Below is a client email alert that was sent earlier today …
I wanted to send you a quick ‘status’ update just in case you have not logged into your Resnn account recently. In light of the market’s recent weakness, we have been taking a very cautious, defensive approach. Early last week we exited margin (for our clients that choose to use margin), and we moved 25% of all our accounts to a cash position (leaving 75% invested in the market). Today we increased our cash holding to 45% cash (55% invested in the market).
Raising cash in light of the volatility we are seeing is exactly what the model is designed to do. Protecting our original investment is paramount to trying to profit in volatile markets, and this is exactly what we are doing … protection is key.
The market is due for a bounce (up) and the strength of that bounce will be very telling as to which way we go next. I am watching our client portfolios very closely and letting the data lead the decision process. The model is acting as it should, focusing on protection at this point.
If you have any questions, please feel free to call or email me, otherwise … I just wanted to let you know that we have moved from a profit motive to a protective one.
I will send you more updates as the market gives us more clues as to the longer term direction of the market.