The S&P 500 is finally trending down after going through a monstrous rally:
This is getting very close to the prevailing trendline. If it breaks then most of the technical traders will take the index down further. What is most fascinating is that the longer term interest rates haven’t gone down over the past 10 trading sessions, which suggests that there has been a decoupling of the “risk-on”, “risk-off” mentality.
Thus, we could be entering into an environment where everything will drop, equities and bonds alike. The only safety will be in cash.
However, my gut instinct suggests that we’re going to get one more good market rally in the summer before a strong concentration in cash is warranted. Currently I am sitting in a 10-15% cash position after raising some money.