Market panics. Technicians yawn. Is it a bear market?

It is not necessary to predict a bear market or even to identify it in its early stages. All you need to know is what to do now, and that is indicated by the ending of the sideways pattern with solid closes below the lowest horizontal line. Holding stocks in these conditions is a good way to go broke. The tide is now running out. Visualize Enron.

Individual stock decisions are made on the basis of their individual patterns, but the context has turned decidedly negative. For more than seven months we have been urging caution and hedging and the weighting of portfolios to the bear side.

How far this wave will reach no one knows. We will make some experienced guesstimates later next week. But all news is not bad. Wall Street, having reported $B (illions) in losses from the subprime scam reportedly will pay its brightest geniuses $36 B in bonuses. Alice in Wonderland. Shouldn’t they be in jail? Stranger and stranger said the White Rabbit. Here’s their sector ETF. Not a bad short bet. XLF.

IWF breaks down. Another short candidate. One wonders whether the 2000 might wither away in these conditions.Given the dominance of the markets by big money players and their interest in big money bets the Russell might wither anyway.

As we were saying last week it was time to hedge gold. It’s not time to be buying. Our buy signals have been incredibly accurate.

Next time we see one we’ll let you know.

The FXE ETF is a slow way to play a fast game. By shorting it you can go long the dollar. A close below the horizontal line would be a signal to get short.Here it looks like a double top is being formed. Not complete yet, and the classical Magee rules say don’t trade incomplete patterns.

Live fast. Die young. And leave a beautiful memory.

Against all the rules we might do it anyway here. You shouldn’t unless you’re willing to take a losing trade — but basic economics argue there is not much more upside in the Euro.

This looks like a bottom being put in to us. Intrepid traders might be getting long the dollar. Obviously many big players are feeling that way — buying chunks of Citi and other US assets.It doesn’t look like the bottom is definitively formed and there is a lot of resistance overhead, but one major currency trends start they slice right through resistance.

Here is a list of ETFs to look at. We’ll be commenting on them in coming weeks: XHB, RTH, DBA, MOO, FXI (Xinhua –looking short), IAI (brokers, looking bad) EEB. ETFs are better short candidates than individual stocks. Indices don’t get taken over.

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