Da Bounce

Ok...this is my first commentary on what's going on. This is a 2 year weekly SPY chart.

Current conclusion: this market is NOT out of the woods, at least for a few months. The last major selloff we've had was May 2006 and ended mid-summer. This is shaping up very similarly so far.

Things to note include the way SPY took out major support in February, and now we have rallied and edged up to the breakout point. This is textbook action, i.e. trend break and retest. In the next few weeks I expect to see the MACD start to roll over again, and then I believe it will be time to resume short operations.

Luckily I bought into the major averages a few weeks ago anticipating the rally and I got it. Yesterday I cashed out of the long ETF's. I think I could have let it ride a few more days but I got a bit itchy. I want cash on hand in case I need to go short in a hurry.

In contrast the energy sector is performing like a champ so far. Let's see how far that takes us.

I have roughly 40% of the portfolio in wonderful, profitable dividend churning cash rich stocks and I would rather defend them than cash out like a wuss.

Let's see how we close today.