Mechelany Advisors’ MODEL PORTFOLIO has been running in a fully transparent way since January 1st 2014. Its Purpose is to implement the conclusions of our research analytical process in a portfolio managed using institutional liquidity, diversification, risk management and asset allocation processes. In our TRANSACTION UPDATES we keep our readers informed in real time of the transactions in our MODEL PORTFOLIO
Last week, we highlighted the occurence of a Bullish reversal after weeks of bearish sentiment. US indexes have reached our target levels for the correction we expected in September / October and we see additional downside from here as marginal.
In the past few days, there has been signs of capitulation, particularly in the US tech stocks with pessimism taking over.
We remain structurally bearish on the US Tech mega caps but have taken our profits today, pre-market on most of our short Positions, reducing our risk. We also took our profits on our Short the US Nasdaq.
The September / October correction has run most of its course in our view and we could still see some volatility in the coming week, but the stage is being set for a year-end rally.
Today ,We have also added to positions in China, increasing BGI GENOMICS, IQIYI and the FT50 ETF we use for global exposure and went long the Nikkei 225.
We also went long the EUR against the US dollar.
At 104 % long and only 10 % short, our MODEL PORTFOLIO is more bullish than it has been for months. However, we can re-instate our short positions very quickly, if market conditions require.
BUY IQIYI ( IQ US ) @ USD 7.3
IQIYI , the NETFLIX of CHINA is a particularly interesting situation.
The market is short 55 Million shares with the stock trading where it is….
This represents 14.7 % of the total shares outstanding of which steady institutional own 79 %, meaning that the current short position represents more than 50 % of the “volatile part” of the shares outstanding.
Expect a very sharp move up in the stock price anytime soon…
New Asset Allocation
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