It looks like the bulls finally decided enough was enough on Tuesday, completing the reversal effort that ultimately failed on Monday. It's still just a dead-cat bounce at this point, but considering even this mere dead-cat bounce could lift the S&P 500 up by another couple of percentage points before facing any real tests, it's worth a closer look. What I really want to look at is the shape of the weekly bar (so far) of the S&P 500, the shape of the VIX's bar from yesterday, and how the VIX's lead-in from Friday and the response today play into Monday's bar. Simply put, the clues say we're in the midst of a near-term reversal. Have I ever talked to you about hammer-shaped reversal bars? I'm sure I have, but just to make sure we're all on the same page, a hammer bar is simply a description of what a key reversal bar looks like.... a hammer, with the mallet part of the tool being at one end, and the handle part of the bar at the other end. It looks like - you guessed it - a hammer. The shape of these bars is considered to be an indication of an intra-day transition from a net-bearish environment to a net-bullish one. Although the shape of the bar doesn't necessarily give you any kind of indication of how long that reversal will last, it generally does point to when one is unfurling. Care to guess what happened to the S&P 500 today? If you guessed it made a hammer bar, well, you're only half right. If you take a step back and look at the week-to-date bar, however, sure enough, this week's bar looks like a hammer. Given that this week's brush with a key floor at 1773 is where it all started, I'd say we've made this transition from a net-bearish to a net-bullish environment. On a daily chart of the S&P 500's volatility index (the VIX) we're seeing some key reversal clues. The VIX formed an upside-down hammer bar yesterday after Friday's big surge, and confirmed that bar was a pivot point with a lot of downside follow-through today. The point is, all signs say the bulls are taking the reins again, and I'm not willing to step in front of that train..... at least not yet. While the VIX has room to keep falling before it hits a floor around 13.7, and the S&P 500 before it hits a ceiling around 1827, I don't know if there's enough gas in the tank to carry the market any higher than that. See, even though the reversal is technically sound, participation in the bounce is tepid. Check out today's low volume. There's not a lot of faith in the budding rally. Even if we make it all the way back to 1827, I doubt shell-shocked investors are going to get interested again, now that the sellers have tipped their hand. Until we actually break above 1827 or break under 1773, we're going to have to be patient. We'll let you know how (or if) the situation changes every day, right here in the newsletter. Honestly though, I'm still expecting a breakdown into a full-blown correction. The Best of the Best My apologies to the folks who deserved this acknowledgement well before today, but it never fails... something unexpected pops up and requires attention. I'm just going to make myself do it today though, and I think you'll be glad I did. What I'm talking about is an update on the SmallCap Network's trading leaderboard. This is just a list of who's knocking them out of the park among the folks who use the SCN site's portfolio tool. Topping the one-month leaderboard, as usual, is ErnieBilco. He's a true penny stock guy, with lots of high-risk/high-reward action. If you're looking for some true penny stock ideas and are willing to get in and out quickly, he's got 'em. In the number-two spot right now is kiamori. He's another pure-penny-stock guy, looking to capitalize on their inherent volatility. And, he does a great job with it. Finally, in the number-three spot on the one-month leaderboard is DoMan.... a name we've mentioned many times before for his strong stock-picking performance. His latest round of trades from the 23rd and 24th was a good batch, as most of them have been in the past. What I like about DoMan's trades is, while they're not high-octane penny stock trades, they're pretty easy to replicate if you wanted to mirror him. The point is, if you ever find yourself in need of trading ideas, the site's got a bunch of people who know what they're doing to keep your plate full. Nickels & Dimes Speaking of great stock trades, congratulations are in order for SmallCap Network Elite Opportunity subscribers. Members just locked in an 11% gain on the Russell 2000 Direxion Daily Small Cap Bear 3X Shares (TZA). Now, I know an 11% gain may not be the proverbial "whale" we'd all like to land in our portfolio. Then again, this trade was only live for three days! Anytime you can make 11% in three days, take a shot. That's about the most efficient use of your investment money you're ever going to get. With that being said, the quick gain on an inverse/leveraged ETF underscores is the perfect segue into a point I don't make often enough... not just about the for SmallCap Network Elite Opportunity, but about everyone's portfolio. Here goes. In a perfect world, the market would always make sense. The trading environment would always be the same. Strategies and approaches would always yield consistent results. Problem: We don't live - nor do we trade - in a perfect world. The market can get messy and erratic. Sometimes it rewards long-term positions, and other times is punishes them. Sometimes it rewards short-term trading, and sometimes it punishes them. If you don't embrace that reality and deal with it, the market can end up eating your lunch. That's my poetic way of saying, sometimes you have to wear a trading hat, and other times you have to wear an investing hat. You can even wear both at the same time. The one thing you can't do, however, is view your truly-long-term investments through trader-colored glasses. You also shouldn't view your short-term trades through investor-colored glasses. It's tough to separate them, but it's one of the things you have to learn to do if you want to consistently beat the market. Now, I make that point so I can go back and say something else about the SmallCap Network Elite Opportunity's 11% score on a three-day trade on the Russell 2000 Direxion Daily Small Cap Bear 3X Shares. What's that? It may only be an 11% gain, but what if you could capture an extra 11% gain (that you wouldn't have otherwise scored) just seven or eight times per year? Even if you only allocated 10% of your portfolio to those kinds of short-term trades, you're still talking about eight or nine more percentage points tacked onto whatever kinds of returns you're getting with your strictly-long-term portfolio. Folks, that would put your performance up there with some of the top-performing hedge funds and proprietary traders. See, those nickels and dimes add up while you're waiting for your longer-term trades to reach their full potential. Don't know how to start spotting those quick swing trades? You don't have to - that's what the SCN EO is for. As proof that they know how do it, just go back to how this discussion got started in the first place - the SmallCap Network Elite Opportunity booked a profit of 11% in just three days capitalizing on an opportunity most people were ignoring. That kind of precision and action could take your portfolio to the next level. Find out for yourself with a free two-week trial. Here's how, or cut and paste this link: https://www.smallcapnetwork.com/pages/SCNEO/v1/ Anyway, be sure to check in tomorrow for the latest update on the bounce effort. We still contend it's doomed, but it remains a day-to-day affair.