Overview Monday 10 August...

It looked like the bears were going to get something going, but they didn't. The market is still holding firm and the bulls are still decidedly in charge. We still could use a pullback, though. It's still hard to buy up here if chasing isn't your style, but that patience will be rewarded eventually with a lower-risk set of entries.

Short-term bias: bearish (I'm still maintaining this as bearish, if only because I'm not chasing, but I do believe we had a buying climax)

Intermediate-term bias: bearish (I still think this correction will take us lower, perhaps to 800 on the $SPX and I don't think we're ready to power higher quite yet)

Long-term bias: bullish (I believe we put in meaningful, long-term bottoms in March, and would use the aforementioned correction to increase long exposure)

Pick updates:

I'm out of DFS (way too late, but better late than never).

PALM took a beating today, but I'm still in it. It managed to basically hold the most recent lows, and as long as it does that, we're not in a downtrend. We had a lower high last week, which is a yellow flag, and today's volume was larger than it has been recently, which is another yellow flag. This is definitely one to keep an eye on.

AIG has rallied hard, and I hope nobody got caught short this thing. It's running into resistance at $30, so a small starter position in AIG as a short could be worthwhile here. As expensive as buying puts is in this name, you CANNOT short the common stock. Events like last week show why. If you were in puts, you'd lose 100% of your money, but if you were short the common stock, you could've lost more than 100% of your money.

Still tons of longs that look juicy on pullbacks. I'm liking F, BAC, and MAS in particular.

I'm mulling switching FCX to a long provided it manages to hold above $60. If it fails to hold $60, I would be inclined to short it. It broke out of a multi-month base and is still consolidating. Let's see what it does first before deciding what to do with it.

Potential new long picks: AA, AINV, ANSS, BZH, CBS, CQB, CROX, CSIQ, CTSH, FSYS, FWLT, GLBL, GRMN, GXP, HANS, HBC, IAG, JOE, LEN, LL, MMC, PCLN, RL, SPG, THS, TKC, VNO, WFMI

Potential new short picks: ICE, STEC

I won't be putting out any new picks until I clean up the present watchlist a little bit.



Positions: long PALM November $12.50 calls and $SPX index fund in 401k