Market Wrap - week ending 7/5/2013

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%

Happy July 4^th to everyone … Holiday weeks are tough in the stock market because most institutional traders are taking time off, volume is light and as a result it is very easy for a large player to manipulate the market.  Many major moves start during light volume weeks, and time will tell if this is one of those times.

The market continued its’ stable ‘basing’ or rebuilding after its’ most recent decline.  Since late May the S&P500 dropped over 7.5% and has since stabilized and recovered roughly half of that loss to date. 

As you know, we moved to cash early in the decline, since moving to cash our portfolio has fallen only 2.4% vs. the S&P losing 7.5%.

We are still in a ‘wait and see’ mode, protecting your investment in a cash position.  Although the market continues to act healthy and is ‘calming down’, there are still warning signs that we are monitoring. 

One of which is the market’s reaction to the Egyptian regime change, which so far is completely non-existent.  The price of oil has jumped which ultimately will hurt our economy if it doesn’t fall back down, but for now … the market doesn’t seem to care.  Watching the market slough off such potentially bad news is a very strong sign, when the bulls ignore bad (or uncertain) new items and keep buying … it sends a strong signal to the bears.

Assuming there are no negative jolts in the market early next week, it would not surprise me if we will carefully re-enter.  For now, we continue to wait and watch on the sidelines focusing on protection over growth.

Hope your weekend is peaceful,