Trade Accordingly

I am aware there are 100's of individuals (and numerous institutions) who read this blog. Anecdotal evidence suggests many are trading according to my personal positions.

To clarify my last trade, I was already at close to a 60% position in my Provident Fund account as of this weekend so this trade is a relatively small 15% allocation of capital to take me to a 75% position. I would be comfortable with a 15-20% draw down from these levels as my long term charts are still very bullish and odds favour a continuation of this bull market for some time.

Please note the following:

It is a HIGH RISK trade given the extreme overbought conditions currently in the market and has been done with a relatively small percentage of investment capital.

I am concerned there might be some out there who are in a much less "equity heavy" position in their accounts who might be considering moving large amounts of money from cash into equities based upon this trade. THIS IS NOT SOMETHING I WOULD DO AT THIS POINT. This is an extremely overbought market and the odds favour a 10-15% decline at any time.

A reminder my ECAM Asset Allocation Fund is currently sitting at a 50% cash position. It is based upon proprietary market technical indicators applied to 10 core market sectors plus up to 4 discretionary market sectors. The current positioning tells me this "rally" is not nearly as broad based as it should be and is prone to failure at any time.

Once again, please be careful and trade accordingly.


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