Condition Bear Market Rally
S&P Target 1020
Small Portfolio IAU & XLF 14.19%
Hedge XLU -1.18%

Position Date Return Days Call
GCI 7/14/2011 12.93% 252 Hold
CSGS 10/3/2011 24.26% 171 Hold
NLY 10/25/2011 -1.34% 149 Hold
DD 10/27/2011 7.98% 147 Hold
KBR 10/27/2011 23.06% 147 Hold
VG 10/27/2011 -34.73% 147 Buy
TTM 11/30/2011 54.84% 113 Hold
BT 1/4/2012 11.51% 78 Hold
PDLI 3/7/2012 2.45% 15 Hold
CLF 3/19/2012 -4.07% 3 Hold

S&P Annualized 4.36%
Small Portfolio Annualized 17.50%
Mousetrap Annualized 19.05%
Hedged Annualized 17.60%

The most amazing thing about this rally is how consistent it has been in regard to the money flow between the sectors. For the entire ride financials have been long and utilities have been short, and even with the action today that is still the case.

My friend Len is looking for a correction. I’m looking for an end to this rally – but I don’t see it yet. There just hasn’t been any meaningful shift… yet… into a defensive posture.

The model is holding its hedge – shorting utilities. And when you think about it, shorting UTILITIES is about as ambivalent a hedge as you can get. This is a market that punishes sudden moves, and it punishes decisive ones most of all.

Boring is a good thing.

Tim