Turning Point?

Yesterday in the WSJ... a hedge fund manager was talking about "new derivatives" in the sub prime lending sector and he was simply amazed at the opportunities...he said, "The sophistication is remarkable right now, you can profit in any scenario."

We have seen comments like this before in other markets and times....it does not bring us comfort.
Consider that, in the third quarter, fewer than 20% of the actively managed large-cap stock funds kept pace with the with the S&P 500. The managers were late to buy and will be the first to sell.

Additionally, the most interesting Fibonacci cycles are calling for a major correction starting in the next two weeks. We agree. The market feels too complacent, over bought after a monster two month run...and people have been chasing stocks to show some performance towards month end and fiscal year end...(many managers and mutual funds end their fiscal years today.)

We have raised a bit of cash and will be travelling in China for the next two weeks to measure real global demand.

Barkly seen here smells something and is looking around for change.