The market action continues to be weak. I feel that it could be some time before the market heals. Unless one is comfortable with very short term trading (daytrading, scalping) cash is probably the best position. I still feel that there is a good chance we may test the lows on the SPY around 110 (see above chart).
The above diagram illustrates investor sentiment during the market cycle. My gut instinct is that we are currently in the Fear/Desperation part of the cycle. I feel that the SPY breaking below 110, may put us in the Panic phase. This is my current outlook and I will adjust it, if I see evidence in the price action.
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