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Market Direction Change On Horizon

|Includes: SDS, ProShares Ultra S&P 500 ETF (SSO)
 
Mistakes were made and the correction in its order is proceeding.

For the major indexes, as wave form follows wave function, the minimum Fibonacci technical retracements of the 2008-2009 crash have been met. As investor sentiment now nears 90% bullish, it appears we are close to the end of this rally, and presented with an opportunity short the market relatively painlessly, and to ‘buy low’.   
 
4% of our holdings are in SDS, with the balance primarily in safe treasuries, having moved out of SSO. We are minimizing our SDS entry price via dollar-cost-averaging; moving progressively until we’re 30% short by the end of fall.
 
While a dip and rise to new post March highs may occur, we will have a risk-limited position for the upcoming swoon.

Why a renewed crash?

Growing unemployment, more wide-spread personal and commercial defaults, and the continued contraction of consumer spending will continue to effect revenues and profits of already stripped down employers who will continue to shed workers. It’s a deflationary spiral and until the real bottom is reached (when the bad credit is all wrung out ot the system) it’s going to be a bumpy ride down.

Fiscal stimulus and QE will be frustrated in applying the brakes to the deleveraging still to occur. Share prices will only follow the social mood downward. The reality of the crash will in the not-too-distant future be recognized for what it’s doing, and it’s not what most used to believe.