On May 2nd, we raised our cash levels significantly and have remained increasingly cautious regarding the market environment. Our negative viewpoint on the market, as specified in our May 18th, 2011 blog, has been continually confirmed by the indexes and leading stocks generally going up on lower volume and down on higher volume.


More than a month later, we continue to see the market claim more victims. At our last count, 50% of the previous bull market’s leaders are now broken. Recently, these other former leaders have also been added to the broken column: WLT, MELI, RVBD, CRUS.


Today, APKT has moved into the broken column. As usual, with a market in correction, we want to remain in cash because it is unknown how low the market can go.


Best Returns,


Scott O’Neil

MarketSmith, Incorporated