Although quadruple-witching Friday is always followed by weaker markets and we are expecting this week to be on the weak side, the powerful reversals recorded last week calls for stronger markets ahead.
As a result, and being disciplined, we made a number of changes and transactions in our Model Portfolio yesterday.
Most of our transactions were on the BUY side and we have reduced our cash allocation significantly but have not yet closed our hedges and short positions.
We increased the allocation to Europe by re-instating positions in BNP Paribas and Unicredito, by investing in trackers on the DAX, the Netherlands and Spain and by increasing our exposure to Greece.
We averaged down on our Japanese ORIX position.
We re-instated our positions in Chinese leveraged ETFs, added Malaysia and New Zealand to our Asian portfolio and, finally,
We built new exposure to the soft commodity space through leveraged trackers in WHEAT, CORN, COFFFE and SUGAR. These are baby-step positions as we do not exclude further weakness before a significant rise later in the year. see our post ( time to invest in Soft Commodities ? published yesterday.
We also increased our Short Palladium and marginally increased our long Platinum.
New Asset Allocation
We increased our long equity long positions to 79 % of the portfolio while our equity shorts remain at 28 %.Cash came down from 45 % to 26 %