Here's where we stand

If you have been following this site since early on, you probably have heard me call this that "Cats and Dogs Rally".

Here's how it works, there's a period toward the end of a bull run or bull market where people feel like the new bull has taken off and they sat it out and missed it, so they look for cheap stocks to buy up and smart money knows this. The stock pattens prove it. It's an explosive period because they are low volume, low price stocks that move huge.

If you follow me on Trade-Guild you know I've been saying for months this is a "Historic" bear market rally-not the start of a bull and I expect new lows to be made. Well make hey while the sun is shining and that's what we did. The fact is, over the last week, especially since earnings started with Alcoa's flop, sentient has finally flipped and stocks and rallies have nothing to do with value, and everything to do with market sentiment. So I'm not going to list anymore of the CAT and DOG longs. If I did, I'd just be repeating what's already on the list. A few that re still viable IMO:

SSN, CXM, MOVE, PEBO may have some more upside after that nice run, CRTX, MNTG, CMM, AMCC, and ENG.

If you have one not on the list and it looks ok or you want a second opinion just email me, then by all means, hold onto it, but be very conservative in how much you put into it. The last chance run for any of these stocks is entirely dependent on a market bounce which I think we may get.

Here's the new reality. the focus here is going to switch, not because I want it to, it's because you take what the market offers. The watchlist I look at and add to every night is about 400 stocks, out of which 30% are doing nothing 20% look like longs, and 50% or maybe more are stunningly amazing short set-ups that are 3 days of bounce away from picture perfect entries.

Stocks fall faster then they rise because fear is stronger then greed. These are exceptionally high probability shorts and with a bounce, they'll be in perfect position with little risk. They won't make you 20% in a day, but they will make you money and as we go along, I'll show you how to make more than 100% in a short position. I'll also start giving you the Ultra ETF's that I think are going to make a lot of money.

So it's sad that the CATS and DOGS fun is over, but now is the time that we can make bigger commitments to longer term positions and make a lot of money over the next several months.

BUT! For now, you have to be patient. That is the only edge you have over Wall Street, patience. Wait for the bounce. I have hundreds of stocks that are perfect shorts-look at GS and JPM-they are picture perfect, if the just bounce a little. So don't swing for the fences, tke whatever the market gives you in these longs if it bounces and take it fairly quick. Then get ready to back up the truck and get serious about committing capital to high probability shorts.

The second shoe is about to drop.

The Market Waits

Even not knowing about tonight's State of the Union Address, it's clear the market is waiting on something and it looks exceptionally dangerous right not. I have 100 shorts that need a bounce to be perfect set-ups, but they ned the bounce and the market yesterday at the close was ugly. So play it safe right now-be conservative. We'll know soon enough.

Strange Times

The market is due for a bounce in my opinion, it looks like it wants to bounce, but it is not acting well-that makes this a very dangerous time. There are a ton of great looking shorts that if they just bounced, would be perfect. On the other hand-the market doesn't need to bounce, it's not oversold, it can continue down. So it's a tough call right now, but I'm going with "wait for the bounce". In the meantime-longs that still look good to me:

SSN, TXCC, MBRK, CXM, CRTX, FOLD, MTLK and BOFL

All the other ides will be on the spread sheet, just be patient, you'll get a fat pitch. And if you do go for the shorts now, thinking you'll miss the bus, be careful and limit those positions so they can absorb a bounce.

Good luck.