I'd like you to look at the post I made on Monday called The Dream Scenario. In it I wrote, "The ideal scenario, as I've shown below, for me would be (a) a climb up
to the underside of the broken wedge – – let's say at 850 or so (b) a
plunge from there."

Well, the market did climb to "850 or so" (emphasize on the "or so", since it almost got to 860), so I was absolutely right on my analysis. Yay, me! But the last two days have been a mess for me. How come? Let's take a look:

The move on the /ES wasn't the nice, clean arrow up, was it? There was a lot of noise along the way.

It is very hard to see that one's analysis was correct and yet still not make money at it. In this instance, I don't beat myself up too badly since I'm not just going to ride the /ES down to 780, hoping it'll turn around. My stop was established, and it did its job.

The silver lining to this is that the "Dream Scenario" is still very much in play. It's encouraging to see that what I was projecting is, so far, so good. I got the up arrow right. Now let's see if that down arrow is going to materialize for us or not!

Today was a total freak show in the markets.

The day started with the news that Freddie Mac's CFO killed himself in the midst of an SEC probe of accounting violations. This kind of thing is really saddening – – he was a family man – – but as I said about a year ago, I think this kind of violence (on others and on one's own person) is going to be the way of the world for a number of years. I enjoy making money in bear markets, but I derive zero pleasure from violence of any kind. I can only say that when the Dow is in the 4,000s, this kind of thing is going to be rampant (not so much suicide, but corporate killings).

Those reading my posts throughout the day probably caught on to what a rough ride is was for me. I'd say about 30 individual positions were blown out by stops. What was most troubling for me is that the Dow itself wasn't up that much. If I'm having a bad day with, say, the Dow up 300 points, I can understand that. But if I'm having a bad day and the Dow is up 60, I'm really worried.

Whatever the opposite of the PPT is showed up at the appointed hour and sold the market off hard, and by the closing bell I was actually looking at green on my bottom line. Taking into account the losses from the prior blown positions, the day was still down, but only by a little bit, and certainly not to the degree it was earlier.

Looking at the wackiest of the wacky – our dear friend FAZ – I am finding it very, very hard to believe that this isn't ready to explode higher. I have been burned, assaulted, mutilated, pummeled, and raped so badly by this thing that my conviction that it's heading higher doesn't compel me to actually buy any of it, but from a safe distance, it looks amazing.

When FAZ came onto the market last November, its volume for the day was 14,000 shares. The last two days, the volume was about one-third of a billion shares.

I'm pretty busy the rest of the day, so any post will probably not come until this evening. Ta-ta!

I am warming up to precious metals again. I like these for longs.

To call me "discouraged" now would be a pretty big understatement. I have been stopped out of many shorts today, and the market seems to be defying all the bears. I have taken on a big long position in OIH as a hedge, since it seems to be pretty well-formed.

You'd think with the economy in its current state, retail would be down, but Americans specialize in buying Things They Don't Need with Money They Don't Have. So we have the chart before us……..

I think the low- to mid-80s will put us in a pretty good place to short.