Bookkeeping: Layering Back in some Ultrashort Exposure

This morning's (ahem) rally, seems to have lost some steam so I have layered back into some of the Ultrashorts - I am back up to about 16% exposure there. S&P 1260 is where we sit right now, which is the level I mentioned I'd be watching closely this morning. We remain on the cusp of a breakdown...

As with the bad selloffs in the past, the fund will be taking a hit as some of my favorites are now beginning to really falter, and frankly when long positions started falling 8-12% across the board, a 15-20% short exposure doesn't help too much.... but I have a high cash position waiting to buy these positions lower if we really begin to falter. Won't ever catch the bottom (or top), but will continue to layer in as conditions weaken. This is starting to become old hat - Aug 07, Nov 07, Jan 08, March 08 - every 6-8 weeks we have a tremendous selloff :)

A lot of headline risk tomorrow with Goldman, Lehman and Fed cuts all compressed in 1 day. But technically we remain in bad shape and my first line target of the S&P if we continue this progression down is summer 2006 levels of 1220, about 3% lower than here. But individual names will suffer far more than 3%....

I'll be poking around this afternoon for some smaller buys if we continue to weaken. As I mentioned this morning, most of my buys have been smaller scale $4-$5K variety. No need to be a hero here and try to declare any bottoms or make huge scale moves. I do want to urgently increase fertilizer exposure (at lower prices) and potentially some natural gas... but still waiting for better prices.