Ouch! So much for my “Sell the Tenth Consecutive Up Day” model. I shorted the S&P 500 September 1050 calls, which expire in two days. The trade was looking good all the way until this morning, when I got stopped out with a 0.5% hickey. It’s no excuse that this works 99% of the time. This is well and truly a liquidity driven market, the kind I used to feast on in Tokyo during 1987-89, when we took Japan’s PE multiple up to 100. The S&P earnings multiple has now made a round trip from 18 times in 2007, to 10 times in March, and back up to 18 times today. Worse, the previous 18 peak was in an era of far rosier economic projections than we are currently grappling with. Don’t fight the tape. Stand out of the way, and let the insanity play itself out before rebalancing your portfolio. At least I have my gold, silver, copper, crude, junk bond, emerging markets, FCX, BYD, water ETF, and short dollar profits to drown my sorrows in.