by Ryan Mallory

This bull market has not been kind to me this past week, and that's okay. I'm trading my system that I know works, has worked in the past, and have no reason to think it won't continue to work in the future. I added another short position today, after getting stopped out of SDS. The new position is Avon Products (AVP). Pulling the trigger on this position was, no doubt, a hard task, but...being wrong on another trade is much easier to take than to bailout on my system of trading, and then see the market validate my strategy, but not be able to benefit from it in the process. That is why I must stick to what I know in the long-term works, despite whatever short-term pain it may present.

With that said, here is the technical analysis on all of my position currently in my portfolio...

Allergan (AGN).

Click Here to See the Rest of My Portfolio.

by Ryan Mallory

My Goodness! Bust out the Champagne, because the market finally closed down today! You know you need a little "pick-me-upper" when you get aroused by a 2 point decline in the S&P. My gosh these bulls can really wear me out. Nonetheless, it is two days in a row now of positive gains for my portfolio, and like I try to do every Monday, I'm going to update you on all the positions in my portfolio so that you know what's going on, in case you are trading along side of me.

Remember too, that The Gap (GPS) will be reporting on Thursday so you may want to decide before then whether you want to be holding a position through the announcement. At the very least, I am probably going to be taking about half my position off the table if not all of it. There's nothing that I hate more than earnings reports, and I'm not going to let my portfolio suffer as a result.

So...Without further adieu, I bring to you my CURRENT PORTFOLIO (applause).

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by Ryan Mallory

Here is a favorite chart of mine called the T2108 - a proprietary chart provided to Worden Charting customers that measures the oversold/overbought conditions of the market. I wanted to give you a look at the chart going back to the market highs of October 2007. The most interesting aspect of all of this is the bearish divergence occurring from July of 2009 onward - signified by the red line that you see on the chart below. Despite the market making new highs, the T2108 was broadcasting warning signs all over the place, as the indicator failed to likewise make equal or new highs itself.

Also interesting was that we have failed to become as oversold as we were in late October/early November of last year - and that pullback was nowhere near as heavy as what we have seen so far in January.

Finally, the October bottom of 2008 is a ways off, so that if we are truly reversing course, we still could see much more in terms of selling-pressures. Which goes to say, if we can continue to rally this week, like we did yesterday, I will be very excited about initiating some new short positions in the near term. For my five favorite short setups, click here.

Here's the Worden T2108 Chart