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
Transaction Update 7th July 2021
The strong move in bonds is pointing to the coming peak in equities and especially in the US mega tech.
We will soon detail in an extensive article why we are reaching the point where a major turn is about to happen in this segment of the market.
Today we decided to re-instate our short positions in Google, Microsoft, Apple and Amazon. We also shorted ETHEREUM again.
A major correction is around the corner and our Asset Allocation is now decisively net short equities.
On Friday, it was amazing to see that it was just the rally in a handful of heavy-weighted mega cap technology stocks (MSFT, AAPL, GOOG, AMZN) which together with a marginal new high in healthcare pushed the SP500 to new all-time highs, whereas in most other sectors we saw almost no momentum.
It is very seldom that we see such a narrow market breadth, where in the meantime we have a historical high concentration of performance contribution of several key stocks in the SPX, which in the past was a clear sign of a bubble and where a major market top was not too far away,
More importantly, with regards to the traditional Dow Theory, we have a larger divergence forming in transport and in utilities versus the recent new breakout in the SP500.
Keep in mind that the last 4 major tops in the US market were all led by a divergence in transport.
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