ENJOY THE RALLY

That’s it. That’s all that we have to do. The SP500 closed again at historical high level of 1,951. Crazy, only 49 points difference from the 2.000 points. Yesterday US markets finished marginally higher. Only SP500 slipped Tuesday, halting a four-day streak of record closes and has advanced 7.4% since a low on April 11. The Dow closed at an all-time high and made its 10th record close this year.

• Dow 16,946 +3 +0.02%
• Nasdaq 4,338 +2 +0.04%
• S&P 500 1,951 -0 -0.01%

The SP500 has risen for 32 months without any decline bigger than 10%. That is quite significant versus the average of 18 months since 1945. The SP500 is up 5.5% for the year to date. Overbought? I don’t guess so. This percentage doesn’t tell me it is a bubble, not at all.

On the other the short term risk has increased while the VIX dropped 5.9 percent last week to 10.73, the lowest level since February 2007. That guides me being more suspicious and reducing the exposure, but being bullish further. Honestly we started to buy the VIX last week because at this level is reasonable to own it.

The BFM Assets Team.