I'm getting a lot of emails from readers asking what is my strategy in the market right now and what I plan on doing if this two-day market rally continues. To answer those curious minds out there, I draw my inspiration from William Wallace in the movie Braveheart, which just so happens to be one of my favorite movies of all time. In the scene that you will find below, the courageous Wallace and his men are lined up for the epic Battle of Stirling Bridge.

After the English (aka the Wall Street Bulls) send their archers forth with two rounds of attacks on the Scots (aka the Wall Street Bears), Wallace gives the appearance that his own cavalry is retreating to safety (in market terms that is comparable to the Dead-Cat Bounce that We have gotten over the past two days). At which point the English general bypasses typical military tactics and send in their own cavalry (picture a bunch angry bulls storming across the field) in hopes of breaking the spirits of the Scots.

The main point to illustrate is that Wallace, as he sees this incredibly intimidating cavalry charge quickly approaching, keeps his troops at bay by yelling increasingly louder with each word, "Steady....Hold...Hold...HOLD...NOW!!!!" At which point, the front line ducks down picks up countless wooden spears 15-20 feet long and gorge the charging horses (in this case the bulls) and decimates the once indestructible army of King Edward I Longshanks (i.e. the Fed, Bernanke, Geithner, you name 'em).

Likewise, I am telling myself, "Steady...Hold...Hold...HOLD..." until the market rallys just enough to give the bulls a false sense of hope, and then "NOW!!!" I will unload on them a full portfolio of short positions to capitalize on the headfake the bulls were sucked into, to arise victorious from the ash-heap of battle.

Here's the Battle of Stirling Bridge from the Movie "Braveheart"

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