We believe we’ve been rather clear about our view of the equity markets here in the US and abroad: this is a bear market and it began, with the benefit of retrospect, back when our International index made its high May 25th at 11,186. One only knows the high of a bull market and the low of a bar market in retrospect, but the important thing is finally to recognize that fact and when recognized to trade effectively. As we have said here for years, during a bull market there are only three positions that one can have: aggressively long; modestly long or neutral. In a bear market, one can have only one of three positions also: aggressively short; modestly short or neutral.
In our retirement funds here at TGL we began last week and indeed we began the year modestly long but by the weeks’ end we had shifted to modestly net short. We have had no choice. The market’s voice was loud and very clear.