Where we are...

Still not completely clear, but a whole lot of things are breaking down to suggest that a rollover is occurring. Whether the folks that have waited for an opportunity come rushing in with a bid or not is to be seen, although I have a feeling that they will get alligator arms and we will watch another waterfall like last Fall.

I'm positioned with some longs to play a bounce the next 1-2 days, but there are a lot of indicators telling us this bear market rally is over:

1. While the dollar is holding its trendline, the Canadian dollar has broken its trendline. This is currency pair tells us that commodities are going to take a breather. However, it is at pretty strong support here, so I'd like to see that broken as well before getting confident with this perspective. The Aussie currency is holding up, so that it not confirming the trend.

2. The Euro is holding up, let's see what happens tonight.

3. Nasdaq sentiment dropped quickly. This either refuels buying anew or marks the start of an exit.

4. Fear is back - the VIX got up over 30. It is now a little overbought, which is why I took a long position in SSO over the weekend. But I'll be quick to get out of that trade Monday/Tuesday.

5. We had major distribution on Friday. In fact, each time we had a distribution day of this magnitude on NYSE since March, that particular level (if not day) roughly marked the end of the counter-trend rally. This is the other reason I went long on Friday with a tight stop.

6. Advance/Decline on Friday was super-low, which usually causes a snap-back rally.

7. Energy sentiment has rolled over. Look for a nice pull-back in Crude, and hopefully that continues to correlate w/ a higher $, causing follow-thru on the equity sales.

8. Most indices have taken out their uptrend lines.

Anyone who is confident that the rally since March is intact isn't trading technicals. That is not to say that it isn't , it just seems like the best stance now is to be a patient bear rather than a nervous or confident bull.

Joe