Another flat day

Today the market was flat again, but closed in green. Now we have two flat days in a row with narrow range. It's an indication that both bears and bulls are waiting for something to happen. It can break the range anytime now, can go up and down at any time. I expect a selloff soon.

1. Because of the recent market gains and the big COT number (last Friday) indicating strong bullishness among so called "smart money", we have confident bulls. And bears are nervous, just like me, and careful not to push the button and sitting on the edge, ready to give up on any rally.
2. So the two days of indecision should be an indication of a down turn in the near future, the bulls are run out of steam, at least for the short term.
3. If most bears are waiting on the sideline, and bulls are pushing for their luck even after 6 months of strong market, then who will buy more to push it higher? It got to be short covering. And we know there are not much bears left.
4. So I think if there is a decent correction (5-10%), then I can see the bulls got another up leg left; if we don't have a correction and get a rally (5-10%) instead, then I see a big correction(10-20%) ahead of us.
5. Of course, the number can easily be reduced to 2-5%. Even for bulls, "venting" is important. It's like inhale and exhale, you can't just inhale without doing exhale.
6. Yes, we have some "venting" two weeks ago, I don't know if that's enough for another up leg. My take is no.
7. Either way, being a bear right now is not too bad. it's safer than a bull.
8. Of course, cash is the best. Since we don't know which way the market will break out next.
9. It's possible we have a flat week, then next week will be fun. The longer the narrow ranged market last, the bigger the break out it will be.

Targets:

1. I took no action today.
2. I noticed RIMM, AAPL, GOOG and AMZN all had a big down day today comparing to the general market.
3. CROX and BIDU shot up again. I'm glad I didn't add any puts on these stocks. I'll keep watching them.
4. FXI and OIH are overbought. But they can go higher.
5. GLD and GDX just bounce off recent lows, maybe in an up leg. But I think they'll follow the market lower even if we have a small correction. So won't add them.
6. Out of all major indices, Russell 2000, Dow and Nasdaq are more vulnerable than S&P500. And I think FXI and EEM are more vulnerable than domestic indices.
7. Let's see how the rest of the week play out. I still expect a lower close on Friday.