Market Outlook - August 31st

Well, we are entering a big week full of data and month end, it will be rather interesting to say the least. Below illustrates my portfolios and each are positioned for a correction. Since March, I am been looking for $105 on the SPY and that objective has been considered “close enough” for my taking. Since it seems achieved, I began building heavy short exposure. I believe we can either have a quick, shallow correction of 3-5% OR if economic data circulates fear, we could see a 10-15% correction across the indices. Then again, we may not. In terms of being "overbought" the NASDAQ is a touch overbought but the NYSE seems more "overbought". That being said, I have found a few stocks that have good value. I will post them when I buy this week; however, these are considered “slow money” with solid dividends and low betas. If you are an investor with a longer-term time focus (rather than 2 weeks) these are worth a look. I will hold these names regardless of a fierce “correction” because these firms have solid business models, are cheap, and have underperformed the junk.

Portfolio 1: Long/Short Book
Short Exposure 77% - Short QQQQ, Short IYR, Short SPY, Short LVS, Long TWM
Long Exposure 23% - Long F, BAC, RIG, STAR, and UNG

Portfolio 2: Long Only Book
Long Exposure 55% - Long ENTER, LVLT, WY, SLM, VALE, RTP, AMD, TSRA, HES, TSO
Cash 45%