Below is a client email alert that was sent earlier today ...
A
quick update on your Resnn portfolio …
CURRENT MARKET EXPOSURE: 0%
CASH POSITION: 100%
Last
week’s aggressive continuation of the drop in prices that started in late May
finally found a short-term bottom on Monday of this week. From Tuesday
on, the market has risen and more importantly … ‘calmed down’.
As
I mentioned in our last message (from last week), panic had set in and when
that occurs the market tends to drop very quickly and aggressively. Usually
during these panic ‘sessions’ the best thing to do is to sit on the side lines
and wait for the masses to calm down.
Trying
to guess the bottom is a fool’s activity, and in fact in the trading world, a
famous saying is “don’t try to catch a falling knife”. Instead of trying
to guess the bottom, we prefer to protect our investment and watch the action
to see if the selling is subsiding and a calm is starting to occur.
This
week we started to see that calming effect as the selling finally subsided on
Monday and we had a nice rise Tuesday, Wednesday and Thursday. The week
has been fairly productive in this regard.
We
are still fully in cash at this point, the market’s decline from late May is
very much intact at this point and although the market action is looking better
this week, more time needs to occur before we will be willing to risk
assets.
As
I have mentioned previously, when markets decline, waiting and watching the
first few rally attempts is very telling as to the future direction of the
market, and this week’s rally attempt has been productive but not convincing as
of yet. In fact, the data we analyze is still pointing to more downside.
For
now, we wait and watch on the sidelines focusing on protection vs. growth.
Hope
your weekend is peaceful
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