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While the action today is not as nasty as we have seen before, it is still somewhat disheartening (unless you're short). There just isn't a lot that is working right now.

A lot of people are talking about the consumer staple stocks (PEP, K, GIS, etc.), and while those are holding up much better, it's still a case of relative outperformance. But I don't think that you are going to make big money overweighting your entire portfolio into those names.

I own some staples, and they have been steady. But I also think there are a lot of undervalued growth stocks out there. The key is to be patient and weather the current bout of pessimism. As such, I am holding higher cash balances than normal.

But I am not predicting the type of downside that many are. I think we are more in a trading range for the time being, and may be revisiting the lower end of the range in the near future. But I also expect another strong 4Q rally this year.

TGIF

long PEP

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