The government released its advance estimate of GDP in the 2nd quarter, and it came in rather light – – – plus unemployment seemed to bump up, thus causing the market to take a nice 200+ point tumble on the Dow today. What was interesting wasn't so much the estimated Q2 2008 figures, but the fact that the U.S. government revised the past several years – all downward! – since they somehow magically discovered their earlier pronouncements were too high. Indeed, Q4 2007 – which, let's face it, was some time ago – went from a positive number to a negative one. Thus, the commerce department actually managed to confess that the economy is indeed shrinking. Big freakin' surprise.

There seems to be a widely-held notion (particularly by the likes of Cramer) that energy and indexes are inversely related. In other words, if oil can only manage to go down, then it's going to be a party for equities. This simply isn't the case. Witness yesterday when energy went up and indexes went up too – – or today when they both went down. More broadly speaking, I am positioning my portfolio for a substantial drop in both energy and indexes. Cheapening oil is going to be a symptom of a weak economy……….not its salvation.

The Russell, which is where my index puts are focused, wasn't as weak as the Dow today, but it did lost six tenths of a percent. I am setting my stop-loss very tight, at yesterday's high, since I don't want to get caught up in a surge just in case the S&P does indeed find its way up to 1325.

Speaking of the S&P, it fell more than twice as much as the Russell. The boldface retracement you see here remains my "line in the sand" for this particular market.

Now that July is behind us, I thought I'd take a look at the year to date performance of the big indexes so far. The Dow is a big loser, having fallen over 12.5%.

The $NDX is down about 10%, having been breakeven back in late May.

And the Russell is down merely 5%, having actually been positive in late May. Even on a percentage graph, you can plainly see the head and shoulders pattern I am playing (which spans May into part of June).

I remain cautiously bearish on banks, both commercial and investment. Wells Fargo is one example, although I have no position in it now.

And Bank of America is another, in which I do have a big position, since it's a cleaner chart.

First Solar's explosive earnings after the close yesterday propelled this stock twenty dollars higher earlier today; it ended up three – count 'em – three shiny pennies. This failure of a bullish breakout is encouraging for this put-holder.

Late yesterday would have been a good time to re-enter some energy shorts. HES did a nice retracement.

And OI sported a very impressive 12%+ tumble.

I re-entered my Priceline position today as well; it could go a little higher, but the horizontal line you see below is my stop-loss, so the risk is pretty small.

I tripped across some stills from a 1975 IBM Presentation. It's pretty awesome. If you want to check it out, click away.

A good trade doesn't have to be based on something like Google or First Solar. Hum-drum stocks work too. Check out Colgate Palmolive (symbol CL). My stop's going to be at 75.34

I mentioned in five different posts that Akamai (AKAM) was an attractive short. Today that prediction seems to be fulfilling in a big way. If you scroll down to the AKAM reference in this post, it provides a nice example of how the "Original" the "Present" tabs in the charts work.

First off, I was relieved this morning to see the pre-market indexes swoon at the sight of the employment and GDP figures. I really wasn't in the mood to have the market keep climbing. We'll see if the swoon sticks. The September e-mini S&P (@ES0809) has done a 15 point turnaround in the span of half an hour as I'm typing this.

Second, I wanted to make a mention of MyTrade, a firm my employer (thinkorswim Group) acquired at the end of last year. This is a pretty cool social networking site for investors – – I've always described it as like Facebook for traders. The feature set is still relatively nascent, but it's a very cool way to organize the blogs you read, track people, add your own stuff (videos, images, notes). Here's a link to my own page, and if you're a thinkorswim customer, you can just use your existing username and password to sign in (otherwise, you can register, and it's free). Give it a shot!

The reason for the title of this post is that I've received a number of very thoughtful and cohesive arguments from readers postulating that Monday will be the end of the "c wave" we are in and will kick off the "wonder to behold" wave 3. In other words, folks think the market is going to keep fighting its way higher (and the past two days have been fairly brutal, let me tell you!) until sometime on Monday, at which time things are going to fall absolutely to pieces for our bull friends.

On the surface, the market looks terribly strong; I had thought mid-day we might enjoy a reversal, but it was not to be. The Dow closed at its highs for the day, causing havoc to bearish portfolios everywhere.

Looking at the Fibonaccis, however, is a little more encouraging. The retracement I've put in bold appears to be decent resistance. I will note that those calling for Monday as the reversal would surely put the Dow's target (and, thus, the DIA's) at a higher level than this. "S&P 500 to 1325" has become virtually a cliche lately.

Crude oil's strength today held the Transports back so that they were actually in the red, in spite of the Dow's nearly 200 point jump (adding to yesterday's 250 point jump!)

I am somewhat chagrined to have written about DUG yesterday. I had a pretty big position in this – 2,000 shares – and early this morning I decided to sell it. Thank goodness, because I scored a very healthy profit, and by day's end it was actually a loss. I consider the red line I've drawn to be important support; if we seem to ease around the $32 level, I'll probably re-enter. You have to be nimble in a market like this, and when I saw this morning that we were not making new highs this month, I wasn't confident enough to hang on. My intuition was right this time.

Looking at the EUR/USD, we're at an important decision point – – the price is right on the fan line, yet it is also positioned for a potential breakout (see red horizontal line). My money is on the fan line being broken, which would naturally result in a drop in energy (and, thus, a rise in DUG).

Another arrow in my "energy bear" quiver is the USO, which is approaching the underbelly of its broken fan line.

As for OIH, can you see the three high prices around $212.50 in late June and eaerly July? I don't think those are going to be breached. That's my stop-loss level.

I bought puts on the $NDX (which were actually in the green during the middle part of today, in spite of the Dow's strength…….) and the $COMPQ seems to be bumping its head up against its lower channel line. Naturally my stop price on my index puts is set to the highs set on July 23rd.

As for my best friend the Russell, this is by far my largest put position, and my stop is set to 726.27 (if memory serves). If we begin to seriously fall within the coming week, this could turn out to be a once-in-a-decade opportunity to be short this index. A push above May's highs would completely wreck that prospect.

Now, in no particular order, a few favorite shorts of mine. Although I won't comment on these individually, I will point out that I am ga-ga excited over Bank of America. Just take a look at those retracement levels, particularly the one I've boldfaced.

Tomorrow morning's GDP report (8:30 a.m. EST) is going to be vitally important. That will probably dictate whether "the fall" begins Thursday or if we're going to have to stomach a push higher (much the same can be said of Friday morning's unemployment figures). The past two days have been no fun at all, but I think relief is coming soon.