Until last week all was going according to plan. Juniors were outperforming, no major trend lines were broken, volume patterns looked good. Then came Thursday - without any news or fanfare, the market just slipped away. Personally, this was my worst week in 3 years - 80% of my year-to-date gains vanished last week. But I did save $5 when I filled my gas tank, lol!

The Friday close was sloppy. Intraday rallies that start at noon never seem to make it to the close, and this one was no exception - but it didn‘t fail completely. My indicator which had turned up mid-day, turned back down by the close. So no confirmation of an intermediate bottom just yet. Of course, we are so oversold a rebound rally could start at any time - it would be very risky to short anything at this point. This is somewhat reminiscent of the mid-summer panic of 2007. Market rallied after that, but unlike the rest of the markets, Venture did not make a new high. That was the prelude to the crash a year later. I don’t think a crash is coming anytime soon, but next year could easily be a down year.

The week’s technical damage raises the big question - is the cyclical bull market over? Had the Venture not broken its June low, I would be confident in saying no. I was looking for the Venture to continue to outperform, but it cracked Thursday along with the rest of the market. Still, Venture is one of the few indexes that has yet to break its trend line from March 09 (it‘s right on it). That’s the last line of defence - it should bounce here, but if it doesn’t, the odds will favour an end to the bull. Right now, the jury is out.

I consider the week’s action as the shot across the bow. It shouldn’t sink the ship, but it is a warning. A rally is due - I just don’t know whether it will be a simple oversold rebound rally, or a sustained one like last year. Until Thursday, I was thinking the latter, but now I’m not sure.

Currently, I’m mostly invested in juniors - a good strategy when markets are rising, but not when they’re falling. It’s not possible to be right all the time, so the key to survival in this business is to accept the possibility of being wrong and minimize losses. I won’t panic sell, but I will sell into any available strength until I raise a large amount of cash, or I‘m convinced the greed trade is back on. My motto is “when in doubt, chicken out.”

Crystal ball reading - choppy trading next week possibly with more downside probing. A bottoming process should be in the works. This should lead to a decent multi-week rally. The strength or weakness of the rebound rally will be key to the rest of the year.