Dead cat.  Get it?  The dead cat bounce is over and the market is now the site of a tug of war between bottom fishers and paniced sellers.  As there is no clear signal the way to stay is short (if you were already short) or out.  New shorts or longs or anything at this point is just cruising for a bruising if you are an investor.  Stocks are cheap?  What makes you think that?  the P/E ratios are still historically high even at the sold off prices.  Mark Hulbert at Marketwatch.com has a useful column on this subject.

But even if we ignored that column and the high P/E rations the price pattern shows nothing to encourage buying.

Remember:  Trend followers do not buy weakness.  They shun this behavior because they hate buying Enron at 50 and owning Enron at 1/16th.  Furthermore the Dow right now shows a pattern of vicious cross currents where you can lose (or make if you’re lucky) 4 or 5% in  a day.  Making is great.  Losing when you do something rash is doubly painful.  Making sense of the post panic day action is not easy, but here is an hourly look, which clarifies the trend somewhat.

Ambiguous here, but illustrated in next chart, the pattern is panic low, automatic bounce, and downwave low, rally lower  high, downwave lower low.  (Lows: 8197.66, 8187.48)  this is not a positive pattern for buying.  

Daily, we have a two day upwave, a two day downwave, a three day upwave, a three day downwave with a new low.  

This said there may be buyable stocks out there — always remembering that if your time horizon is as an investor and at lest 5 years long you must be patient and willing to suffer further price erosion.  If you have a candidate, let us know.