Added to Equity Holdings

As discussed in yesterday's blog, my intent was to add to equity positions within the EK Provident Fund on a break of the 20/50 dSMA on the daily chart. This occurred on yesterdays close. In addition the 1-box PnF chart turned back to bullish resulting in all 3 short term charts turning bullish.

I completed a buy order this morning (to capture yesterday’s closing price in the BlackRock Managed Equity Fund). This has moved me into a 50% Equity/50% cash position.

SPX 6 month Daily Chart

I have annotated on the chart my concerns. Most of the technical indicators are positive but I am not happy with the low volume buying on this important technical breakout. Also the ADX DI lines have yet to cross and they are usually pretty good at determining buy and sell pressure.

Given the above, I only increased my equity position to 50% in the off chance this is a false breakout. If/when the ADX DI lines cross to confirm the move (with volume hopefully improving), I will look to increase my positions.

My feeling is the 1249.05 bottom was an "emotional bottom" associated with the Japanese situation. I feel pretty confident we will not go below that level again for the near future but it is possible we could go back down from here to retest at some level above 1249 (perhaps near the uptrend line I have drawn on the chart.

A decline and re-test would be a very positive thing but I'm not sure whether we'll get it. My playbook will be to add to my positions on any dips and be in a full 100% equity position if/when the medium term charts come into alignment (the weekly remains bullish but the PnF (traditional) remains bearish).


Bottom Line:

-My short term technical indicators switched bullish with the intermediate term indicators still neutral and the long term indicators still bullish.

-Combined with the bullish cycle period we are currently in (yearly cycle bullish, 4 year cycle bullish), we have entered the technical "sweet spot" for equity investing.

-It appears likely an emotional bottom was put in due to the Japanese earthquake. Ongoing news out of that event will continue to move the markets somewhat but I feel the worst "emotional" response is in.

-Based upon long term Elliott Wave Theory, we still have much further to run before this bull market completes.

I have switched a 25% position from the BlackRock Managed Cash (US$) Fund into the BlackRock Managed Equity Fund.


Emirates Provident Fund:

As of Friday, March 25 I have moved into a strategic 50% equities/50% USD cash weighting as follows:**


-BlackRock US Dollar Cash Portfolio Fund: 50%

-BlackRock Managed Equity Fund: 25%

-Russell Global 90 Fund: 15%

-Fidelity International Fund: 10%

**Actual positions will change daily based upon price action and market volatility.


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