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We think the summer correction could be at hand, though obviously this will only be confirmed in time. The volume of the selloff from Wednesday thru Friday is a good indication.

As we indicated in an earlier post, we are roughly 15% in cash and 5% short the S&P 500 (NYSEARCA:SH). Should we sell off roughly 3%-5% in the S&P 500 from peak we will reverse the short trade. Anything below 5% we will start to work cash back into the markets. We lost ground in May against the indexes, but should start to gain rapidly with the short position on the S&P 500.

We also think the time to exit DBV or lower our exposure could be on the horizon. We continue to stay overweight on large caps with a bias toward growth over value.

SH 1-year chart:

Pro-Shares S & P 500 chart

Source: Is This the Summer Correction?