1) High short interest
2) Yen carry trade falling apart
3) Sub-Prime blow up continues
4) Falling housing market
5) Slower consumer spending
6) Rising global rates
7) Oil, gas, food prices continue to rise
8) Fed and inflation
9) Trade deficit
What To Do?
We continue to hold to our guns with being conservative. Obviously, we are getting knocked on performance. In the short term we continue to monitor high yield for possible entry. We may add to our Short S&P500 ProShares (SH) holding, as the percentage becomes smaller due to an increase in equities.
One last, bright point in the portfolio: Our overweight in growth seems to be paying off as the gap between growth and value has closed in relation to the S&P 500.