Last year, I remember so well eagerly watching the Rusell 2000. It had formed a huge head and shoulders pattern. It seemed ready to plunge.

The problem was that it didnt plunge. It held on to that line at 660 forever. Those who piled into shorting the market got hurt, because it pushed right on back up to 750, forming a second shoulder – – truly a deformed creature.

Of course, we all know what happened after that. This plunge was fantastic for me, although I kicked myself for not being more aggressive about such an obvious pattern.

Some people think that just because a pattern is obvious, and everyone is watching it, it means that it isn't worth watching. I disagree. I think the challenge is playing the pattern properly, and being patient enough to deal with its machinations. The Russell's cutesy little fake-out last year was a great example, because a lot of people got burned in mid March to mid May as the indexes leaped higher.

Of course, the "obvious" pattern I'm referring to right now is none other than the S&P……

There are a couple of key differences. First of all, the current pattern is much, much smaller than the Russell one. The $RUT pattern was nearly three years big, whereas the current pattern is just about ten weeks. Secondly, the $RUT was truly at a lifetime top, whereas the SPX pattern is on the heels of a pretty big plunge (and partial recovery). So the best I think the bears can expect from this is the very low 800s.

Today was down a little for me, although I made some green from my energy longs. I switched from an energy bull to an energy bear intraday, and we'll see how the last day of this week pans out with that disposition. I've got a lot of good ideas waiting in the wings, but I want to see if we resume the downturn after today's push higher before getting any more aggressive.

Good night!

I think if there were one word I would use to describe this market, it would be annoying. And I'm sorry if I've written that exact same sentence recently; I truly can't remember if I have or not; but this is definitely how I feel!

It's gotten to the point that when I wake up to start a new day, I feel like I'm about to walk into a boxing ring again and wondering how many sucker-punches I'll need to endure. All too often lately, I will be showing very fat profits in the middle of the day, and this end-of-day nonsense comes along and evaporates them. I'm not getting stopped out, but it's like the profits are being dangled before me, in a teasing and taunting manner. It gotten really old.

I went through over 1,000 individual charts in the past 24 hours, and there wasn't a single one – not one – that appealed to me on the long side. There were an abundance that looked intriguing on the short side, however (hence my prior post of ideas).

The three charts below are all of major indexes, and they all suggest to me the same thing that I've been feeling lately, which is that a meaningful descent makes the most sense now (most of the big indexes fell a little today, but it surely didn't feel like it, since there were down so much more before).

I've also tinted in an area I'll call "the zone of doubt"; if these confounded indexes manage to shake off their malaise and push higher, I think these tinted areas show the hefty amount of risk bears are facing, since there's not much standing in the way of these markets pushing through the entirety of these regions if they can get above the current range.

I'll see you in the morning after Retail Sales are announced. I've had enough for today.

Below is a chart of the S&P 500 on a minute-by-minute basis for the past six months. Beneath the chart I'd like to break down what I consider the "theme" of each tinted chunk of time (as always, you can click on any chart to see a big pop-up version of it).

• A – "Hey, a nice inverted head and shoulders pattern has formed. It's time for this market to push up to 1050!"
• B – "Wait a second. This breakout failed. Why can't this market get its act together? We've got a new President coming. Oh, well. At least things are stable."
• C – "Ahhhhhhhhh! Oh my GOD! This bear market is never going to end!" (The climax on March 6th was touched to the day by Time magazine, which had its Hanging On For Dear Life cover story).
• D – "Things are incredibly cheap. Brand-name outfits are trading for 50 cents a share. Buy, buy, buy!!!!!!!!!!!" As you all know, the one portfolio of mine which benefited from this was my 401-K, in which I bought all kinds of goofy, junky stocks. I made low triple-digit gains in some cases, and many, many 50%-70% gains. But overall this was a really rotten time for me!
• E – "OK, cool. We've got a nice inverted H&S setup again, and we've broken out above 880! Yes! Time to head to 1050 now!"
• F – "Ummm. So where's the big surge to 1050? What's going on? This market is just stuck in neutral again!"
• G – "Yes! We're at a new high for the year! But – – ummm, again – – why are we stuck here?"

So this market's psychosis has tricked a lot of folks, bulls and bears alike. But no matter what you consider yourself to be (and don't give me that "I just trade the market" nonsense; you know you lean one way or the other) – everyone has been getting excited (or wringing their hands) over this inverted H&S pattern since the time of the cavemen. Take a good hard look at "G". If there was an explosive rally based upon the pattern from January through May, where is it?

At this point, I have one word for this market: feeble. It's not soaring higher, as bulls would expect it to do based on the pattern (which I think we can dub a head and shoulder and shoulder and shoulder and shoulder pattern, based on its freakish design), and its attempts to drop lower are usurped by these end-of-day erasures.

I think all we can assume is that the next stage, "H", will stand for "what the Hell???", which is one the disappointed side is going to exclaim.

One last closing item for the day – – yes, my watch lists are coming back, but for those who just can't wait for it on the sidebar, here's a sneaky link so you can see it now.

I'll make a market commentary later, but I wanted to say something about this silly end-of-the-day insanity that happens day after day after day after day.

It's important to me to be able to "walk away" from the markets when I need to do so. I cannot be a hostage to my screen from 6:30 a.m. to 1:00 p.m. for 260 days out of the year. I just can't. There are other aspects of my life, and a well-managed portfolio should not require the level of micromanagement that a day trader has to assert.

Take this summer, for example. I'm going to spend a week up at Stanford Sierra Camp. Do I really want to spend that week, where people are enjoying water skiing, archery, and volleyball, holed-up in some dark little computer room hunched over my laptop? No thank you.

So I've made it a practice to try to get away from my screen during chunks of the day just to show myself I can do it. My stops are in place, and they're fresh, so there's no reason I shouldn't be able to leave well enough alone.

It can be unnerving, however. About an hour before today's close, my overall portfolio was up about $28,000. I decided to go to the store to get a few items. I even brought a couple of glass bottles there to get my $3 bottle deposit back. I come back thirty minutes later, and I'm flat for the day. (Only a last-minute dip in the market, which was just as fast and unexpected, put me up $8k for the close).

I mean, that's ridiculous. I refuse to bail in and out of dozens of positions based on these little spurts. I will continue to completely avoid trading e-minis (which is I market in which I used to very actively participate!) until it's clear there's some sanity left. But what you see below is not sanity. It is manipulation gone wild, and I'm simply going to focus on my individual positions and let the stops take care of themselves. I will continue to avoid the /ES and /NQ, because this market absolutely cannot be trusted as normal.