Amazing, Amazing, Amazing

I tried, people, I really, really tried.

At 11:55 a.m. EST I wanted to do something I hardly ever do - - put up a post during market hours with a special alert. I was going to give it the subject line "Run for Cover!" and tell everyone to close out all their shorts, go long (if especially aggressive) and basically run back into the bear cave for now.

This would have been exceptionally good advice. I followed it myself, closing out over 40 different positions at fabulous profits. But the pinheads at Blogger can't seem to keep their systems up, so try as I might, I couldn't get the word out.

I'm not sure why I felt so guilty about this. After all, folks, you pay me $0 for this service. I write it just for the hell of it. But I still feel an obligation to my loyal readers to give them some clue what I'm doing, and when I decide to take the highly unusual step of closing out everything, I wanted to say something about it. (If optionsXpress had a Close Everything At the Market button, believe me, I would have clicked it).

Here's the graph of the S&P on a minute-by-minute basis, pointing out the exact moment when I closed everything and wanted to get the blog posted:


Here is the image of the graph I took at that time illustrating why I felt the NASDAQ had bottomed out for now:


And here's the gorgeous channel on the S&P 500, illustrating a perfect touchpoint on the support line. This was far and away the biggest reason I felt it was time to get the hell out of Dodge.


As you well know by now, the markets did a total "V" today. This has resulted in more hammers than a Home Depot tool aisle. Here's the NASDAQ Composite:


The Dow 30 hit its Fibonaaci marvelously.......


....as did the S&P 100........


The Gold & Silver index ($XAU) looks so oversold I think it's ready to push back to the underside of its former support line.


Of course, the big question is: what's next? It's great that we've had such a nice quick ride down (nearly 600 points in just under four sessions). But what now?

I think we're clearly in a bear market now. So the fun is really starting. The key is to avoid the occasional upswings (or even profit from them). With all the hammers around, I've got to believe there's a strong chance we've bottomed out for now and should just step aside until we get back to safer levels. I would mention in passing, however, that the $VIX looks like it's making a nice series of higher highs and higher lows, which suggests that today's late-day surge might simply be another setup for yet another fall.


I am 100% in cash now and am at least going to wait until 10:00 EST on Friday to see what the market's doing. If it looks like it has any reasonable strength, I think I'm just going to keep sitting this one out.