WAM Strategy Note: Time to BTFD

Moving Long/Short and 60/40 strategies into an overweight equity position with room to add on weakness.

Disclaimer: For informational purposes only.

Discussion

Yesterday I discussed how the market was setting up for a BTFD moment once SPX’s 20/50dmas caught up to the Index, as the FEDeral Government Put is very much alive and well. With the move down in SPX this morning to its 20dma, and crystal clear evidence of the FED Put beginning to course through the system, it’s time to start moving into an overweight position in equities. As such, I moved my WOTE US Long/Short Equity strategy into a 200% long position via the SSO ETF, and the WOTE US 60/40 strategy to a 70/30 SPLG/BIL position (a 10% OW versus the 60% benchmark weight). On any further weakness - perhaps in and around the June 12 FOMC meeting - I will bring those OWs up to 300% and 80%.

A tell-tale sign of stocks working through a durable bottoming process is when VOL and CDXs are down alongside the market, as is the case today. Further, the fact USD is down and BTC is up says FED liquidity is beginning to enter the system.