Tuesday's sell-off may have been a classic case of buy the rumor/sell the news -- heightened a bit by the president's anticipatory remarks at his first press conference on Monday.

Whatever the reason for Tuesday's sell-off, it will no doubt terrorize the public and have the letter writers running for even deeper cover.

Using long-term seasonal cycle studies, Sy Harding was 100% invested until mid-May, when he exited the stock market. He notes, "We may have been early in taking bear fund positions, but it has now paid off."

In his Street Smart Report, the advisor now says, "We continue to expect the low won't be seen until the October-November time frame." In line with this view, he reviews the "downside ETF positions" in his model portfolio.

The advisor explains, "We believe the correction has just begun. We still expect a decline of 20% or more for the Russell from its peak to its low in the October-November time frame."

In his Aggressive Seasonal Timing Strategy portfolio, the advisor has been holding a pair of exchange-traded funds that bet on the downside: ProShares Short Dow ETF (ASE: DOG) and ProShares Short S&P 500 ETF (ASE: SH)."

For those not holding these ETFs, Harding suggests buying now. He forecasts, "Wall Street and market pundits will be trying to hold the market up by focusing investor attention on earnings. But earnings won't matter as the real problem won't go away."