Stock Market Review week of August 7th 2011

Crazy week last week. the markets were taken down in a very decisive manner due to all sorts of geopolitical and political headlines.  This is a cash heavy market.  I am currently 100% cash and very happy to.  The thing about cash is that its the best hedge possible.  I have no care in the world if the market opens down 1000 points tomorrow or 100 points as im cash.  As i keep telling you guys this is not a good environment to swingtrade.  When you break below key support levels like the 200dma what you will tend to see is gap downs all the time.  So swingtrading can be very difficult as your basically losing money while you sleep as you wake up and your stock will be down 5%.

Expect a very news driven week. This will make the trading difficult as rumors and news will be what makes the market move.

We have a fed meeting on Tuesday. This will be major as people will be cluing in to see if the fed can concoct something to save the markets and whether QE3 is on the table.

Europe looks like crap. My guess is they will buy spanish and italian bonds but thats just a stopgap to prevent full on contagion.  Spain is a pretty dang big country the now way anybody just has the money to bail them out.

Historially the odds tell us after such a death drop there will be a bounce and a nice one but we need to confirm through price action on shorter timeframes.  We cant just buy blindly.

capital preservation is key….i want a fully loaded gun for when i see the sign that its buytime.