Weekly Commentary

August 10, 2010

The markets have been in a fairly tight trading range for a little more than a week now. The short term trend is positive but overhead resistance from the June high levels are proving to be a tough challenge to clear . Overall market volume has decreased steadily over the last few weeks, but when we compare advancing volume to declining volume, we see that advancing volume has decreased at a much faster rate. This does not necessarily imply that this is a higher risk market, it simply indicates that the positive volume that had been pushing the markets higher during July has now waned, as market participants wait for some economic factor to drive prices into a new phase. The Stadion Investment Model continues to signal for full equity allocations, based on risk objective. In the last week we have seen our longer term trend indicators beginning to participate, with recent positive price action taking precedence and negative movements from April and May being weighed less heavily in the calculations. As the model continues to signal for allocations to the equity markets, we continue to vigilantly monitor our current positions, as well as the Stadion Investment Model, for any changes. We are well positioned during the current sideways trending market to react to any changes moving forward. If the markets breakout to the upside we are positioned in selected equity ETFs to participate in any positive price movements that may occur. If however the markets breakout to the downside, we will be able to quickly move our portfolios to more defensive positions, and protect our clients' "serious money". - SMM-082010-168

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