Asset allocation
The short term rebound develops chaotic waves: SPX have moved back below the 1350 pts target… as well as financials have been stopped at resistance level (JPM is a good example). My odds are still positive & I expect a break of these resistances, but we need confirmation today. If yes, the rebound would find a new strength. Very important: check the 1350 pts level on SPX, this is the key technical number for the following…
Under such conditions we must find the leaders: here it is clear, the biotech’s are leading as you can see on the ratio : BTK/SPX! Do not hesitate to buy if the SMA50 is broken up! BBH for biotech holders is a good vehicle as well… It gives some “support” to the all market. Technology is not leading but doing well, look at GOOG! This is a fundamental point: we need a positive trend on the NASDAQ versus the SP500 to have a powerful bounce… More later
Warning: in any case, the continuation of the general bounce on big caps, maybe still 10/15% to gain is certainly temporary (few weeks). For a yearly investor, the best is just to wait for better opportunities at lower prices in the coming months…
Do not hesitate to contact us if you want more information on asset allocations in such periods…
April 2nd, 2008 at 4:40 pm
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