TECHNICALS

After buying all the dips on the way down, revshark on realmoney.com offers this in a column today:

"It is extremely important that we stay patient and not be overly aggressive in trying to catch a turn. First, the losses you can rack up while constantly trying to catch a bottom can cut into any gains you ultimately realize. In many cases you are better off missing the early part of a move rather than overanticipating because the downward moves have a tendency to last longer and go further than seems reasonable.

It is also important not to become overly excited at the first sign of strength. In this sort of market there is a strong inclination for trapped bulls and aggressive shorts to sell into strength. We saw this yesterday when the markets couldn't gain any upside traction although the move to the downside had slowed.

Stay patient. The market will make a lasting turn at some point and when it does there will be plenty of time to participate in the festivities. If you miss the early part of the move you more than likely will still be ahead because you missed the tail end of the downward move. Precise timing is nice but it's more about ego than it is about making money."

I find it quite interesting that Rev is now saying don't call a bottom after trying to call the bottom several times over the last few weeks. I have a feeling that running a hedge fund puts one in a performance anxiety situation while trading for ones own account yields no such pressures.

I also remember Cody last week asking the question about whose more scared bull or bears. Well the answer was obviously bulls, but it also did not matter as the market continued lower and the bears continued to make money as they sold/shorted all rallies.

My point is that the market is in a brutal downtrend and trying to game the turn is more than difficult. The money trade is shorting rallies and ignoring long trades as all the major indexes are in severe downtrends. I would also ignore all signals for long side entries and stay focused on short trade signals.

Today also looks to be the day when the downsloping fifty day SMA crosses below the 200 day SMA and that may bring out more sellers as timers head to the sidelines.

Bottom line is this war doesn't look like it will be out of the way any time soon and staying short or sidelined in this ugly downtrend is the way to hang on to your capital. And remember another old adage "the market can go up more than you thought possible and the market can go lower than you thought possible."