Well, amazingly, after analyzing my charts last night and looking harder I noticed some small problems (hence, my late night post yesterday) with some of my longs and did notice some shorts presenting themselves as good candidates. Today has now confirmed that NOW (not the past month and a half) we must be on-guard for lower prices. By habit I have sold 1/4 of all positions that have shown good gains or stocks whose charts have slightely faltered.
All indexes fell over 1% on a BIG increase in volume, cutting through some minor support levels. However you slice it, it was nasty! A 1% plus drops on a big increase in volume does happen quite often in uptrending markets but if you get one or two more in rapid succession in the next week you can be certain the upside momentum is over and the market could fall into consolidation or worse yet start a new leg down. Whatever happens be ready to have tight cut losses and stay disciplined.
$60 oil can only do nothing but negative things to the market. And the second negative about this bull rally, in hindsight, that we have had since May is that even though every trader I know thought we would not go much higher or were about ready to crash, every fund manager that I know was almost too bullish. Including me. The bullish/bearish newsletter writers report that I follow in Investors Business Daily showed that as the rally went higher bulls kept coming on board. That is not what you see at a hard bottom. And also bears never exceded bulls in the survey at the May bottom.
I will be back to find the diamonds in the rough on the long side and some shorts that I might like to put on, as I significantly raised my cash position at the close and will continue to raise in the morning.
GO PISTONS
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