Over the past week the majority of our core market health indicators fell. Most significantly was our core measure of risk. It bounced back and forth between positive and negative, but managed to eek out a win and stay above zero near the close on Friday. As a result, there are no changes to our portfolio allocations this week.

Our core measure of risk has been positive for eight weeks now, but the other indicators are refusing to follow. The only other time since January 2000 that one indicator cleared and the others didn't follow within two months started in June of 2000. It took nearly three months (until late August) before two other categories cleared. Those signals ended up being whip saws and the market turned over in early September. Those of you who lived through it know what came next.

I'm not making a prediction that the same results will follow now. I'm merely highlighting the one occurrence I have recorded of a similar situation. Nevertheless, internal indicators aren't confirming the market so we'll stay comfortably hedged until we get a resolution…one way or another.