Relax - It's Just One Day (so far)...

It was a sea of red today. With the exception of GLD, all major sectors were down. BIG. The catalyst? Some rumor about the stress tests results, and the BAC earnings report - something about a surge of bad loans. What? You're kidding, right? So, all this euphoria over the last six weeks and the 'record' earnings in some banks was just smoke? Hmmm...

In my post yesterday, I mentioned that if history repeats itself, we are due for a correction. Well, part 1 of that correction occurred today. Now the question becomes, is this part of a slight pullback in the new 'bull' market, or continuation of the bear market? That's why the title of this post is'It's just one day'. The market was waaaaay overbought and needed an excuse to go down. Technically, the daily chart of the SPY is not broken yet. We are still above the 20 and 50MAs, and the 20 is still above the 50. However, on the 60 minute chart, we look vulnerable for more downside. The next levels of support seem to be around 81.50 and then around 78. Make no mistake, today was a big drop, bringing us that much closer to the next levels of support. If those do not hold, then there is much more downside to go.

My trades today were GS which was scalped for a short twice, and I took shorts in ADM (highlighted by tickerville on Saturday), and NIHD which I mentioned on Twitter yesterday. I was able to scalp about 60c to $1 on those trades. The best trade of the day which I DID NOT take was a signal to go long SKF at around 12:30 which would have been good for 3-4 points. Ah well, you can't take 'em all - it was a good day regardless.

I see some more downside this week, but the burden is now on the bulls to resume the uptrend by buying the pullbacks. Oil looks terrible and I will be looking there (ERY) for shorts this week.

Good luck.