Getting Sentimental

"Fear? That's the other guy's problem."
--Louis Winthorpe III (Trading Places)

Jason Goepfert, purveyor of the fine Sentimentrader site, posted some interesting comments on the Buzz today.

The Rydex fund bull/bear ratio, which compares the value of assets invested in the Nasdaq 100 (NDX) long vs inverse funds, is near an all time high. Current, there are 34x more assets invested in the long fund. That ratio has been bested only a few times since 2000, all in the 2000-2001 period.

Over 40% of the core sentiment indicators that Jason tracks are now at optimistic extremes. 0% are at pessimistic extremes.

As we drift higher on progressively lighter volume, current conditions remind Jason of last spring prior to the 'flash crash.' He suggests the possibility that this extended rally gives back all its gains and then some in a swift and severe manner.

Resonates with me...prolly no surprise since I'm card carrying contrarian with big picture concerns.

I am in the process of unwinding what little long side exposure I have while beefing up my short side. Peeled off some MSFT yesterday and unloaded small SLV position today. That leaves CSCO, GLD, DBO, and RJI--all small potatos but held for sale if we jig higher.

Added to short equity (SH) and bond (TLT) positions today as well. Nothing crazy. Just gradually turning the wheel of my risk profile in favor of lower prices.

positions in CSCO, GLD, DBO, RJI, SH, TLT