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Sullivan is editor of two newsletters, The Chartist and The Chartist Mutual Fund Letter. Sullivan has been publishing the first of these since the late 1960s, nearly 40 years ago.

His "gut feeling" is that we're in a bear market that we will need to let "run its course." That's Sullivan's way of saying that the decline he now expects is not likely to be a small one, either in terms of duration or magnitude of losses.

As a result, Sullivan has liquidated his two model stock portfolios and gone completely to cash. The last time he was in an all-cash position was in early April 2003, nearly five years ago.

Would Sullivan anticipate recommending short sales for his model portfolio? He said "no," on the grounds that it is difficult to turn a profit when shorting a stock, even when we're in a bear market. There are too many ways in which you can be "right" about the stock and still lose money, he said.

The safest place to be, for now, he said, is "cash or the equivalent."

For the record: Sullivan's newsletter is in 4th place among the services the Hulbert Financial Digest has tracked over the last 25 years.

http://www.marketwatch.com/news/story/long-time-bull-turns-bearish/story.aspx?guid=%7B13831378%2DD85D%2D4AEC%2DBFBF%2DD289224E9620%7D