Finally, Some Relief; Markets Try To Find Some Support, Bouncing On Higher Volume.

After eight straight days downs for the Nasdaq and seven down out of eight down for the SP 500, the market gave us a welcome sigh of relief, Friday.

The Nasdaq fell early but found support intraday and rebounded the best of all the indexes with a .62% gain. The SP 600 rose .44%, the SP 500 rose .41%, and the Dow Jones Industrial Average rose .14%.

Volume was higher on both the NYSE and the Nasdaq. However, this is not an all clear signal to start buying stocks as the indexes have tons of overhead resistance to fight off. The SP 500 found support at the 200 dma but is still solidly below the 50 dma. The Nasdaq is below both lines of support. Those lines are now lines of resistance. The trend is down on all time frames on the Nasdaq so this is NOT the time to be buying stocks.

What we need to see is if we get a follow-through day on the third up-day of this rally attempt that started on Friday. This should happen within the next ten days. However, even if we follow-through we will still need to get above the 50 and 200 dma to get bullish on the Nasdaq again. If we start to selloff again and undercut the lows on Friday, you can erase that accumulation day on Friday and reset the count.

That along with the Nasdaq's 50 dma now trending down just doesn't put the odds in our favor of jumping into stocks and buying the en masse on the next uptick.

Leading stocks also support this. Many of the top stocks in top industries have come crashing down--all of them. And as for new leading stocks replacing these stocks that have gone away...nothing. There isn't a solid rotation going on, except some money starting to go into Food, Tobacco, Medical, Leisure, and Retail-Dept Stores. Last time I checked there weren't many leading stocks from those groups and those groups normally outperform in poor market enviornments.This is not a market, I reiterate, to be bullish on in the intermediate to short term.

I mean the II Survey of Newsletter writers even showed bulls increasing and bears decreasing as the market fell. That should have gone the other way! Period. No, if's, and's, or butt's about it.

So even if we get a follow-through in the next ten days, I believe it would be a simple traders market. The best stocks in best industries could give us some gains. But as I mentioned before the big winners do not come from these trading follow-throughs.

BUT....that is far away from now. Now, I am just guessing at the future. But isn't that what people want? Even if they do, they also know the facts now and the facts show that this market has a lot of upside resistance to battle through. So, as I keep saying, keep the cash heavy and keep new buys very small. If you are brand new, don't try shorting just yet. It is a very complex and very different kind of game than just putting a market buy order in on a new long.

Stay alert. If you have taken some hits, don't feel bad. My account is well off the highs earlier in the month. But the most important thing is I preserved most of the big gains in my big winners before the selloff happened. That is enough to declare victory for me, even though I have lost money the past two weeks. It could have been a lot worse.

As long as you have cash still you have another chance. That is all we need to succeed. Don't get upset at the stock market for what it has done to you. It hasn't done anything to you. You did it to yourself. It is time to now review what we did wrong, what signs we missed, and what signs we ignored for our own greedy pleasure. I will see you in Investors Paradise.

New Swing Longs: GGI CXW WEBX AMD -- for more info on longs go to Joshua Hayes on Investors Paradise.

New Swing Shorts: SSL

Shorts Watching For Entry: TTM IPS GGB VTI GXP

Longs Outperforming Market-number is % gain after purchase: JOBS-33 RATE-150 AKAM-114 COGO-72 HSR HOM-108 PKE RSTI-39 TZOO KEX-48 LRCX-41 BGC-74 CTXS-52 TGE IHS-30 NMR-33 SNDK BAM-29 WDHD ATHR-85 MTU CYMI CBEY BWP AOM RBAK-228 KNOL-119 SWW-42 SYKE PAY-46 PWR SMDI-147 KNXA-68 DIS CVO-92 DCEL MNST-52 HNZ LCC-131 UVN REFR PSPT AXE-32 CPTS-25 SWIR-38 NAVI MORN

Shorts Outperforming Market: ELY CRXL SWC JOYG BPFH ASA AMH CLF FCX ILF IYM CBSH SGY BUCY EWZ RTP