Current Long Positions (stop-losses in parentheses): None 

Current Short Positions (stop-losses in parentheses): None

BIAS: 100% Cash

Economic Reports Due Out (Times are EST): MBA Purchase Applciations (7am), QUarterly Services Survey (10am), EIA Petroleum Status Report (10:30am), Beige Book (2pm)

My Observations and What to Expect:

  • Futures are down for a sixth straight day, heading into the open. 
  • Asia was mixed, with Hang Seng being the notable index down about 0.9%. Europe is seeing losses of more than 1%. 
  • The market yesterday was putting together a nice bounce, that was until Bernanke decided to speak 15 minutes before the close, and litterally tank the markets into the red. 
  • Though volume has been strong throughout the duration of the market sell-off, we are, however, seeing the volume level wane from day-to-day.
  • We attempted to close back above the 1294 level, but was met with strong resistance.

  • Market is still due for a bounce, we are looking at an open today, that is almost 75 points off of where we were at just a week ago. At which point, the bounce will be an extreme one, due to the short exposure that is increasing each day. 
  • 1250 is definitely in the sights of bears, but I don’t think it happens until this market bounces. Markets don’t move straight down with no reprieve. 
  • We are officially in a downward trend. The rally we saw off of the September lows, and onward, is dead.
  • We are only 27 points away from trading in the negative on the year.
  • We have declined five straight weeks – the first time that this has happened since the March ’09 recovery lows. We are definitely overdue for a bounce, and the possibility of seeing a sixth straight week of declines becomes less likely (which we haven’t seen since July ’08).
  • My conclusion: Near-term bounce in the markets is imminent, bears are too hot and heavy and will likely see a massive squeeze to flush them out before resuming the downward trend.

Here Are The Actions I Will Be Taking:

  • Traded RDNT for a 4.3% gain, ZLC for a 1.3% gain, MGI for a 1% loss, and SONE for a 0.5% loss. 
  • Will continue to day-trade the market with my focus being on small cap stocks.
  • Follow me in the SharePlanner Chat-Room today for all my live trades and ideas (as well as everyone else’s).

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