Qui Audet Adispicutor

Dow 10K we hardly knew you

2009-10-24T22:12:00Z

So DOW 10,000 came and went with little fanfare. Second times around are rarely inspiring. Most sequels flop, and second weddings are usually muted affairs also. Fridays surprising sell off in the face of rather robust earnings out of both Amazon and Microsoft we feel signals a tectonic shift in the mood of the tape and sentiment in general. Whereas buying bad news has been the order of the day for over six months now, it appears we are in an environment where we sell good news. This is important to note. Despite the aforementioned shift in sentiment, we are coming into a calendar period around the holidays where trading is light and the forces wishing this market higher can surely prevail. The "Tim Geithner" rally of last fall as you may recall occurred right around this time frame, so I would not at all be surprised to see the market march forward into years end.

As mentioned earlier, support for the beleaguered US dollar seams to be forming around the 75 area. The action of the dollar and the opposite action of almost every other asset class is perhaps the most important theme to develop since the financial meltdown. As the worlds reserve currency, it cannot simply be allowed to fade into oblivion like the shares of a failed dot com. Should we see a gradual bottom form and some emerging strength in the US Dollar, the profitable trade long commodities and precious metals will surely come to an end. To this end we are short gold around 1060, and feel this will prove to be a fortuitous move. As always a nimble hand and a shot of humility rule at this shop.

Current Portfolio Themes

2009-09-28T00:29:00Z

As sometimes unbelievable as the current rally in equities seems, as a prudent fiduciary I have no choice but to continue to participate. Our allocation to the equity markets is much more mundane in nature currently, consisting mainly of blue chip dividend paying securities or ETF's such as DVY. Last weeks weakness in the equity markets would seem to have played its course, and institutional money will want to support the market going into the quarters end. Beyond that we will have to see if less bad economic news or the so called second derivative trade can continue to propel the markets higher. The dollar seems to be displaying some nascent strength, and I continue to explore alternative assets such as Natural gas, silver and commodities, which have worked out well as of late, but may be derailed by a dollar rally.

Welcome

2009-09-26T18:13:17Z

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