The question at moment is whether past few days reversals are continuation moves or aberrations. Signs still conflicting, but overall indications are they will turn out to be continuation moves, i.e., beginning of sustained, good sized moves in new directions.
So. still like stocks from long side. Currently have the type of momentum line pattern than tends to produce several week to couple month (or more) up moves. On Weds VIX gave good sign of a significant top. Sentiment extremely bullish (way too much pessimism). When sentiment at an extreme and momentum turns in opposite direction can get very fast, very sharp move in new direction. Have couple of next day down indications for today (relative weakness of NDX to Dow and next day down signal in VIX on yesterday's close, but see so much upside potential prefer to try to hold through any short term weakness.
Very tough call on currencies and precious metals at moment. Can still make slight but legitimate case to be long here (all currencies), however any further down today and patterns will go neutral to negative. Gold pattern still marginally positive, but unless up today will turn neutral. Platinum still weaker than Gold and this remains clear downside warning sign, especially when divergence this extreme. Plus if all other markets reversing direciton, only logical these would also, although "logic" always lousy indicator in this game. So lines on gold and silver slowling tilting to downside. Want to be long but too many negative warning signs, and up trends little too strong for shorts.
Patterns in nat gas and crude still very negative. Prefer to pass on shorting crude due to event risk, but odds still clearly favor lower in nat gas, and possibly lot lower. See only risk there for near term as "time," meaning might have to ride through day or two up, but if do odds very high the up will be given back very quickly (when intermediate term momentum this strong to downside it's very difficult for short term up moves to last more than day or two, especially the first up move).
Grain patterns still fairly negative, but yesterday was good example of what weather threats can do this time of year. Understand have potential for very bullish weather in week or so (hot, dry for several weeks). In this type of situation, due to weather risk prefer to pass on short side regardless of line patterns, and if should start to get a weather caused up move, then being positioned with the SL (going long on turn up in SL) is not bad idea since SL would be quickest to react to weather. So if SL's in bean complex turn up next few days nothing wrong with some longs. Upside potential extreme on beans if should get weather threat (due to low stocks).
Still like shorts in cocoa, and sugar now as well, but lack of down in cotton now becoming a concern. So would put any cotton shorts on fairly strict probation (either down or out today). Also still like shorts in Copper. Aggravating market past few days though since keeps coming close to breaking down big, then comes right back up, but sideways still more negative than positive so will give it more chance.
Bottom line: The big reversals of past few days have come on type of momentum line patterns that tend to produce sustained and good sized moves in the new directions (couple weeks to couple months, several hundred percent or more of margin). But as always this just probability, and if action goes opposite enough to turn lines then will have to adjust.
Note: For anyone interested, a former subscriber, "Ashan," has been writing a trading journal on the Elite Trader web site (
www.elitetrader.com). Look in lower right hand corner of site for "Other Forums and Threads." Then it's about the fifth group down under "Journals" and is called "My Chick Goslin Intelligent Futures journal."
It's quite good and you might find it interesting. His results have been excellent. It is an accurate view of what successful short to intermediate term trading actually is. No magic. No "genius" predicting of the future. No great market "calls." Just constant, day by day grinding it out. Observing and trying to identify price energy flows and then betting on continuation of any clear flows. Simply making best decisions can on a case by case basis. Decisions based on sound, proven trading rules. Just persistently and consistently playing probabilities. This is really all we can do, fortunately for us that can be enough.
Chick Goslin
Just kidding, I'm glad you like my journal Chick, I couldn't have done it without you. Very few people share such valuable information with the generosity that you have. Following your example has made it easy to do the same with this journal and with others who ask for for trading guidance in my personal life. 
