If you don’t have a clue what to do in this market, you’re not alone.  After forcing myself to watch the testimony on the Hill the past few days, I don’t know if it’s comforting or frightening that they don’t have a clue either.

The markets got to give us a few more clues here on direction, before I make too many moves. Todd Harrison gives good advice for appropriate action in this market.

“Understand that opportunities are made up easier than losses and the ability not to trade is as important as trading ability.

Remember that risk management trumps reward chasing and profiting is a privilege rather than a right.

Most importantly, take the time to be mindful of the little things in life, situations that you may have once taken for granted.”

Oil stocks still have a gap to fill above.  OIH filled the downside gap yesterday, and I’ve got to believe, that upside gap’s going to be filled, before the next leg down.

The VIX is back up to 35 here, which would indicate some type of relief rally is due.  I’m quite happy just pulling small pieces out of this market.  Patience is still the key.

It’s easy to get caught up in current market discussions.  Should we have bailed out all these thrifts and insurers, or let a worldwide financial crash occur?  It’s tough to keep your emotions and opinions out of the way when trading in this type of crazy environment.  When the end of the day comes though, technicals still rule.  Is it amazing that the NASDAQ bounced off of the long-term trendline stretching back to the high of October, and stalled today at its 50 day moving average?!

Obviously this is not your normal trading market.  I felt going into yesterday’s morning gap higher, that it wouldn’t hold.  I should have shorted the market, but decided to watch instead.  After the market kept falling, I figured at that point, I might as well wait for some panic selling, and buy that.  Not an easy thing to do.  I knew 1150 was a crucial line in the sand for the S&P 500.  Below that the market really did have a chance to crash.  I thought they’d take it down to around the 1146 area, and then close it above 1150.  Of course, the market decided to really scare the Bulls and bring the S&P 500 down to 1133.5.  Is it a surprise that the bottom trendline, of the year-long channel down, sits at the same area?!  And guess where the S&P 500 stalled today?  Yup.  The 50 day moving average.

Technicals still rule in the market.   Smarter people than me saw that if the market lost those two important trend lines on the NASDAQ and S&P 500, we were in for another stock market crash, and came out with the big guns to help.  Was it the right thing to do?  I don’t know, but remember how I said September was going to see increased volatility?  I guess we got it…huh  Hope you’re all playing it safe in this bear market environment.