Tetrapod's  Instablog

The current rally is getting long-in-the-tooth, and is due for a significant correction.  It's time to make a gradual shift from aggressive growth areas (Financials, Tech, and Real-Estate) to a more neutral to down posture.  Make this transition gradually over the next month.

Best bets:

Precious metals and pm miners, especially SLV (silver etf) and GDX (gold miners).  These should remain neutral as the high-risk end of the market continues to rise, and should rise substantially when the market starts to decline.

TBT (inverse 2x 20 year plus treasury ETF) -- This will do well as the market travels sideways.  It will go down if the market totally tanks and risk-aversion returns in a big way.  It will go up gradually if the market rises.

Retain PGF (Preferred Financials) and PFF (Preferred industrials).  These yield around 10% and have moved up sharply (140%) during this runup, but are less risky (less volatile) than other growth vehicles.

Retain some commodities exposure.  I recommend a small position of UYM (Basic Materials ETF) and XME (Metals and Mining ETF).  These could be very volatile, and should not be more than 10% of your portfolio at this point.

Disclosure:  Long TBT, PGF, PFF, UYM, XME, SLV, GDX, UYG, URE, ROM, USD