Rolling Correction Continues and a New Short Position

My favored sectors continued to get hit today as the agriculture complex in particular is getting some damage, so despite pushing the cash stake up to 15% and increasing the UltraShort stakes up to near 10%, treading water is hard to do when one is 75% long and the top heavy positions are getting hit. I did lighten up on these positions yesterday which is helping to some degree. A very difficult market to say the least; most of my watch lists are in the red so for the indexes to be holding up, I can only assume money is flowing into recession type of sectors today (i.e. Coke, Procter & Gamble types).

To offset some of the long side exposure I have added one new UltraShort - the very volatile UltraShort MSCI Emerging Markets (EEV); talk about a hot potato. I only took a 2% position (about $23K) since this instrument has volatility like one could not imagine, but if the market were to put another leg down it should pop nicely. With that said, this can turn into a losing position very quickly but its a small hedge against a lot of foreign exposure in the fund. This is not for the feint of heart, and in fact might not be for me either, but we shall see.

Overall the market is in a tight range with S&P 1490 on the top side and S&P 1440s/1450 on the bottom. Until we make a move one way or the other it's hard to determine the short term trend. However speculation is still not stomped out as seen in the solar space, so I still think we have more down to do, since we need to get rid of those last embers of hope to truly bottom. While I do understand the moves in the leaders in this space (deservedly so), speculators continue to run up the operationally weak companies on promises that the future will be so much more brighter (sorry for the pun). I realize a growing pie helps all (or a rising tide lifts all boats) but unless this is the first industry where competition ceases to exist and business cycles do not matter, and there won't be winners and losers this running up of any company in the solar space no matter what the performance is still troubling. I do expect it to continue for a few years, on and off, as this will be a sexy sector for speculators for a long time; until clear cut winners and losers emerge and people see that eventually there will be business pressures on the weakest, no matter how great the overall "pie" might be.

Long UltraShort MSCI Emerging Markets in fund; no personal position