No Change

I am 100% short despite the slight breakthrough above the 11,782 level. I'll have to see a stronger move above to exit this position as there are too many indicators flashing bright red warning signals.

--Fred

The Top or Just a Stop?

The time is here to tell whether or not the DJIA will hold at 11,782 or take off for higher levels.

I added to my short position - SDS - today and will add more if the market falls from here and will sell half if the stock market looks like it's going to close higher tomorrow. I'll also be looking to take a position in VXX if the fall looks to be at all violent.

The extreme bullish sentiment and possibility that we may close above 11,782 and then turn south will keep me from taking a long position.

The market knows....

--Fred

Patience...

Once again I remind myself that patience is a virtue. The financial community is talking themselves into a higher market but only the market will tell us if that will happen.

I predict that the market will fail to break through the important 11,782 level, to any great extent, and will then proceed to eat away at bullish sentiment over the course of 2011 with completely unexpected action that will keep people hopeful and in the market, waiting for the next big up move. The rally out of the March 2009 lows was just a big setup that will be the cause of much more wealth destroyed than created. That's what secular bear markets do.

Should the stock market break through I will certainly revise my outlook. For now it continues to eat away at the confidence of bears and only those who fully understand history, what a secular bear market is, and how massive this one is, will be able to profit.

--Fred