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This is the most difficult time and market environment that I can remember in a while. Todd talks about reducing risk and trading less in markets where one is confused over the near-term direction. I do the same from the analysis side of the equation. I don't need to explain every wiggle and jiggle because that frankly would be impossible and it clearly isn't my strength.

While I mentioned a number of times over recent weeks that a one-day wonder is always possible, I certainly did not anticipate a 8% rally over four days. I keep asking myself the question of whether the rally was something that should change my intermediate-term view? I don't think so, but let me explain my thought process.

The hardest part of trading or analyzing the market is removing emotion and remaining consistent. For me, removing emotion basically means taking ego out of the game. If I am wondering how I am going to look or whether I will be considered right or wrong - I am in big trouble because it would clearly skew my thought process and not allow me to remain consistent. Remaining consistent doesn't mean unwilling to change direction or admit a mistake. To me it means defining what your strategy is and why, and not changing your view until the reasons for your strategy are no longer valid. You can come to your conclusions using any approach - I use a combination of technical and fundamental analysis.

When I put it in that light; I review what I have said would change my view and step back, turn off the quote machine (analysts aren't supposed to stare at the ticks anyway) and review my position. I have indicated that from the intermediate-term standpoint, the market was likely in the final stage of a leg lower in the bear market, but was not quite there yet. As a result, patience in my view was warranted. When on CNBC last week, I said in response to Ted David's question that it would be ridiculous for me to suggest aggressive selling AFTER three years of decline and in the third year of the Presidential Cycle, but that it was also too early to be aggressive on the buy side.

After much debate in my head (just thank God you didn't have to hear that), I came to the conclusion that the only reason I would suggest buying aggressively here is because I would feel like I was missing something or that I would be viewed as wrong. Not good enough reason for me to change because it would be ego based. On February 26th I wrote;

There are basically three things that could change my intermediate-term view (remember that I DO NOT make trading calls) that the outlook for stocks is neutral at best near-term;

1. If a war related dislocation brought the market down enough to get the near and intermediate-term indicators near levels where prior lows have been established
2. If Blue Chip corporate America began saying how sharply demand was picking up and began guiding estimates higher.
3. If neither of the above happened and the major market indices moved above their late November and early January highs on convincing volume.

While there is always potential for sharp bounces, they should remain fleeting until some or even one of the fundamental, technical or geo-political issues are resolved.

While opinion can change quickly, I prefer to have reasons for opinion change where I can justify the new approach. Even if I threw up my hands and said it was the right time to buy aggressively, damned if I could convince myself of the reasons.
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hey Daisy, was it something I said??!!
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