Thank You Mr. Bear

Bears continue to own the tape but I advise being careful if you are positioned heavily short. Short is OK but not heavily so. Not only are we pushing the extremes in breadth but we are also nearing my February 2, 2010 date.

I exited virtually all my short positions on today's open which may have been a bit premature but I've learned to not want to time the exact bottom. There are various indications that we may pause around these levels. That being said, the risk is definitely to the downside until it isn't.

Here are a couple of charts....

McClellan Oscillator


SPY (Positive Divergence on RSI(9) - 120min timeframe)



USD/CAD (Positive Divergence on RSI(9) - 120min timeframe)



GDX (Positive Divergence on RSI(9) - 120min timeframe)


Note: GDX has been somewhat of a leading indicator.

However, despite the technicals (a) the trend is down and (b) the forecast also says down.

Intraday ES Forecast


If the scaling is correct, we could see a print of ES 1057 by February 2.

Overall the week was probably one of my best to date. A had a few blunders here and there but by and large I stuck to my rules, and more importantly, I didn't try to catch a falling knife - other than today ;) ...I am human after all!