Years ago, while traveling in Mexico, I visited a cave. What alarmed me was that there were no protective barriers of any kind. In the litigious United States, there would at least be a chain-rope along the edge of the precipice, as a security blanket, if nothing else. But in Mexico, you were on your own.

It occurred to me this morning that this is probably why I like trendlines and retracement levels so much. (And, as an aside, I apologize again that I must "hide" my chart's retracement levels; 2sweeties was more than happy for me to include them in my charts, but I guess some subscribers kept whinging at him about this, so I suppress them to shut them up.) These lines are my guideposts – – and sometimes a security blanket – – for my decisions and my trading.

They've certainly been vital lately. Tuesday and today have both been dynamite. I've trimmed some of my really fat, profitable positions, including FXP and OIH (long and short, respectively), and I cut my wonderful STRA put position in half. At this point, having closed out /ES at 810, I have a fresh (but smaller – 10 contracts) short position on /ES at 821 with a stop set above 826.

As that red trendline indicates, a break beneath today's low so far of 808.25 would amp-up the bear case even more.

Finally! Finally, finally, finally!

I've been patienting holding puts on ()#$^%)(&#%^& STRA for weeks. It's kind of like AZO – – the kind of stock which seems to be defying gravity in this market.

Well, my options are up 100% today. The challenge is knowing whether I should take my profits (given that it tapped the long-term trendline) or hold out.

I think I'll sell half (with a 100% gain, I'm already in the clear) and keep the rest "just to see".

Congrats to fellow STRA bears.

Greetings, Slopers!

Here I am in my fuzzy brown images-of-a-bear-evoking-robe staring bleary-eyed at an /ES down 15.50 and a plunging Euro.

I'm looking forward to the day. Let me catch up a skosh with emails and comments and loop back to you.

Right now, the indexes don't excite me that much. Even if you're quite bearish, it's hard to squeeze much more out of the likes of the S&P. Don't get me wrong – – I'm short the /ES modestly – – but to me, that's not really where the action is.

I have found many, many opportunities on the short side, and quite a few of these stocks have ample room to fall (unlike, say, the Dow 30, which has been beaten to a pulp). It will help if indexes fall hard, of course, but I'm not necessarily counting on their aid.

I will say, however, that Exxon is a valuable bellwether – perhaps even moreso than a big index. Take a look at this long-term graph, spanning pretty much my lifetime.

Pretty amazing stock, isn't it? It did breach that very long-term trendline briefly last year, but it has recovered now; let's take a closer look.

If XOM can break below $73, that will help the bearish case overall. This is a gigantic stock, and it has a huge influence on the major indexes. It's worth your attention.

I'm "blogged out" for the day, so I'm heading to bed. I'll see you in the morning, and I hope we can get some more fireworks on Thursday and Friday before my big ski week coming up.

I'm about to head out to dinner with the family, so I'll do a real post later tonight. I'll just say a few words for now.

As most of you know, I really enjoy the work of the folks at Elliott Wave Intl., and lately they've been firmly behind their belief that the market is in the early throes of its final wave 5 downward before higher-degree wave 1 down is complete. In other words, the game plan is to soon plunge below last year's lows before the market is finally in a position to enjoy a sustained, multi-month countertrend rally. Here's a chart from their update tonight, used with permission:

Compared to yesterday, today was a total bore. I updated all my positions, and I entered about 30 new short positions. Look at Short Equities (1 of 3) to see where all these new positions wound up.

I'm honored at all the traffic and comment activity on the site. Keep it up!