This Correction May be Coming to a Temporary End

Yes, I know there is plenty of ambiguity in the title of this discussion. What I mean is that the uncertainty surrounding several issues mentioned in these discussions before have, at least for now, been resolved. Bernanke was reconfirmed, and whether he has done a good job or bad job, at least the market knows WHO will be heading the FED. The uncertainty of his confirmation, I believe, had plenty of investors sitting and waiting. The market had a nice run at the beginning of the month and then dropped considerably in the last two weeks. I think investors can now apply their asset allocations with slightly more comfort and we will see a reversal very soon. I mentioned that the correction may have come to a 'temporary' end because even though I think the market will recover in the immediate short-term, it's possible that it will go through yet another correction in the coming months. It's just too sensitive to bad news and the inevitable truth is that even in a recovery, we will receive economic data that disappoints and we will have periods of uncertainty that will cause investors to pause. Over the last year, I have been using the 3X leveraged ETF's and invested a bit more nimble than I have in my entire career. I was able to capture a substantial multiple of up months and minimize losses when the markets declined. Using options, I was also able to protect my portfolio during sudden and dramatic drops. I don't recommend this strategy for everyone. I'm still a proponent of asset allocation! But in this environment, nimbleness can generate alpha.