I've been positioned short since last week, and up until today my account was holding up pretty well, considering. Today was a bit more painful. I covered my UBS short, but otherwise I'm sticking with my positions for now. The SPX 800 level was much talked-about, and shorts were scrambling to cover with the strong close. At the same time, volume appears to be just slightly above average on a day that saw index ETF's up between 6 and 9 percent. The buying may continue, but I do not see this as a good place to cover shorts that are under water.

For now, we still have a V-shaped move off of the lows on mediocre volume, with resistance remaining above. SPY is now peeking out of its downtrend channel, but it is not free and clear of resistance.



To make myself clear, I think there are going to be some excellent opportunities to buy stocks in the near future. For now, we are overbought and bullish sentiment is hitting high levels. I want to remain patient with charts that still show promise. For example, CXW went the wrong way on me today, but I am not ready to bail on this short:



- SYT: I have been short this one for a week or so. Perhaps the high volume move last week will prove to be a false breakdown, but I would like to see how price reacts as it approaches the 200 day moving average



- DLTR: Another short I entered last week. This position is still slightly profitable, and remains an attractive short in my view.



- AZO: One more from last week, AZO didn't see much action today, which bodes well for its potential as a short trade.



- ANSS is a chart that looked very clean last week.