Friday’s mid day reversal changed the near term playing field and put our shorts into the high risk category. As such we recommended closing them to preserve profits. This does not mean however that the near term outlook for the long side has dramatically improved. On the contrary, as we are now faced with a large looming unknown; that is ”What will the Fed do Tuesday afternoon?” Be prepared for fireworks this week. We still have a number of factors to deal with in this market. • Overhead resistance at the broken uptrend looms above; • The trading range started April 15 was preserved on Friday after a severe test; • The market downtrend is still in tact, and; • We don’t know yet if the Fed has finished raising interest rates, nor do we know how the market will perceive any comments the Fed might make in Tuesday’s report. These factors, and probably a few others we failed to mention, raise risk levels and make trades vulnerable to whipsaw effects. Until we see what reaction the market gives on Tuesday, a cash position is the safest alternative as we embark on the week. Institutional money promises to stay sidelined early this week leaving the market action nearly fully in the hands of speculators. The next best alternative would be to keep position sizes small to reduce risk exposure in the event of another market reversal.