Try To Stay In The Game

We had one brief attempt at a bounce today, but the selling pressure was broad, heavy and persistent. The point loss was huge, and we have little technical support left other than the lows of October.

It is a very ugly picture, but the good news is that with all the downward pressure today and the very low expectations for the monthly jobs data in the morning, we are setting up for a potential "buy the bad news" bounce. We have some very extreme negativity, and if the news about jobs and from the auto markets is as bad as so many expect, that may set the stage for a washout that produces a bounce.

I want to stress that the major trend is as ugly as it gets, and that this is no time to be even thinking about longer-term positions. If you play the long side at all, it should be extremely short term. I only bring up the potential for a washout-type trade because of how extremely negative the sentiment and selling have become. Your No. 1 job in a market like this is to protect your capital. That doesn't mean you can't try some trades, but this is not a place where you should try to be the hero that hits the home run.

As bad as this market is, I still have no doubt that if we just keep plugging away, we'll have better times soon. Just make sure you don't do anything that takes you out of the game.