Author: Paul MacNamara, Strategic Investment Partners
Disclaimer: Paul MacNamara owns SSO in his Covestor Capital Appreciation ETF model.
August 12, 2010: July marked our sixth consecutive month of outperforming the market and six out of seven months since inception under CV. The market made a dramatic rebound in July even with continued concerns over the macro environment and the possibility of a double dip recession in the U.S. Major concerns still plague the market as voiced in comments by Fed Chairman Ben Bernanke’s Congressional testimony this month. The market dropped over 1% on his “Unusually Uncertain” comments.
We see a continued battle into the fall as data points either confirm or deny the direction of the U.S. economy. We believe weekly unemployment and global growth will continue to drive the market on a short term basis and create volatility. We maintained our position in SSO the 2x leveraged S&P 500 Index (near par) and did one short term trade increasing our position in SSO and our leveraged position. This short term trade made a positive return and helped us outperform the market for the month. We see continued volatility for August as the S&P500 strives to hold 1100. We will continue to look for opportunities to trade around our core position for the month of August as corporate earnings come to a close.
