The Daily Dose of Trading Comments

Mercifully the month ends for us as it's been month of lessons in trading. We have perpetually positioned a day late and a dollar short or conversely, a day early and two dollars short. I'll catch up with some thoughts later but for now I sign off. Uptrend still looks in place; more like consolidation today it appears.

For the past fortnight, the days that we saw strength the underlying strength was missing and now that we see weakness, the underlying weakness is also absent. Although negative now, it's taken half a day for the internals to turn sour as they were mixed all morning.

We are seeing a breakout in PAAS today and a short squeeze developing there. That's the one bright spot in the market today for me personally. There are plenty of stocks up and down big as has been the case of late due to earnings mostly. These boards are pretty red today though and late day strength today seems like a pipe dream. I do expect some sort of push to occur here somewhere soon, but I expect they will sell it back down today. The one bright spot arguing for a push is that oil has come back in as they head towards the close.

Some register ringing today with oil heading higher and that overheating PMI number. I did take some long exposure earlier but it appears I've gotten on the wrong side of this market once more and will get stopped out shortly on that trade. The only thing working for me is the precious metals. Need I say more?

From a vew outside of the intraday view, the test here today is of the breakout point on the SPX of 1239. If it holds, then you have the obvious thought of a push towards that 1250-1260 area still to come. Until we take out those targets I'll have to move cautiously on the short side as this bull is definitely hard to kill.

No sooner than I posted and the Chicago PMI comes out much stronger than expected and contrary to the earlier GDP numbers that shows more of an overheating of the economy or at least that's the way the market is looking at things at these lofty levels. The story being sold right now is that we have a just right economy where the Fed has engineered a soft landing. Anything too hot or too cold douses the idea and causes selling.

I believe there is likely still a bid under this market and although I protected on that hard sell down, I'm looking to add back again.

The markets started off weak again like yesterdays early weakness which lets the shorts pile in to call a top but if it turns on them, they run to cover which we saw happen again a couple minutes ago.

I would have to go with a bullish bias this morning but it's just barely. I did add longs on early weakness and will be protecting them now.

The GDP numbers did bring the market back in some as they came in a little lighter than expectations but in my way of thinking, the market should like that. The big problem would have been a really strong GDP as that would have hawkisk implications on interest rates. That's what the currency markets are saying as the dollar comes in a bit after the numbers. So I read the report as more bullish than bearish for the equities but we'll have to wait to see how it shakes out. I'm adding on weakness here on the index plays thinking this breakout move isn't a fakeout but instead another stairstep move towards those targets of 1250-1260 SPX.

Well, another possibility is these second quarter GDP numbers. If they were to come in really strong then the interest rate issues could become a catalyst for profit taking. I can't imaging them coming in really weak. They are due up shortly. There are a couple other numbers as well today but they are secondary in nature and likely aren't real movers other than for a few minutes.

I've been looking around this morning for upcoming events that could trigger a selloff and can't find anything other than possibly crude spiking to new highs here. If it were to spike higher today that could certain provide and excuse to lock in some profits.

Yesterday we witness the start of another leg higher on the indexes. It was a pretty clear cut move up and it's hard to find a reason to suggest it won't continue short term. Although I harbor doubts about the long term viability of the move and the higher we go the hard we fall kind of thoughts, short term this market is talking and it's talking in a bullish tone still.

I'll look to work from the long side as a result and hold off on any shorting ideas here unless something quite wrong develops. It appears that those targets a stones throw away are now in play and they are to be tagged before we are done on this move.

It's never easy is it ... or is it just me. I've worked both sides of the table today and I have little to show for my intraday efforts. The most frustrating part of this advance is that it teases the bears into putting out some stock and then just creeps higher forcing them to be on the wrong side of the market and have to some in and cover. Then you get that little lunge forward as a result and it stairsteps higher.

I did end the day with a DJIA long and will look to stay that way for a while. The bias was wrong today early and until I turned it wasn't pretty as we couldn't get any kind of pullback other than that one early one.

The precious metals are perking up and it's been a while since I felt good about any positions but those are finally looking as if they may be ready to do something. That FNX in particular is looking interesting but as I said before, the volume is very light in this issue so don't get in too deep just in case.

So the day ends at new highs and we certainly look as if we are ready to push to those original targets we laid out almost a month ago. There will come a time where things are not nearly so neat and so simple on the long side but right now nobody's asking questions. I used to hear the term fat and happy when I was young. I think the title dumb and happy is more apt at this point.

The strength of this tape continues and the short idea is providing nothing of substance so I've stepped aside. You'd have to be an ostrich to miss the tapes strength here and today doesn't appear to be the day for a hero. I'm looking for some sort of pullback to try and catch a little exposure to the north side of the street as we ready ourselves for the afternoon delight this market appears to be setting up for. Heck, if you can beat them, join them I guess, if only for a little while. This stair step higher is making it easy to see the exit points if it is going to break down.

As I write the market has made that push into the area where it either fails or breaks higher. I've waited all morning to find a good point to add a little short exposure and I'm doing so at these levels. Not that I'm all that comfortable mind you, but instead just looking to work a trade into what I see is some heavy selling at these levels.

The bias is mixed rather than lower at this point given the continued strength all morning and two sided trades can work. As I said earlier, one way or the other, one of those faster moves is setting up and the only question is direction. Trend followers are betting higher. Internals along with some other indicators suggest the fade trade. Whichever side wins, it promises to be an interesting battle.

Well, they didn't find their second wind and the bias has turned negative now. I would look for some kind of bounce over the next hour or so and will look to take some short exposure once again.

As you are aware, I've been accumulating the precious metal stocks for a week or so now thinking that an intermediate term bottom is in. I've added some more this morning. I'm staying away from most other stocks due to my growing negativity that we are slowly reaching a rollover point but I like the metals. One thing has been clear of late and that is that the profits these companies have generated of late came on the back of increasing pricing power ... in other words the ability to pass on costs. That eventually will show up as inflation even with the government continuing to discount that away through their increased utility/price depreciation models they use to calculate CPI. What a farce that is.

They are trying to run this market higher here early but I've got to tell you, when I post these numbers at night and look through the internals, the internals are negative and getting worse, not better. I'm still holding onto the thought that we are seeing a topping process. Timing it is a different animal but it is happening. The more I look at the bigger picture, the more I am beginning to believe that the highs we see on this April through July move (August if it carries that far) are likely to be the highs we see for the year. More on this thought in an upcoming Naked Trades article.

The bias this morning is mixed but if we don't catch a second wind soon it will turn negative.

As much as I've looked for a signal of a turn, it just isn't forming yet. There are no signs of exhaustion but rather a slow steady climb with little in the way of tell tale signs that the market has overstepped itself.

With the indexes trading at or near their highs for this move since late April, we are staring at 8 weeks of an up move and wondering just how far it will carry. Is it possible that the summer rally carries past July? Will the end be signified by a failed gap up/exhaustion move or will there be the slow rollover when it comes.

Each step higher sets up either a follow through or failure case. With the SPX pushing 1139 again, a push beyond those numbers that holds could set off another round of short covering and purchases propelling us to those original targets we set a month ago. A failure here at this level probably does the opposite setting off profit taking and short positioning. That's the way the market works. So the key area to watch is the 1140 area on the SPX. Same thing applies to the NASDAQ where the capture and hold of 2193 likely sets off short covering and additional buying and the inverse being profit taking and short positioning. These key areas setup throughout a move and they get more interesting and dangerous when a move has been underway for a period of time ... like the current one.

It's hard to argue with success and this market keeps flouting its success. New closing highs on the NDX and SPX with that 2 week trend line break on the NDX being a faint memory now. There are a number of earning reports before the bell tomorrow that could provide the extra juice to go up and tag those targets we laid out three weeks ago ... we are that close now. I made some money early on the shorting but had to give it back when we busted higher. I took and ugly stop on the NDX as my limit stop was jumped and I didn't get that order off nearly soon enough.

I'm looking to buy some DJIA futures after hours this evening as we appear ready to break a leg on this market's seemingly inevitable march higher. It's only for a trade mind you, but I grimace putting the order in. It's become a grudge match at this point with every step higher. I know that it doesn't matter until it matters but I sure wish that it would start mattering soon as I'm tired of the nonsensical move higher.

Impressive it was as they powered this market higher jumping right over my stops and forcing me to scramble along with everyone else. What's most impressive when you stop and think about it is that the chips are down while the NDX is making new highs for this move. If this isn't the teflon market, then I don't know what is ... nothing sticks to it. The two most important groups are showing red today (BKX and SOX) yet the market rallies. Maybe I've got a hole in my head being pessimistic here as this market is what it is and that continues to be teflon and rising.

We are approaching the time where a swift move either direction is likely to occur. Intraday charts are starting to look like an ascending triangle on the SPX and I don't like that given my bias. I'm monitoring and will get out of the way if they start to take off. Small caps still struggling as are the chips so it's going to be a real job if the bulls are to rally this from here.

Lunch hour here already and it looks like chips may be on the menu as they have started buying them for some reason. I'm still maintaining the negative bias but am watching this development closely. If the chips threaten green we will have a problem with this intraday bias.

I booked some early profits on the fade of the first move higher on the NDX but am reluctant to stick them back out again right now. I'm switching my attention to the DJIA futures here.

The buy programs kicked in on the NASDAQ a few minutes back driving stops and the price back to almost unchanged. Despite that, the Russell is trading down sharply as are the chips and I suspect we will see the NASDAQ come right back down as a result. I shorted into the strength and though I'm trailing with some tight stops now, I believe the odds are good that we come back in.

One of the things we talked about two to three weeks back was the idea that there are times to range play trades and times to think that the dam is about to burst (up or down) and that we should keep some exposure in play and maybe make a bigger bet. I have been researching lately looking for clues to allow me to know the latter situation is in play. So far I have no solid indications that I can time these larger than life kind of moves, but anecdotally it appears we are near a larger move rather than a range trade. I'm thinking it will be to the downside given the action of late so I am keeping some short exposure on the table looking for that move. If we appear to actually begin to get that move, I'll look to try a momentum trade in that direction with more exposure.

Look at the 1592 area on the NDX and the 10575 area on the DJIA as key critical short term areas that could cause some cascade type selling if violated.

The last couple of days I've focused on the DJIA for short positions. Unless BA turns and leaves a shooting star high here, I'll likely focus on the NASDAQ and the NDX today as the chips are weak and the offerings there are better for short exposure. Again for now at least, it's sell the rallies, buy the dips mentality.

The early bias is negative again. They opened them higher but is being met by selling. Until the bulls prove they still have buying power, I have to error on the side of negativity intraday.

There are a couple other reports that will hit these markets and could be movers today so be aware that an hour after the opening you have the weekly oil stocks. Oil is hovering around $59 again this morning. Also, the Fed Beige book is release at 2pm EST and reports on the economics of the country. With the real focus now on whether growth continues or abates, that will be scrutinized as well.

On the earnings front, the big names left this week are DOW and XOM tomorrow morning. Three are three weeks of earnings where the market is flooded with earnings news. Next week is the third of the three. So far they have not sold the news as we thought they might. The Fed has been forgotten though they come back into focus on August 9th.

It's end of month again and the levitate/consolidate type action is in full force. So far it's acting typical; more like a consolidation before a continuation and that may in fact be what's happening. I've yet to change my thesis targets which are still higher because this trend higher could still make another bolt northward before it's over.

At the same time, I've discussed here the need for caution and patience as the end is nearer than the beginning in my opinion. I may be fighting the obvious and could thus be throwing away the opportunity to embrace and prosper but as I've felt all along, there are too many warning clouds for me to stoop to that thinking. Maybe it's just my philosophical nature that forces me to doubt.

We have the DJIA looking stronger on BA earnings this morning yet I see the financials lagging badly preopening. Chips also look a bit weak early. Durable goods just hit and bumped us higher on higher than expected orders. As with a lot of these numbers, it's rather volatile and hard to read month to month but it does move the market when it hits.

The intraday bias the last couple of days has proved negative. We have witnessed to consecutive days of weak closes. What will today provide ... we will see.

Well, bust my britches ... a little give back into the close once again. That's two days in a row and though there are still no major breaches other than the NDX breach yesterday which was somewhat negated today, it's getting interesting. I'm still modestly short and looking to stay that way until it doesn't make sense. I'm still gaming for a turn but, as before, we need to get it pretty soon or our confidence will diminish.

Once again the market that just won't die proves it's made of industrial strength as it squeezes higher. No major tells have been made today as we are still range bound. It sure looked as if the wheels were getting ready to come off when the DJIA threatened it's line in the sand at 10575 but it did hold and pushed higher once more giving it a little breathing room.

As the days pass here, I believe we are quickly approaching a decision point where we either get a more serious retrace or we bust higher yet again. Either is possible and it's best to keep your positions at a comfortable size until the market tips it's hand. You can't totally discount the trend despite the warning signs but until those signs actually bear fruit, it's just more water under the bridge.

Yet another short squeeze develops and I continue to step back and forth selling rallies and buying dips from a short perspective. I know the indexes are higher on the day and with all the good news I suspect that makes sense, but this market smells of a rotten variety especially on the DJIA so I continue to work in that area.

The DJIA continues to be the weakest link in this domino game. It breached the 10575 area a bit ago and then bounced hard on some likely short covering but I'm not sure the real bottoming has been felt yet. I've shorted into the bounce as I keep a close eye on the NASDAQ as it has been the cushion today. If any weakness develops in the chips this could get ugly. TXN is really holding us up though and doesn't look to want to falter today.

So the game of cat and mouse continues with the attempted push higher here meeting some resistance. Bias is lower today just like yesterday and if you want to works some trades, that's the side to play from. Naturally you have to respect the short squeezes though as this long bull run still has a lot of admirers.

So today has a bit more up and down volatility as the traders are seemingly confused about which way to lean. I'm working a few trades intraday with the futures and concentrating mostly on the short side as I believe that offers the greatest potential. If the bottom falls out of this puppy it's going to be quite a ride.

The wheels look to be coming off the wagon right now as the NASDAQ is really selling down fast. There were/are plenty of warning signs out there and have been for a while. Timing a turn is never easy though and it's many times filled with frustration. What's most interesting here is that this must be programs coming in on the sell side given the underlying indexes. Don't know yet if they are speculative shorts or profit taking longs. Stayed tuned.

We are seeing a pretty good short squeeze once more take us higher. The DJIA scraped bottom early and then squeezed higher along with the other indexes. I've taken that short position that I talked of taking on this spurt but will guard it with a tight stop now. With DD being such a drag and not lifting at all in this squeeze, I find it hard to believe that we can sky today on this index. If this was a squeeze, then it should back off and the pressure reapplied.

The early bias is mixed with the DJIA negative but the NASDAQ higher. I'm looking to short the DJIA at some point. DD is a big drag today and that whole sector is getting crushed. I made one move short some of the WB I mentioned earlier. I'll short more if it rises.

Watch the chips and financials because they will be the tipping point in today's struggle.

TXN came in with strong numbers and is trading higher on them. In fact, most of the reports were positive last night and the mood is one of buying this morning. Futures have eased a bit but are still showing gains from yesterdays close. When I look at these markets though, I can't help but see possible warning flags all over the place. Mind you, they are still yellow flags, but flags nevertheless. The most important flag is that of the BKX that is showing a clear cut head and shoulders top. Earnings in the sector sucked air and the stocks are starting to break down some as a result. The financials are the heart of the majority of the listed stocks and just like the chips on the Nasdaq, without their advance, that entire market will suffer.

The weakest major, the DJIA, has failed to trade above that 10700 area. It hasn't broken down yet, but a move below the 10570 area would mark a retracement. The SPX reversed pretty hard yesterday off of new intraday highs while other markets couldn't make them. Add that to the fact that we are slowing in momentum here as evidenced about the break in the NDX of the two week trend line. All in all, there's enough to make me suggest that it is quite possible that the highs for this move are now in.

I'm continuing to look on the short side for swing trades as a counter trend trade. Unlike before, I'm waiting until we get a more clear cut signal that we have a more serious retracement brewing before I take a larger short swing trading position on the general indexes. Take a look at WB as a good short candidate now for an individual name. That sector is hurting and that stock in particular is sporting a failure bounce pattern now. See what happened to WRLD yesterday. The sector will soon be the talk of the town.

It comes and it goes. Not much of a bump up on the expected bounce intraday so I exit the long at a push and look to the short side again. The NDX has broken an important short term trend line that has held prices higher for the past two weeks. The SPX, NASDAQ, and DJIA are close to breaking theirs. This may mark the beginning of a retrenchment as the NDX led up and should lead on the way back down. I've taken a little NDX exposure short that I intend to hold now after the bell. TXN reports after the bell and that could cut either way but like INTC, it has ran up for a long stretch into earnings. Don't know if it will suffer as a result, but I would place the odds on that side.

I know this sounds like the same old thing ... counter trend trading, and it is. I'm staying small until we get a bigger break and on the other indexes. As I said first thing this morning, this rally appears to be running on fumes and though these trends have a way of going longer and farther than most would expect, they do run out of gas eventually. That may or may not be the case. We have some definite resistance areas to tell us we are wrong and will work with those on the assumption that we are getting a little change in character here; the absence of the late day strength. We need two or three days of late day failures so this is only a start, but a start nevertheless.

The rally was attempted quite early and failed. I again took the short for a intraday trade and am looking to close it soon. I'd like to see one more gasp down that provides the opportunity for a short covering squeeze into the close. I'm looking to switch long for a bounce trade if I can get that setup. Either way, I likely look to close flat today and let the overnight antics play out without me.

It's been a very slow day with reasonably small ranges and any profits made today were small ones on a percentage basis trading the indexes. Some individual stocks continue to rock and roll both up and down on earnings news.

Volume remains light and though we have steadily sold down off that little squeeze higher earlier, the fact that we are not getting a little better selling makes me think another little squeeze higher is brewing intraday. The market has show reasonable consistency to print money to buyers show see higher prices end of day. I would suspect that they are getting ready for the occurence again given that the selling isn't a little heavier. Until that late day strength is broken, it will continue to occur and the scalpers will buy in anticipation. I looking for an early pop (next hour) that fails leaving for a greater likelihood of some selling into the close where I can reestablish short positions. Bias is down today still and I'll look to sell any rally that extends itself as it did this morning.

We got the squeeze higher that is fading fast. I've been slowly accumulating the metal stocks again after they sold off. We tried them earlier, made a few bucks but had to step aside as they had evidently not bottomed yet. I'm trying them out again having added some last week and again this morning.

I'm short again here the DJIA futures and looking for this market to sell back down now.

Very low volume selling this morning which gives me little confidence in a continuation lower early. I've made a couple quick short trades but have booked them and am waiting to see if the bulls want to step back in here. At some point there will simply be a lack of buyers and that's when things will cool off quickly. Until that situation develops though, you have a large group of traders who are unwilling to step in front of this train and actually continue to stand on the tracks for any length of time; yours truly included.

The first half hour shows little in the way of setups although the early bias is slightly negative. That's the way I'm looking at the market for intraday setups.

After taking some time off to reflect on where we are, what we have been doing wrong and where we may be going, I've come to the conclusion that the primary problems were twofold. The first I mentioned a week or two ago regarding the tradeoff between success in trades and drawdowns. To keep the overall success rating higher, you have to be willing to hold a bit longer when trades are not working your way.

Secondly, we should typically try to trade in the direction of the trend and not anticipate the turn as much. When we do anticipate the countertrend trade, we have to have some evidence that a turn is upon us and some clear cut parameters of where we bail if wrong. We have to have something more concrete than just the belief.

Last week, we had the setup for the turn and we were right in taking the position for a turn but once we didn't get the followthrough on that gap down Wednesday, we had to pull our positions a bit quicker and run with the crowd. That's the sort of thing we have to do better.

What's most important is where are we now. We have bullish short term and intermediate term indicators with a sideways longer term. I still can't shake the thought that we are running on fumes though despite all the bullish indicators. As a result, I have to say that I believe that buying/chasing this market continues to carry more risk than reward. If you are nimble, then maybe it's ok, but it sure looks risky to me.

My desire is to see the thesis that we posted a couple weeks back play out. My timing had me thinking we would top last week. Maybe it's this week, maybe next. I suspect it's just around the corner though but rather than anticipate with no evidence, I'll continue to wait for a bit more evidence to occur. ACe points out some reasons to be careful up here and I'll not recount them. This morning we are starting out flat which is what you would want as a bull. Let's get back to determining a bias for our intraday trades and stay mostly in cash until we get a better setup to deploy our monies into.

I started the day thinking that finally, finally the stage was set and the dominoes were about to fall. The market refused to break though and as soon as the chips began to turn with AMAT and KLAC catching fire, what was a good day turned very ugly for me and all other faders.

I took a good hit today and until I turned and ran with the bulls, I was bloodied and beaten about. Two weeks ago I penned the current thesis we have ran with and I for one need to start believing in these thoughts. In it I said that the bulls were likely in control and that the targets were
2200 NASDAQ
1265 SPX
10635 DJIA
700 Russell 2000

I started to give up on the surge to these levels as only the DJIA had made it in the time frame I was considering. Today the market caught a second wind (maybe the third at this point) and took no prisoners as it stabbed higher. We closed at
2188 NASDAQ
1235 SPX
10689 DJIA
677 Russell 2000
.... still not quite there but definitely looking to make the numbers now. The summer rally has finally come again and it's making a believer out of all of us who care to think otherwise. I'm certain that it will end ugly when it ends and I will necessarily have to be cautious on this potentially last leg up, but fighting the tape here has been just wrong.

To that end, I'm going to take a couple days off to consider things and to remove the burden of writing off my daily tasks. I'm strictly long as I end the day and am willing to let those longs run if they will a bit farther. In the seventies there was something called the nifty fifty which, long after the bull market tha tpreceded the bear of the seventies had died, these stocks just continued higher. It feels that way again.

This market made a statement a couple weeks back when the London bombings took place. We gapped down yet prices were rejected at the low end and we started a 7 day swing higher.

Today we have the same story, just a different title. Today we have the situation where we gapped down on earnings news but once again lower prices are rejected and we turn green. Like it or not, this market is telling us that lower prices are not in the cards yet. Extended or not, bad breadth or not, this market wants to move higher for a while longer.

I have closed all my short positions; across the board. It's not working and I'm tired of forcing a trade through a keyhole. I've turned and went long the DJIA futures with a stop behind them. I'm considering the same with the NASDAQ. I'll give this market a chance to prove that higher prices are indeed in the cards for the coming week or so. It looks to me like the DJIA wants to close that gap that was left many moons back and that the NASDAQ wants to test 2200. I still harbor serious doubts on this bullish romp but until something turns here I'm beating my head against the wall and getting bloodied for the effort.

I cannot begin to explain the depth of my disappointment in this turnaround squeeze higher. All the cards were on the table for what I had desired and had built positions for and the table was turned upside down. I've taken some pretty good hits as a result as I had began to put on some sizeable positions and I gave them enough rope to make the hanging painful. At this point I'm totally clueless and am starting to think I need to take some time off. Back in a bit.

Strength in the small caps is building again as they surge forward once more intraday. The chips are improving, down only 1% now and the BBH continues to push higher. All of this is combining to give strength to the NASDAQ and, as a result, the beast simply won't die. This strength is disconcerting to someone leaning the opposite way yet again and has me truly questioning my opposition to higher prices. Maybe there really is a summer rally underway and it refuses to die for another 2 or 3 weeks. Right now I feel clueless.

These are quite dangerous times for the market because you are either on one side or the other. There's very little middle ground. I am attempting to use this mornings volatility to make a few dollars shorting and covering in the DJIA futures. I've been that route twice already and am looking to get short again.

I've finally shorted the SPY (last night) and the IWM (a bit ago on the early bounce off the gap down). It is going to be an interesting day to say the least. The early ledger shows continued pressure although one sector, the banks, seems to have stabilized after two days of distribution. Likely a pause there only.

There is a stampeed into the biotech arena after the AMGN report. Seems like even that sector is starting to suggest a last fling type move. The key today, in my opinion, is Greenspeak and the chips. INTC is such an important barometer and if it appears that it really is breaking back down that will weigh heavily on what has been the leader of this charge higher. Tomorrow offers up a spate of earnings after the bell with GOOG and MSFT leading the billing. MSFT usually is in line and GOOG has beat wildly so far in it's earnings. That could continue but that's kind of a one pony trick I think. So, I think we have seen the big earnings for the week unless MSFT surprises which is uncharacteristic.

Chips are down 2% out of the gate. For the day, watch that sector carefully and watch to see if Greenspeak offers any bones to the bulls over the next couple of hours.

There was a time when a little more sanity ruled the roost on Wall Street. That was back when the mutual funds had the upper hand and were the ones who you could count on to move the markets. Now with mutual funds giving way to hedge funds we see a time frame compression on results. What I'm talking about is the fact that the gyrations from day to day seem greater now than in the past where there is such a disconnect between one days direction and the next.

Now at the turns it is expected but during the trends it makes no real sense. Short term performance decisions greatly impact the markets more now than in the past in my estimation and the vehicles are more short term oriented players who have size. Mostly thats the new breed of fund called hedge funds but I suspect that it's even the old breed mutual funds as well as they are forced into shorter time frames.

I bring this up because I myself have become more and more short term oriented over the past year or so. It's been mention on the boards by others and I see it in my data as well. I'm not sure it is better or worse but certainly different. Something to continuing thinking about.

As for today we have earnings again and all but AMGN look red. I've talked about earnings and the sell the news probability. It appears to be kicking in finally. We also have Greenspeak this morning and that is likely to impact things as well. Any hint of rate rises coming to a close will cause a spike. Steady as we go will likely accelerate the selling. Bias is still for a turn down here.

The day was one of strength and it lasted all day. I thought you might see some profit taking towards the end but not to be. They pressed higher even in the afterhours with AMGN reporting first but then reality began to set in with each subsequent posting and we find ourselves down fairly big as I write.

I dabbled with some trades in between other things I was doing and I did get shorter by the end of the day. I'm doing my best to stick with my thoughts on the way this market will play out and not be scared out of it. That requires some fortitude and confidence which has been an issue this year to some degree.

Today has been a strong day for the bulls following yesterday's light volume pullback. THe internals are good and volume good as well. Remember we were up 7 straight, got a light volume pullback and then a strong surge again today. The market is setup for some major fireworks as a result and the question is which way do you want to lean? I'm a fader at this point as the exuberance is more than I can handle. We are at the beginning of a night full of earnings reports and the day before Greenspeak begins his testimony. I do not expect that he will be a dove tomorrow no matter what the Fed has planned for rates.

The most bothersome point about all of this is that it looks to pat; the setup is too perfect. That of course makes me nervous as well and keeps me from doing anything of size still. The one confidence builder in all of this is that the financials are still lead weights today and the listed issues are going to have a serious problem lifting much without them.

That was quite a squeeze higher and they did set new highs but on negative divergence. That divergences seems to be setting in now as we come back down. I've done very little today and I still think we are seeing the vestiges of the a tired bull. I'm measuring my entries but thinking short still.

Well, the giddy opening lasted about 10 minutes rather than a couple hours. Expect the next push here soon. If they don't top the early highs we could see some better selling then. Financials are missing in action as Greenspeak comes tomorrow and on the back of C earnings they are like lead weights.

It's turnaround Tuesday and the markets are on cloud nine. The bearishness of yesterday was but a one day event and futures are charging this morning. Expectations are high for todays earnings flow and IBM has this market juiced going into the evening.

I was playing blackjack with my family this past weekend and had remarked that you live for the runs, you know, that string of 6 or 7 wins in a row where you can build up your holdings. Inevitably during those runs though, there's a prove me hand, a situation where you have to really work to win. The market is no different. It provides the runs and it has the prove me hands as well. Last week we saw a couple and the market held in there.

Today we are more like what you see at the end of the run, the last hoorah, the case where you get the sense that a false move is setting up. We look downright giddy this morning and given what has transpired to this point, buying this opening is a recipe for potential pain. It may stick for a few hours, but there's a lot of news that we are in front of, expectations are very high and the possibility of failure looks sincere. I'm doing nothing with respect to chasing this beast.

Stocks traded lower into the close but then IBM reported and picked them right back up again. The bias on the day was correct but with earnings here, the volatility (even with low volume) was to be found as we traded up and down in a reasonably narrow range. I don't want to discount the IBM report but I do believe that it's not a good test of the sell the news rally just like the reports of last week weren't either. This is a stock that had been killed and left for dead so a surprise to the upside is going to find a lot of short squeeze material waiting and profit takers (on the short side) covering. Is there really an abundance of new buying this evening? I doubt it but understanding that reality is always an interpretation, not fact.

I believe the financials showed a better feel for how reasonably strong performing stocks will react to good news. BAC was an example today. INTC is the poster child example tomorrow. I'm willing to sit tight here and wait it out. There's always the possibility that the best is still in front of us from a bullish perspective but I still doubt it. I do note that we had a low volume sell off today and you typically don't want to short a dull market. Today was the definition of dull. Tonight that old adage has life.

We have IBM after the bell today and that will be the first tech of a significant impact capability to report this earnings season. In the morning we have a hodge podge of tech, banks, biotech and drugs. A little bit of everything to spice up the joint before the big report by INTC, MOT and TER.

I've opined for a good couple weeks now that the INTC report was going to be key. With the way that it has held and made new highs, I think it is even more key now and has the potential to define an intermediate term top in this market. It's just setup that way.

We are seeing some of that weakness I expected towards the close begin to show up here. With some big reports yet to come I doubt they sell them off too hard but it is possible. Furthermore, I can't see a huge spike into the close either as there is simply too much baggage today.

Oh my ... it's a struggle today as I get up and take a look to see what is happening. What is happening is that they top ticked me out of my added short position this morning for a loss ... (a few unprintable words go here!).

The weakness thought for the day is playing out but I have no additional exposure and in fact have a loss on that one trade today. Doesn't make me feel any better. This is in fact the problem with stops ... you have to either allow a cushion so great that it should be hit in which case why have the stop, or you keep a little margin in there so the loss is manageable but the very fact of doing so causes your risk of getting stopped out to increase. This is the primary reason that I typically keep mental rather than physical stops so that I can judge when a stop needs to be taken whether I will take it right there or allow it to go for a few more points if the supporting ideas of why I'm trading the position I'm trading still appear valid.

From what I can see, the day is choppy trading. The internals look bad still as they have for 3 or 4 days now. Small caps are down but have come back some. Retail continues to be the only real safe haven today and I expect we will see some further selling before the day is out.

When spot crude began to drop precipitously we got a pretty good spike back up in the indexes. During that lift we didn't see any improvement in the financials however and that keeps me negative this morning. Volume has slowed (a negative on my bias) but small caps are under significant pressure (a positive on the bias). I'm also seeing weakness starting to set in on the bio tech, internet and the chips again after a bit of a lift. Retail is the brightest spot today.

I did add some additional short exposure on the lift and I'm thinking that it would be pretty impressive if the market could actually rise to green today given the way things look. Talk about a sick looking market, yours truly is under the weather here today and my posts may get a bit more sparse as I set some stops and step away for a while. I'll do my best to post if events warrant but I'm struggling mighty just to keep my trading cap on right now.

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