Market Wrap - week ending 7/12/2013

Below is a client email alert that was sent earlier today ...

Hello everyone.   A quick update on your Resnn portfolio …

CURRENT MARKET EXPOSURE: 100%

CASH POSITION: 0%

Margin / Leverage use: 0%

This week the market continued its’ strong resilience and rebuilding effort.  As noted in last week’s post, freshly off an almost 8% correction lasting most of June, the first two weeks of July have been almost entirely positive … a straight up recovery.  Although the S&P500 and Dow Jones have yet to make new highs, the Nasdaq made a new high Thursday and continued its’ upward trajectory today again.  This is exactly the kind of action you want to see after a correction, a strong unrelenting uptrend eliminating the previous price correction quickly.

This is the third time this year that the market has shaken off its’ weakness and gone on to move to new highs, and although the latest correction (in June) is the most aggressive of the three possibly showing a tired uptrend, the sheer fact that we were able to move into new high ground and stay there for a day implies we are off to a good start.  The fuel this time again seems related to the Federal Reserve’s continual monetary purchase program, fueled this week with Bernanke’s statements on Wednesday being interpreted euphorically.

Another strong indicator of the market’s strength is its’ ability to ignore bad news.  A market looking for trouble as an excuse to go down might have found it in the news today, if the bears were in charge.  The University of Michigan’s consumer sentiment survey was weaker than expected, though only narrowly so. The producer price index showed more inflation than the Street estimated, though energy appeared to be the chief culprit.  Fitch Ratings downgraded France on concerns about a lack of

growth and rising government debt, but when has the Street ever been much concerned with France?  Yes, all of the above items are relatively light on the worry scale.

But a fussier market might have grabbed one or more and run to the sidelines.

As I alluded to in last week’s post as the market continued stabilizing and was further confirmed with our data analysis, we entered the market earlier this week and positioned our client portfolio’s fully into the market with a fairly even split between the S&P500, Nasdaq and Russell 2000.  We are now 100% invested in the market, using no leverage as of yet.

For now, the previous uptrend continues and we hold on for the ride.

May you have a peaceful weekend