TODAY'S ACTION

During the neutral range, I was thinking to myself, "there are two options available for the market: 1) we form a long tedious rounded bottom, or 2) we form a very large bear continuation flag. #2 came really quick in the last hour. Over the weekend, I also stated that I had those two conditions that needed to be met. It's Wednesday, so both have expired and have not been met (not by a long shot). The bottom line is that we have broken our critical support level and the S&P 500 is reaching the 2002 lows which are currently around the 775-785 level. Unfortunately, this suggests that we have at least a very possible short-term 3-5% additional downside move. Whoever is still buying and holding...should probably stop. It doesn't make sense. Want some advice? Buy once we make a higher low (that means you might not be buying for a while). Don't be stupid. This is exclusively a traders market, all others will get/are getting killed and it's all your fault.

I, on the other hand, made a sweet 7% today adding to a 5% gain yesterday. This is a tricky market and I still remain mostly in cash overnights. There is too much uncertainty and the risk associated with holding overnight. I could hedge, but I just prefer to be in mostly cash. The $RUT, $SPX, and $COMP are all in trouble. The $DJIA is actually sitting at Thursday's lows, but this divergence will soon be corrected. The VIX is trading in a upward range and today's candle suggests additional upside. The financials are in some serious trouble and there is no possible way for the market to rally without them, so don't forget that. What's the only chance left for the market? We have to cancel out today's loss tomorrow (gain 400+ points), and that is highly unlikely. Today was just an all out bloody day and longs got mauled by the bear demon or the cartoon blood drop.

SPX 1-day

SPX 3-day

SPX 10-day

SPX 6-month

VIX 10-day

VIX 6-month

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MARKET CARPET

Ok, I count 4 stocks that are up (not including the ones that are 0% or not trading). The Financials crushed the market in the last hour (esp. C)

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TODAY'S UPGRADES & DOWNGRADES

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