A few thoughts... partial shorts initiated

First of all, I was 100% flat and in cash this morning. If I was to look long right now for some stocks, I would take aim at some (gassy) independent oil and gas companies. A lot of these names have not participated at all in the rally of the last 2 years, and some are barely higher than June 2009 lows. I know some very respected traders on the site have stated their negative bias on some of the natural gas equity names, but although my ears perk up anytime one of them has something to say, I am just looking at some good charts, and I have posted on the site several times over past couple of months how I really wasn't bearish on natural gas, and that I would sell fakes that have run up something stupid like NOG, or XEC, before I would be selling gas names. Note that (XEC, SM types have been on a bull run for months because they were low debt and did not waste a bunch on money on leases in 2008 that didn't get drilled like some others + they were mid cap. So many mid cap names have just gone to the moon over the past months) NOG BEXP and WLL and BRY are up with oil. NOG and BEXP being those growth Bakken names (I guess). Here is CRK, its been a dog for a while, but looking up. I missed the breakout, but am stalking a long here and in future. It could see 20 or 25 % over next few weeks or months. COG is another one that is more in the public eye, and has been mentioned a few times on Twitter, looks good right now. When they get too hot on the daily/weekly like COG is, I won't buy them. Only reason that behavior worked during past months is RED BULL run, and school is out on RED BULL for the time being. As far as RUT trade goes. I was VERY FORTUNATE to be in cash. I missed out on the last part of the down run by being conservative, but here, being conservative is paying off. I had several reasons for being conservative for the bounce: daily McClellan, VIX and RVX spikes, OS conditions in ISSUES ABOVE 50 and 200 DMA RUT and NYSE, OPEX, OB Conditions in 10 yr note, HI- put call ratios. All of these things had me scared to short market, but wanted to pull trigger. Now, my thoughts on reasons to short. First, lots of good news has happened and came out already, also 1-3 day charts are OB (which I very much expect during these snap backs and we could see something Monday even), also the notion that BULLZ are going get a clean out is unwarranted. This bounce was too very clean and technically perfect to be a bottom, too easy to see and know. Now we don't know how powerful it will be or how vicious a squeeze we might get it we open higher Monday. Look at some of the bottoms from last summer, and how hard some of the bounces were, so I am conscious of this. But for the following reasons, I have gotten partially SHORT right around RUT 794 Levels.

Oh, here is that chart from Brad Sullivan the analog chart that Fari Hamzei posted last Sunday. I'm sure many of you have already seen it but here it is if you haven't. Fari said it was fine to reTWEET, so I do not believe it would be a problem to post to this board. The date is wrong, I am counting us about 7 days into the Japan situation, and looking for one more wash down.

Please note, that Green emphasis and text in red box is MY COMMENTS only. Not Fari or Brad's.

One more comment. I am still partial short, from this morning and I am examining 7-22-2010 RUT ACTION for next few days as an ANALOG if I AM WRONG and squeezed. I see some notable differences in that situation. But very cautions here of Squeeze to 820, and if Squeezed to 820 then what. Already planning the what if's.

Then overlay the oil crisis of the 70s... Then european bond fund crisis... And what do you get? NO CLUE.