Eric,
Nice weekend review. I enjoy reading them. I like that you are looking at real stocks and seeing what they are doing. The market will eventually follow the leading stocks. I looked at the case where you covered your short at the 50-day and smiled. It is difficult to write rules. There is another one that says short a position that is slicing through the 50-day on high volume. Watching what happens at these places is important. If a strong bounce takes place cover, if weakness is obvious double up on your short position.
If I had to guess, we stage a bear market rally in a month or so from now and run up into the end of year and then seriously roll over next year. Bear market rallies can be played. The trick is not to be fooled for too long as they can be extremely convincing. The low road scenario should not be considred a continuous down move. Keeping a shorting list could be important if a rally occurs.
Mike Scott
Cloverdale, CA