I don't usually start threads like this but, I've been positioned bullish for almost a 1.5 years and experienced an epiphany of sorts this weekend. Multiple indicators that I watch have been looking bearish but what wrapped it up was a grasp of the macro-economic dynamic right now. Many here are complaining about extreme liquidity provided by the Fed and how it has to be unwound. This is true enough, and consumer spending is due for a hit within the next 12-18 months. Markets have only just begun discounting this now. The real scary factor is China, which has just recently experienced a dramatic expansion, with bubble-like investment in multiple sectors. The scary part is the short-term drivers of this investment. Get this - the US Fed jacked up liquidity to counter potential fallout from the launch of war, etc. etc. In China, the catalyst for extreme liquidity about the same time was SARS. Yes, SARS. Recall that SARS all but shut down Hong Kong and the global community was furious at China for keeping the disease a secret. Domestic anger was at high pitch as well. This was potentially a grave threat to stabilty and CCP power in China. Think TianAnMen on an unprecented scale: Beijing, Shanghai, Guangzhou, Chengdu. Think tanks, CNN, trade restrictions, all kinds of nasty, ugly stuff. How did China counter this threat? With their tried and true formula - improved living conditions and a strong economy. I'm not an economist and I don't have stats in front of me, but I'm certain the PRC flooded their economy with extreme liquidity and gave banks marching orders to lend, just as SARS was all but shutting down much of the country. This is the real threat - much of the recovery over the past year, in the US, Europe, and, well everywhere, has been contingent on bubble-like investment in China. Now that China is unwinding this liquidity flood and the US consumer is poised to step back, we vulnerable to a world of hurt. I've aggressively unwound longs today and initiated shorts in NK, HSI and ES. Also buying some puts on the NK. Will be buying ES puts and selling rallies in the days and weeks ahead. That is, of course, unless things change.