June is very close.

Asian and European exchanges lost some gas last night with nearly everything in the red.  S&P, as well as Nasdaq futures are predicting a down open for this morning.  Oil and precious metals are up, while the buck is down.  It appears that we are back on the track of the bear this morning after a brief respite.

   uh

I bought a 2% GRZZX position yesterday, though without much enthusiasm.  Added to BEARX, that's roughly 5% or so in bear market funds.

Reasons:

• Short-term failure to take the 200-day MA (S&P, DJIA)
• Movement of Banking sector in the opposite direction (it led us down on previous moves)
• Fading volume on rally
  
• Seasonality
• Overbought conditions short term

Just an ounce of prevention, not a big bet.  Am still long the usual suspects.  But this does tilt my portfolio towards a long "global growth" / short US weakness stance.  A counter-trend rally would leave me a vulnerable, to put it mildly.

Based on this AM you are looking quite timely. Good call.

I opened a position yesterday in MERKX -- about the same size as your GRZZX. So far so good. The $US is a basket case today.

I hate to say it but I am glad we may have a serious drop today. I essentially completed my defensive positioning yesterday that I had been doing for two weeks. So a real time test of how my portfolio performs on a down day is welcome.

I just sold my REIT position. It was a momentum play and the momentum went away. Made a small profit but need to reexamine the thought process that got me into it. In short I was bailed out but a nice general stock rally.

Unless the bottom falls out in the next ten minutes, it looks like little or no technical damage has been done on the major indexes. 

• Short-term trend channel:OK
• S&P 1407: holding
• Breadth did not worsen during the day even though the S&P did
  

It looks like banks & housing are leading this drop.

DI: REITs seemed way overvalued to me, but perhaps I was missing something. 

My NLR is finally on the move.  It certainly took its time getting started. 

(Just a quick peek - haven't had the TV on or been paying close attention.) 

Norbert, Look at the top 25 holdings for BEARX: 23 short, 2 long:

http://quicktake.morningstar.com/FundNet/Holdings.aspx?Country=USA&Symbol=BEARX

norbertc:

DI: REITs seemed way overvalued to me, but perhaps I was missing something. 

As a momentum play they usually get overvalued sooner or later. Since I made money I guess it was less overvalued when I bought it. :-) Actually Norbert it is your fault. You suggested the approach and I modified it and ran a test. Made money but just by the hair of my chinny chin-chin. Like I say the market bailed you out.:-)

Nuclear is going through a second awareness period after a year of dormancy. Not sure the current US political environment is more favorable but the rest of the world is moving on while we burn food.

On the Omen watch we had 69 new lows today and an Omen required 72. Close but no Omen but the Bears may demand a recount.:-) One aside we had more highs than lows today in a day when the Indexes dropped a lot.

You guys will be delighted to know that I finally got it right.  My former DUG position is now my Grzzx position.  Other than that I had no reason to make any changes in my port as the market slid down. 

However, the BLS has not learned a thing yet.  The PPI came in as good as it did because energy was seasonally adjusted as they did with the CPI numbers.  The adjustment shaved an additional .2% off the PPI figures which are higher than expected as reported.  I think the fed has no choice but to begin focusing on inflation and let the economy slide a bit.  Add that to some seasonal factors and I feel it is time to go short on McCain. 

uh

My bull-sense is telling me that we're all being fooled by this rally.  It appears so obvious that it is a fake-out and the market is going back down...that I don't believe it.  This contrarian is putting a little back into equities tomorrow.

Regardless of the near-term direction, I'm comfortably positioned going forward; long on credit (carefully selected), long on interest rates (not on bonds), long on Asian currencies, short on volatility, and long on gold (just in case the rest doesn't work).

If I told you 1 year ago that oil would be 120+ and the stock market would be going up would you have locked me up?

Mattwright: Yes, it's possible that yesterday's dip was just your typical double secret reversal pattern.  It didn't seem to cause any technical damage, so the short-term uptrend is still OK. Your market sense has been very good since last Fall.  Are you actually shorting the Vix?  What are you using on Asian currencies (I have PLMIX and am waiting on Mohamad El-Erian to get cracking with his new fund).  I'm still very long GG, as posted ad nauseum.

It's very hard to say where we'll land by October.  My 5% in bear funds is a combination hedge / long-short play. No bets on interest rates - a man has to know his limitations.

The German IFO came in stronger than expected.  European equities like it.  So does the Euro, unfortunately. Crude popped again, no big surprise.  Global Growth wins another inning.

The Hang Seng and Shanghai indexes soared as the afternoon session opened.