Volatility

To be long, short or out? Feeling very much like I should be net short or out of the market. The break down last week was a signal: conviction at these prices is limited. We have climbed the The Wall of Worry for the past year, but the structural issues in housing, unemployment and debt have shown little ability to recover. The big bounce in corporate earnings has come through, but it is hard to see how a sustained recovery can happen in an age of OECD budget austerity, wage stagnation and high unemployment. After a statistically massive year long rally, the odds suggest better prices.