I read that a commentator on CNBC uttered the most idiotic of notions a couple of days ago: "It's not a loss until you sell." Try telling that to the holders of any of the firms below. And, believe me, this is just a very small sampling.

I have two persistent problems in my trading. One is my innate bearish nature. I'm not sure I'll ever be able to fix that. The second is an inability to accept just how far a market can travel. Strangely, this isn't confined to underestimating how high a given stock might go; it also goes the other direction. Even though I've been having a great time in this bear market, I frequently think that there is simply no way a particular stock can go any longer, and lo and behold, it keeps plunging. So, uber-bear that I might be, I don't give the potential for a security to get wiped out enough credit.

Over the past seven trading sessions, the markets have been struggling to make a bottom. The news media have been, on a daily basis, saying that This Is It, but each day It doesn't happen. We just keep grinding away in a trading range. Any meaningful pop lasts only a few hours, or a day at most.

This morning (and I'm referring to Wednesday morning, even though I'm typing this nearly at midnight), I entered the market with a large put position on the Russell 2000, and I was terribly nervous about it. The market was a little bit weak, and I sold out of the position (which had a net positive change for the day, but a net loss for the position), and I felt relieved. I was astonished to see the market continue to be weak, in spite of a mountain of good reasons for at least a short-term bounce, so I re-entered the put position, which was extremely profitable by day's end. As you can see in the DIA chart below, Wednesday created a substantial bearish engulfing pattern, but given the "grind it out" state of the past seven sessions, I wouldn't give it as much creedence as I would had it occured at a market's peak.

Looking at the $INDU's retracements, it seems that the next target (assuming yet more weakness) would be about 10,700. That seems like a really low number, but it's only about 400 points away. We've already fallen 3,000 points since last October's peak.

A lot of us here were, until recently, very frustrated with our energy shorts. Not any longer. My agriculture and energy shorts are doing dynamite, and even if the general equity market does turn higher, I'm holding on to those positions. Look at the marvelous breakout of DUG, with beautifully behavior on the trendline.

People keep talking about a lack of volatility. They're talking about the $VIX, which certainly isn't at panic levels. But for the more basic definition of volatility, we've had it in spades. Just look at the movement of the Russell 2000 over the past six weeks.

The one remaining bull market is the $CRX, and I am counting on this one to fail. This will be the Last Man Standing.

The S&P is below its retracement, but, just as it did in late May and early June, it may simply be screwing around outside the bounds of its normal trading zone without defining a new range. I've tinted the areas to show you what I mean.

The SPY, on the other hand, is still neatly within the retracements.

Even though BX has already fallen a lot, I'm thinking of adding this short position to my portfolio. Man, oh man. I won't even start talking about these clowns.

Another cool chart I tripped across tonight is PLCE.

I sold my CME puts a week ago for terrific profits, but that was hasty. This thing just keeps fallen, having lost over half its value over the course of 2008. Breathtaking!

I mentioned all the potential profits I think are stored in my energy shorts. This is the kind of chart I am talking about.

………and this one……

CSX has shaped up very nicely here.

Oh, and then there's my favorite, ICE. I just love this position. Love it to pieces.

I bought a single put on $NDX today (fairly deep in the money). Continued weakness could shave another 100 points off here.

It's officially Thursday now (wee hours of the morning), so I'm off to bed. Farewell!

My posts tends to be epic-length, but I'd rather start the day with just one chart – GOOG. I'm intrigued by this pattern. I already own puts on it, but I am buying more, with a contingent-stop set at 557.80.

My "theme" has been repeated so often, it risks getting tiresome, but I'll say it again: energy shorts and agriculture shorts (with index option day-trades thrown in for good measure in either direction). It has served me well recently.

Even though yesterday showed the potential for "The Bounce", it sputtered very quickly. Today, however, a push higher held, and in some cases, the push was quite substantial. The Dow's 152 point rise was actually one of the tamer ones:

Since we're in a bear market, I really, really like rallies, because they give me new opportunities. The giant question, as always, is this: does the rally represent a one-day wonder, or is this simply the start of a very substantial countertrend, like we saw in mid-March through mid-May? I don't know. The IWM, shown below, doesn't hit really serious resistance until around $71.

I was excited this morning to see how quickly oil-related issues were plunging. Today's hammer pattern implies we're going to have a bit of a bounce short-term, but I think that for at least the medium-term, the high prices in crude were marked a few days ago.

In my IRA account, a couple of days ago, I went very bullish, putting all my cash into QLD, DDM, DUG, UYG, and UWM. Yesterday, July 7th, DUG's strength compensated for the weakness in the other four positions. Today, however, all five positions were up handsomely, particularly UYG, which benefited from the bounce I've been expecting from the world of investment banks.

I was amused to see a headling that AMBAC had "surged over 50%" today. Yes, that's very true.

But it's important to keep such things in context!

My puts on the $XAU had a decent day, but I am looking for much, much lower price levels from here.

With such a strong day for the bulls, it was particularly heartening to see one of my favorite put positions (and one of my largest ones) take it a bit on the chin. Clearly a break below last week's lows would spell great things for this position.

But even more favorite than that is the chart I keep foisting on you – ICE. It went up today some, but that's OK with me. This pattern is uber-powerful.

I bought some IBM puts today, although I've got fairly tight stops on it. It really depends on if this rally has legs or not.

My short on RJF was already in place, but it's pretty clear to me from this chart that, in spite of a 11% lift in the price of the stock, the general direction is going to be down.

I was going to buy a bunch of BAC and COF stock this morning, but I didn't have time. Ah, well. It's no surprise to see such a battered issue have a spring higher. This is the largest rise BAC has seen in months.

The overinflation of OIH has definitely been let out to some degree. Looking at these fan lines, noodling around in the 200-210 range seems most likely.

Here are a couple of short ideas. MTL………

……and STT, which seems to be retracting back toward its broken trendline.

Tomorrow is also going to be busy for me. ThinkOrSwim users, please note I will be doing the "chat" session at 2 p.m. PST, 4 p.m. CST, 5 p.m. EST, so please join me there. I have no idea what I'll talk about, but I'm sure I'll think of something good by then!

Energy is being very, very good to me.

I can't remember such a consistent winning streak. I am loaded to the chin with puts on energy-related issues, and the most challenging task I have is to set the stops properly. There is a huge, huge, huge amount of air beneath current price levels and support. It's gorgeous. And huge.

With such a fast-moving market, I am finding that daily charts are insufficient for setting good stops. What I am doing is looking at the daily chart first, then moving to a 60 day minute bar chart to look for the most prior "high" scallop – – that is, the market's previous attempt to push itself higher on that particular security. That way, if we do get any kind of strength in these issues, I've buttoned down my profits. Otherwise, I get to keep enjoying the ride down, updating my stops from time to time.

Yay!