As the market rips higher and sentiment swings wildly into the bull camp I think it’s time to brush up on the death watch list.  As I’ve been saying for weeks this market is susceptible to all sorts of shenanigans until April comes around.  Then the real test starts.  I said two weeks ago that this market was a coin flip heading into April:

“The market is fixated on the M2M accounting change, uptick rule change and the latest and greatest version of the Geithner bank plan which makes the next two weeks a real coin flip.  Shorts will be very hesitant to jump in front of policy action, but once earnings season gets into full swing in early April I expect this market to once again focus on the fundamentals and the truth about corporate earnings will once again (unfortunately) be revealed.”

The government changed all of that with their recycled TARP plan.  I’ve been on the sidelines (after staying out of the market from January-March before calling the 666 bottom) since the Fed meeting last week and expect to remain so heading into April where I will likely look to implement some short positions or remain neutral/heavy cash.  These are not the times when you run with the crowd.  The Ultimate Indicator and my other strict risk management tools are the main reasons why I called the crash in 2008, why I navigated last years market to a 19% return, why I am in the green this year and why my risk adjusted returns (Sharpe and Sortino) are more than double that of your average mutual fund manager.  Having strong risk management structures in place won’t help you navigate every little move in the market, but it will keep you out of the disastrously risky times.  I am quite confident that now is one of those times and I have no problem missing out on any further upside.

With that in mind I am brushing up on potential short positions:

Death List — Companies Outlook Q1 2009