The much anticipated down cycles has started

Thoughts from market analysis on Wednesday (Jul 1st-2009):

The market correction that I had been anticipating for since a month or so now and had been preparing for.. I think has started now.. 2~3 weeks back VIX action kind of indiacted that it may start soon but market levels weren’t there as yet.

But now when I look at VIX, VXN, VXO, etc. and other market sentiment indicators, technical indicators, Various resistance levels on indices charts, I kind of feel strongly that the correction of 10~15% has started now.. or will start anytime from now (within next 1~2 weeks).

I have some positions in QID, SDS, SKF, SRS, URE, and covered positions in INTC, BAC.

This has further created opportunities to short
- US indices,
- also to speculate on major downside in US financial Houses, who esp. may be vulnerable to deleveraging related to consumer finance defaults and reduced payments.
- Overblown commodity leveraged funds.
- (A friend adds) Some overblown emerging market stocks that had rose too much, too fast in last 3 months (which in my mind was more of a pump and dump action by latge investment houses, and sold to common man as hope of quick upcoming recovery).

Enjoy the downhill game.