Sell the rally; Wait for next pitch

They'll be preemptive so be pre-preemptive
and strike with common sense for instance
freedom of thought is the only chance
fools can't control the force, Jedi's don't dance

Speculate on armaggedon/ I'ma pull out my weapons
a big book full of crooks and a history lesson
on a rain slick precipice overlooking a deficit
to fall for the traps is effortless

Not paranoid 'bout paranoia off the cuff
paranoid 'bout not being paranoid enough
I ain't drinking they stuff
times is rough time to call their bluff and take back

Government gets bigger than Shaq at the playoffs
poor guy gets laid off/ rich guy gets ripped off
I ain't lying and you can ask Bernie Madoff -- Muddy Souls featuring Mo' Money

What a difference a few days make. Last week when I noted that EVERYBODY I knew was finally bearish and even certain in their bearishness, I wrote that:

"Don’t freak out now that we’re here near my DJIA 6k target. If anything, catch your breath. I’ll go out on a limb here and say that we’re more likely to see DJIA rally 15-20% before it falls another 10% from the 6600 level as I write."

I finished by noting:

"Remember that just last week DJIA was close to 7500."

Well, here it is a week later and suddenly 7500 sounds more reasonable than 6000. That's what happens when the marekt is closer to 7500 than 6000. Which it is right now. Which it wasn't last week. Although it was the week before.

I wrote that last paragraph that way on purpose -- to underscore how wildly volatile this market really is. We didn't see volatility like this during the bull market of 2003 to 2007. Indeed, there was even a span of more than 100 trading days in a row near the end of that bull market that never saw the S&P 500 move more than 1% in a single day's action.

Today's move, which isn't nearly as wild as most in the past couple weeks has already gyrated more than 2%.

Volatility like this is probably another symptom (or sign, or cause...) of the bear market which we are still in. Let me repeat that -- we are still in a bear market. And we will be til we aren't. And that means that bottoming will be a process. Not a point.

A few weeks ago, I initially moved my 7k-9500 range for the DJIA to 6k-7500 after the Republican/Democrat Regime appropriated another trillion dollars or so for their cronies in corporate America and the banking industry with their latest stimulus packages and TALF welfare anarchy laws.

I still do expect that the 6k-7500 range is probable here for the foreseeable future. And guess what -- as I noted at the top of this article, we're now closer to the top of that range than the bottom of that range. So if you caught any of this rally at all, I think it's probably time to go ahead and take a good chunk of that 10% move you just caught off the table and wait for the next fat pitch, which will likely come in one of two forms:

1. A huge blow off top to this ongoing bear market rally that takes us close to or above 7500 and sucks in some of the few remaining believers in the stock market. You'll want to short that move if you're an aggressive trader.

2. A slow dribble lower and then a panicky sell off closer to 6k and forces even the "longest-term" investor out of the market. You'll want to buy that move if you're an aggressive trader.

Oh, and if you're not an aggressive trader (heck if there are ANY traders out there who consider themselves "aggressive" these days, lemme know!), then you want to just continue to, as I keep telling people --

Take 10% of whatever money you actually want to have invested in the stock market for the VERY long term and buy some stocks like Google, Apple, RIMM and Microsoft at these levels since they have tons of cash and no debt and aren't on welfare guarantees of any sort from the government. Put 10% per quarter to work each quarter for the next two years or so and you'll have a nice average price for some nice long term gains in some very good companies.

And gold's always good. GLD or the physical commodity itself. I'm sticking with my 2011 or 2012 $2000 price target for the shiny stuff.

PS. Take a listen to my band's new jam featuring Mo' Money rapping -- http://myspace.com/muddysouls (You Can Ask Bernie Madoff) and let us know what you think.

PSS. Bet the market would be higher if Ken Lewis, Chuck Bob Prince, and Dick Fuld, Hank Greenberg, and all those other guys who ran these scam financials were being sent to prison too!