I was caught by surprise by the severity of today’s declines. We gave back all of the post-Fed rally on the Dow and just touched that area on the Nasdaq, which held up fairly well despite all the selling pressure today. There’s a lot going on in the markets and I’m not even sure I understand exactly what’s going on. Oil’s tanking, gold is surging, bonds are surging, and the U.S. dollar is falling off a cliff. The government seems to be biting off way more than it can chew and acting like everything is going to be OK, but the reality is we’re one major crises away from drowning in the weight of our own private/public collective debt. Scandel after scandel is being exposed, the Fed’s running out of trees to print money, and mums the word on the auto bailout. Shame on me for thinking we could have an orderly Santa rally to close out the year. Never have the words “Brave new world” ever been so appropriate.

I didn’t get a sell signal on the markets today however I did get scared out of my positions right before the markets really dropped just after 2pm. I was really taking a hit and I didn’t want to give back all of my gains from the other day so I bailed Part of this is my fault as I wasn’t quick enough taking some of my positions off when I had the chance and being too over-invested to withstand today’s decline.

It’s frustrating when you know what to do, plan, but fail to execute.I’ve mentioned numerous times that in this type of enviornment it’s important to keep the amount of positions manageable so you don’t get shaken out and can withstand the ebbs and flow of intraday trading that seem so random.

Right now I’m on the fence as to which direction the market is going to go and I just didn’t want to risk being heavily invested and waking up to a 500 point decline tomorrow. Ironically I kind of feel like we’ll rally tomorrow since everybody is so negative and if we sustain those gains through the morning I may be back in some positions as like I said before I still have the markets in bullish mode, but treading lightly. A big down closing day will most likely give me a sell signal on the markets at which time I would be looking for stocks to short. Stocks I’ll be watching will be forthcoming.