Morning Note: Patience and Caution are Key Right Here…

Quick one this morning…


Asian equities were slightly green in the aggregate overnight. Europe’s up a bit this morning while in U.S. equities, the Dow and the S&P are flat, Nasdaq’s up .4% and the Russell 2000’s down a hair.

The VIX (S&P 500 Volatility Index) is up 2.4%, at a dangerous 34.46 as I type… Other vol indices point to turbulence (at the moment) for the Nasdaq, for oil, for the Euro and for energy equities, and relative calm for foreign equities and precious metals. 


Oil’s down 1.25%, Gold’s off $7, Silver’s up .27%, Copper’s up .8%…


The dollar’s up .3%…


So, kind of all over the place, with no clear short-term signal this morning. Other than expect volatility I suppose…


We pulled the plug on our tiny UUP (dollar bull ETF) position this morning and replaced it with a base metals ETF. Over the past few weeks we’ve been at the margin building a bit more commodities exposure. Call this an early play against the potential for a weakening dollar going forward, not to mention adding more true diversification to our core portfolio, and, not to also mention, prospects for infrastructure spending going forward. 


If we end up correct on our longer-term (again, we could be a bit early, which seems to be our MO) weaker-trending dollar thesis, we’ll incrementally (and very carefully) exploit other related opportunities (foreign equities, for example) as they clearly present themselves. 


Patience and caution are absolutely key given present conditions…


At the moment (the day is still very young, mind you), our core positions are split right down the middle, half up, half down on the morning so far. Coincidentally, this morning’s addition, DBB, is up nearly 1.1% (although I suspect that’s mostly our fault). Also, speaking of relative calm in foreign equities at the open, our three non-US equity positions are nicely in the green.


Watch for my weekly message today (it’ll likely be a video). I’m going to share some of what we’ve discovered (or confirmed) from our latest work on historical volatility…

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