One Interesting Note

Despite the markets still down quite heavily 2 of the largest contributers to fund performance and best performers over the past 3-4 months Ultrashort Financial (SKF) and Ultrashort Real Estate (SRS) are down 4.5% or so. Meaning the underlying indexes they bet against are up. Meaning if you came into the day with heavy emphasis on these short positions you had insult to injury as these positions are actually working against you in quite a bad tape. So both your long and short positions would be sinking.

However, combined with the retailers I mentioned earlier today, you can see this rotational push into "oversold and beaten" areas of the market. Another note - the Russell 2000 is only down 0.10% while the larger cap indexes are down about 2% as I type this. Another "rotation". Small cap has been (relatively speaking) the worst place to be for the past 4-5 months.

In a general sense these are good things. Without financials (especially) it is very hard to make any sort of sustained move.

Remember, the news flow doesn't need to be great for a market to move up. Markets can go up during periods of bad news (see mid August through mid October). Or down in the face of good news. It's more about sentiment in the short term. And it appears we have the first inkling if you look at some outperformers last week along with today in the areas that were hit the hardest.

We'll see how it goes. As stated earlier, the action the last hour should be very telling. I did cut back on the foreign short exposure as these ETFs were up 12-15% this morning. And since my US index short is focused on small caps (Ultrashort Russell 2000 (TWM)), I am culling that position as well. It just appears the stuff that has been hit the hardest the past half year is now getting a reprieve. We'll return to all these areas after a rebound, but for now they seem (if the market can stabilize) to actually become the first candidates to bounce.

Long all names mentioned in fund; no personal position