Thanks for reading my Diary.

Enjoy the weekend!

I have put out more (SPY) short at $269.70, and (QQQ) short at $168.15.
Back to large-sized.
Let me briefly explain my Index moves of today and yesterday.
You might recall that I moved from large-sized short (in SPY and QQQ) to medium-sized yesterday - with covers at $268.75 and $167.47, respectively.
So, why did I come back just now and re-short SPY and QQQ within a dollar of where I made yesterday's covers (new shorts at $269.70 and $168.15)?
Several reasons:
* I always trade around positions.
* I wanted to see if the "complexion of the market" had changed.
* Specifically, in the past, swift declines (-400 in the DJIA at a point yesterday) would result in a "V" like recovery. (It did not).

* I often disagree with Jim, but one thing is certain...
* Jim is an investment treasure and someone we can all learn from



"I mean, I'm not smarter than the market, but I can recognize a good tape and a bad tape. I recognize when it's right and when it's wrong and that's what my strength is."

--Jim "El Capitan" Cramer

In advance of his 64th year on Earth this Sunday, I wanted to wish a warm, healthy and happy birthday to Jim "El Capitan" Cramer.

By now Jim and you all know how fond I am of Jim as I have written countless articles about his contributions as a writer, as a son, a father and mentor.

The delivery to my annual holiday tribute ("Welcome Back to Jim Cramer's Pool") to Jim during the December holiday is one of my favorite articles of the year.

I recently wrote an article, "Lessons I Have Learned From Jim "El Capitan" Cramer," that I am particularly proud to repost today which incorporates the highlights of how I would describe Jim's contributions to TheStreet, Real Money, Real Money Pro, CNBC and to other venues:

Speaking of Jim Cramer -- as I did in my opener this morning just below and in yesterday's "Welcome Back to Jim Cramer's Pool" -- I wanted to follow up with some thoughts.

Every day I jot down on yellow legal paper a list of ideas and subjects that I think will be interesting to our subscribers and that I can add value to -- topics for future opening missives in my Diary.

Each morning, at around 4:45, I think about what I will write as the subject of my opener for the day.

I typically contemplate the prior day's market action and the overnight price changes in the major asset classes and regional markets around the world and I try to come up with something relevant, topical and actionable.

Something on my list, for many moons, is the subject of the lessons I have learned from Jim "El Capitan" Cramer.

Over the years I have written about the contributions that Jim has made and I have defended Jim as well against the wrong-footed criticism that he often faces in his role as a high-profile and visible public figure.

My defense of Jim is not done because I essentially have worked for him over the last two decades. Rather, it is heartfelt and done in the recognition of the contributions that Jim has made since he invented and founded TheStreet. I do this in large part because Jim has been my professor, an important contributor to my investment experience.

I have learned monumentally from his input to the right of my Diary. I read every single word he publishes, sometimes twice.

Stated simply, I have never in my life, and that's over four decades of investment experience, met someone like Jim who has such an immense reservoir of investment knowledge and who possesses the sort of insight into the markets that he has.

To be honest and direct, I have met and befriended many investment legends, but Jimmy is unique in many aspects. His ability to distill the rhythm of the markets into a few understandable bullet points, his general and specific insights, his keen sense of finding and adopting market leaders and explaining the rationale is unprecedented and borderline miraculous, and his understanding of the market's subtleties are delivered in a succinct and well-articulated manner.

And, unlike the many, there is a strong sense of honesty and integrity in his writings. When he is wrong, he admits it, and when he doesn't know, he writes that, too.

Jim is the supreme educator of all things investment-wise.

Importantly, Jim recognizes that the path to investment success is not made with phony promises and superficial analysis. The road to lasting wealth is a road to be traveled carefully, with thought and analysis.

I often criticize talking heads and commentators in the business media as managers of memorized bullet points. At the core, however, their knowledge is typically miles wide but only inches deep. Their investment advice is too often uninformed and reckless. And typically there is little follow-up, especially from the "carpet sweepers" who sweep their investment boners under the rug, never to be heard from again.

By contrast, Jim's three-and-a-half decades of investment experience -- including a lengthy period of managing a hedge fund that delivered substantial excess returns -- is coupled not only with insights but from many hundreds of direct interviews in which El Capitan goes belly to belly with company executives. In those interviews, mostly on "Mad Money," Jim distills complicated issues that every company faces into concise questions that provide us with answers that often illuminate our understanding of specific investments.

He constantly follows up, on the winners and losers.

As our mutual pal Byron Wien has stated, "Disasters have a way of not happening."

As Jim constantly has emphasized, the preponderance of days, weeks, months and years is for the gravitational pull of markets to move stocks higher.

As an example, despite my protestations, 2017 was a year of market progress (2018 not so much!). My fixations on President Trump (and his dysfunctional administration), the economic message I interpreted from the bond market, my valuations concerns, the possibility of a number of adverse economic/market outcomes and so forth have been wrong-footed. I should have listened to Jim more this year -- and for the last 20 years!.Like Jim, I should have played the odds, as stocks, over time, have a gravitational pull higher.

Today's missive, in which I discuss some of the many lessons I have learned over the last two decades gleaning over to the content to the right, in Jim's columns, is long overdue. Among them:

* Always worry, but keep the worrying in context. Sometimes you can be too skeptical.

* In other words, optimism "trumps" pessimism in most markets. Rather than looking at potential headwinds and adverse outcomes, I should have been more upbeat.

* Spend time searching for superior company investments as the micro is often more important than the macro.

* Being long is inherently a better bet than being short, as one can make "only" 100% on a perfect short but one can make an infinite amount of money on a perfect long.

* A large portion of one's time should be dedicated in isolating the one to two sectors that possess market leadership potential.

* Develop important investment themes and do not be afraid to participate in those themes regardless of your overall investment views.

* Delivering superior investment returns is critically dependent upon finding companies and sectors that will beat consensus expectations.

* Active management is far superior to passive investment management.

* When wrong, respond quickly.

* An important ingredient to good stock selection is one-to-one, belly-to-belly contact with company managements.

* But a blind acceptance of management's optimism is unacceptable. Move further. Talk to customer and competitors.

* Organic growth is more valuable than cost cutting.

* Stocks move in groups.

* The first double usually leads to a triple. Let your profits run.

* If a stock goes down on great news, sell it.

* No stocks are too cheap to sell.

* Don't violate your cost basis.

* "Breaking up is easy to do."

* Don't make investment decisions solely based on government releases.

* Pay little attention to buy and sell decisions of large, high-profile hedge-hoggers and other "big-time investors."

* Don't be fooled by contract wins; they are exciting but seldom move the needle.

* Relative valuations seldom justify a purchase.

* If the fundamentals change, just exit. Cut your losses when the thesis changes.

* Insider buying is not a reason to buy; clusters of buying deserve attention.

* Identify big-picture themes, as the right thesis can be a gold mine and can transcend the macro concerns and headwinds.

* Stock leaders, more often than not, overshoot.

* Typically buying the best of breed is the preferable alternative.

* New age means investment leaders means superior investment performance.

* Determine what matters, what doesn't and what we should care about.

* Listen to conference calls.

* Try to take advantage of confusion.

* Be worried about sharp market declines -- it's not the time to be calm.

* Check your emotions at the door.

* Stick with your convictions.

* Change with the times.

* There is usually a reason why stocks are underperforming, especially for an extended period of time. Always and continuously test your investment thesis.

* Above all, do your own homework, there is no substitute for research and there are no shortcuts.

Frankly, I could go on and on, for pages. I have just touched the surface of what I have learned from Jimmy over the last two decades, but I think you get the point by now.

I often respectfully disagree with Jim but one thing is undeniable -- Jim "El Capitan" Cramer is an investment treasure and unique resource from whom we all can learn.

Warm Birthday Greetings, El Capitan!

Added further to (TWTR) at $29.77 just now.

Here is a Top 10 list of some of my fears as we enter the weekend:

1. Domestic economic growth weakens, Chinese growth fails to stabilize and Europe enters a recession

2. U.S./China fail to agree on trade

3. Trump institutes an attack on EU trade by raising auto tariffs

4. U.S. treasury yields fail to ratify an improvement in economic growth

5. The market leadership of FANG and Apple (AAPL) subsides

6. Earnings decline in 2019 and valuations fail to expand

7. The Mueller Report jeopardizes the President

8. A hard and disruptive Brexit

9. Crude oil supplies spike and oil prices collapse - taking down the high yield market

10. Draghi is replaced by a hawk

I monitor about 60 ETFs and stocks (on my primary screen), and only (PG) , (GLD) and (TLT) are green.

The debate is now about - how much does the Fed going on hold outweigh the global slowdown?

I have increased my short net exposure to large-sized through the purchase of short-dated (SPY) and (QQQ) puts.

A few things here and there from Peter Boockvar:

Continuing the string of softer data overseas, the Markit Hong Kong January PMI was 48.2, little changed from 48 in December. It marks the 10th straight month below 50. Markit equates this level with just 1.5% GDP growth. They said "Given flagging Chinese demand, the outlook for Hong Kong's private sector continues to darken. Business sentiment remained negative, as signalled by the Future Output Index. Firms trimmed staff numbers further and cut back on purchasing activity." As the slowdown is not new news, the Hang Seng was only down by .2%. 

The growth of regular base pay in Japan (which takes out influence of bonus' and overtime) in December moderated from the recent pace with a .9% y/o/y increase after a 1.3% rise in November which was the most since 1997. Including bonus' and overtime did see a 1.8% y/o/y increase in cash earnings which is the best since June. 

Bottom line, faster wage growth is still the missing piece of the Japanese economic puzzle even with an extremely tight labor market. It is also why consumer spending remains punk. With respect to household spending in December, it was up just .1% y/o/y, well less than the estimate of up .8% and follows a .6% drop in November. The BoJ should stop thinking that monetary policy can lift wages and instead be focused on keeping inflation as low as possible in order to help REAL wages rise. 

On the softer data, the 10 yr JGB yield went further negative, down by 2 bps to -.03%. This is now approaching the January 4th low which was the biggest negative print since 2016 and the Nikkei closed down 2%. In sympathy, the German 10 yr is just .11% and their yield curve is negative out to 9 years now from 8 yesterday. The US 10 yr yield is at the low point of the week at 2.64%. 

I know the equity market is happy that the Fed backed off from their rate hikes and expressed 'flexibility' with QT but the action in global bond yields should be reminding everyone why. 

French industrial production in December was about as expected when we include the November revision. The manufacturing component rose 1% m/o/m after falling by 1.5% in the month prior. Italian IP was weak, falling by .8% instead of rising by .4% as forecasted. 

Germany finally saw an upside surprise to its economic data with exports rising by 1.5% m/o/m, above the estimate of up .4%. On a y/o/y basis, exports though were up by just 1.3%, the 2nd smallest print since the summer of 2016. Exports within the Eurozone grew by 4.5% y/o/y and were higher by 1.9% outside of the EU. The better than expected number was not enough to lift the euro which is little changed while the DAX is down modestly. 

Lastly, if you haven't seen the chart of iron ore after the awful Vale dam break, here it is. 

IRON ORE

JP Morgan lowers Twitter (TWTR) price target from $44 to $40 and reiterates its overweight ranking.
From the research: Twitter's investments in long-term growth at the expense of near-term profit "make perfect sense," but are still a bit higher than expected and require "recalibration" for 2019, Anmuth tells investors in a post-earnings research note. He believes Q1 will be the low point on operating income growth and that the increased spending does not change the overall thesis on Twitter shares. The stock remains one of the analyst's top picks and is on his firm's Analyst Focus List.

* The foundation of my ursine market view is slowing economic and corporate profit growth* The big bank merger highlights that, higher jobless claims lie ahead * The consensus remains optimistic about growth - I am not in that consensus
My pal Danielle DiMartino Booth discusses the rising claims picture (with an assist to the SunTrust/BB&T merger of equals):Grist to the Merger Mill

VIPs

• The announced regional bank merger between BB&T and SunTrust is the biggest in a decade, creating the sixth largest U.S. bank; just weeks ago, in Davos, JP Morgan's Mary Erdoes predicted banks would be compelled to consolidate to achieve sufficient scale to combat the big banks.
• Tellers will be saddened at the synergies that will eliminate their jobs, and they can commiserate with their back-office brethren who will also be made redundant; the "good news" for finance professionals is they tend to lose their jobs last in a given cycle, as headcount reductions peak late and persist early into recoveries.
• Banks throughout the country can breathe easy-ish; we're not even at DEFCON 2 on the initial jobless claims scale as only 43% of states have seen year-on-year increases; that said, we're just four shaky states' shy of DEFCON 2, half of U.S. states sporting rising claims
• The takeaway: we're within a hair of our economy being at grave risk of physical, but not yet the lethal, assault that arrives when we ramp up to DEFCON 1 when 75% of states have rising claims; that line in the sand will be drawn when the states' list deteriorates all the way down to envelop financial centers of Massachusetts, Connecticut and New York, in that order.

* Tops are processes and we may be have been in that continued process over the last 12 months

* I see growing evidence that an important market top may have been reached in late January, 2018 and, again in September, 2018 (Points A and C above?)

* Investors are not being compensated for taking risk as the market's margin of safety has shrunk in a heightened regime of volatility

If you left early last night I published this closing post:

I continue to be of the view that 2018 marked the beginning of the end of the 10-year Bull Market and that an important top was in the process of being established last year.

All signposts lead me to conclude that the topping process is still very much in play.

The principal sources of my concern are continued political turmoil, an untenable level of private and public market debt and a less-promising outlook for U.S. corporate profits and global economic growth.

The U.S. and world-wide bond markets are signaling an important message and I am fearful that there are now -- with a burgeoning U.S. deficit/debt load and a low by historical levels of interest rates -- few monetary and fiscal tools left to catalyze global growth.

* Back in late December I covered all my shorts and went long.
* I sold my Index longs and trading long rentals into the rally and despite the strong breadth thrust in early January.
* I slowly accumulated an Index short hedge and went large short yesterday.
* I reduced to medium-sized my Index short hedges into today's schmeissing -- and still remain net short of exposure.

For most the short side is neither suitable, practical nor does it conform to most's risk profiles/appetites -- but large cash reserves make a lot of sense to me given the dramatic difference in downside risk vs. upside reward coupled with the opportunity to earn (on a risk-free basis) 2.4% on three-month U.S. Treasuries. That return is nearly fifty basis points above the S&P Index's dividend yield.

I remain medium-sized net short and want to add to my short exposure on any rallies.

There is an old Wall Street adage that reads:

"Tops are a process, bottoms are an event."

There is a tendency to look at a day or two, or even a week to make a determination or statement of a changing market complexion - in fact I did this two days ago in my Diary. But, in the age of machine and algo dominance, this is probably not a good idea nor may it not have predictive value.

The notion of an important market top is not an old idea of mine - signposts have been apparent for over a year.

Back in July I wrote about the possibility of a market top: The warning "bears" repeating in an updated form and version.

In that column I wrote that tops are a process and bottoms are an event, at least most of the time in the stock market. If you looked at an ice cream cone's profile, the top is generally rounded and the bottom V-shaped. That is how tops and bottoms often look in the stock market, and I believe the market is forming such a top now.

Consider the following fundamentally based issues and concerns I raised back then (and that still have value, and have been updated in boldface):

* Downside Risk Dwarfs Upside Reward. I base my expected market view on the probabilities associated with five separate (from pessimistic to optimistic) projected outcomes that seize on a forecast of economic and corporate profit growth, inflation, interest rates and valuation. In the past I have suggested that this exercise is a guide and is not intended to be a precise calculation, especially in uncertain times.In late September, 2018, the averages significantly surpassed my expectations of a top in the trading range - in a dose of euphoria similar to late January, 2018. (With the S&P 500 Index at 2700 at yesterday's close we are significantly above my calculation of intrinsic value (2400-2500), higher than my most pessimistic scenario (2400 - which was penetrated in late December) and near he upper end of my projected trading range of 2500-2775). In other words, risk dwarf reward.

* Global Growth Is Less Synchronized . The trajectory of worldwide growth is becoming more ambiguous. I have chronicled extensively the erosion in soft and hard high-frequency data in the U.S., Europe, China and elsewhere, so I won't clutter this missive with too many charts. But needless to say (and as shown by these charts here and here), with economic surprises moderating from a year ago and in the case of Europe falling to two-year lows, we are likely at "Peak Global Growth" in the current quarter. The data are even worse in South Korea, Taiwan, Indonesia and Thailand. Since July, the global economic outlook has been reduced twice by the International Monetary Fund (IMF). (Global economic growth forecasts have consistently moved lower in the last six months. Yesterday the EU's projected growth rate was ratcheted lower).

* FAANG's Dominance Represents an Ever-Present Risk. I have warned that earnings disappointments in the FANG stocks represents an immediate risk to this league-leading sector, and to the markets FANG has become GA! Since I initially wrote this article investors have been clearly rotating out of FANG, reflecting misses in important metrics (subs) and some lower broader guidance ahead. As well, the existential threat of increased regulation and antitrust hostility that I warned about nearly a year ago are now on the front burner.Indeed, in recent weeks, FANG has been declawed by virtue of a series of disappointing earnings releases (Amazon (AMZN) , Google (GOOGL) ) that indicate top-line sales, higher-cost pressures due to added spending.

* Market Structure Is One-Sided and Worrisome. Machines and algorithms rule the day; they, too, are momentum-based on the same side of the boat. The reality that "buyers live higher and sellers live lower" represents the potentially dangerous condition that investors face in a market dominated by passive investors -- a threat I have focused on since early 2017.In this Monday's market schmeissing, on Tuesday's robust rally and then again in Wednesday's big up and down, we saw those bad actors and financial weapons of mass destruction -- quant strategies -- take hold again. The almost criminal role of machines and algos has fueled a new regime of volatility over the last year. That vol and spastic price action (down big in December, up big in January) is another sign of a market topping process and a broken trendline higher.

* Higher Interest Rates Not Only Produce a More Attractive Risk-Free Rate of Return, They Also Make It Hard for the Private and Public Sectors to Service Debt. And over the last two-and-a-half months short-term interest rates have made a decisive move higher. This also serves to reduce the value of stocks, as every dividend discount model incorporates a discount factor based on the current level of interest rates. The three-month U.S. Treasury note yields 2.40% - that's 50 basis points above the S&P dividend yield. C.I.T.A. ("cash is the alternative") has replaced T.I.N.A. ("there is no alternative").

* Trade Tensions With China Are Intensifying and Mr. Market Is Improperly Looking Past Marginal Risks. From Goldman Sachs' David Kostin (hat tip Zero Hedge). Remember, as previously discussed, the dispute has buoyed second- and third-quarter U.S. GDP. The benefit soon will be over and a fourth-quarter economic cliff is possible. I continue to believe that the trade hostilities with China will likely resemble the long tail of the Cold War that began in 1948. The President thinks in a timeframe of a tweet, while Chinese officials think in a timeframe of decades.

* Any Semblance of Fiscal Responsibility Has Been Thrown Out the Window by Both Political Parties. This has very bad ramifications, which shortly may be discounted in lower stock prices, especially as it relates to the servicing of debt -- a subject I have written about often. Not only are our legislators acting irresponsibly and recklessly, but the Republican Party is now considering more permanent tax cuts. Should economic growth moderate, tax receipts diminish and undisciplined spending continue, stock valuations will likely continue to contract. With the rate of growth in GDP slowing and the Trump administration considering a middle-class tax cut, the deficit should widen to well above expectations, inciting those bond vigilantes to reappear. Deficit projections are going through the roof - and neither company cares (but the markets are starting to).

* Peak Buybacks. Buybacks continue apace, but look who's selling. As Grandma Koufax used to say, "Dougie, that's quite a racket!" If I am correct about the peaking in corporate profits, higher interest rates and slowing economic growth, we shortly will have another rate of change -- negative in buybacks. Since then, aggregate buybacks are lower year over year - cumulatively in 2019.

* China, Europe and the Emerging Market Economic Data All Signal a Slowdown. It's in the early innings of such a slowdown based on any real-time analysis of the economic data. The rate-of-change slowdown on a trending basis is as clear as day. A rising U.S. dollar and weakening emerging-market economic growth sow the seeds of a possible U.S. dollar funding crisis. This slowdown has not gone unnoticed by investors, as emerging markets have declined absolutely over the summer, materially lagging the strength in the S&P index and the Nasdaq.Since July (as I have consistently chronicled), China's economic weakness is growing more conspicuous and unsettling to worldwide economic growth. Remember, though China is only about 14% of world GDP, it is responsible for one third of the year over year growth. 

* The Orange Swan Has Returned. Again, hastily crafted policy delivered by Twitter that conflates politics is dangerous in a flat and networked world. The return of an untethered Orange Swan is market-unfriendly... brace yourselves as the Supreme Tweeter will likely "Make Economic Uncertainty and Market Volatility Great Again" (#MUVGA) The current sub-40% approval rating (which is trending lower) for the president is historically a losing proposition in the midterm elections for the incumbent.
While we have learned not to make bold political forecasts, the baseline case seems to be a Democratic House win and a Republican Senate win, which could result in personal headwinds for the president and could slow down or eliminate any new White House legislative initiatives. This projected political outcome of a split Congress has been realized and has led to ever more animus and hostility between the parties.

*We May Be Moving Toward Some Conclusion of the Mueller Investigation. This could create even more market uncertainty. The Mueller investigations, in particular, have angered the President (and was mentioned in the State of the Union address Tuesday). Its outcome is uncertain but could bear on the markets.

Bottom Line

"Confronted with a challenge to distill the secret of sound investment into three words, we venture the motto, Margin of Safety."
 - Benjamin Graham

The search for value and comparing it to risk taken is, at its core, the marriage of a contrarian streak and a calculator.

While it is important to gauge the possibility (based on fundamental and technical input) that the market may be making an important market top, it is even more important to distill, based on reasonable fundamental input, what the market's reward versus risk is. This calculus and taking advantage of the discrepancy between price and intrinsic value trumps everything else that I do in determining market value.

As Columbia University's Joel Greenblatt wrote:

"There's a virtuous cycle when people have to defend challenges to their ideas. Any gaps in thinking or analysis become clear pretty quickly when smart people ask good, logical questions. You can't be a good value investor without being an independent thinker - you're seeing valuations that the market is not appreciating. But it's critical that you understand why the market isn't seeing the value you do. The back and forth that goes on in the investment process helps you get at that."

My investment process points me to conclude that, at current prices, downside risk substantially eclipses upside reward.

As noted yesterday, my trading has conformed to a new regime of volatility and a likely topping process. After covering all my shorts into the extreme October market weakness and then going long through a bunch of trading rentals, I built up my short book into the September high. I covered my shorts on the weakness that followed and went long around Christmas in late December, selling those positions into the January rally. Since then, I have been slowly expanding my net short exposure.

Going forward, I plan to be flexible, trade opportunistically and continually evaluate the market based on my calculation of reward vs. risk, and based on the notion that a broad and important market top formation began one year and two weeks ago.

Hold on to your hats -- and preserve capital in your portfolios -- in a continued topping process and heightened regime of volatility.

Yesterday was a good day for the skeptics.

* As I suggested in "Who's Next? Probably No One!", bank stocks faltered after the announcement of a merger of equals between SunTrust (STI) and BB&T (BBT) . Indeed, bank stocks were some of Thursday's worst performers. I continue to believe after the nice run up in bank stocks - they will falter over the short term under the weight of slowing economic growth, low absolute levels of interest rates (a sub 2.7% 10 year yield), a flat yield curve and a new (and larger) competitor. (I recently eliminated my JPM (JPM) long and took it off my Best Ideas List).

* Despite sell side and buy side optimism, increased spend levels at Alphabet (GOOGL) (the shares briefly broke the $1110 level yesterday) and Disney (DIS) continue to pressure those stocks. (I am a buyer of Google at $1020-$1040 and I bumbled the short of DIS at $115 a few days ago immediately following the DIS EPS release).

* The Bezos drama is, in some measure, responsible for renewed share price weakness. (The shares are trading sub $1600 in pre-market trading. I am a buyer of Amazon (AMZN) at $1500-$1550)

* Twitter (TWTR) was a conspicuous portfolio disappointment as forward guidance was lowered. (This does little to negatively impact my view on the shares - the franchise remains tremendously valuable and there is little of a takeover in the share price now. I added on the weakness as the stock approached my $30 buy level).

* Tech was drek on Thursday - semiconductors, Apple (AAPL) , Microsoft (MSFT) , etc. all lower.

* Industrials (e.g., DowDuPont (DWDP) ), under the weight of slowing growth, were also downside leaders.

* Not surprisingly to this observer, more headwinds seem to exist in the China/U.S. trade negotiations. Larry Kudlow said as much.  

* Retail was one of the only sectors in green yesterday - after weeks of poor action.

* Breadth was bad. (2100 advancing issues, 5100 declining issues)

Unlike my pal Rev Shark, days like yesterday seem more ominous to me regarding the short term market's vulnerability.

I am not predicting gloom and doom - just lower markets.

Finally, as suggested in my opening column, this action seems to be consistent with the broad topping process apparent for over a year.

I remain net short of exposure and I want to short all rallies now.

Note: Long TWTR (large), C (large), BAC (large), WFC (large), DWDP (large), DDS (small), M (small), Short SPY, QQQ, MSFT (small), AAPL (small)

I was mentioned in Market Watch yesterday.

Global Central Bank Update: India cuts rates by 25 bps to 6.25% as inflation hits a 13-month low (2.2%).

Source: Charlie Bilello