Week of 12-28-2008

Timing Model = -1.5
20% long, 80% cash

Global allocation of long positions
MSCI EAFE Index 40%
MCCI Emerging Markets Index 10%
Russell 3000 Index - U.S. 50%

Top U.S. Sectors
U.S. Pharmaceuticals 5.0
U.S. Telecommunications 4.5
U.S. Biotechnology 3.5
U.S. Health Care 3.5
Precious Metals 2.5
U.S. Consumer Goods 2.5
Small Cap Value 2.5

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%

Two sentiment components of my timing model are retreating from mildly optimistic levels - this is not a good sign during a bear market. Also, the trend direction as measured by the 75 and 200 day moving average is still down. In sum, my timing model is signaling caution as long as the intermediate trend direction remains unclear. A move in either direction would not surprise me though.