At the close, the SP 400 led to the downside with a .55% loss, the DJIA, SP 500 and SP 600 closed .4% lower, the Nasdaq fell .3%, and the NYSE held up the best only falling .2%. The IBD 100 fell .6%, leading all the indexes lower. There is really nothing to read of that, however, as this was just that kind of day where you really can not draw any conclusions about underlying weakness or strength amongst the indexes.

Volume was higher on the NYSE by about 35% and higher on the Nasdaq by 20%. Breadth was negative on the NYSE, with decliners over advancers by a 5-to-3 margin. On the Nasdaq, losers beat winners by a 3-to-2 margin. New highs beat new lows by a 114 to 96. But the Nasdaq still has more lows to new highs; 64 new lows – 34 new highs.

All of the increase in the volume can be directed completely to the quadruple-witching action. The higher volume, with the price declines over .2% would normally be a clear distribution day. That would send a warning signal up that this rally has a much higher chance of failing. But I find it hard to draw conclusions on days like today so I will continue to watch for further selling on much heavier volume.

Don’t forget, right now, we are now looking for a follow-through day within the next seven days (ten is OK too) of a gain of 1.7% on higher volume. To be honest, I wouldn’t be looking too hard for this to happen. I am pretty sure….like by 100%….that there would be a ton of more stocks setting up in beautiful green sound chart patterns in sectors moving up the list. Guess what? That is not happening.

For the week, the DJIA led to the downside with a 1.4% haircut, the NYSE fell 1.2%, the SP 500 fell 1.1%, and the Nasdaq and SP 600 held up well only losing .6%. The IBD 100 managed to not swoon either, only falling .8%, in what was a wild and confusing week overall for the majority of market players. To me, the week, can be wrapped up in one word: failure. A failure for the market to produce a follow-through and a failure on the markets part to show me that it really wants to resume its four year bull market.

All the talk this week was of the subprime market. And who can blame everyone? The fact that stocks like AHM NDE NEW LEND and many many other stocks with subprime problems got killed is just stunning. But what I find more stunning is the action in LEND. That must of have been a daytraders dream (too bad that is all it normally is for that sub-group) as the stock fell 80% in seven days and then rallied 170% the next three days. Obviously, the intraday players, did not nail all these gains. But the few smart swift traders out there that were able to play these moves correctly made a mint. And when I mean a few, I mean a few. I monitor over 30 chat rooms and I saw the majority of the trades. They were not winning trades. I am still stunned that newbies try to play this stuff without the basic rudimentary knowledge of this stupid game.

The only good part about all of this is the fact that TA worked well, once again, in saving your behind from huge losses. The only way not to lose 99% (like in NEW) is to cut your losses short. Cutting a loss with a 5% to 10% loss is the ONLY insurance you have against stocks like NEW AHM NDE and the bunch. The even more wonderful ability of TA comes in the form of Homebuilding stocks. These stocks topped last year at the beginning of 2006 and ALL rolled over on heavy volume during the summer of 2006. Now we have all this horrible news in the homebuilding market with the DHI CEO going so far as to say his business is going to “suck.” TA, you are the greatest thing EVER for the individual investor in the stock market; thank you (yes that was rhetorical and a bit nutty).

The trend is still in place, after this week. The pattern of higher volume sell-offs and lower volume rallies continued this week and that pattern has created a very negative picture. To look at it this way, just think, the Nasdaq is the only index with a Acc/Dist rating of D+ or better, with a C-. All other indexes are in the D range. Real strong powerful market bottoms do not occur when this grade is a D in so many indexes. It appears more time is still needed before anything exciting is to happen. This market is still ugly.

The ugliness comes in the form of all the red on my charts, the nasty acc/dist patterns in the index and stocks, the few new longs that appear on my scan, the NO new Featured longs on my scans, the increase in shorts in my short scan, the nasty breakdowns in all of the old leaders, and the fact that one of the top two indexes the past three months has been the US Defense index. This is the best chart out there and it has gained 4.81% the past three months. This leadership shows that the market is in clear defensive mode and that this is not the time to be looking to go 200% all-in.

But I must say the possibility that a bottom could occur still exist. I am still long around 170 stocks and even though I am not finding much new that often there are still gems out there like FALC and TESOF that are as pretty as can be. I would think that if this market was about ready to really breakdown and crash that I would not still be long 170 stocks. The number would be under 100. Maybe the number will fall under 100 soon. But for now the fact that I am long 170 stocks means that I am long 170 stocks in clear uptrends that have NOT violated my complete cut loss or complete profit taking rules. So we must be ready for anything. However, I am leaning heavily, very heavily, for lower prices. I expect to be selling off more longs in the near term. But if we rally, I will be ready to make more money.

Especially with the FOMC meeting coming up. I am sure this will be market moving news, as it typically is, but everyone is pretty much for sure that rates will be left the same at 5.25%. The one fact I am sure of is that we will not see the Fed lower rates. The inflation number and worries are still too prevalent in this market for them to be taking such action. The CPI is still growing too fast for the Fed to make that decision. But hopefully, after Wednesday, we can get a better trend going and actually get some real follow-through to the downside or upside. The choppy action is not the best market for me to make money in.

The most important thing to remember, this weekend, when you are getting wasted, is that ALL bear and consolidating markets eventually turn into bull markets. Even in severe bear markets, there will be many rallies of 10-20% on the indexes where you can get some handful of stocks that produce 50%-100% gains. This is because the VIX will be up and every downtrend always overshoots itself.

Patience and hard work = success. Patience and a little bit of hand sitting in this market = success. Trust me, the majority of people will flip and burn their account here. The best and most sound advice right now is to be cash heavy. CASH IS KING!!!

Aloha, enjoy your St. Patrick’s Day, and I will see you in the chat room.

At the close, the DJIA led the way to the upside with a .2% gain, the SP 500 and Nasdaq closed .1% higher, and the SP 600, once again, diverged closing lower by .2%. The IBD 100 did not lead but it did not lag either. Instead it kept pace with the SP 500 and the Nasdaq, closing .1% higher.

Volume was much higher on both exchanges as quadruple witching contributed to the HUGE spike in volume. Trading for the last day were stock index futures, stock index options, stock options and single stock futures. These days, like always, are hard to analyze on an accumulation/distribution basis. However, on days where the market does nothing like today, it doesn’t matter.

Breadth was negative on both exchanges, diverging from price, with decliners over advancers by a 6-to-5 margin on the NYSE and by a 8-to-7 margin on the Nasdaq.

The biggest movers of the day came in the form of Gold stocks which got hit pretty hard. This is normal, for old leaders. They come back from the dead after the “real” run and then everyone thinks that this run will be as good as the last one. Sadly, there normal is never another run. The AMEX Gold Bugs dropping 1.5% and the Philly Gold & Silv Index losing 1.4% show the true intnetion of the big boys. They are selling these stocks and some of the “true” leaders like GG on a weekly show the same patterns EVERY old leader shows. Goodnight gold.

For the week the SP 500 led the way with a 1.2% gain, the DJIA followed with a 1.1% gain, the Nasdaq followed with a .8% gain, and the SP 600 lagged with a .2% loss. Leading stocks, in the form of the IBD 100, rallied .5%. This is the first time in a while I don’t remember this index leading. However, the fact that the SP 600 is lagging so bad and the IBD 100 is still keeping up keeps me positive.

Overall it was a pretty darn good week, considering all the positioning I had to do in my portfolio. I took a lot of gains/small losses this week on over 150 different stocks. But despite all this moving around in my portfolio, my account did pretty darn well. I know one thing, had I not taken profits and cut some laggards I would not have ended the week with gains. Discipline always works better than hope.

Today was not a big deal, unless you consider another all-time high by the DJIA and six year highs in the SP 500 to be news. For me, there is nothing of importance with this, besides the fact that it just confirms that this market and economy is currently still very strong–sorry bears, facts say you are wrong AGAIN.

We are starting to enter that time of the year where traders start taking vacations and get prepared for the upcoming Holidays. Normally this means stocks drift to the upside. Last year that did not happen. In 2004 we drifted up on low volume only to break really hard in January. Nobody knows what will happen this year but be cautious of a low volume drift higher. They have a good track record of ending badly.

However, with a backdrop of the PPI, the personal income report, the spending report, the LEI, and 3Q GDP, lower prices would not surprise me. I wouldn’t mind them to be honest. The gains this week on the Nasdaq and SP 500 did come on heavier volume and since the last couple of trading weeks are on lower volume a low volume pullback would be welcomed here.

I hope you are having a great weekend and I will see you at Investors Paradise.

New Swing Longs: CACB GMRK VPFG MFG FSLR ISSC

Adding To Longs: NHWK BOBJ PFWD

New Swing Shorts: NONE

**stocks up 25% or more have % gain listed since long position taken**

Longs Up On The Day: JST-131 HMSY-40 INWK-55 CXW-37 IHS-95 ICE-41 STEC-73 IAAC-49 BMA-34 PCCC-37 SVNT-89 SEIC-26 TYL-54 CPA-55 OMTR-79 MA-95 MAMA-83 UAHC-25 SOFO-98 PERY-35 MALL-36 GENT-42 GRRF SRSL NITE JCG ISE FMCN BOT CELG RENT NHWK OTEX TSRA RKT SKX DECK TATTF SQM EVEP LFL TMO BLUD HOS INAP CCO LRCX OPTM NLST OSIR EFUT ULTR EXLS CBF GSIC FTGX NMGC ADBE BOBJ MFB PFWD MDF OPLK BITI OEH WOLF AZK AEZ AYE NWL ACGL AGR NHP MCRS CCBL HURN HNZ CMCSA RAH HCSG PNW BMRN EOC INMD PRCP

Stocks On Radar Screen: GMKT PKTR WFD CRK XTXI NTGR DIGE BRG KSW HTZ IPHS GOLF ENTU SWKS DAR GILT CLWT CBRX DSCM ADL CTCI HTI GE FLIR PBH PHLY NUVA LYTS MAT EMC CTC TLEO MEL VRSN NAVI TMI TPK FRGB WBKC

Selling Some Of My Holdings: LCC IGT BONT CVO ASCA CRT MOS AZS PRFT TSYS MBLX ACHN

Completely Selling My Holdings: TSEM MSTR ROG VOCS SMSC LMRA AXTI