Analysis is a funny business.  It’s a good thing that it’s only money at issue here and not blood and lives.  What’s that?  Money is blood?  Well, yes, it can get serious, but if you take it that seriously it is life and death.  But you know what they say — if they can’t take a joke….

We preface our remarks with this little piece of 5 cent philosophy as a prelude to saying that our analysis today may not be worth more than 5 cents.  But, what the hey, we’ve got the microphone…

Friday felt like a reversal day to us.  And beyond feelings it analyzes like a reversal day too.  The euro turned — at least on the hourly charts, and the dailies look like a turn too. The indices tried to scare the hell out of everybody and then finished up.  There were power bars off the bottom all over the place.  The volume bars were exaggerated — looking like volume climaxes.

We closed a bunch of hedges for 5-10% profits, sold UUP, re-bought C and BAC and are almost completely long, except for a small hedge in the Dow. Except for the metals –where we are largely hedged.

Now for the bad news.  The broken long term trendline.  When the music stops you have to pay the piper.  It could well be that we will be looking at sidewaves and trading ranges for some time.  And of course we could be tone deaf and the bottom could fall out and we could see the market go back to Patagonia.  The country, not the company.

Next week we will see whether we bought a ticket to paradise or to Patagonia.  Lots of cute penguins down there we hear.