• Thanks for reading, and see you tomorrow.

Thanks for reading my Diary today.

I have to run out to watch The Bachelor replay again.

Enjoy your evening.

• This is highly anecdotal, so take it with a grain of salt.

I have spoken to a number of my hedge fund cabal.

Those who were medium bearish have almost all acquiesced and gone small net long.

When asked why, the reason is unanimous: They all cite that the market bends but doesn't break.

Though this is a thin-reed indicator, I am using this as another top sign, though a bit more patience might be needed before the market's consolidation takes place.

Or maybe not!

• Be wary of perma-bears and perma-bulls.

Harry Dent is on CNBC calling for a market apocalypse this year.

The lesson to be learned?

Be wary of perma-bears and perma-bulls -- they are good at garnering headlines.

They are attention-getters not money-makers.

They are harmful to your investment well-being.

• Standpoint Research is behind the downgrade.

Break in: General Motors (GM) downgraded to Hold from Accumulate at Standpoint Research.

• Microsoft's Windows 8 platform is a pain.

Here is another reason why I sold my Microsoft (MSFT) long.

• Traffic has been weak.

Break in: Netflix (NFLX) is trading lower off of an intraday call from Piper regarding weaker-than-expected fourth-quarter traffic data for both Coinstar (CSTR) and Netflix.

• My emerging market analyst, Milo, thinks I have prematurely sold my iShares FTSE China 25 (FXI) long.

He thinks it should be held for the long term, though he admits there could be continued profit taking.

Here was his reaction to my FXI post.

Milo's Reaction

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• Posting on positioning.

" How you doin'?" - Joey

Today I purchased more Procter & Gamble (PG) and shorted the IShares Russell 2000 (IWM).

In addition I added to my S&P SPDR (SPY) short.

That is what I am doin' -- what are you doin?

• Things I am looking at for the remainder of the week.

I just mentioned that I have no interest in Alcoa's (AA) 4Q 2012 earnings report after the close.

But I am intently looking at the reception of tomorrow's 10-year Note auction and Thursday's 30-year Bond auction.

The auctions will be a good gauge of how the market feels about domestic economic growth, longer-term inflation and, of course, when the Fed is anticipated to stop QE.

• I am buying more shares.

I am adding to Procter & Gamble (PG) now, joining "El Capitan."

• I don't care about Alcoa's earnings.

I the media are breathlessly excited about Alcoa's (AA) earnings, which are to be reported after the close.

For me, this chatter brings out my "I give a crap" meter -- as in, I and investors shouldn't give a crap.

• I expect that Mr. Market is in the process of filling some of the gaps left on the first day of the year.

• Where the hell have they been?

This morning, Goldman Sachs is pushing the notion of a revaluation upwards in the life insurance sector, citing better capital markets, better sentiment for variable annuity sales, regulatory clarity emerging, higher interest rates and so on.

My question is where the hell have they been?

That said, based on this late call and the extended nature of the sector, I sold more stock today, and I am now down to tag ends.

Again, like so many stocks/sectors the risk/reward has eroded.

• The stock is at the day's low.

Speaking ofPowerShares QQQ (QQQ), Apple (AAPL) trades at day's low As Grandma Koufax would say, "Dougie, the stock tastes like spoiled belly lox."

• Jim Cramer, Stephanie Link and yours truly are in agreement on Procter & Gamble.

Jim "El Capitan" Cramer and Stephanie "The Missing" Link are buying moreProcter & Gamble (PG) in their Action Alerts PLUS portfolio today.

And I agree.

• Oaktree hit another new high.

Another new high this morning for the mighty Oaktree (OAK).

A tree that keeps on giving.

• Too many have jumped on the China trade.

On the subject of China, below is an ugly chart that Steve "Hernán" Cortés "de Monroy y Pizarro" just sent to me.

Source: Bloomberg

I would further say, in response to my sale last week of iShares FTSE/Xinhua China 25 Index Fund (FXI), that too many have jumped on the China trade.

Again, the time to have bought FXI was, as a contrarian, when no one wanted China in the fall. The time to sell FXI is when investors pay 15% to 20% in price.

• Important index components look quite extended. 

I received a couple of sub questions on why I am so short PowerShares QQQ (QQQ).

Answer: Apple (AAPL), Google (GOOG) and Amazon (AMZN) are important index components, and

Apple is dead meat (my interpretation!), and Google and Amazon are quite extended.

As well, old tech -- Microsoft (MSFT), Hewlett-Packard (HPQ) and the like -- are hopelessly mature without much in the way of tailwinds.

• Here's a whiff.

Below is a look at breadth at 10:05a.m. EST:

• S&P 500 -- 129 advancers to 367 decliners
• NYSE -- 671 advancers to 1,111 decliners
• Nasdaq -- 884 advancers to 1,061 decliners
• Russell 2000 -- 815 advancers to 1,002 decliners

Volume on S&P 500 is even with past 10-day average volume, 10% higher than past 30-day volume, and 5% lower than yesterday for this time of morning.

• Again.

I have reshorted American Express (AXP), as it is back to my selling price.

• Shorted Russell.

I am short iShares Russell 2000 Index Fund (IWM) at $86.80 -- first time, long time.

• I am now 25% net short.

• BGR has some information on new iPhones.

And now something for the Apple (AAPL) heads from Boy Genius Report!

• Reallocations take time.

This morning the yield on the 10-year U.S. note has fallen by 2 basis points, to 1.89%, down from last week's high of 1.94%.

As discussed in my surprise list for 2013, I expect the yield to range between 1.6% and 2.0% during the first six months of the year. If my forecast is correct, there will be upward pressure on yields in the second half.

I expressed the rationale behind my reversal in my bond short position yesterday -- this list warrants repeating:

• As you can gather from my "15 Surprises for 2013," I am less sanguine about domestic economic growth than most others.
• My forecast of only 1% real GDP growth in the first half of this year should contain the interest rate rise in the first few months of 2013.
• One of the reasons for expecting slowing growth is that the GDP multiplier associated with the recent fiscal cliff decision will be higher. (The Street is using 0.50x; I believe it will be closer to 1.0x.) This is something Barclays' Barry Knapp discussed on "Squawk Box" this morning and something I addressed in my surprise list.
• An inability for Washington, D.C., to come to a decision regarding spending cuts and entitlement reform in March will likely weigh negatively on business and consumer confidence, hirings, capital spending and production.
• A relatively weak second half will further slowdown U.S. growth and keep inflation (and inflationary expectations) contained -- and it will likely, too, delay the interest rate rise.
• With U.S. debt at an average maturity of about five years, we cannot afford an interest rate cliff, as it will mushroom debt service.
• Despite some concerns after the Fed's minutes were released, the Fed will likely continue to anchor short-term interest rates at zero, as it has to. I expect more, not less, easing in 2013.
• The rise in the 10-year U.S. note yield from 1.60% to over 1.90%, which has produced an increase in the price of ProShares UltraShort 20+ Year Treasury (TBT) from $60 a share to almost $68 last week, has discounted a lot of the yield rise I see over the first few months of the year. I expect a range of between 1.60% and 2.00%.

I wanted to add one more factor that could contribute to a lower level of interest rates -- that is, a delay in the reallocation trade (from bonds and into stocks).

It is important to note that reallocations take time (especially of an institutional kind), and usually they are instituted well after an interest rate rise takes place. Given the extended period of low interest rates and higher bond prices and the repeated cries about a bottom in interest rates, a show-me attitude will likely continue to describe investors' propensity to move out of fixed income and into equities.

Investment committees make these decisions, and those committees are not on a real-time basis -- rather, they are notoriously slow moving.

I know firsthand, as I am vice chairman of an investment committee for an educational institution.

Toward that observation, according to AMG, $3.5 billion came out of domestic equity funds in the latest week.

Finally, as to individuals, the middle class and individual investor have never been as squeezed. The screwflation of the middle class, in which wages and salaries have failed to keep up with the costs of the necessities of life, will continue to favor risk-aversion over risk-taking and risk-free bonds over riskier stocks.

That is because the average Joe has stock market investing on the back burner, whereas paying for housing, food, insurance and other costs lie on the front burner.

• Rumor has it.

European markets are trading off on a rumor that the French government has been told of an imminent downgrade (already a negative outlook).

• After I get to Florida, I will be introducing a regular video to the diary.

Finally, with my health better, I will be returning to Florida this weekend.

The good news is that we will be introducing a regular video (probably after the close) out of my Florida office.

It should be a good addition to the commentary in my diary -- at least I hope it is value-added!

• At 88, the confidence reading remains near its 38-year low.

Small business optimism remains low based on this morning's report.

At 88, the confidence reading remains near its 38-year low.

• Analysts downgrade Och-Ziff and Fusion-io.

Och-Ziff (OZM) is downgraded by Goldman, and William Blair downgrades Fusion-io (FIO) to Market Perform, citing aggressive second-half 2013 estimates (something I cautioned about yesterday).

• Here it is.

The economic calendar is light today.

Below is what is expected by the consensus.

• The Crimson Tide crushed the Fighting Irish in last night's BCS Championship game, proving one of my surprises correct. 

"Alabama trounces Notre Dame by 28 points in tonight's BCS Championship game, but Notre Dame's men's basketball team reaches the Final Four."

-- Doug Kass, "15 Surprises for 2013"

Nice start to my surprise list for 2013.

In the BCS Championship game, Alabama rolled over Notre Dame by the exact amount (28 points) included in surprise No. 15!

Meanwhile, Notre Dame's men's basketball team won its twelfth straight game (ranked No. 17 in the country and 14-1), beating No. 21-ranked Cincinnati last night.

I discussed some of my list on "Fast Money" yesterday with Mel and the gang.

Let's go to the tape!

• I am attempting to expand my net short exposure. 

I shorted more SPDR S&P 500 ETF Trust (SPY) at $145.95 in premarket trading in an attempt to expand my net short exposure.