My move to 25% G fund effective Friday was of some help during the drop but those partial allocations are kind of a catch-22.  I lighten up on stocks in case the market pulls back but the 75% I have in stocks gets hit.  If the market goes up I am happy to have something working in the stock funds but I feel as if I am missing out on something. 

The S&P is still in a short term, and intermediate term uptrend, but I am finding more and more reasons to be nervous, even though that doesn't always mean anything.  Any more weakness and the short term uptrend could be broken.  That could mean a modest pullback to the 1175 area...

                                Chart provided courtesy of www.decisionpoint.com

I hate to dwell on these "smart money" / "dumb money" indicators but something happened Friday that hasn't happened in about 20 months.  The "smart money" bullish percentage went to 5%.  The bearish number went to 67%.  That's one of the most lopsided readings you'll ever see.  And this comes at a time when the "dumb money", as I showed Friday (see below) is is at a 2 to 1 bulls to bears reading.




                             Chart provided courtesy of www.decisionpoint.com

Don't get too alarmed.  As I mentioned last week, these "smart money" readings can change on a dime.  You can see that is just what happened in February in the above chart.  That means acting on it today (to get out of stocks for Tuesday) could set you up for a whipsaw.  If we are down Monday then rebound Tuesday you'd take the worst and miss the best.  Unless you believe this pullback could last for more than a couple of days, you are probably better off not trying to play it.

If you do believe this is the start of something more sinister, you may want to get out now.  That will have to be your call.  It does appear to me that we could see more strength before things get too bad, but the short term (this week) is very fuzzy. 

Any moves I make may be for the short term.  I'm talking about a couple of days.  If I lighten up even more on the stock funds, say go to 50% G fund this week, it may be so I can buy back the stock funds in few days at lower levels.  I will have to make this call close to the deadline so I have as much information as possible. 

Bottom line:  We are in an uptrend and a pullback is very possible.  You can play the short term or wait for the trends to break before making a move.  You have about as much information as I do and you can see it is not an easy call.  Always do what is most comfortable for you. 

That's all for today.  Currently 25% G, 50% C, 25% S fund.  Until next time...