Week of 12-21-2008

Timing Model = -0.5
40% long, 60% cash

Global allocation of long positions
MSCI EAFE Index 30%
MCCI Emerging Markets Index 10%
Russell 3000 Index - U.S. 60%

Top U.S. Sectors
U.S. Pharmaceuticals 5.0
U.S. Telecommunications 4.0
U.S. Health Care 4.0
U.S. Biotechnology 3.5
Small Cap Value 2.5
U.S. Consumer Services 2.0
U.S. Consumer Goods 2.0
U.S. Oil & Gas 2.0

Top Intl. ETFs
MSCI Switzerland Index Fund 3
MSCI Japan Index Fund 2
MSCI Malaysia Index Fund 1
FTSE/Xinhua China 25 Index Fund 1

Strategy 3
Money Market 50%
U.S. Long Bonds 50%

Strategy 4
U.S. Long Bonds 25%
Agriculture 25%
Precious Metals 25%
U.S. Large Cap 25%

Not much has changed since last week. We're in the midst of positive seasonality but when I look at the charts it seems as though we may need a break. Precious Metals seem overstretched here - I wouldn't be surprised to see some profit-taking here.

On the whole, it seems as though we're in the midst of an intermediate term rally, but the tape and sentiment indicators aren't all that impressive. I don't expect any big moves one way or the other from here...for a while at least.