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[2cents]

Ronald Wright (A Short Illustrated Look at History) would surly call the current economy a progress trap. Even with history as a guide and a clear understanding that what we spend (or print and spend) will have to be paid back by someone, the Fed and current administration take no caution to curb or deflate a bubble before it bursts. Keep nothing in reserve has been the spirit since 9/11. I recently read Bob Brinkers news letter where he believes a stable economy with moderate growth and the current bearish sentiment based on the 10 ma P/C should provide a healthy environment for stocks to rise further. I can't think of a time when I have seen a more bullish sentiment since 1999. Virtually nobody in the upper investment community believes there's anything to fear. The wall of worry has become so easy to climb that bad news doesn't desire any more attention than an hours selling in the silly hour. Recently there has been the type of upgrades by analysts you only see when things are about to get ugly. The most ridiculous was the multiple upgrades on the semi equipment manufactures. This is the perfect progression trap. The efficiencies in chip manufacturing have now reached a point where the industry can increase yields 400% higher than just 3 years ago. The chips themselves have an increase in function and cross platform of 300% per footprint with the cost per function now less than 25% of would it was 3 years ago. Margins per function have been cut in half in 1 year. Unit sales would have to increase 10 fold to maintain current revenue. Now I ask you, does this sound like an environment that desires an increase in infrastructure investment, particularly with China now starting to build the same equipment and chips. Yet the analysts regard this as an opportunity given that these stocks are at their highest valuation since 2000. This is the really gage of sentiment. In Mar. the $bpcompq hit a new 3 year high. It has become an excellent long term sentiment indicator. The up volume days are averaging 30% lower than down volume days in the last 10 days. The $USD is about to break to new multi year lows. The yield curve has been inverted for months. This might be a good day trading environment but for investors, particularly the small retail investor, I see a screwing coming. Personally I'm 25% in energy, 25% gold, and 25% short semis. I'll wait to go all in short again when I get a sell signal which could come as early as Fri. Good luck out there. Thats my 2cents