Two days in a row with the Dow down triple digits. I like it.

I like even more the fact that we are getting away from the idea that a reduction in crude oil prices is all the economy needs to thrive again. A drop in oil and equities on the same day is just what the doctor ordered. Although the bullish uptrend in crude oil is not broken, it has been a while since we've seen this firm of a downdraft. Six out of the last eight trading sessions have crude closing below its opening price.

The only news on the scene today (besides GM soft sales) was Lehman Brothers (LEH), falling nearly 10% today alone. Perhaps people think this is "Bear Stearns II" on the horizon. Looking at those fan lines, unless LEH is heading for the graveyard, I think most of the selling has been wrung out so far.

The equity markets pushed beneath May's lows today in many cases, and we seem to be on the "right side" of the Fibonacci retracement line.

The Transports, too – – worrisome of late – – could be in the process of turning the tide. That lifetime high we saw in May could be the high water mark for quite some time. A fall beneath 5,150 would cement that.

The the NASDAQ, a favorite of mine to watch these days would make its bearish case clear again if it fell beneath 2,450 Friday's unemployment report may be the catalyst to really take the market down, since there's no real economic news on the scene until then.

Looking closer at the $NDX, we got tantalizingly close to breaking the channel, but instead it touched it perfectly. Maybe next time, eh?

If oil really tumbles, how far could OIH go? Judging from this graph, I'd say the low 180s.

Russell 2000 – formerly my favorite – remains stubbornly above its retracement line. We have another 20 points to fall before we're in the clear.

I do, however, have puts on the S&P 500, which is weaker.

In my IRA account, I can only buy positions, so I am forced to go long either equities or inverse funds. I've got a mix of both. A few favorites right now include CPI Corp….

……Firstfed (much riskier)…….

…….the QQQ double inverse fund……..

…….and Toll Brothers (although I'll be a lot more enthusiastic if it breaks above $26).

On the short side, CEPH's pattern is terrific, provided it doesn't cross above the line you see here.

First Solar closed at its trendline both yesterday and today. I am optimistic this is going to take out the $250 level, which is critical to its plunge.

I have good hopes for ISRG as well. Its formerly bullish pattern is ancient history now.

If the Transports roll over, there are some stocks which enjoyed the sensational rise in 2008 which will fall just as fast. Ryder, a major component, is one of them.

I also shorted GD today based on its failure to fulfill its bullish breakout.

Genzyme, profitable but a source of frustration, is finally inching down beneath its neckline.

I have puts in both GOOG and BIDU. Today was better for the former.

And another of the four horseman, RIMM, has failed its bullish breakout – – often a good sign for us bears.

Dick Cheney-land, Halliburton, is a new short for me today.

I used to be excited about LNN, but this chart just isn't acting right at all. I may bag this one.

Lastly, SLB is behaving itself beneath resistance, and I could see this easily getting down to $80.

Thanks for all the nice comments and emails about the prior post; they are much appreciated! Good night.

There have been three instances in the three years I've been writing this blog that I've felt shame.

None of these instances had anything to do with trading ideas. I never have remorse about my trading ideas from a moral perspective, since I have no impure motives in mentioning this. I don't make a cent from anyone reading this blog, nor from their gains or losses. I just speak what I see.

But back to the shame. 

The first time was when I posted a picture of a Special Olympics contestant crossing the finish line, and I implied he was a bull. Some people thought it was funny, but a man wrote me saying he had adopted a Downs' Syndrome kid and that it was in poor taste. I immediately removed the picture and felt like a heel for the rest of the week.

The second time was when I was really frustrated at the market's unrelenting rise, and I suggested the terrorists should attack to shake things up. I got an email from long-time reader Leisa which set me straight, and I've been on my toes ever since.

The third time was last Monday, when I put up a post on Memorial Day morning about Randy Pausch. I had seen a big ad in the New York Times for his book, and I guess I felt it was unseemly to take a terminal diagnosis and make some cash off of it. In retrospect, my post was insensitive, to say the least.

Although it was a holiday morning, the post instantly got some very negative comments, and it was clear I had said something inappropriate, so I took the post down. Even though probably only a few dozen people had the chance to see it, I felt rotten for the next two days. And I thought if I ignored it, the incident would just disappear.

But I saw the aforementioned book in the store yesterday, and I felt it would be appropriate penance to buy it, read it, and reconsider. So I did that.

I did enjoy the book, and I learned some things from it. But more importantly, it clarified for me how wrong it is to cast judgment out of ignorance. So even though 99% of you reading this post didn't see my original post – – and I risk looking like a schmuck by even bringing it up again – – I wanted to apologize to the handful that did see it for my poor judgment and insensitivity.

I've learned a lot of trading from doing this blog, but I also continue to learn about the proper way one has to conduct himself in a public forum. And so, for that, I appreciate the feedback I got, hard as it was to read.

This week is relatively light on economic events, with the exception of Friday's unemployment report, but today still provided some interesting fireworks.

I've been following the $XBD (AMEX Securities Broker/Dealer index) with great interest over the past year. This index peaked in June, and it got smacked hard in July, October, January, and March. A few days ago, I was starting to wonder if the bottom had been reached with the March 17 Bear Stearns bailout. One could see a lower in mid-March, a higher low in April, and a higher low in May. Perhaps a new uptrend was in the works.

I think today answered that question – – the trend appears to still be down. If we take out April's lows, which we can close to doing today, the entire "higher lows" pattern has been zeroed out.

 The downgrading of the investment banks had sweeping effects throughout the market. The Dow was down 200 points intraday, although it closed down 134 points. It is still dancing around its Fibonacci retracement, but it is on the underside of it with good prospects of moving beneath April's lows.

 Although high-tech had a very big bounce from mid-March to mid-May, the action over the past couple of weeks may be marking an exhaustion point. The $MSH, shown below, tried last Friday to push to a new high for the year, but it fell short. Today the price of the index started falling away from that level, and a crack beneath 580 would seal the fate of this index.

 A similar phenomenon can be seen with the $COMPQ, although the bearish point is easier to judge; a break beneath 2,430 would clearly indicate lower prices ahead., as the failure to move above the resistance line is a loud signal of the bulls' failure.

 Another interesting NASDAQ pattern I am watching is the ascending price channel on the $NDX (NASDAQ 100). A dip beneath last Wednesday's low price would crack the lower support line and, in my estimation, signal we have entered a "C" wave downward.

 I have a few puts in semiconductor stocks (like KLAC) since the one index I was fairly bullish on a couple of months ago seems to have petered out as well – – the $SOX.

 I mentioned last Wednesday that the S&P had closed precisely at its retracement line. It pulled the same stunt again today, matching the retracement almost to the hundredth of a point. Obviously the price is noodling around this line, trying to figure out which way to make a break.

 I got a bit of flak for my AAPL puts, but I stand by this call. I have great hopes for this trade.

 We've all been watching FSLR, and today's sharp movement downward has pierced the supporting trendline. I am optimistic that I've got about $50/share more in intrinsic value to pad onto my FSLR puts.

 Although GENZ has pierced its neckline, I'm a bit frustrated that the prices haven't moved more plainly lower. I find the strength in the face of this pretty good H&S pattern to be puzzling.

 Capital One has also been a long-time favorite stock on this blog. I had even suggested last week, given its proximity to the supporting line., that it might be a long candidate (although I simultaneously said I wouldn't buy it myself, because I was afraid the trend would break). Sure enough, it broke today. This has been a frustratingly slow-moving stock, but I can at least say that I think the likelihood of a bullish move by COF is now kaput.

 Several nice folks thanked me for my CHTT suggestion. This H&S, unlike GENZ, is clicking along nicely. Traditional projection measurements would put the target price on this at about $48.

 Lastly, I sold some INFY short. Many folks in the comments section have puzzled over why I short really strong stocks and not those already getting beaten up. I am starting to take this advice seriously. INFY has plainly been in a downtrend for about 17 months now, and I felt that the recent surge representing a relatively low-risk entry point.

I am back from my travels, so my updates should be a little more punctual for the rest of this week. Thanks, as always, for stopping by!