Wednesday, June 30, 2010

[Video] Barry Ritholtz 75% Cash, Says Too Early to Call it the New Bear Market

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Hey this 75-80% cash thing is catching on!  Barry Ritholtz of 'The Big Picture' blog explains he has moved from 100% cash in May, back to 75% cash (but hedged) and is awaiting more information before calling this a new bear market.  Fair enough.  Ritholtz has had a pretty good track record staying long and strong since spring 09 up through May (I was much more of a doubter of the rally).  So for now all the human drones will simply sit and stare at their screen waiting to see what the silicon machines do with S&P 1040.   Thus far I find the dead cat bounce today very uninspiring.  Carry on humans.

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"Everyone is watching 1040 on the S&P," says Barry Ritholtz, CEO of Fusion IQ. "If those lows hold we'll see a bounce back. But by and large this market is looking much less healthy than it was just three or four months ago."

While that may seem obvious, it should be noted that Ritholtz turned bullish in March 2009 and didn't turn bearish again until May 2010 when he went to all cash just ahead of the "flash crash".

As of midday Tuesday, Ritholtz's firm was 75% in cash and long a handful of names, including BJ Services, Navistar and the ProShares UltraShort QQQ, a bearish hedge. "We're certainly voting with our feet and carrying a lot of cash," he says. "Cash is better than losing money."

Given the S&P 500 is down about 15% after rallying nearly 80% from its lows of March 2009, "it's a little early to say the bull market is over," Ritholtz says. "Gun to my head, I would say this is a regular correction...but it's better to step back and not be involved when things are unclear than just throw a dart and lose money."

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