It's Official.....Time To Go Short!!!!

I am very, very sorry to note that my proprietary equity allocation signal has finally gone to "short" for the first time since 2001.

Believe it or not, even January's rollercoaster ride and March's collapse didn't trigger it. Almost, but the April bounce lifted the S&P just enough to keep us long for a while.

For my partner and I, now, that means calls rather than puts, since we have moved on from straight equities. But the message from the underlying equity markets is still important, and not to be taken lightly.

June's S&P return of at best -9%, on first glance using a simple Yahoo-sourced price difference, is the worst in ages, and sends my proprietary market turbulence/allocation signal firmly into short/put territory.

It will take at least a +3% July S&P return to reverse this, based on my tools.

I don't predict the S&P, and I don't market time. My tools are more like hurricane warnings than daily weather forecasts. And right now, I'd be boarding up the windows and filling the bathtub with water. At least for the next few weeks.

More as conditions develop later this month. But for now, we are almost certainly going to be buying puts next week, when end-of-June Compustat data arrives to drive July selections and weights.