Market Wrapup - RF Technicals are at pivtol point

Sorry for the late delay, been really busy. The market rallied huge today, monster gains across all the indexes. I didn't buy anything into the rally, only some ultrashorts, to hedge myself and keep my gains (and hopefully expand them).

As for the market, we are at a pitval point. My indicators show we are officially overbought; however, with the DOW arounds 8000, mutual fund managers may come in and start buying. According to the RF test, I think we can retrace an easy 10%; however, if cash comes in off the sidelines, this day markets the beginning of the buying and zoom we go. I bought some FAZ and SRS today because I think a pull back is in need; however, we may not get it and its a tiny percent of my portfolio, in case we rip higher.

Going forward I will keep my long inventory in: PCU, TTWO, NTGR, and IBKR.

In the longer-term, I will build positions in select Financials, Energy, and Commodity based names. For the short side, I will aim at commercial real estate and select oil service names.

My asset allocation is right now (in this order):
1. Cash
2. Long
3. Short
4. Fixed Income (Long Treasuries)

An ideal porfolio in this market condition if you have to be fully invested is (in my view):
20% long treasuries or short-term corporates (like berkshire, GE, or Utilities)
30% short (Com RE, Oil Explorations Firms)
50% long (Financials on a dip, Energy, Tech, Industrials, Basic Materials)

I think we will catch a short-term dip in financials, then I will buy them. I would avoid Citigroup due to the broad dilution of shares, from the government cash injection. The firm has limited upside in its equity because of this, in my view. BAC is an interesting one. They had a great bank to begin, bought Countrywide, which had junk but also some good stuff, and one of the best brokerage houses in the world, in Merill Lynch. I might buy some of this on the dip as a speculative financial; however, JPM will be the best of breed. I like high teen's, low $20's for entry points in JPM. Jamie Dimon (CEO of JPM) bought $15 million worth of stock at $22, so I would try to get below that for an entry.