Goatmug has done an absolutely fantastic post, but it's quite lengthy, and I don't want to publish it until after the close so people can get it the attention it deserves.
In the meantime, I'll just offer this one comment – – we're dead in the middle of the "WAG Rise". People were really questioning the WAG, but it remains intact, albeit under the forces of greater gravity than I imagined (that is, the selling pressure didn't allow a breakout from the IHS, so it's been trading like mush).
I think our situation can be expressed with one simple graph, shown below. The bears are facing about 500 points of Dow risk right now. I have felt the pain of this risk lately, having been stopped out of several dozen positions this morning and having a pretty bad day yesterday. But the risk to the bulls is about four times greater.
I think even if we bears have to suffer through another 500 points, it will serve one purpose and one purpose only: to make the fall that much greater. I remain short, and I intend to add more positions today. Yes, tomorrow morning represents risk, but the uncertainty about the jobs report also represents opportunity. I am embracing the opportunity and facing the risk.
