There is not much time to post from the time that the COT comes out and the close. So let me tell you what my plan is for both the Model Portfolio and my personal account.
As you should know by now there are three COT strategies that I have written about. If the commercials flip today, I’m going to use one of the “buy strength and sell weakness” strategies for the long signal. In other words, since it is highly unlikely that the S&P is going to close down for the week, I’m not going to do anything today. I’m not going to cover my COT short positions and I’m not going to go long. Why? Oh, part of it is seasonal considerations. Part of it is I don’t trust the move that we’ve had, but most of it is just good old intuition. As you know, over the long haul, it doesn’t make much difference which approach you choose. They all have performed very well.
The risk you take by waiting a week is that this market could just keep going up. But I’m not taking much of a risk in the Model Portfolio because it is only 30% invested. As always, each of you must choose your own approach.
I’m also going to hedge part of my short position in both the Model Portfolio and my personal account by buying the DIA on the close if the Dow stays above 9504. I’ll take a 10% position in the Model Portfolio.