Yesterday, I expressed reservations about the bounce.  Today, those reservations were confirmed in a brutal way. 

Everywhere I look, the market is a world of pain.  The S&P 500, the Nasdaq and the Russell 2000 (which I am short) all closed below the closing levels last Friday while the Dow is essentially flat, meaning that the GSE nationalization counts for nothing in the market, at least in the short-term.

Worse, today's NYSE Composite volume was 7.1 billion shares, only slightly less than yesterday.  Had volume been substantially less, say 5 billion, then perhaps we would be less concerned.  Making the environment more dire was that downside volume was 10.5x upside volume.  Yesterday, upside volume was less than 2:1.

For Canadian investors, the sell-off has been nothing short of amazing.  The TSX Composite closed down 488 points today.  From the high on the Monday morning open, Toronto has fallen an astonishing 1017 points, or 7.7%.  For the month, the TSX has plummeted 1625 points in six trading sessions, an 11.8% decline.

My gut tells me that a bounce is nearing in Canadian stocks and commodities.  However, these stocks have come a long, long way over the past five years, and there is a lot of space between where they are today and where they were then.

I have been massively short the past few weeks and will be looking to take profits into further declines.  This is a vicious bear market and there is no evidence of an end in sight. 

Position yourself accordingly.