Still No Panic

We are doing all the things necessary to form a bottom - the natural gas stocks are finally being hit, fertilizer is now joining coal in the outhouse, and we are getting some minor rotation into financials. All things we've been looking for to form a bottom.

On the negative side - this move into technology as 'safe haven' is, aside from idiotic, stalling the process - now people are using Apple (AAPL) and Google (GOOG) as safe havens. We need to eliminate all safe havens. And then it will be safe(r) to swim. The VIX is still in the mid 20s unfortunately - I'd like to see it cross 30. (What's the VIX you ask - read here)

This has to be one of the more orderly carnages I've ever seen. We're taking a lot of boffo hits in the portfolio in individual names, but I remain on the sideline with new buy orders despite some salivating prices since I want to have cash at the ready when (if) a real panic emerges. I still don't see that panic. Maybe there will be no "panic moment"... but I am hoping for some between now and Friday when I think General Electric (GE) [just a hunch] will provide a soothing moment to the market. We have a slew of multinationals who report in the first two weeks of earnings season and many will be able to put up good numbers on the destruction of the US peso alone. So that should create a counter trend rally *IF* we could get some sort of washout. We should of opened down heavy this AM but I believe the Invisible Hand was in there doing their tricks of buying futures in premarket... if they'd just let us wash out it would be less frustrating. Pulling off this band aid every day is getting old.

I am interested in getting some of these countertrend plays like Big Lots (BIG), Embraer (ERJ), or Cash America (CSH) <--- by the way putting in another strong performance today. I like the beaten down merchanside here over the stuff that still should be taking a beating. Like "safe tech". I do own Ciena (CIEN) but it's a "beaten to hell" tech.

We'll see how the market handles S&P 1225. If no hold there, then maybe the panic will begin. Every move up without crossing over S&P 1275 is just fools gold for now...

Remember, we predicted this sort of action in our weekly summary... the indexes look benign but damage underneath is extreme. This has been the pattern near the tail end of other corrections. And it makes it nearly impossible to outperform the indexes on weeks like this (S&P is down less than 10 points for the week as I write this, whereas many individual names are losing 7-10% a day)

If past is prologue we might have one of these transition weeks where the markets do falter (some) but not as bad as previous weeks - however the strongest groups of the past (global growth) take much more serious damage.

Long Apple, Ciena in fund; long Ciena in personal account