Great Trades

With the S&P 500 consolidating under the 800 level rather than selling off sharply like the two times it reached this area late last week, our trading model is covering half the remaining shorts to reduce risk.

We did get the pullback we were looking for late last week, though it was shallower than we would have liked. We said last week that "we believe it will be a buying opportunity for a strong rally over the intermediate term."

As we mentioned last Tuesday http://greattrades.blogspot.com/2009/03/bought-back-ge-identifying-bear-market.html , 90% upside days following a series of 90% downside days is very bullish. Today we may have yet another 90% upside day.

So the intermediate term picture looks strong. However, the market is still very extended shorter term, so we will hold half our remaining short positions until there's a better buy opportunity.

Open Positions: 25% short S&P 500, 15% short financials, speculative traders short an additional 15% S&P 500, short financials an additional 20%.