Technicians note that a failed signal, followed by a signal in the opposite direction, is a high probability bet, meaning that today’s cancelation of yesterday’s power bar presages further downside.

BUT — we have remarked a number of times lately the deceptiveness of signals in the present environment.  While this is always true of mule –or sideways — markets, it is even truer in the present markets because of the presence of thousands of formerly  unemployed investment bankers and Goldman employees who have started hedge funds and are desperately trying to justify their compensation schemes to their investors.

We have been advocating hedging and scaling out for some weeks if not months, and have repeatedly warned of BAD THINGS HAPPENING WHEN THE LONG TERM TREND LINE IS BROKEN.  Well, they’re happening.  When bad things happen to good investors, good investors protect themselves with their stops.

Our letters over the last  6 weeks illustrate these stops, but if you are confused, disoriented or just plain disgusted post a question to the googlegroups and we will, like Clarissa, explain it all.

Among other greased pig signals, the euro and Swiss franc, which we sold (to exit).  You could short them if you were willing to get grease (better than Greece) all over yourself.

Gap down.