opined that concern about increases in the various rates is the most important market headwind.

For several reasons, I think that most of the cuts will be extended.  I also posed the question to colleagues in the Kauffman survey of economic bloggers.  You can see the results and my argument here:

oldprof.typepad.com/a_dash_of_insight/20...

This ISM Manufacturing Index for August was 52.9.  This continues an eight-month streak of gains.  As a real-time read on the economy, the ISM research says that this pace, if annualized, would indicate GDP growth of 3.7%, near the top of the range of consensus forecasts.

The ISM numbers are better than other data we watch more closely.  We are not very bullish on Friday's employment report.  We'll do our monthly employment article soon.