Reading Assignments:

• Buying Emerging Markets Bonds on Sustained Fund Inflows
• Ladies and Gentlemen, The United States of America is Insolvent
• Emerging Market ETFs Will Lead the Way Out Of A Correction
• CIT Group’s Bankruptcy Plan: Goodbye Common and Preferred Stock

Pre-Market:

Yesterday I watched all day, as several of the best-known traders on Twitter were in and out of short positions, taking gains and losses for just pennies a trade. I can’t believe, unless they are trading very large positions, that they are making any money off these trades.

That’s the kind of market we are in. It will chop you up short or long, coming or going. And that’s why I would rather spend my energies on days like yesterday just doing some photography or something instead of glueing myself to a tube.

Today is not looking good for starters, and I’m not surprised. Internationally, futures and the Asian markets all posted down over the evening, as the $DAX, $EUR, $DJW, and all other international indices have all have touched or dropped below their 50 DMA.

The ratio adjusted McClellan Oscillator is oscillating itself right around the –100 mark, trying to find a bottom – but I believe that won’t happen until we decline in the DOW another 4.3% from yesterday’s close.

My Candle Pattern Index shows only 5 bullish breakouts (7.10%) of 499 patterns, lowest on record this year. My market candle scan is very slightly positive but with no breadth, showing 35 bullish to 24 bearish candles.

I took a small short position in DTG @ 17.91, and I’ll watch it closely this morning – if it rises beyond, say 2% of my short entry, I’ll cover.

My posture remains the same – stay mostly on the sidelines, in cash, await ideal entries for foreign investment opportunities, take advantage of very short term trading opportunities (long and short) as they present themselves.

I do believe we will be out of the woods in the near future.