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With all major averages now below the 50-day MA, the timing model is on a clear sell signal. While many IPOs have held up, current market conditions are simply too volatile to produce reliable buy setups. When volatility increases it becomes very hard to control risk due to gaps and wild trading action. As far as the short side is concerned, it is simply too late to locate low risk short entries. Ideally, we’d like to see a decent bounce in the broad based averages to produce low risk short setups. One potential short setup down the road is in the Market Vectors Steel ETF ($SLX), which has broken a clear support level and $40 and could possibly sell off to or near the lows of 2009

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