Discipline trumps conviction and despite whatever I may think that the risk isn’t large at this point our market models are flashing no better than neutral at this point with some at an outright sell. For the past month profits have come with the ease of fighting an uphill battle and I’d prefer to raise cash and wait for a bullish trend to re-emerge.
While we may be at or near a market bottom in terms of our indicators, experience has taught me that in sell offs such as the one we’ve witnessed will typically need a second bottom which could come from a lower level in the markets.
In addition we have significant gains to protect, which is of paramount importance.
This does not change my opinion that there will likely be a very sharp rally in the second half of the year.