The market continues to trade near resistance levels. It appears overbought using the stochastic oscillator (noting that the indicator and the price trend have diverged), but looks more positive on the MACD.
The curve ball to this is that today is when the Bureau of Labor Statistics releases the monthly employment statistics, in our opinion the most over exposed, overhyped economic statistic. However, too many economists and investors put credence into this massaged and modeled monthly statistic monthly for any one investor to completely ignore. Either way, the consensus is looking for a creation of 100,000 jobs, a number that may be hard to reach considering the rise in new jobless claims in recent weeks and the slowing global economy.
Our portfolios remain defensively postured with the largest asset exposure being cash and equivalents. We remain heavily exposed to coal stocks, which have contributed greatly to performance as of late with the group catching a bid.
The group, as exemplified by the coal stock ETF (ticker KOL), appears overbought short-term, but both the RSI and MACD are more positive and rising. In addition, our long-term technical indicator is showing that the coal stocks are at or near an attractive entry point. We may see a consolidation shortly, but would expect the gains to continue with an improvement in the fundamental outlook.
As for the remainder of the portfolios, we remain exposed to precious metals and precious metal stocks, the thesis here being that continued monetary actions and/or an eventual move to a gold standard will lift the price of the precious metals and the respective stocks. We also have exposure to the dry bulk shippers, thinking that the industry is at or near an inflection point of fleet deliveries and scrap rates. We also have a small short exposure, which was taken on back in April. We had taken our principal back on the hedge and await further indications as to what direction we will take the remaining position.