Fundamentals keep blowing-up . . . for those calling conditions ripe for recovery yet in the United States. While we would absolutely prefer to see just that occur; we have an obligation to remain realistic, even if it's not what investors generally want to hear. When forecasting this entire saga back at the very end of 2006 as the 2007 Outlook (and by the way we were honored to learn that our call for 13,200 at yearend 2007 a year earlier was not only the lowest of 16 Blue Ribbon panelists polled; but closest), we said it would be a 'Chinese Water Torture' drawn-out affair, and it remains that. Of course the cash buildup provides fuel; but (reserved for ingerletter.com members). Of course it's amusing listening to pundits tell us how 'high' the market is; whereas that essentially ignores the narrowness of the gains, and the sector limitations as well.

Dow Jones Industrial Average chart:

(chart courtesy Quote.com)

MarketCast (intraday analysis & embedded Daily Briefing audio-video). . . remarks forecast substantive irregular volatile rallies over the weeks just past (as outlined). 'At risk' markets were seen returning as previous oversolds got 'eliminated'. I called for rebounds erratically that would make it look like 'pause to refresh' action; but they'd falter; and they universally did. We called for a late fade in the S&P despite the Dow strength partially because of strong energy & commodity action holding the Dow up relatively; called resumed risk; masked by transnational commodity-based shares.

In any event we're retaining a macro (forward-roll adjusted) June S&P 1599 short; irrespective of interim oscillations; including periodic intraday shorts and longs (now mostly shorting spikes as upside is winding down). Changes in prognosis as needed.

(New members: Daily Briefing is complimentary with MarketCast. Email California office for details. If you're a Daily Briefing member and wish to upgrade; that is easily done via Lynn in our office as well.)

• (For complete access to this weeks Daily Briefing, select Inger Seven.)