MarketWatch.com’s Mark Hulbert reports that Dan Sullivan, whose newsletter The Chartist has been the most successful that Hulbert Financial Digest has tracked over the past three decades, has moved all of his model portfolios back into cash.

Back in April, Sullivan, who had presciently cashed out of stocks in January 2008, moved half the cash in his model portfolios back into stocks. In June, he put the other half into stocks, Hulbert says. But a couple weeks back, Sullivan moved his stock portfolios back into cash; now, he’s also moved his mutual fund portfolios back to cash, Hulbert says.

“Other than repeating to subscribers that his preset stop-loss levels had been triggered, Sullivan offered little rationale this week for his retreat to cash,” Hulbert said. “His market timing model is largely a black box, and the only basis we have for paying attention to it (or not) is its track record.”

Hulbert says the net effect for Sullivan’s calls this spring and summer have been a small net loss for his average portfolio. “But we shouldn’t need to be reminded that no market timing strategy is always successful,” Hulbert adds. “Failures are inevitable. The key to long-term success is keeping losses small when bets don’t work out so that those losses don’t cancel out the profits of those bets that do work out. So there is no guarantee that Sullivan’s recent bearish turn will be any more successful than his bullish turns earlier this spring and summer. But it’s a good bet that, if the rally does quickly reassert itself, Sullivan will jump back in.”

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