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August 2 2011 - Selling Intensifies
August 1 2011 - Bear Returns
July 28 2011 - Before The Open
July 27 2011 - Down But Are We Out?
July 20 2011 - Stock Market Volatility
July 18 2011 - Investors' Nervousness
July 15 2011 - Earnings VS Bleak Data
July 14 2011 - Below 1310
July 13 2011 - Ugly Looking Chart
July 12 2011 - Razor's Edge
July 8 2011 - Nasdaq Leads The Way
July 5 2011 - Expected Weakness
July 1 2011 - Overbought
Jun 28 2011 - July Rally?
Jun 27 2011 - Mixed Signals 
Jun 21 2011 - Bottom Or Bounce?
Jun 16 2011 - Raising Cash
Jun 15 2011 - More Downside To Come?
Jun 14 2011 - Bounce or Bottom?
Jun 12 2011 - Batten Down The Hatches
Jun 6 2011 - Bounce Sometime Soon?
Jun 2 2011 - Sell Signals and Warnings Everywhere
Jun 1 2011 - How Bad Could The Selling Get
Jun 1 2011 - Tread Carefully - Markets Remains Overvalued
May 31 2011 - Success - 100 Day Moving Average Tested
May 17 2011 - Be Careful Out There
Apri 18 2011 - Two Bears Compared
Apr 13 2011 - Why I Bought Puts Today
Apr 4 2011 - Breaking The February Highs
Mar 16 2011 - The Art Of Being Wrong
Mar 15 2011 - Market Remains Resilient
Mar 11 2011 - Trend Is Down
Feb 25 2011 - Trend Turning Bearish
Feb 11 2011 - Still Up - But Watch For June
Jan 3 2011 - Trend Remains Positive


June 14 2011 - Bounce or Bottom?

Today's volume and the nice move up may convince some people that the bottom has been put in on the S&P500, Dow and NASDAQ. Personally I think the real clue is the XLF. It is impossible for a SUSTAINED rally in the markets without the financials helping the move. It is true that the markets can move up, but without the financials regaining the 200 day and then moving back to the 100 and then 50 day moving averages, every rally higher has to be considered suspect. Today the Ultimate Oscillator and MACD are still negative. I have made the mistake in the past of trying to second guess these indicators and moving to the uptrend side. Instead it is obvious to me that the Ultimate Oscillator and MACD are STILL NEGATIVE and the index is STILL BELOW the 200 day moving average. The chart on the XLF looks absolutely terrible and has since January. It is filled with lower highs and lower lows. Until this changes here is what I am going to be doing:

XLF - June 14 2011

From here on in, until the XLF regains the 200, 100 and 50 day moving averages, any move higher is just an opportunity to close naked puts that in good profit positions. Any move lower is a chance to sell out of the money naked puts on my favorite stocks.

I will be watching the XLF and my two favorite technical tools - the Ultimate Oscillator and the Moving Average Convergence/Divergence or MACD for short. Even if these indicators turn positive, in my book the uptrend will be a rally until the financials start to carry their own weight. A rally can last for days or even weeks, but until the financials return to help this market, every rally has to be suspect. This means that EVEN if the market can make a NEW HIGH, it remains suspect in my strategy and I will continue to stay with the strategy cautious bull that I commenced January 2 of this year.

Meanwhile for another view on the market and a bullish one, here is a technician group, that I follow, Birinyi Associates, from today's If their outlook turns out to be true then any major downturn such as the one we are experiencing right now should end up being a buying opportunity. Personally I intend to watch the XLF for clues as to the market's direction.


There is no reason to fear this market for those of us who are interested in owning great companies at great prices, but for buy and hold investors or those investors with low comfort zones, I would be staying out or raising a lot of cash and I mean a lot of cash because I believe the chance of the market moving lower is high until the financials assist this market. .


Disclaimer: There are considerable risks involved in all investment strategies. Trade at your own risk.
Stocks, options and investing are risky and can result in considerable losses. None of the strategies, stocks or information discussed or presented are financial advice, trading advice or recommendations. is a private website. Everything presented and discussed are the author's ideas and opinions only.
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