AH....

Every once in a while, I get the feeling that I actually know what I'm doing in these markets. Things that I look to possibly happen actually happen. I feel more in control of the portfolio.

This was one of those days.

After a week of probing to the downside while taking small losses, I scored nicely today.

I could throw up a daily chart, but nah...let me describe it instead: since mid-summer the S&P 500 has been a series of selloffs followed by rallies to LOWER HIGHS. This pattern was NOT changed by the Fed dropping money via planes trains and automobiles into the banks and brokerages. The monster rally set off by the Fed has once again stalled at a lower high than before.

Now for all I know this could be a bottoming action, or it is the prelude to another nasty leg down, sending us into full blown bear market mode. I just don't know.

What I DO KNOW is that we are once again probing the downside with an increase of volume, albeit still light volume because this is the last week of August for God's sake.

Today was nasty though, any way you slice it. I think the only sector that rallied a bit was gold stocks, although gold actually went down a bit for the day. Transports slammed, semiconductors mauled, Real Estate obliterated, brokers broken, health care on life support, biotech booted, etc. etc...I'm out of clever metaphors for the moment. In short: nothing to brag about if you're a bull on this market.

Also re: my long bond idea: maybe I'll be right eventually, but I'm not right now. The is a spastic flight into bonds right now, and yields are still going down. But I still think the long bond rally is a weak one, and yields are going to have to come up...but it's not a trade yet, even if I'd hoped it would be one. Patience kids...we take what the market gives us, when it gives it.

Now, strategy wise this is what I'm doing: I'm short, but I'm using shorter timeframes to set my protective stops, so if/when the Fed decides to sprinkle more pixie dust on this beleagered market, I will hopefully be in a position to quickly take profits and possibly go long if events warrant it. I have no single stock positions because simply there are no stocks that meet my buying criteria.

OK, time for bed