The Latest Rally

Our point of the week for the March 13, 2009 InFocus is below.

"The markets have most likely made intermediate-term bottoms on March 6 that may take the $SPX back to the 850-950 price level over the next couple of months."

Figure 9 below was Figure 4 then. It is updated through April 13, 2009, with the S&P at 858.73. We still expect this rally to top out in the 850-950 range no later than the end of May 2009. We then expect a decline near 740, and if that fails, a retest of the lows near 667 by year-end. Technical estimates do not affect the maintenance of a structural balance among assets that hedge booms and busts.

Portfolio Exposures & Convictions

Figure 10 is composed of a focused list of indexes and assets classes (we keep an eye on these and many more) and corresponding ETFs. Returns are through March 31, 2009 and April 3, 2009. AI 75/50 portfolio weightings are labeled in the third column. Red highlights are for sectors that were shorted through 2x inverse ETFs (Figure 11). Our long ETFs are either overweight (OW) or neutral weight (NW) relative to the Dow Jones Global Index.

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