The strength over the last 3 weeks has been potent but we remain cautious and removing ourselves from increasingly bullish market chatter. There is potentially some bearish divergence showing up as well as the simple fact that markets need to rest after such strength.
Our shorter term portfolio went into today with 1 position, BRM, and opened another in MRE. The weak close in MRE is cause for concern. A proper breakout should have stayed form and not given up its intra day gains. As such we’ll be taking defensive action to alleviate a false breakout scenario as best we can.
Our medium term Growth Portfolio has been busy in the last 3-weeks adding long positions across the board. This is a very popular portfolio as it doesn’t rely on short term price movements to justify profits. Indeed it rides the bumps very well but captures modest trends when they come along. There is a chance that many of the current basing patterns could portend some nice trends, at least over the coming 9 months if we are seeing a proper bear market rally developing here. On occasion we get some luck with these as can be seen with Macquarie Communications (MCG), accelerating 90% in a short period. We unloaded 1/2 the position a day or so ago and we’ll now ride the rest.
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