Wednesday, August 8 Market Assessment

It hasn't been pretty!

The market has been vicious the last few days. I've been whip-sawed thoroughly, stopped out and pounded upon. Right now, I'm down substantially after the roaring come-back of the financials, but I still don't see a market bottom, much less the resumption of the bull run. The market internals have been questionable at best: as many stocks declining as advancing, more 52-week lows than highs, and volume still much higher on down days than up days (overall).

So, I'm holding on to a few put positions (XHB, CFC, SLPS), retreating mostly to cash, and looking for good equity buys on pull-backs. I can't agree on the promise of a tech rally just yet, and I certainly don't believe that we've seen the last of the mortgage/housing mess.

I had hoped that clever positioning with puts would enable me to weather this storm with no losses, maybe even some gains. But a market that moves 200 points a day, and a VIX that shoots from 21 to 27 and back to 23 in less than a week, is a treacherous place to be. If you don't hear from me for a few days, it's because I'm off licking my wounds.

Summary: Short-term bearish, long-term bullish