Week of 2-17-2008

Timing Model = -.5
40% long, 60% cash
10 day moving average: 50% long, 50% 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. Oil & Gas 5.5
U.S. Basic Materials 4.5
U.S. Biotechnology 4.0
Precious Metals 4.0
U.S. Oil Equipment, Services & Distribution 4.0

Top Intl. ETFs
MSCI Malaysia Index Fund 3
MSCI Brazil Index Fund 2
MSCI Hong Kong Index Fund 2
S&P Latin America 40 Index Fund 2
FTSE/Xinhua China 25 Index Fund 2
MSCI Emerging Markets Index Fund 2
MSCI Canada Index Fund 2

Strategy 3
Money Market 25.0%
Agriculture 25.0%
Precious Metals 25.0%
Industrial Materials 25.0%
Emerging Markets 0.0%
EAFE 0.0%
U.S. Large Cap 0.0%
U.S. Small Cap 0.0%
U.S. Long Bonds 0.0%
U.S. REITs 0.0%

Week of 2-10-2008

Timing Model = .5
60% long, 40% cash
10 day moving average: 42% long, 58% 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
Precious Metals 5.0
U.S. Oil & Gas 5.0
U.S. Biotechnology 4.5
U.S. Basic Materials 4.0
U.S. Oil Equipment, Services & Distribution 3.5
U.S. Health Care 3.0
U.S. Consumer Services 2.5
U.S. Technology 2.5
U.S. Semiconductor 2.5

Top Intl. ETFs
MSCI Malaysia Index Fund 3
MSCI Brazil Index Fund 2
MSCI Hong Kong Index Fund 2
S&P Latin America 40 Index Fund 2
FTSE/Xinhua China 25 Index Fund 2

Strategy 3
Money Market 33.3%
Agriculture 33.3%
Precious Metals 33.3%
Emerging Markets 0.0%
Industrial Materials 0.0%
EAFE 0.0%
U.S. Large Cap 0.0%
U.S. Small Cap 0.0%
U.S. Long Bonds 0.0%
U.S. REITs 0.0%

Is the bear tired?

I think so.

The combination of recent market action (multiple selling climaxes) and favorable sentiment readings (short term indictors are OS, and the intermediate term indicators are rising from OS) spell a rally based on my experience.

I just took a couple decent sized positions in 2x funds but will be using a mental stop 1% below the recent lows in case I'm wrong.

Is the bull market over? No, I don't believe so, but bear market rallies should be expected and can be taken advantaged of if you're both patient and nimble.

Week of 2-3-2008

Timing Model = -.5

40% long, 60% cash

10 day moving average: 52% long, 48% 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. Basic Materials 5.0

U.S. Oil & Gas 5.0

Precious Metals 4.5

U.S. Biotechnology 4.5

U.S. Oil Equipment, Services & Distribution 3.5

U.S. Technology 2.5

U.S. Utilities 2.5

Top Intl. ETFs

MSCI Malaysia Index Fund 3

MSCI Brazil Index Fund 2

MSCI Hong Kong Index Fund 2

S&P Latin America 40 Index Fund 2

FTSE/Xinhua China 25 Index Fund 2

MSCI Emerging Markets Index Fund 2

MSCI Canada Index Fund 2

Strategy 3

Money Market 20.0%

Agriculture 20.0%

Precious Metals 20.0%

Emerging Markets 20.0%

Industrial Materials 20.0%

EAFE 0.0%U.S. Large Cap 0.0%

U.S. Small Cap 0.0%

U.S. Long Bonds 0.0%

U.S. REITs 0.0%

Bizarro chart of the week courtesy of Stockcharts.com. Below is the 90 day rate of change for 6 style/cap asset classes. Growth and large has been the dominate style/cap over the past year but could value be making a comeback?

My timing model hasn't changed much. The sentiment indicators are indicating bullishness, but the intermediate and long term trend is decidedly down. We are in a bear market, no doubt, but bear market rallies will occur. Just look at a chart of the 2000-2002 bear. That said, I believe we will likely see another leg lower before we see a significant bear rally.