Today we had a classic bear market type activity.

Now we need to watch price to find out if the turn around rally was mostly short covering or there is some new buying in it.

History, while it does not repeat, does often rhyme

The chart above shows the market from 1/19/1906 - 9/25/1911 and from 10/9/2007 - 9/20/2011.

For more insight you can check the chart/blog from August 4, 2011. Is the history repeating ?

Anything is possible in this environment and we have to be prepared and ready for the unexpected.

                              Sideways chop continues. Stay patient and take care of job #1 capital preservation.

It's a volatile world !

We are at the moment in no man's land, after the last hour sell off, and we can go ether way based upon the next headline. We need to get a tip from Mr. Market in which direction to go before we can get involved.

Stay alert and patient.

A trader's question:
 “How far can a market rally built on rumors, technicals, short-covering and quarter-end window dressing take us?”
Well, we are about to find out.