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Yesterday, the VIX went over 40. Panic was in the air. According to plan, I held my nose and bought some stocks. Needless to say it worked out very well but I cashed out completely by the end of the day.The question on everyone's mind is, "Was that the bottom"? My answer would be yes if the rally wasn't spurred by the Europeans banning short selling and talk over here of a new RTC. In addition, the effect of these actions were amplified by being done right before option expiration. I suspect the market would have gone lower if the governments did not interfere. I wish we could see a washout without government interference, then we would see a true bottom.
However, we must deal with the facts and the fact is that the government interfered. So what now? I don't think we have seen the ultimate bottom for this Bear Market but yesterday could have been a short term bottom. We had panic, a VIX over 40 and a strong reversal. However, I don't believe that a rally can go much further than a few percent from here. As we speak the S&P futures are up another 43 points as our country is taking its cues from Pakistan and banning short selling. This is an unprecedented move and I will not chase it. I am very tempted to short it, but will probably just watch as our free markets become socialized. I continue to err on the side of caution.

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