Friday Recap

Very volatile session on Friday. I made a few small buys in the early morning on the early dip. The bulls attempted to buy the early morning gap down but the move quickly fizzled out. The rest of the session, up until the late hours, was characterized by further low volume profit taking for those who were able to catch the lows. The averages stayed between 2-4% losses for the bulk of the session until around 1pm when the bulls begin making a late day charge. Volume picked up and I considered adding to some positions but I felt the troops were a bit early with the move and decided to wait for the close. The bulls were able to push us all the way up into the green but ultimately ran into heavy selling pressure in the final half hour. It felt like the days of hedge fund liquidation again as the averages shifted courses abruptly and closed on lows. I'm down a little on a couple positions but all the selling was on light volume, and I have left plenty of room to add should we see further weakness. It is still clear that this is a market you can't buy strength into and the best play is to remain patient, scale slowly into your favorites at low risk spots, and cut your losses quickly if they move against you. Ultimately, I think we will see more moves to the upside next week now that most of the earnings are out of the way and as we look to build off of Thursday's move and the test and retest of the recent low. Even though the averages were down a big percentage on Friday, I thought the action was constructive for much of the day considering the previous day's massive move. The close on lows is the real negative from the day given the pick up in volume in the late hours. So I will remain patient to start next week and continue to watch for a shift in sentiment.

Current Positions:
EXM 9.05
PRGN 4.75
STLD 7.8
SGR 14.55 (avg)
MTL 6.11
CSUN 3.06