The recent weakness in the markets is concerning, but not overly so. A Fed meeting is a little more than two weeks away. The odds are extremely low the Fed does not deliver at least some encouraging language in their July/August statement. They do not need to announce QE3, they just need to hint at it. QE2 was hinted at in late August 2010, but not announced until early November. As shown below, the markets did not wait for the formal announcement.
The S&P 500 and NYSE Composite Index have numerous forms of support relatively close. We are open to hedging our long positions between now and the Fed meeting. Given what we know today, any hedge would be relatively small in terms of percentages, at least the first incremental step. Flexibility remains extremely important.