Week of 8-2-2009

Timing Model = 2.5

100% long, 0% cash

Global allocation of long positions

MSCI EAFE Index 25%

MCCI Emerging Markets Index 50%

Russell 3000 Index - U.S. 25%

Top U.S. Sectors

Composite Internet 3.0

U.S. Semiconductor 2.5

U.S. Basic Materials 2.5

U.S. Real Estate 2.0

U.S. Technology 1.5

U.S. Banks 1.5

Precious Metals 1.5

Top Intl. ETFs

MSCI Turkey Invest Mkt Index 3

MSCI Thailand Invest Mkt Index 3

MSCI Hong Kong Index Fund 3

MSCI Singapore Index Fund 3

MSCI Brazil Index Fund 2

MSCI Austria Index Fund 2

iShares MSCI Chile Investable Mkt Idx 2

MSCI South Africa Index Fund 2

MSCI Taiwan Index Fund 2

MSCI Sweden Index Fund 2

MSCI South Korea Index Fund 2

Strategy 3

Money Markets 9%

Emerging Markets 9%

Precious Metals 9%

Industrial Materials 9%

EAFE 9%

U.S. Large Cap 9%

International Real Estate 9%

U.S. REITs 9%

U.S. Small Caps 9%

Energy 9%

Agriculture 9%

Strategy 4

Money Markets 20%

Emerging Markets 20%

Precious Metals 20%

Industrial Materials 20%

EAFE 20%

My timing model fell from 3.5 to 2.5 this week due to increasing levels of over optimism. Sentiment change still wasn't enough to reduce equity exposure, so I'm still 100% long.

The hedge(s) I mentioned on a previous post are still in place, barely missed hitting their stops on Friday. I still believe the market will see lower prices over the coming weeks, but I'll be sticking to my model.

The technology sectors still lead domestically, while emerging markets dominate globally. There's a lot of frothiness in this market, but that isn't to say we can't mover higher. I just think the odds are in favor of taking a breather.