Waking up to an /ES down 26 points is a pretty pleasant way to start the day if you're short (it's 20 minutes before the regular opening bell as I am typing this). I confess that I am so shell shocked from prior explosive rises that I have taken my /ES profits on my 30 contracts even though the next retracement level is an additional eight points lower from here.

The truly curious item to me is gold. I used to think that if (a) EUR/USD was down hard; (b) OIH was down hard; (c) equities in general were down hard, that gold would be getting bludgeoned. This isn't the case at all, even though all three circumstances are true this morning. Gold is absolutely soaring, and I've got plenty of precious metals shorts (some of which are sure to get nuked the moment the market opens).

My charts definitely indicated an overextended market, and the "cause and effect" relationship I thought was in place would have, I thought, helped my cause. But gold is clearly in its own special bull market (and hats off to Gary Savage for beating the bible on this point) in which I am wrongly positioned.

Once again we're at the bottom of the ~70 point S&P range on the /ES.

I'm forced to wonder what would happen if we ever broke 800 with any gusto. Recent history suggests it would, for the zillionth time, push back higher. But this range can't last forever. This week – particularly with "Mortgage Forgiveness Wednesday" – should be another interesting (and hopefully not agonizing) one.

After my recent griping about bailing out the "nimrods" who bought at the top of the market and could wind up having part of their principal forgiven, I received the email below from a reader. I clearly painted with far too broad a brush, and I appreciate this input from someone actually in the thick of this mess to show me things aren't as black and white as they appear.

Our family moved to Oregon a year and a half ago for my husband's work.  Our home, a 16-acre walnut ranch 45 mins. southeast of Sacramento, has been on the market for two and a half years.  Since we've been gone, the house has only been rented out 9 months. There are no renters, even with price reductions.  Stockton has 10% unemployment and our ranch is 30 mins. away.  This year the price of walnuts fell 50% so we're barely covering production costs.

It's taken four realtors, numerous price reductions from the beginning (much as in pains me as a trader to say so, yes, we chased the market) to finally get an offer, a SHORT offer. Though we bought at the right time, nearly nine years ago, our ranch is now being sold 66% below what it was worth two years ago.  We are walking away with nothing, even losing what we put into it, even though we tried to sell it a year before the market began to fall apart. 

We intended to hold onto it through this decline, but as this is going to take years to recover, we can't rent it, and walnut prices have bombed, our lawyer and CPA have told us to get out and take the hit on our 800+ FICO scores.

You are a very intelligent guy, as is Dylan Ratigan on CNBC, but frankly I resent both of your uninformed observations that people losing their homes are "nimrods" and "stupid people who bought houses they couldn't afford" (Ratigan). 

I worked in television news for years in Fresno, where I graduated from college. Over the years I got very tired of reporters and anchors who would get in front of a camera and pontificate over issues they were less than completely knowledgeable about.  Your blog is your camera, Tim, and I am very disappointed in you.

There are a lot of people getting hurt in this fiasco, more than just "nimrods" and "stupid people".  WE didn't create this housing debacle and yet, like an atomic bomb that keeps killing people years later, we are part of the fallout. 

As my grandmother used to say, "They don't need a gun to rob us,"  OR our three children.

It's a national holiday, plus I'm on "vacation", but the posts keep coming!

More than a few people have written to me trying to reconcile (1) my distaste for the goings-on in Washington; and (2) my support for Obama last year.

This isn't a political blog, nor do I have an interest in agitating for any given political philosophy. We live in a relatively centrist country, and even in last year's extraordinary election, the split between McCain and Obama wasn't 10/90 – – it was much closer to 50/50. So anyone taking one "side" or the other is going to wind up with a lot of people who disagree (unless his readers are all on a web site heavily tilted to the left or the right).

In my opinion, sometimes history is larger than the people living within it. My support for Obama – – and it wasn't jumping-up-and-down support, but this-one-is-better-than-the-other support, was based principally on his intellect and earnestness. But no one – not Obama, not McCain, not Marmaduke the Dog – could step into office in January 2009 and make things right.

If, for instance, we could hold an election for Captain of the Titanic after it struck an iceberg, we may strive to choose the wisest and most capable leader. But the ship's still going to sink. And a lot of people are still going to perish. An especially intelligent and wise leader may get a few more lifeboats available so that a few more people are saved, and perhaps there will be a little less panic. But it's still going to be bad.

So there can be situations where (a) one can opt for a given leader yet (b) still be really unhappy with the situation. I may be very pleased that I voted for Captain Brown instead of Captain Smith, but I'm still distressed that the ship I am on has its bow sticking in the air and hundreds of people are falling into freezing water.

I hope this helps explain things.

Am I not destroying my enemies when I make friends of them?

America will never be destroyed from the outside. If we falter and lose our freedoms, it will be because we destroyed ourselves.

Better to remain silent and be thought a fool than to speak out and remove all doubt.

Give me six hours to chop down a tree and I will spend the first four sharpening the axe.

I am a firm believer in the people. If given the truth, they can be depended upon to meet any national crisis. The great point is to bring them the real facts.

I care not much for a man's religion whose dog and cat are not the better for it.

My dream is of a place and a time where America will once again be seen as the last best hope of earth.

These capitalists generally act harmoniously and in concert, to fleece the people.

This country, with its institutions, belongs to the people who inhabit it. Whenever they shall grow weary of the existing government, they can exercise their constitutional right of amending it, or exercise their revolutionary right to overthrow it.

Whenever I hear anyone arguing for slavery, I feel a strong impulse to see it tried on him personally.

You cannot escape the responsibility of tomorrow by evading it today.

You cannot help men permanently by doing for them what they could and should do for themselves.