Just wanted to send a quick update to those of you who have taken my advice to start selling equities and mutual funds....

The data indicates that outflows from mutual funds is heavy and on par with the money that was liquidated last September. This tells me that the selling pressures are intense and more likely to subside soon than to intensify. If this happens a brief summer rally could ensue that will be swift and sharp. I know it is hard to believe a sustainable rally can happen after Friday gave us yet another fake-out (I have lost count now!), but it is possible. However, any summer rally will only set up the classic, and typical, Fall sell-off.

So please note, this is not another one of those tired bottom-fishing calls. This is more an alert as to what the balance between buying and selling looks like out there.

So what to do? Your goal should be to maximize cash BEFORE Labor Day weekend. Whether you sell it all now or gradually is up to your own individual risk tolerance. I would recommend selling gradually since I always advocate leaving room for being wrong. In these cases it is always best to sell into rallies rather into sell-offs. If the markets *close* below the lows they just set and begin separating downward from those lows, feel free to sell everything immediately.

Once you have accumulated a good amount of cash you should use any significant sell-offs in September-December as buying opportunities (but I would not be buying if no sell-off happens and would be happy just to wait until 2003 to re-assess the world). Again, the amount of buying you do is up to your own risk tolerance and investing horizons.

As always, be careful out there!