Week of 2-22-2009

Timing Model = -2.0
10% long, 90% cash

Global allocation of long positions
MSCI EAFE Index 20%
MCCI Emerging Markets Index 20%
Russell 3000 Index - U.S. 60%

Top U.S. Sectors
U.S. Health Care 5.5
U.S. Biotechnology 4.5
Precious Metals 3.5
U.S. Pharmaceuticals 4.0
U.S. Semiconductor 2.5
U.S. Consumer Goods 2.0
U.S. Oil & Gas 2.0
U.S. Technology 2.0
Composite Internet 2.0
Small Cap Growth 2.0

Top Intl. ETFs
MSCI Malaysia Index Fund 1
FTSE/Xinhua China 25 Index Fund 1
FTSE China (HK Listed) Index Fund 1
MSCI South Africa Index Fund 1
S&P Latin America 40 Index Fund 1
MSCI Brazil Index Fund 1
MSCI South Korea Index Fund 1
MSCI Emerging Markets 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. Small Caps 25%

Pessimism grew enough last week to push my model to a 10% long exposure. The market is also technically oversold on a short term basis and I fully expect to see a bounce this week. I'm feeling more optimistic about the intermediate prospects for this market than I have in a long time. That doesn't necessarily mean the low is in, but at least sentiment is now beginning to bolster the bullish case.