Weekly Update 02-16-2010:

Last Tuesday we entered a SELL position with the active portion of our portfolios.  As I mentioned then, the “anticipatory” portion of our Core-Plus™ directional indicators had been “screaming” a SELL signal since the first week in January.  Therefore, we have been waiting since then for some confirmation that this was truly the direction that the market was going to turn for a long enough period of time to warrant taking action.  Since then, we have gotten that confirmation and are using this current small bounce up as an entry point into what appears to be a much larger longer term movement to the downside.  When we entered last week we mentioned that this bounce may still have a bit more carry through until turning, which it has had some into the end of the week.  However, we are not expecting this bounce to exceed the previous week’s high in the vicinity of 1105 in the S&P 500.  Therefore, as long as the market remains below this level, our entry point will be considered a successful entry.  If by chance the market were to continue this rally beyond that point; for the purpose of risk control, instead of trying to issue exact stop-loss price levels for individual ETF holdings, we would just simply issue a CASH signal if needed to stop out of our positions if necessary.  Otherwise, the move downward that started January 19^th appears to be one that over the coming months could very well carry this market to lows exceeding the March 9^th lows of 2009 taking the S&P500 to levels below 660 and the Dow to levels below 6500.  Therefore, for those who have monies invested in 401K’s that are not conducive to “active” management, this would be a good time to take some action to become very defensive and simply move the majority, if not all, assets to Money Market for the time being.  Due to the nature of the current financial landscape, bonds may not serve as the “safe haven” this go around…time will tell.  We will keep you posted.  Yours for Safe Sailing in Bull and Bear Markets.