Up on Bad

This week, the economic numbers keep coming in below consensus, earnings are slowing, and the earnings plays still pop and the market still keeps going higher.  It looks like the May selloff took out the weak bulls.  Now, you have mostly the true believers in this market who will only sell if things get really weak.  The hedge funds are up sh*t creek.  They have been selling the dips and buying the rips, and can be seen by their massive underperformance versus the S&P this year.  The S&P w/ dividends is up over 9% in the first half of the year, and hedge funds are up 1.7%.  They are underperforming bonds, stocks, everything.  This is on top of last year's very poor showing where they got trounced by the S&P. 

I am surprised that there are hardly any redemptions at these funds, it seems like another big asset class that has mediocre performance, but with big fees.  Worse than mutual funds, if that is really possible.  I am betting that the hedge funds will have to soon chase for performance, getting aggressively long, and will start getting desperate if the market doesn't fall soon.  That is the only downside I see with shorting right now.  The market is in denial, but it may stay that way until more hedge funds pile in and mark a top.