Here we go again. It's like a bad movie that keeps being played. The market's getting hit again on news today.  After showing strength on Friday, I thought today might be an up day that would move us above this trading range I’ve begun to call the “Zone of Hope.” Every time we approach the upper part of this range, it seems the better stocks give us hope just before we get hit with a sudden reversal.

Instead of emerging from this zone today, we get reversed again and gap down.  

I was just on the phone with Bill (to give him some short ideas and a few longs for our institutional recommended list), and we agreed it's not the stocks.  A few dozen are setting up nicely. The problem is the stock market environment. The market is just too news-oriented.

I believe this market is reducing investors to guessing and hoping, because of its violent reactions to news. Remember that hope can be an emotional pitfall for investors, and we certainly never guess. We take studied, calculated risks.

Patience is paramount to capital preservation. We have to have our cash intact for the next bull market. We also never tune out. We watch and wait, with our watch list fresh at all times. Those are the attributes of a successful investor.  The next Bull Market will come; it always does, and we will be ready.

Best Returns,

Scott O'Neil

President, MarketSmith Incorporated

Follow Scott O'Neil at Twitter.com/WScottOneil