All indexes fell around 1% today on heavier volume technically making today a distribution today. However, the late day bounce and the fact that a lot of my longs continue to hold up VERY WELL into this selling makes the distribution day seem a little lame to me. However, the statistical facts are still facts and they say that we just had another distribution day despite the obvious intraday support. Still it was ugly, unless you were in oil.

Thankfully, I am in most of my biggest positions. Sadly my biggest position did not do well but that was made up for by 3 oil stocks that are in my top 10 holdings that FLEW today. The poor action in my biggest holding hurts but the lower volume helped. The oil stocks however are getting exponentially parabolically, climaxy out of control. Still the top is not signaled yet and there is no way I am going to attempt to top call another commodity after my incorrect guess that the chemical-fertilizers topped in July and January. 0 for 2 and not looking to strike out.

Where I did strike out and once again I am HIGHLIGHTING MY MISTAKES. Which is something most do not do. Why do I do that? Because I do NOT have many. But LNN was a mistake. I should have stressed more to readers that earnings were coming up and it was a late stage base. I only bought a few shares in only one account but I do not think I made myself clear to some and for that all I can say is I am sorry and then point you to PDO MA GEOI MCF which have gained 243%, 488%, 180%, and 205% respectively. It is a stock picker market but you can find 3 out of 4 have the exact same thing: energy.

The bottom line is that every once in a while I make a mistake. Remember, nobody is perfect and I hope that some of you understand that. I have fought MANY battles in my life and I am still alive. If my life and the market hasn’t beaten me yet, you can be sure that it never will. I will lose and get it wrong sometimes and sometimes I will get it REAL WRONG. But, in time, I always come out ahead. Because even a 15% to 20% loss once a month in a small position will NEVER come close to taking a big bite out of my top producers.

Besides this there really is not a lot to talk about other than sentiment and China.

I see that bearishness seems to be the talk of the day still on the news networks. As long as they are speaking like this, it is going to be hard for the bears to really get there mojo going. The put/call ratio did fall today to 1.06 from 1.09. But the fact remains that the put/call is still over the 1.00 level which is historically the contrarian bullish signal. However, the most important contrarian indicator I watch is the bulls/bears % survey of newsletter writers. Obviously, most of the time they are bullish. But actually even more so they are really bullish. So it is rare to see them cross. In fact it never happened in 2007. Well, for the second time in 2008 we have another cross. This time the bulls are coming in at 36% and the bears are coming in at 37%. Perfect.

Obviously, you do not buy stocks based on this information. But remember, we are starting to see a lot of nice charts. Some of my most favorites took some small hits today. But overall the charts are still looking pretty good and I don’t see any reason to sell all of some of my most recent favorites. However, a stock I just went long (ugh!) is already not acting right and must be paired back. Either they are going to be winners right away, with the market acting like this, or I am getting rid of them. I have no time for selloffs on low or big volume. (Rhetorical) But Josh what about that you bought on 6/4 that is now down 18% but you are still long? Well, for that long, 85% has been cut and it is NOW AT THE 50 DMA. PURE STRONG SUPPORT. Selling the final 15% here would be silly. It needs to bounce. But if you are following the 8% cut loss rule, you should be out already. I get to trade differently than you because I have been doing this for a VERY LONG TIME and have seen probably at least 5 million charts. I know what I see.

Right now, there is no way any new longs are going to be large, UNTIL I SEE A BIG SURGE IN VOLUME ON THE INDEXES WHEN THEY RALLY. The next big up day better have a lot of volume or else I don’t know how I can trust going long anything in bulk when I see some recent near-perfect longs OUTSIDE THE OIL&GAS (all of my oil&gas stocks are moving higher–100%) SECTOR falling so quickly after I go long from patterns that should NOT be reversed with a near-perfect pattern so fast, I take a step back. Therefore, unless it is a CANSLIM energy related stock, I am not sure I would go long at all, if I was a newb.

I love the put/call ratio, the investors intelligence survey, and the trends in stocks with green BOP that are in high volume rallies. However, a VIX at 22 indicates that there is no fear within the stock market. That means if we do rally, we will not get many 1000% to 2000% winners.

The trend is still basically down since November but up since March which is basically putting it in no-man’s land. But a break one way or the other could give us an opportunity to make money as long as the market trends for more than a week. All I know is that we need more PDO stocks. I was used to this all the time in 1999 and in a few stocks near the end of the run in 2003. I hope this is not an end of the run for commodities that lead to a nasty market. I would like to see a rotation into tech/retail stocks. That would be FANTASTIC. However, with all the recent flooding and our stupid BIGGER government, I doubt commodities are falling any time soon.

Hopefully, Thursday will be as good to us as the market has been great to me the past two days. I look forward to the new trading day and I will see you in the chat room! ALOOOOHA!!

Last 5 posts by Joshua Hayes

• Following Through on Friday's Gains Stocks Stage Another Rally on Strong Volume - June 2nd, 2009
• Small Cap and IBD Indexes Lag the Major Indexes with Volume Higher Across the Board - May 29th, 2009
• Are Items That Fill Up Your House too Expensive? Then Rent Them at Aarons Inc. - May 27th, 2009
• Finally We Have The IBD Indexes Leading The Way As Stocks Rally On Heavier Trade - May 27th, 2009
• Ending in Mixed Fashion Stocks Fail to Close Out With Gains Seen Earlier in the Session; IBD Indexes Take the Lead - May 20th, 2009