The note below went out to subscribers yesterday, and here it is for any interested blog readers. It does not offer the keys to any kingdom, does not tout 2010's gains and does not do much of anything in the way of prediction. It simply alerts that risk is really high now for some kind of correction.
You see Clif Droke's piece (PDF, top of list) highlighting that bastion of higher Market intelligence, USA Today, with all the usual old hags on the cover and all the usual bromides.
You see the American Association of Individual Investors (AAII, the ultimate dumb money) having jerked to 80% bullish.
You see the yield on the long bond having hit the constraining parameter that has kept it - and the current system of doing macro business - in control for decades.
You see that the play to get bullish was in Q4 2008, and again in Q1, 2009. Then finally, post Flash Crash last summer.
You may anticipate that this pig can levitate against its tragic sponsorship or even blow off higher in January. This may be so. But folks, RISK v. REWARD SUCKS.
The market has been kind enough to provide outstanding gains in 2010. It is legal to take some of them.
Happy New Year.