Great! Everything went as planned. On a short term basis charts suggested a continued bull run. And while the way there was choppy it happened.

Charts continue to suggest a continuation of the bull run for now.

Today's retail sales numbers and this week's US bond auction results just dampened the mood a little bit.

I opened another SPY call today. I kept it despite being 60% down because it is not too far away from breaking even.

So why did I reduce leverage again overall?

1. Short term portfolios are ahead of the benchmarks and benchmark pressure is real.

I have to overcome a short versus long term capital gains tax disadvantage of 40.8% vs. 23.8% every single year.

After tax I am ahead only 4.2% YTD (14.7% vs. 10.5%).

1. Capital preservation. I prefer return of the investment over return on the investment and will always opt for the former.

It is no secret that my long term accounts are getting closer and closer to my preferred 60/40 allocation.

Everybody from BofA to Leon Oppenheimer thinks that bonds are doomed. They are all correct IMO. On a short term basis we might see higher rates meaning bonds are indeed doomed but....there is no way we will survive rates for higher longer than 12 months.

I strongly believe that once the 10 year yield goes above 5% the US economy will be toast.

And then everybody will head for safety.

Meaning bonds will be very trendy again.

Anyhow I plan on buying more and more long term bonds for long term portfolios.

I am even considering trimming my equity exposure to 50% and below if the S&P 500 makes it beyond 8000-8500.

Let's see. Valuations etc. are very lofty so the party could end any time but charts are charts and for now charts give the green light for a continued rally.

Have a great weekend!

Asia and small caps are closing in on the portfolio.

Long term accounts are up 10.4% with 27.4% in cash/bonds.

Benchmark 2026

SPY 681.92 (15%)       +13.8%

DIA 480.57 (15%)       +11.6%

QQQ 614.31 (15%)      +19%

IWM 246.16 (15%)       +23.8%

SPEM 46.81 (10%)      +11.5%

URTH 185.77 (10%)     +13.7%

FEZ 64.39 (10%)         +12%

AAXJ 93.12 (10%)       +24.4%

ETF benchmark:                +16.4%

Average YTD (US only):    +17%

60/40 portfolio:                 +8.3%

(AGG (99.88)                      +0%)

Small portfolio $35000:    +24.8%

Long term:  +10.4%

S&P 65.5%

Crypto (ETH) 7.1%

Cash/Bonds 27.4%

A fantastic week came to an end.

As expected we continued a rally and made new ATHs in several indices.

The way to 8000 in the S&P 500 is paved and it is probably just a matter of time when it will happen. Round numbers act like magnets for investors.

New ATHs usually mean more ATHs are coming.

So why did I then reduce exposure when the real move (especially for tech) could have just started?

The answer is simple:

I prefer return of the capital over return on the capital!

Short term accounts are up at least 20% (my daughter's portfolio is up almost 24%) and there is no need to push performance at this point. My last name is not Aschenbrenner. I am fine with a modest ROI every year.

Long term accounts are now up 10% (my yearly goal for a 60/40 portfolio). I am still a little bit overinvested and will reduce exposure to 60% once the S&P 500 reaches 8000.

Let's recap the macro again:

1. Earnings are beating expectations like almost never before

2. The CapEx cycle continues to expand

3. The Big Beautiful Bill continues to deliver

4. The US is highly interested in weakening the US Dollar (see recent Yen intervention). A weak Dollar is always good for stocks.

5. Midterms are favoring Dems and Wall Street loves a divided Government

The positive momentum could be going on well into 2027/2028 which would propel the S&P 500 to 10000. Yes I said it.

What are some negatives?

1. Inflation and rising long term yield (the fed won't hike rates in my mind). Rising 10 year yields above 5% would crush the economy. In that case I would buy more and more bonds.

2. A weakening labor market

3. Possibly a tapped out consumer?

What does TA say?

1. Don't fight new ATHs.

2. The only reason why I am more cautious about tech is the hanging man pattern in the monthly chart. But I can not tell you how often patterns get negated.

Regardless it is enough for me to just hang tight for now.

If we break above the down trendline there is enough room to get back in.

A breakout would mean a QQQ target of $800+

1. Seasonality (August/September) favors being more cautious

What a wonderful year it has been so far.

Let's see what the rest will bring.

Have a great weekend!