Leading Stocks Continue To Take A Pounding; Stock Indexes Finish Mixed On Mixed Volume.

Stocks were pretty much lower throughout the day until a late day reversal helped bring the indexes off their lows and give them a decent short-term oversold bounce. The Dow Jones Industrial Average led to the upside with a .42% gain, the SP 500 rose .25%, and the Nasdaq lagged with a .23% drop.

Underneath the relative ok performance of the big-cap indexes today, the small-cap stocks and leading stocks did much worse. The SP 600 fell .45% and the IBD 100 index full of leading stocks fell 2.3%. That is just horrible. In three days the IBD 100 has fallen 2.6%, 3.8%, and 2.3%. If that kind of performance in leading stocks doesn't make you want to get cautious and NOT try to catch this falling knife, I don't know what will. It is obvious this pullback is much different than any other pullback we have had since the October lows.

The semi-good news is that the Nasdaq found support at its 200 dma and the SP 600 put in a major intraday reversal. But besides a short-term bounce I just don't see any new leaders out there to take the baton. It seems to me the leading stocks of Medical and Food tells me that the market is in trouble. Oh, yeah, I forgot about all the climax runs, diverging indicators, and everything else that I have been talking about the past three days.

So let's not get too wild about buying this pullback. I think it is best to stay in plenty of cash. And unless you know how to short stocks I don't recommend that either. This isn't a proven secular bear market yet. That will take plenty more time. AND TRUST ME then you will have plenty of time to short plenty of stocks for OK gains. Besides, there are still great longs to buy in the Medical and other sectors that will go up in a bad market. Also I would lock in profits more quickly than last time. Three out of four stocks follow the market.

So we shall see what tomorrow brings. Whatever it is, I will be ready. Like always!

New Swing Longs: FVE PSPT TIII TTG--For more info on longs and shorts, go to Investors Paradise.

New Swing Shorts: CRXL SWC--on a bounce to the 50dma. If no bounce, there is no short.

Longs Outperforming Market-number is % gain since purchase: LMIA-130 ACR-115 ICTG-96 HOM-83 NVDA-78 JOBS-38 COGO-68 MTU MORN SHFL NMR-40 AAPL LYV AOB TVIA TMG SPSX-56 ABI SBAC-49 USEG HNZ DIS NAII SNTO-28

Shorts Outperforming Market: NVT ELY

Stocks On Radar Screen: AE PCLN

Selling All: Gold stocks