Rally Shmally

Call me a complacent bear, but I think the market has an ass kicking in store for the bulls.

Yes, that's a new low for the banking index. Yes, there may be a major pop due to government shenanigans. Yes, it will probably be a fantastic shorting opportunity.

Stocks on the NYSE are increasingly volatile and less bullish, so until I see some X's here, I'm selling the rips.

If banks can plumb new depths, why not housing? This too looks ripe for bear raping rally, but in the end, this too will fall.

Here is the real bearish smoking gun. The NASI has made a new O, and the floor is a long way down from here. Grab your parachutes!

Bonds failed to rally with the rest of the market, and I trust debt traders more than the equity schmoes. A Treasury sell off will be a huge tell for a sustained market rally.

Despite my bearish leanings, I'm actually long a smidgen of URE. I successfully shorted it towards the end of the day, but over covered my position, and didn't realize this till after the close.

Tomorrow will be a big day, and with the VIX floating around 50, I imagine the swings will be crazy. According to my indicators, the environment still favors cash and short term trading, so there is no need to rush into new long term investments.

Assorted Auguries

A few themes to keep an eye on during the week.

The housing sector remains in an uptrend, but like so many indexes, a break below the weekly low is likely to bring sellers.

The regional banking index hasn't made a lower low during the last round of selling, perhaps this is the first sign of real stability in equities. At the risk of sounding like a broken record, the weekly low is critical.

I first mentioned JNK here, and it continues to be a profitable trade, making nice moves up with little volatility. My target is the upper Bollinger.

My first post about RGLD can be found here. It continues to make new highs, but the lack of volume isn't very encouraging. Nevertheless, price is the only thing that pays, and the trend remains long and strong.

While this chart is nothing to trade from, it is interesting to ponder. It represents instances of the word "recession" found via Google over the last year. Mumbo jumbo on how this statistic was aggregated can be found here.

Gold and fixed income will continue to keep my attention in the coming week. The potential for reflation is increasing, and since my indicators are technically positive, I will be giving the benefit of the doubt to the bulls. All the same, we are still in very high risk territory, and my small position sizing reflects this reality.