http://www.stockrake.com

I was deciding between going heavily long, moderately long, and remaining in cash. I went heavily long.

I see two scenarios tomorrow.

1. Another extension down day. If this happens I think we get 2-4 (but probably 3 max) small up days. If this occurs I will hold for the slight up, take my lumps and cash out.

2. Slight up movement off tomorrow, maybe drop in the morning that closes higher. A hammer candlestick or similar trading action type day. The 2nd day off this pattern should be significant up. I’ll cash some there.

3. We start up movement tomorrow that leads to a new closing high, but doesn’t close on the highs into the close. THEN after THAT. The market can move lower freely. If this scenario happens I’m holding and cashing where appropriate.

Bears think today was it and the signal has been set maybe so, but the bull doesn’t roll over easily. I don’t have anything that says “put a fork in it” right now. I don’t get a boner for being short until I see at least one thing I trust has turned down. Nothing has changed yet. If you are a trend trader, these are the spots on charts where you buy and its always difficult. So that is what I’m doing.

Just a note on the stocks I bought not too long ago. The portfolio reached a peak of 25% in two weeks, but has been sliding ever since. I’ve been long biased since 3-20-09 with a slight hiccup on 7-10-09 that ate a little bit into some significant gains. Then I swapped back long and short and have gone to cash at the right spots. The close last Friday as one. I’m trying not to think, just react (aside from all that thinking above).