Heck of a move up today in the stock market.

Yes, today the market soared after the rise after the close on Friday. The Volume equalled Fridays which had been higher than many days last week. It was convincing and propelled the Dow from 8,500 to the 8,700 level, closing at 8,721. This was just under the 200 day Moving Average, but both the S&P 500 and the Nasdaq have gone above the 200 day MA, and it happened on stronger volume. This is why I say it is convincing.

So where do we go from here? Well it looks like we are headed higher and, in fact, we may go back to the top of the range for the Dow which is at 9,300. The Dow is taking out both Citigroup and GM and replacing them with Cisco Systems and Travelers Ins. Co. Today some commentators said that the Dow may now become more volatile with these 2 new additions.

This makes it very difficult for those holding Shorts like TZA and SDS as I am. I had several friends ask me today what to do if they still hold them. Here's what I said. First you must ask yourself a couple of questions. The first is this. Do you believe we are not going to go back to 7,300 on the Dow? If the answer is I don't think we will go lower and retest 7,300 or lower, then you should sell those Short positions. If you think we will eventually go back and test that level, as I do believe we will, then hold on and wait. You could buy more shares as your positions continue to deteriorate and average down from your current price. I will tell you what I am going to do. I am going to continue to hold my shares of TZA and as the Indexes continue to rise, I will wait and buy more shares of TZA cheaper and hopefully will be rewarded before years end. As most of you know from reading here, I believe we will have a major drop and retest most likely in the Sept./Oct. timeframe.

I did not expect this rise with still all the bad news out there and most everyone knowing Friday's unemployment numbers will be about 9.2%. But I said I would say I was wrong if I was. I was wrong when I thought we would have the pullback. Sorry friends. But I never promised you I would be always right, either! It doesn't make sense from where I sit that the market would be going up, but I can't fight the facts. I do believe this is a false sense of comfort and I still caution to preserve capital. I felt this way back in the year 2000 and felt then like I was crying in the wilderness as everybody wanted to jump on the gravy train of a higher Nasdaq because of the Dot Com bubble. I said to go to cash then too, 6 weeks before the big drop. But most didn't head my warnings except a few that did and were thrilled they had. Stay tuned!