Pardon me for my lack of posting today, as I have been away from my desk most of the day taking care of errands that I have been putting off for quite some time.

As for the market, today’s selloff just goes to show that the market will usually do that which frustrates the majority of traders. The news yesterday would seem to have erased the uncertainty in the market, but clearly that is not the case today. Either way, we are still in an oscillating market, and not a trending one. To me, that means you should be in heavy cash.

As demoralizing as today may seem for the bulls, keep in mind we still have the potential to make a higher low. I have been looking for a pullback from the sharp move from 1010-1100 over the past few weeks. Now that we have it, will the bulls step up to the plate? It sure does make for fine summer entertainment. However, just like the other summer entertainment, Shakespeare in the Park in New York City, you should not be spending any money on it just yet.

For me, my line in the sand is the 1050 area. Should be blow through there, I will go back to 100% cash and look at the short side more seriously for swing trades.

________

I will go into more depth in my market wrap up this evening, but into the closing bell, I bought full positions in:

• $SAPE
• $SWSI

All trades are timestamped in The PPT.

_________

TOTAL PORTFOLIO:

EQUITIES: 36%

• LONG: 36% ($NR $NTAP $LULU $THOR $SAPE $SWSI)

CASH: 64%

Ok guys, here it is. We could be in the process of making that higher low, and then subsequently sprint higher, changing the trend from bear to bull. Alternatively, we may have just retraced to the “scene of the crime” for both the death cross and head and shoulders top, before we head back down and break to new lows, solidifying both of those technical phenomena.

Either way, my best advice is to hold off on getting caught one way or the other. Both bulls and bears have strong arguments here, and we are just going to have to wait for things to unfold before getting aggressive again. Further, even if we do make a higher low, we could easily chop around for a while being moving higher, seeing as we are still in earnings season.

Finally, here are some names on my list of scans that I am looking at for potential longs:

• $NR (already own 1/2 position)
• $SAPE
• $NXTM
• $VRX
• $LSCC
• $PACR
• $VLTR

One of the most frustrating aspects of trading is the idea of taking a pass on fast gains in the interest of discipline. To always look at the market through the prism of the potential risks involved can seem tedious and not very fun. There is not much comfort food I can offer you for that, other than to say that risk management is what separates those traders who blow up their trading accounts from those who consistently grind out a solid return.

With those ideas in mind, the updated charts from last evening of the leading indices and sectors illustrate why I am reticent to be aggressive on the long side at this point in time. Although there is certainly the possibility for an imminent breakout of these falling wedge patterns, to chase that potential breakout right here, right now would not entail a favorable risk/reward profile, in my view.

___________

_________

_________

__________

__________

Considering the stock has been up ten days in a row, and I am up roughly 10% on the position, I took profits in the remainder of my $CRM position. Keep in mind, as I noted yesterday, that I am not letting my winners run in this type of market. I am going to need further evidence that we are in a trending market, in order for me to return to my strategy of letting the winners run.

As a result, despite banking a nice profit in $APKT, I am watching it run higher today without me in. Sure, I wish I was still in the name, but the  general risk/reward profile of the market at this point in time still does not favor getting aggressive.

__________

TOTAL PORTFOLIO:

EQUITIES: 20%

• LONG: 20% ($NR $NTAP $LULU $THOR)

CASH: 80%

Early last week, I noted in one of my posts that I saw many traders trying to short the $EUR/USD here, awaiting a seemingly imminent breakdown. I continue to believe that such a bet is foolish. Pertaining to equities, the $EUR/USD relationship has been a proxy for risk appetite in recent months.

If the Euro was going to parity versus the Dollar, then equities would surely suffer for a myriad of reasons, one certainly being that U.S. firms would get crushed with a stronger Dollar vis a vis exports.

As the updated $EUR/USD chart illustrates below, the 1.27 level has been previous, multi week resistance. It now appears to be turning back into support. From my vantage point, it is no coincidence that equities have been performing markedly better since this currency pair put in a bottoming pattern, and has been acting more constructive ever since.

_____________