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January 2012 Blog

Mid-month rebalance for Absolute Indexes. January 2012

Global Tactical has moved into all in U.S. Sectors. Decisively bullish on the domestic equity side.
Commodities are still 100% in what we classify as cash (SHY) as defensive positioning according to our quantitative rules.
Bonds are split evenly between the extreme short end of the yield curve (our cash equivalent) and high yield bonds indicating bend to risk on. I think what is more telling is it is out of long term government bonds (TLT)
International is 75% cash and 25% in Mexico. Definitely little appetite for international equities.

Global Tactical Index (XLB, XLF, XLI, XLV, XLY)

Absolute Commodity Index (SHY)

Absolute Bond Index (JNK, SHY)

Absolute International Index (EWW, SHY)

Global Macro Indexes provides an indication of market strength, weakness or even neutral allocation which may provide one with some insight from a global / macro level. Although the PCM Global Marco Index rebalances monthly we ran it after the close on January 15th. Allocations would be the following if it were a rebalance day for the PCM Global Macro Index:

Long commodities (GSG), High Yield Bonds (JNK) and S&P500 (SPY) are bullish. The inclusion of China (FXI) is interesting. Australian Dollar (FXA), China and the S&P 500 are all .75 correlated to one another and fairly bullish allocation.

The comments and discussion here do not represent financial advise what so ever. This information is provided for educational purposes only. Investing is risky and one may lose money, a lot if it if they are not careful. Please read further disclosures on this site. A link is provided at the bottom of every page.

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