There are no changes to the Model Portfolio this week.
This week the DJIA reached a new bull market high confirming the highs recently set by DJTA, Nasdaq, S&P 500 and Russell 2000 equity market indices.
Economic: From an economic perspective, the ISM Manufacturing Survey in the United States delivered better than expected results, while consumer confidence reported by the Conference Board in the US came in lower than expected. For the week starting 4th November, we look forward to updates on Factory orders for August on Monday,ISM Non-Manufacturing PMI for October on Tuesday, 3Q2013 GDP and initial jobless claims on Thursday and the US unemployment report on Friday.
Technical: From a technical standpoint, the indicators remain in a steady uptrend. Market breadth as measured by the Advance/Decline Line continues to confirm the recent price highs set by the main equity market indices. Also, market volume continues to expand on rallies and taper off on declines. There is very little selling pressure to speak of at present.
Strategy: Despite the continued positive technical set up for equity markets, we continue to maintain a cautious stance in the model portfolio due to valuation concerns, stock markets being overbought in the near-term and investor sentiment having reached an optimistic extreme,
Next update: Monday 11th November 2013.