Double Bottom?

Basically exactly what I mentioned yesterday morning ended up happening yesterday. Too many traders pushing shorts trying to take advantage of capitulation action break the October low. A run of stops is hit and then many begin to cover...dip buyers jump in...more shorts try to lock in gains...and then we break back up through the old low and BOOM the buyers jump in...squeeze city...more and more feel left out...and we finish up nearly 7% and reverse almost 100 pts. on the S&P.

Last time we tested this low we had nearly a five day rally. So I am feeling more bullish than normal but I still want to respect the fact that we are in a bear market. I am not buying hand over fist and I am being very patient with entry points and cautious of my position size. I'm thinking there will be some profit taking at the open and give dip buyers a chance to jump in. Where we move from there is a good question with so much economic data coming out, Bernanke speaking this morning, and the G20 economic summit this weekend. I'm gonna flip out the SSO in premarket.

I continue to like the commodity and alternative energy plays. They rallied the hardest of the last test and I expect that trend to repeat itself here. The solars rallied particularly hard last time supported in part by the election. I think this could be a repeat performance as many traders look at the same thing...as well as oil in rally mode.

Here is a watchlist of some of the stocks I watching for a pullback and how they act:

Coal
PCX, ICO, JRCC, FCL

Steel & Metals
NUE, AKS, STLD, MTL, FCX, RIO, TC

Shippers
DRYS, PRGN, GNK, NAT, EXM(ex-dividend Monday)

Solars
CSIQ, STP, YGE, CSUN, JASO, SOL, LDK

INFA
SGR, FWLT, KHD

AG
MOS, IPI, TRA

OTHER
LVS, VISN, APWR,

Remember to stick to your rules, respect your stops, and remain patient. Keep the emotion out of your trades and don't be afraid of locking in gains too early.

Good luck guys.