Some of the timing systems flipped to the long side after yesterday’s buying panic, so I added some long positions accordingly. Nasty whipsaw, hope the others don’t follow with even nastier whipsaws. Now in the situation where either long or short position is likely to close with a loss (although not necessarily). Don’t like it, but I didn’t want to close the put option positions after volatility (VIX) collapsed yesterday.

However, most of the longs that I added were Metals and Mining - specifically Goldcorp (GG) and Pan-American Silver (PAAS). The precious metals should benefit from the weakness in the dollar. The rest were some Proshares Ultra QQQ (QLD) - a new leveraged ETF that moves twice the change in the Nasdaq-100 index.

Looking at the charts, we’re still in the oversold zone in terms of measures such as the Bullish Percentage Index (BPI) and Price Momentum (PMO). This worried me before yesterday’s rally and still does, in terms of my short position. On the other hand, the fundamentals continue to deteriorate. The Chicago Purchasing Manager’s Index (PMI) came in lower than expected today, around 56, showing a very high “prices paid” index. That says slow growth and inflation, neither particularly happy numbers for the stock market.

The Fed raised a quarter point today, but more importantly hinted that it was finished raising rates for the time being. Accordingly, the stock market rallied strongly and the dollar tanked. Reasonably enough, as Bernanke signalled that cheap money wasn’t going to be withheld regardless of inflation.

The revised Q1 GDP report this morning was strong. Perhaps most interesting was the revision to the personal savings rate, now -1.4% for Q1. The consumer is borrowing like crazy to maintain his lifestyle, the heck with the future.

(P.S. 6/30 - Personal savings for May came in at -1.7% this morning.)

Being short I wasn’t too happy about the rally as you might imagine. But news items don’t often cause a trend change.

Apple (AAPL) was today’s options cheater.

Pretty much every day another company is caught in the SEC’s net for backdating stock options. It was AMCC today. RMBS yesterday. HD Friday. What these companies are doing is awarding stock options to their executives that are already in-the-money. So rather than have to get the stock price up to make money from the options (which was the theory behind options in the first place), these fortunate few simply exercise the options and walk off with the shareholders’ money. As if they were underpaid in the first place. The level of greed is just incredible. Not satisfied with straightforward, properly disclosed, astronomical salaries and bonuses, these folks have to cheat as well. Disgusting. Unfortunately, I think it is only a civil matter. I’d love to see some of them go to jail.

The new and existing home sales survey show a housing market that is still quite robust, with sales volumes down 5.9% and 6.6% respectively from last years’s peak.

The Mortgage Bankers Association numbers out this morning tell a different story.

Per Bloomberg: ” The refinancing index has fallen 46 percent from the same time in 2005, and the measure of purchase applications is down 27 percent from a peak in June last year, today’s report showed. Refinancing’s share of all loan applications slipped to 35.3 percent last week, from 35.5 percent the prior week, according to the report.”

These numbers seem much more consistent with the anecdotal evidence of a sharp slowdown and steadily rising inventories.