Week of 8-23-2009

Timing Model = 0.5

60% long, 40% cash

Global allocation of long positions

MSCI EAFE Index 30%

MCCI Emerging Markets Index 40%

Russell 3000 Index - U.S. 30%

Top U.S. Sectors

Precious Metals 2.5

U.S. Basic Materials 2.0

U.S. Oil Equipment, Services & Distribution 2.0

U.S. Banks 1.5

U.S. Real Estate 1.5

U.S. Biotechnology 1.5

Top Intl. ETFs

MSCI Spain Index Fund 3

MSCI Sweden Index Fund 2

MSCI Australia Index Fund 2

MSCI Austria Index Fund 2

FTSE/Xinhua China 25 Index Fund 2

MSCI All Country Asia ex Japan Index Fund 2

MSCI South Korea Index Fund 2

MSCI Emerging Markets 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%

International Real Estate 20%

Industrial Materials 20%

Precious Metals 20%

EAFE 20%

Sentiment once again led to a timing model downtick, this time to .5, signaling 60% long. We're also seeing EAFE/Emerging Markets momentum reversal, which could be signaling a flight to safer equities.

This market looks so ripe for fall right now. The trend is undoubtably up, but sentiment and momentum indicators are not only stretched, but retreating from their highest levels this cycle. That behavior normally signals a swift downturn in prices.

We'll, I guess we'll see what happens. I'm going to following my timing model.