Intel Leads The Market

There’s no question as to the catalyst igniting yesterday’s rally. It was Intel’s bullish earnings report followed by strength in energy and financials.

The gains were the best for the Dow and Nasdaq since the end of March and for the S&P; 500 since the beginning of April. This now marks the third straight day in a row that the indexes have closed higher.

Expectations rose again that an economic recovery may actually start this year, a view that the Federal Reserve supports. However, I am not sure if this enthusiasm will eventually clash with the Fed’s latest economic projections that pegs the national unemployment rate at 10% this year and hitting 10.6% in early 2010.

While unemployment is a lagging indicator, a lack of improvement will eventually affect corporate bottom lines, since unemployed people tend not to buy new cars and houses or go on wild shopping sprees to spend now and pay later.

Be that as it may, right now the markets have moved higher and so have our Trend Tracking Indexes (TTIs), which are positioned as follows:

Domestic TTI: +2.71%
International TTI: +10.45%
Hedge TTI: +0.79%

We are holding on to our hedges and a few long positions. I will jump back into the international arena once upward momentum has been clearly established, which means I will wait until the old highs have been taken out.