Batten Down the Hatches for a Dive

For starters, my various technical indicators grew sharply more bearish last week. This abruptly ended my tenuous short-term bullishness and prompted me to raise cash all the way up to 50%.

I also lowered ratings on some of my past-mentioned stocks. Smith & Wesson (SWB - commentary - Cramer's Take) and OSI Systems (OSIS - commentary - Cramer's Take) are now holds, which in my parlance means I took half of any remaining position off the table.

I sold outright Global Signal (GSL - commentary - Cramer's Take), WR Berkley (BER - commentary - Cramer's Take) and Enterprise Products (EPD - commentary - Cramer's Take). All of these decisions were made more for technical reasons than fundamental ones. I also took out a couple of bets against the indices. Though I'm still a tad net long, that could change any day.

While hindsight may prove my defense is too severe, I am acting out of concern regarding a growing typhoon of negative data and indicators. Considering the damage that could be wrought, it just seems foolish not to prepare for a direct hit.

Punch-Drunk Consumers

I am not so sanguine about the ability of the U.S. consumer to continue propping up the world economy. Yes, I harbored similar concerns (incorrectly) over a year ago, and September's retail sales seem to show the disconnect once again between consumer confidence indices and what the American family actually does when wandering through the aisles at Wal-Mart.

But past performance by the U.S. consumer does not guarantee future profligacy. Bulls seem to be arguing that what has not killed the U.S. consumers must have made them stronger. But I think there's a better-than-anticipated chance that the consumer is more like a battered boxer in the late rounds of a fight -- still standing for sure, but definitely bruised from past blows and more vulnerable to future ones.

And future hits are a given, in my opinion. Higher heating bills, interest rates and inflation are the obvious ones, so obvious that some argue these factors have already been accounted for and budgeted. I doubt it.

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At the time of publication, Moreland was long SWB and OSIS, although holdings can change at any time.

Jonathan Moreland is director of research and publisher of the weekly publication InsiderInsights, founder of the Web site InsiderInsights.com and the director of research at Insider Asset Management LLC. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. While he cannot provide investment advice or recommendations, Moreland appreciates your feedback; click here to send him an email.