Threading the needle

Lately, it seems as if we're walking through a veritable market minefield of various catastrophes and calamities, any one of which has the potential to send the market bus careening off a cliff.

The latest one is the bizarre new Mideast war on Libya. We are told that the object is not to get rid of Col. Khadaffi. This is sort of like Babe Ruth stepping up to the plate and instead of pointing to a spot out in left field, he announces that the object isn't to win the game, he's just there to play some ball. I'm just wondering, if the object isn't to get rid of the esteemed dictator, then what the heck's going on? The current course of dropping bombs on antiaircraft guns looks like all it will do is prolong an already uncertain civil war.  As far as I'm concerned, either go long or go home.

And as far as I can tell, the opposition consists largely of young guys riding around in beat up Toyota pickups and shooting their AK's into the air. They don't inspire a whole lot of confidence in a quick and decisive victory.

On the positive side, it appears that the Japanese have successfully averted nuclear Armageddon by reconnecting their reactors to electric power. From what I read, if it can be believed, reactors nos. 1 and 2 are now reconnected and doing OK, nos. 5 and 6 have been successfully shut down, and only nos. 3 and 4 are still in question. In any case, this catastrophe seems to be rapidly falling over the event horizon as it is not the headline story in any of the news sites I've visited this weekend.

So given all this uncertainty, the only indicator we have as of Sunday evening for where we might be headed tomorrow is the futures. And somewhat to my surprise it's actually not looking too bad right now (8:30 PM EDT). All three futures are up about a third of a percent. Given this and the considerable retreat of the VIX last Friday from extremely overbought readings, I am right now cautiously optimistic for stocks tomorrow. This of course assumes that Col. K. doesn't do something stupid like setting all of his oil wells on fire or something.

In any case, the Dow chart above shows that we have exited the descending RTC channel and that in itself is a bullish trigger.  Also, note how all of the indicators have hooked upward from highly oversold levels.  Also bullish.

Performance

It's been a rough month for me. I am actually down four weeks in a row now, something that hasn't happened since I can't remember when. Minus 0.17%, 1.32%, 1.36%, and last week 1.68%. Ouch! However, these are unrealized losses and I'm still up 3.47% year to date, compared to the Dow's 2.42%. I've been hampered in my ability to play the short side on a swing basis because of all of the volatility in the market. When 90% of the day's movement happens in the first minute of trading, it's kind of tough to capitalize on it.