Model Portfolio Update - 12/21/2009

The market is STILL trading in a range. I can see two scenarios playing out at the moment.

• 1) We drop hard in the next week and begin the next down leg of the bear market
• 2) We bust out of the top of the trading range and set new highs going into the new year in a blow off top.
  

I feel like I am leaning toward scenario #2. The dollar has rallied over the last two weeks and the market has stood firm and hasn't given up an inch. Stock market bears are MIA and with the dollar likely to take a breather over the next few weeks I believe we could see a good rally into the end of the year.

Because we could fall from here I am lightly positioned short. If we do rally from here I will greatly expand my short allocation; if we fall from here I will short into any bounces along the way. Here is a look at the portfolio right now:

http://apps.facebook.com/kaching/portfolio/516251517/holdings

Here is a list of potential shorts I have complied from various locations:

ED, CNP, X, CENX, CI, LUV, MRVL, AXP, CAL, CMS, CMCSA, D, DAL, DUK, LOW, MHP, PCG, PEG, XLU, XEL, UAUA, BA, USO, GE, DOW, FXB, NBG

So we wait. With only a small amount of my portfolio invested I can wait for awhile. I'll post another update when soemthing dramatically changes.