During the three years or so that I’ve been doing this newsletter, I’ve rarely gotten the market direction so wrong. All the technical signs last week pointed to a summer rally. Fundamentals wound up, however, handing those technical signs their head on a bearish platter. Glad I’m mostly in cash and holding just a few biotech positions – which only took a glancing blow.

What now? Well, the economy is slowing along with job formation. The housing sector continues to fall into the dumper as residential home builders begin to slash their work forces. Oil prices are stubbornly high. The start of the earning season suggests there is going to be quite of bit of missed earnings and downward revisions to company forecasts. The dollar remains in a weakened condition. Shall I go on?

No need really. My advice, at least to myself, is to hunker down for the long hot summer mostly in cash while I sit on a few long term buy and holds like EPIX and VITA. That’s the strategy for July as The Well-Timed Strategy crew takes our summer hiatus. If you absolutely, positively need to make money, feel free to deviant from that strategy. On the other hand, this is the best time of the year to take some time off from the market as volatility and volume both usually are low.

This Week’s Market Movers -- No Xmas Cheer this Earnings Season?

It’s a relatively light calendar for economic reports. Of the bunch, the trade report on Wednesday has the most market moving potential. The large trade deficit continues to weigh on the markets via the inflationary dynamics of a weak dollar and the collateral need for higher interest rates by the Fed to prop it up.

That said, there’s a whole bowling alley full of earnings reports rolling down the lanes. Alcoa (AA | Quote | Chart | News | PowerRating) on Monday, Pepsi (PEP | Quote | Chart | News | PowerRating) on Tuesday, Gannett (GCI | Quote | Chart | News | PowerRating) on Wednesday, and GE (GE | Quote | Chart | News | PowerRating) on Friday, just to name a few. This earnings season is likely to be the most important in several years. Weak numbers and downwardly revised guidance is a likely theme and the markets will HATE that.

Peter Navarro is a business professor at the University of California and the author of the best-selling investment book “If It’s Raining in Brazil, Buy Starbucks.” His latest book is "The Well-Timed Strategy.”