It was yet another day of huge losses for the stock market as most indexes are now down over 45% for the year. This kind of market action is enough to make a lot of people sick. But that is the last thing you want to do here, especially with the selloff starting to slightly hit panic levels.

Now, I am not saying that we are near a bottom what-so-ever. But what I am saying is that we are getting a little crazy with the selling and that should lead to a rally in the near term. However, before that rally occurs, I expect that we will more than likely set new lows on all the indexes.

One of the reasons I believe that is possible is because after today’s session I saw that ZERO stocks on the NYSE or Nasdaq hit new 52-week highs, while over 415 stocks on each index hit new 52-week lows. This number of new lows expanding along with the non-numbers in the new highs is my warning that the market is not done with the selloff, even though it has been going on for a long time.

I will know when it is time to go long again as my scans will start to produce some stocks building nice bases with excellent accumulation patterns. Right now, sadly, scans that usually have 50-300 stocks in it during bull markets only have 5-10 in it now. This is not only some of the lowest numbers I have EVER seen in my long scan but I am in a unique position myself with my own longs.

I am currently long only two stocks right now, after having to cut my loss on DMND. With me only having two stocks this now officially makes it the LOWEST number of longs I have ever held at one time SINCE I STARTED IN 1996. When I started I bought somewhere around 3 stocks and ever since then I have built upon longs since I learned to buy new highs right when I started off. I have always been a breakout buyer and I was blessed to have started in 1996. Not perfect timing as IOM had its huge 5,000% gain in 1995 but still early enough to have been lucky and come out on top. It took me three years to learn how to sell correctly and if you can do simple math you will know that in 1999 I had my sell discipline down.

With that in mind it was no problem taking longs off as the market sold off in 2000. However, there were still a few stocks that either held up or that showed up as longs (like CRUS and GNSS, for example) during the two year bear market. This allowed me to almost always have AT LEAST 5 longs. At the start of the March 2003 rally I had around 20-30 stocks and by the end of the year had over 65. All of them were great longs.