416 POINT GAIN IN THE DOW

Phew, good thing I got out of my short position yesterday. I sold my QID shares at $56.81. Here's another example of my poor selling timing, if I waited just a few more minutes I would've been able to sell at a price that was 70 cents higher.

So today was a big day...the Fed has lent $200B to the banks which lead to Dow's biggest day since 2002. Everything looks a whole lot better now as most people expect positive gains in the indices. This could be the beginning of new all time highs, and we may have bottomed but here are my reasons why we haven't bottomed yet...

It's too early to say that we will be bullish. If you look at a 5 minute chart on the S&P 500, we haven't even confirmed a rally. If we break 1325, we will have a good chance of testing the 20-day and 50-day moving averages. Keep in mind that nine of the biggest up days in Wall Street history all occurred during the bear market of 2000 to 2002. Today's bounce should just remind you of spikes back in 2002, which, in hindsight, only provided opportunities to sell. This could just be another fake breakout. Institutions love these gaps, they want amateurs to run it up so they can short the heck out of it and watch the panic selling that happens. Further, after today's proposal we shouldn't be expecting a .75 cut in next week's Fed meeting. Aside from these reasons, let me introduce you guys to a "useful" market indicator. I shivered when my girlfriend asked me to go to MAC again to buy more makeup. The Lipstick Indicator is an "indicator based on the theory that a consumer turns to less expensive indulgences, such as lipstick, when she (or he) feels less than confident about the future. Therefore, lipstick sales tend to increase during times of economic uncertainty or a recession...This term was coined by Leonard Lauder (chairman of Estee Lauder), who consistently found that during tough economic times, his lipstick sales went up. Believe it or not, the indicator has been quite a reliable signal of consumer attitudes over the years. For example, in the months following the September 11 terrorist attacks, lipstick sales doubled"-Investopedia.

Alright, so that about sums it up. Again, we may very well be heading higher if we break 1325 in the S&P, but be careful and keep all these things in mind while you trade for the next few weeks. Oh, and I know I've been lacking charts in my posts, but I promise that you'll see lots of charts in the new layout.