Well the markets have turned very dull. They say don’t short a dull market, but the fact is the main timing system I use is still short and, accordingly, so am I. It is the last day of the month and so the mutual fund crooks can be expected to manage the market today to optimize their compensation.

The drawdown is painful and will result in a poor month. An example of the risks of being aggressive, especially on the short side. I’ll post the portfolios tomorrow or Saturday, but the hatches are well battened down. Despite the bullishness in techs (which are mostly what I’m short), led by the semiconductors, the transports (DJTI) and financials (BKX) are weak, which is a bearish sign.

Yesterday the GDP numbers were revised upward for the second quarter, although that is ancient history at this point. However, Nouriel Roubini dissects the numbers in his blog and shows that they are less than they seem. The employment numbers are tomorrow, although they are very much a lagging indicator so I do not expect anything too interesting.

The ten-year Treasury yield index is down to 4.744% as I write. The bond market sure doesn’t see inflation ahead. But all the chatter I see is ignoring the bond market’s view. And of course the stock market in general doesn’t see the inverted yield curve as a problem.

There is a jam job going on in the homebuilders also. Oh yes, Bill Miller at Legg Mason is long the homebuilders and somehow his picks seem to enjoy miraculous recoveries at important junctures. Funny ’bout that.