True selling day

We just had what qualifies as a true selling day (almost). A true selling day happens when all of the major indexes are down 1% or more. The thought being, it is not a day where people are just shifting from say techs to small caps or whatever, it is a day when "real" selling goes on. And the market may soon go lower. See Author & trader Gary Smith for more information on this. It was almost a true selling day because Dow Jones Utilities Average held out. I am not a purest with the signal for me this was close enough; I could see the Utilities being used as a safe haven in this market. Anyway this really chaps my hide because if I follow my trading rules, which I do, this means I close out 50% of my long positions, and I am convinced we are going higher soon. But I have to trade my rules no matter what. If this signal fails, which it seldom does, it means I get back in (long). C ps. I trade IT-LT not ST, I do not think the signal is very usfull for day trading.

I agree, it was true selling. It was a 9 to 1 down volume day on the NYSE (mostly due to GE). I also have a long side bias here for the IT. I capitulated on my longs today when 1337 failed to hold. I rode this trade from 1325 to 1385 and back to 1337, it almost feels worse than a loss knowing what was left on the table. I also tend to trade the IT but this market has forced me into some short-term trades. I thought I would give this trade a chance for the IT. As Jesse Livermore said "be right sit tight, the big money is on the big move". My plan is to buy somewhere below 1312 cash SPX intraday next week. If we do not reverse and close over 1312 on that day I will look for another oppurtunity which may or may not be on the long side. Good Luck,