Bull Pen

Last week's pain was gruesome.  Traders were able to avoid it, but growth investors really couldn't.  The market doesn't seem to care.  The VIX closed the week in the 12s again.  WTF?  The market is a bull pen!  As Ed Yardini says, we're all bulls now.  Check out the chart he shared on the investors intelligence sentiment poll.

Psych 

When stress and emotion is high, it's a great time to review and re-assess everything.  It's where you'll gain the most wisdom about working with your tendencies to improve your trading plans.

Weeks like this are why you have a trading plan that includes much more than stops and targets.  Everybody has to work around issues like emotional intelligence.  Again, the way to figure out our issues is by soul searching to find what we think deep down about the market.  Rule of Thumb: if it's not uncomfortable to think about, you're not digging deep enough.  Then we dig into the data that your actions provide.

Market Internals

When looking through the internals, it's easy to spot out multiple reasons to think there is more room lower.  Here are some examples

The smoothed trader's index is just now getting to sell zone.

The VIX is already back in 12s thanks to Friday's rip.

The IPO ETF is really starting to struggle.  Notice how much weaker it acted than the major indices this week.

The % of stocks above the 50 day moving average is falling sharply while the % of stocks over the 200D MA fails to budge.

Groups

Transports are still holding support.

Utilities keep trying that 200D and major uptrend support line.  A break lower adds credibility to the mega bull in bonds may be over.

Real Estate bounced where it needed to.  How strong will this bounce be?

While flashing relative strength, Energy may be near the end of it's run as XLE nears the 200D MA.

The agribusiness ETF MOO s showing fresh relative strength and there is some great action in the group like DE

Bonds

German 10 year bund yields have ripped above the 50 day moving average as bond investors run for the exits at the 0 rate boundary.  Thank god.

High Yield Corporate Bonds continue to test major resistance as it gets some inflows from treasuries

The Rest

Industrial metals are the stars of the show and are testing the 40 week moving average.  Copper ripped through this average last week.  Will the group follow?

Nat Gas appears to be 'free and clear' for more upside next week

Overseas, not much is going on.  It appears to be a big week for China coming up.  My girl @BeckyHiu noted the action in Short China ETF FXP.  It might rip big.

It became evident early in the week that the Yen idea I shared last week wasn't going to work.  The dollar was very weak, and there was no upside movement in the yen.  Now is it breaking the other way?  It lost a key support area Friday.

To sum it all up, as Warren Buffett says: be fearful when others are greedy.

Trade 'em well!