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.

Internal Investigation

A few ratios to discern the state of the market.

My NASDAQ indicator printed a new X today despite today's fall. Lower volatility is bullish.

The BXM:SPX ratio is banging against the 10sma again, hopefully it will act as resistance and the spread will turn around (bullish).

The continuing fall in Treasury yields is quite discomforting. Either it is fear or a part of some fund strategy that I have yet to understand.

Some suggest that the VIX:VXV is signaling a sell, but I don't see that quite yet.

Although oil is falling in dollar terms, it has yet to make a new low in gold. I'm cautiously bullish on oil, but not with much confidence.

Mixed messages all around, but I'm still buying the dips. Risks are still very high, and the potential for government currency intervention makes prediction particularly difficult.

State of the Market

The market continues to rally as the Fed lowers key lending rates.

Rate cuts are having a negative effect on US bonds relative to foreign ones.

Up volume significantly outweighed down volume, continuing the bullish theme.

More stocks are trading above their 50dma on lower volatility.

New highs are becoming more prevalent as this index makes a new X.

The oddest thing about today's action was LOWER treasury yields... What The Fuck?!?

The action in Treasuries is mystifying, but it isn't stopping me from trading gold and silver related stocks. The USD has been getting trashed, and while I expect a few bounces, the writing is on the wall. We're still in high risk territory, and the whipsaws will continue, but I'm buying the dip in the strongest sectors.

State Of The Market

Even with today's negative action, my indicator was positive.

We're at the levels that preceded the last down leg. Will it be different this time?

Short treasuries and short gold is breaking down, so people are still shunning risk.

The yield on the 30 year looks ready to make new lows.

I've been too busy to trade the last few sessions as I focus on other income streams. The action still looks choppy, but buying the dip is not crazy. Risk management remains critical in this volatile environment, but if you've made it this far, you know that already.