WEEK 11-12

I am back to about 4% YTD, which is really not that bad considering how under-invested I am presently. I am holding approximately 50% in cash, and the remaining 50% mostly in rather defensive positions. The markets really surprise me as the pull back, while volatile, remains rather shallow. I would have thought that it would be much deeper, given the run we had since last August. Having said that, the market is always right, and you can't argue with it, just like you can't really argue with your boss (you may disagree). I remain not convinced though. Moreover, I still don't see a lot of compelling buying opportunities. A lot of names on my watching list behave like the market, with some pull back, buy not sufficiently and compelling. The next couple of months could be important and my feeling is it will run a bit, one way or another, before the summer dull. The question is which direction will it run? I wish I knew. My gut feeling is that it will go down and hard, maybe another 400 points day, then consolidating until September. This has been a rather difficult year for investors. Pros are not doing much better.

The only transaction I did in the past two weeks was that I wrote some covering call on QCOM (July 50).

Position: Long QCOM, Short QCOM July 50 call.