Last Mohicans standing.

Remember, leaders must be shot down in order to have any meaningful rally that has potential to hold.

An old Wall Street saying has it that they don’t “ring a bell” at market bottoms.

Thinking that panic selling signals a low ?
Consider the Crash of 1987, which is the granddaddy of selling panics in U.S. stock market history. On that day, Oct. 19, the Dow dropped 22.6%. And even though the Dow bounced back impressively over the two trading sessions following that Crash — gaining 5.9% on Oct. 20 and another 10.1% on Oct. 21 — the stock market’s post-Crash low wasn’t registered until Dec. 4, more than six weeks later.
Chances are that the final low of the decline we’re experiencing will not be recognized as such until well after the fact.

Keep it simple !

Let’s keep it simple – protect yourself, never let small losses have even the remote potential to grow into large losses, remove hope and your emotion from the process, and finally stay opportunistic. Do these things and you’ll be there to profit more than you can imagine once the storm passes. We’ve been here before and we know what to do.

VIX check.

There has been virtually no safe harbor in today's market action.

For those of you who have been buying silver and gold over the last few weeks may consider taking some profit here. That is not to say they wont keep going higher over the longer term, but in the short term, they may continue to sell off as liquidity is raised to meet margin calls.
In late 2008 when the market had its slow motion crash from September through November, nothing was safe, with most stocks and commodities losing typically between 50-85% of their value peak-to-trough. Gold was perhaps the most robust out of all vehicles, but still sold off over 25% peak-to-trough.

The market seems particularly vulnerable here, so it may be prudent to keep your long exposure to precious metals on the lighter side until the dust settles and the general market stabilizes. You can then always buy back what you sold.

Is the history repeating ?

Sector check from July 22.

Congress and the market's performance.

Weekly view of SP-500.

       Let's look at the big picture. The market remains stuck in a wide and loose sideways trading range. There is a head and shoulder possible formation that we need to observe and there is possible support there from which the new rally could start. We have to wait for the market to tip its hand for us to act. Although trading is an active verb, sometimes the best action is no action.

Mindset.

"To live a pure unselfish life, one must count nothing as
one's own in the midst of abundance." (Buddha) 

Where are the best opportunities now ?

Silver directionally correlates highly with gold.

Further money printing in the US and in Europe will cause the dollar to fall further therefore hard assets including gold and silver should continue their long term up trends. Use any pullback in precious metals as a buying opportunity, as the long term trend is up. 

On the market.

Well, it looks like it is going to challenge yearly resistance. The question is; are we going to break above resistance to new highs across the board and keep on going OR just reverse from here OR we challenge the resistance but don't break out OR we break out of the range but the break out fails. Have a plan for each scenario.

Losing discipline is not a trading problem; it is the common result of a number of trading-related problems.

Here are some common sources of loss of discipline I have learned about through my personal experiences.

10) Distractions and boredom cause a lack of focus

9) Fatigue and mental overload create a loss of concentration

8) Overconfidence follows a string of successes

7) Unwillingness to accept losses, leading to alterations of trade plans after the trade has gone into the red

6) Loss of confidence in one's trading plan/strategy because it has not been adequately tested and battle-tested

5) Personality traits that lead to impulsivity and low frustration tolerance in stressful situations

4) Situational performance pressures, such as trading slumps and increased personal expenses, that change how traders trade (putting P/L ahead of making good trades)

3) Trading positions that are excessive for the account size, created exaggerated P/L swings and emotional reactions

2) Not having a clearly defined trading plan/strategy in the first place

1) Trading a time frame, style, or market that does not match your talents, skills, risk tolerance, and personality

Reading charts.

I view charts from the perspective of people with positions (long or short) in the stock and those looking to get in or out.  What would compel them to act?  What can a big guy or crowd of HFTs do to pile on and get something started?  Who is trapped ? What is a possible surprise ? I'm always looking for that.

There is no one right answer -- but an endless number of right answers -- to most of trading problems.

Remember that money-making, like all business, is about getting the highest return for the lowest cost. If you compare money-making to flying a plane, trading is like flying an inherently unstable aerobatic plane and investing is like flying a relatively stable one. To fly the first you must be at the controls all the time or you’ll crash. To fly the second, you just check out the plane (and the pilots), point to your goal and (eventually) get there.

US Dollar watch.

2011.

In recent years the market has shown a consistent tendency to bounce back from selloffs that occur on the Monday following options expiration. In fact, 16 out of the last 17 occurrences since 2005