Dow 2009 High, Strong Commodities and Weak Dollar

The Dow hit a closing high for 2009 as the rally that began in March continues. We did see some risk indicators turn negative this week so we are beginning to dust off our defensive plays. This may mean setting tighter stop loss points, raising cash or buying inverse funds depending on your risk tolerance. We are still in a longer bullish trend but we may be starting to see that pull back that everyone has been calling for.

Commodities were strong this week as gold hit a new all time high. We also saw our indicators for commodities turn back to positive after a period of consolidation. We would be over weighting commodities and commodity related stocks here.

Along with the strength in commodities we saw weakness in the dollar. This would have us leaning toward commodities, obviously, as well as non-US areas of the market of which emerging markets have reestablished themselves as leaders.