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ETF portfolio May 9 th. 2011

Two quotes come to mind this morning:
- "Are you confused? - Stay tuned for the next episode of Soap"
- "There is something rotten in the state of....."

The gyration of the markets and the constant lack of direction in all asset classes these last few weeks makes me look for the least volatile asset - Bonds.

Equities
While there have been some wild intra day swings, the trend is going nowhere. Last week failed to push higher and I was, yet again, stopped out of my long positions. All indicies and sectors except the defensive ones ( Healthcare & Utilities ) are in neutral mode and Energy actually turned bearish.

Earning season is over and it is May - I think the next couple of months may be bearish for equities as we face seasonally selling and the end of QE2. Markets will like to see what happens once the stimulus end. August may be a good month to see a trend develop.

Bonds
All my bond funds are now bullish and as it is also the least volatile asset - I prefer bonds curently. I have bought postions in the long dated US and German bonds expecting it may go up some 5 - 10% over the summer.

Commodities
Historic times are upon us in all sences. All time highs followed by all time intra day drops and all time high derivative activity. Sound like a buble??? - Well maybe, or just an overdue correction as a result of the unwinding of the mother of all carry trades in the currency markets. I think the reason Gold, Silver, Oil and Copper was up as much as they where is as likely to be speculation against the USD as speculation in them directly. It may all come down to what happens in Europe with the sovereign debts.

For now, I would recormend you stay away until Sep, when seasonal demand return and macro economic issues are more clear.