Bill is right as rain on bonds here, it's a downpour. Traders on the run (blood in the streets?).

In my accounts, I have increased my exposure as bonds have come in the past few days- from 5% to 12% in bonds and utes. Currently showing an unrealized loss of 1% over all. 5% of the position is long dated STRIPS which I consider 'core' for now in the event of a hard landing; 2% in corporates and 5% in utes are new in the past few days.

Sentiment has moved sufficiently to justify more exposure, but a break in the downtrend is required to take further action.

Bonds are very oversold (and may get more so)

Utility sentiment is at a bear extreme (and may get more so) at Rydex

The closed end utility funds and corp bond funds have seen premiums vanish and some now at nice discounts / high yields. Also seeing some insider sponsorship here.

Bond sentiment is at a bear extreme at Rydex but actually upticked yesterday

Stock:bond ratio at extreme suggesting that stocks are stretched to the upside relative to bonds. It is unlikely that stocks will continue to rise AND bonds continue to fall.

So, if one has a heavy exposure to the equity side in theory the long bond could make a good hedge here. Of course as an individual investor you also can go to a substantial cash position (as Bill has been for some time), that is the lowest risk alternative.

Worth repeating that a break in the current down trend WHILE sentiment is at negative extreme is a lower risk entry point.

JMHO

stockman - if you please, where is Rydex Gold sentiment these days? Thanks for the post.

Bill - The "Bond King" might have been reading your remarks because he is now calling for a "strategic boycott". Here are his exact words:

"... PIMCO suggests in the near term that a total boycott of the bond market is impractical since non-economic central bank buyers should continue to dominate. We do suggest, however, a strategic boycott of most risk assets based on the reality that an investor is not being paid adequately to hold them, as well as the Greenspan assumption that today's low risk premiums ultimately lead to future periods that end badly. In turn,
we currently suggest a substitution of near cash assets and non-dollar currencies for standard index assets. These out-of-index bets ultimately should produce higher returns with less than expected risk if done in moderate quantities...."
http://www.pimco.com/LeftNav/Late+Breaking+Commentary/IO/2006/IO+April+2006.htm

Personally, I think that some of the commodity-based dividend paying stocks that have insider buying might also be good near-term bets for more total return than a near-cash assets such as CD's or Money Markets. Of course, good stops are always advised in this market!

Long: EPD PNY

stockman-

Larry Berman (CIBC World Markets), whose work I respect, said (ROB TV) that utilities are still reaching for a first level of support, but that once having reached it and rallied somewhat, further declines may be in store (rate hikes). Makes sense to me. Similar to homebuilders IMHO.

Guys & Gals-

Great Chart of the Day. Shows the parabolic rise in home prices through this low interest rate period (mid-90s on):

http://www.chartoftheday.com/20060331.htm?T

What goes up?

g034-

I should get your email sometime, a picture...

Sentiment troughed a few weeks after prices and has now begun to rise in earnest. That being said we have just crossed the 50dma on assets and are about 1/2 way back to prior peak. Note that the NAV of the PM fund has recovered almost ALL of it's price decline so if sentiment should go to the prior extreme it should peak with prices well past prior highs.

Rydex Energy looks similar-

JMHO as always.

Great chart MarkM. Makes one want to short the homebuilders ETF.

Now CNBC is going to talk about zinc. Didn't Bill predict this earlier? I have to leave for a meeting at the Merc so I'll miss it.

Stockman, thanks for your ideas on some defensive stocks. I also consider some homeland security stocks at the right price in a somewhat similar vein (GD, FRGO & VICL). But as Bill says, all including the PM go down in a bear market.

LONG all mentioned, with a lot of cash on sideline.

g034/stockman-

Let me know and I will act as your intermediary (email) to make this happen.