an tSionna 5.17.10

I've discussed over the past couple of weeks the market's change of investment character. Right now what we've seen has been a market sell off followed by a weak attempt to rally which has then been met with further selling. This is not usually a high probability level from which markets begin a new rally. At best this usually means stocks churn about and at worst it often signals that a decline could resume. This level also leaves us stuck between support levels in the 1115-1120 range and resistance levels between roughly 1145-1175 on the S&P 500. Money flows are now showing up with more neutral readings but are nowhere near suggesting higher probability buying signals at this time on the overall indices.

There are some specific sectors that are beginning to look like they're washing out and we will keep an eye out there for attractive entry levels per our client mandates, especially since certain ETFs have come down to levels where their dividend yields have again become compelling. Over all however I will keep my Net Market Neutral stance regarding the larger market indices for the time being. I am a tepid Net Market Positive in the very short term. You can click here for a definition of those terms.

*Long ETFs related to the S&P 500.