I believe Monday October 6 at 2.45pm (US market time) could mark a significant market bottom. Whether it is the market bottom remains to be seen, but certainly a tradable bottom was more than likely put in.
As I have mentioned before the signal I have been waiting for is a watershed of fear. The volatility index (VIX) spiked to an all time high yesterday, hitting 58.24.

Fusion Investing Portfolio

Consequently the Fusion Fund is investing heavily. The fund currently has 69% cash, $681k. The fund bought the following:

• NASDAQ Index via QQQQ at close: 5000 shares at $34.86
• S&P 500 Index via SPY at close: 2000 shares at $104.72
• SPDR S&P/ASX 200 Fund STW.AX: 5000 shares at $42 (current price)
• For a massive one day purchase of $593,740.

Reasons for this action:

• I won’t have the time over the coming couple weeks to closely watch the markets.
• I have been waiting for the VIX spike, so to not act now would be contrary to my plan and would indicate I have been influenced by the very fear I was waiting for.
• I purchased index funds/ETFs as with earnings looming I do not wish to invest heavily in any one specific company.
• I purchased 2:1 US index as the Australian dollar just hit a three year low of $US0.6985. The Portfolio will use the slightly higher $US0.7005 which prevailed around US market closing time. While the downward trend of the AUD is very strong, like the stock market I believe the highest probability is that it is over done in the short term and will bounce. While timing two markets, stock and currency, simulataneously is not my ususal style these are not usual times. [UPDATE: That was a bewildering stupid comment by me and contrary to all I have said previously. It was early I was rushing. Very stupid. The current fall of the AUD appears overdone and if the AUD strengthens this will be bad for the large US positions the portfolio took.
• I purchased the funds with a short term objective of trading the bounce from the current oversold conditions.

Fund Update

I have updated the Fusion Portfolio spreadsheet and PDF, both can be accessed from here. The Fusion Portfolio’s outperformance of the ASX has increased with the recent market panic and now stands at 20.45%. I still have to account for AUD:USD currency rates. My current intention is to do this upon sales of US stocks or at the portfolios anniversary, which ever comes first.

Related posts:

1. Fusion Portfolio Trade
2. FI Fund buys STP and GE
3. Exciting Times
4. Fusion Portfolio Update
5. Fusion Investing Portfolio Q1 2009 Update
6. Nice bottom! An exploration of P/E