The Market Sucks In People And Then Drops Precipitously From The Highs...

Typical. Can't say though that it wasn't predictable -- I had already said that it was time to reduce longs and think about opportunities to short. Am not saying that the market cannot go higher -- in fact, it probably will, as all mature bull markets overshoot, as they tend to suck in performance chasers/momentum "monkeys" to jump on the gravy train. The smart thing though is to wait on the sidelines when things seem out of whack. And things have seemed out of whack lately -- emerging markets have weakened, bonds have sold off, and people are still quite unsure as to where Bernanke stands.

Speaking of Big Ben, anyone who read his speech from the other day would conclude that the man not only has a bigger ego than Greenspan (if that's at all possible); he also likes to "talk", just like any gifted academic. Greenspan mumbled, and in his mumblings, there was something for everyone. In his effort to be "clearer", Bernanke basically sounds more confusing... Counterintuitive, I know, but that's the way it is unfortunately. Hence, bonds sold off, and so did equities with them, after the latter didn't manage to break technical resistance at recent highs (1310-11 in the SPX -- the upper end of my March SPX target). It's tough to be short out there, I know, but it could actually get a bit easier during the next quarter. Stay tuned.