9 MAY 2010, Sunday

• It happened fast...really fast.
• Skynet failed....once the HFT computers were turned off...there were no bids at all and, thus, the markets plummeted seeking the next bids which were way down there...perfect reason why machines should not be trading markets.  Same situation that exacerbated the 1987 Crash once it got rolling.  Less reliance on human intervention as a "slowdown reality check" has led to this brave new world.  Crappy and unfortunate but it is the market we have.
• Volatility is high as you can see by the daily ranges.  Will more than likely take 2-3 weeks for this to settle out whichever way it is going.  
• As stated in recent posts, the risks were getting very high...just needed a trigger.  We got it.  Of course,   there is no real way to time it with the utmost of precision.  You can only try to pick a price area or general time area.  
• It's now short term oversold...I would anticipate another 2-3 weeks of chop with a general downside drift toward the Thursday lows but it will be whippy.
• The key will be the "bounce" that comes out of that.  Do we drift down to 1050, rally back to 1150 and set up a Head and Shoulders which brings us back down to the low 900's, high 800's?  Or do we go back up to pop slightly new highs and set a double top which then fails and projects down toward the same area?
• No hurry hear right now...shocks like that aren't dealt with in merely the next day or next week.  For me, I'm going to try to be nimble or sidelined as it is a skosh short term environment.