It would have been nice if our models had gone to a hedged position a couple of weeks ago but we use earnings as a timing mechanism and earnings are only now rolling over and I think this is just the beginning. Our models have formally gone to a hedged position so the risk is very high and preservation is paramount.
This signal is relatively weak so time will tell, on a subjective note I don’t trust 2012 estimates at all, at least not until they come down hard. If anyone honestly thinks $112 estimated earnings for the 2012 S&P 500 is achievable then you must be having a Woodstock flashback.
Trading and “investment” opportunities remain: Precious Metals (PM) and on the Dark Side with Inverse ETF’s.
And if that isn’t gloomy enough: David Crosby of CSNY turns 70 today.
Long SDS, GLD, SLV