Ugly Action Continues....

Today's ugly action is the reason why I've been saying that one should keep any new trades minimal and small. My defensive strategies post also highlighted several ideas that one can employ to add protection and increased return during this dry spell. I was weary when I posted the new In Play candidates today. I stressed that if one were to play them, to keep the positions small as the markets future direction is uncertain. I noticed the markets strength fading when we dipped from high 80 all the way down to 30-40. Still, I was expecting a late intra-day rally to help us close near the days high. Instead, we completely erase the days gains and close over 200 points below the HOD. If that doesn't spell out bearish then I don't know what will. Its time to get defensive and careful about which stocks we sell and which we keep. If your stock is still showing strength despite the down trend, then keep it. If its falling 7 to 8% below where you bought it, then sell it.