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With wild volatility whipping stocks around, it is a very difficult environment to make any moves. The best bet for now is to wait for the market to settle down, establish a trend, and wait for leadership to strut its stuff. The charts above of failed breakouts illustrate this point well.

I’d like to see the rally prove itself before diving in, but am willing to nibble and nimble. Keep in mind if today ends as a distribution (lower close on higher volume than yesterday on the DOW, S&P500, New York, NAS), then this rally will have a high probability of failing. However, if this rally holds, look for leadership in the railroads, biotechs, solars (maybe).

CANSLIM guru Gil Morales likes the action in the computer services in recent newsletters, a group I missed in my scans. These include IBM, ACN, and IT.

That’s me on page A4 of today’s IBD. The AP photographer was shooting these at the same time my SKF was tanking, so this was the best smile I could muster up. While I have my 5 minutes of fame, I like to thank some folks. God, mom, Susana, Rachel, Sarah. And the pros who help me keep an eye on the market: Covestor, IBD, Gil Morales and his newsletter service www.gilmoreport.com, Gary Kaltbaum’s Investor’s Edge radio show www.garyk.com.

The NASDAQ scored an 11th day follow through yesterday, a timing signal which IBD uses to determine a new market rally. For those not familiar with FT’s, here are a couple facts. No market rally has started without it, and it has a 70-80% success rate. But don’t stop reading yet, FT’s work best when it occurs on days 4 – 7 of a rally attempt, so an 11th day FT is failure prone. The market has also been going through wild swings lately, so I am mildly bullish at this point.

Today is the 6th day of a rally attempt and the market can go either direction; even both ways if volatility picks up. Former leaders; oils, ferts, techs are breaking down and a new crop of leaders are just starting to emerge; biotechs, truckers, industrial machinery. Keep an eye on SNHY, FLS, ODFL, JBHT, OSIP, CELG.

OK, I really blew it with my SKF trade. I had two successful trades then let emotions kick in. Greed, pride, all the stuff that kills investors. The good news, I do know where I went wrong. I also successfully applied a CANSLIM day trading technique which worked and would have protected me had I followed the rules. Here’s a rundown on how it works:

1) Study a chart and get to know it daily price volume characteristics. I’ve used SKF. The financial’s are under pressure, it trades very violently, but followed a buy on weakness sell on strength pattern. So my strategy was to buy off of support then sell as it came through resistance. See my SKF chart.

2) Monitor market conditions. We continued to be correcting. Financials, housing, were leading the market down. Accumulation was picking up on the SKF and it was about to complete the right side of a cup formed from 3/17.

Things I missed. SKF started going parabolic on 7/11, and was up 11 out of the last 13 days. The NASDAQ tested support on 7/15. The Put/Call equity ratio was approaching 1. These signs indicated an SKF top and increased chances of a market turnaround.

So what, I had my biggest one day loss ever. No one is prone to losses, and I’m in good company. Best of all, I learned a valuable lesson which will equate to future profits. There was way more important things in life than money.

The last of our very thin leadership, ferts and oils, is breaking down today. One or the other has carried the market on certain days, but today, for the first time since earlier in the month, everything is down. Compound this with the fact that laggards are todays leaders, the home builders and banks, and this all adds up to a classic bear market. And this one could be huge!

6 distribution days on the DOW and S&P, with back to back days has changed the tone for this market. Also note the one day change leadership stocks. What a difference a day makes. Now is the time to get out and raise cash.

Last Thursday, Energy Conversion Devices (ENER) busted out on its highest volume ever. The pictures can tell you why. Not only are these modules frameless, they are easier to install, and work in indirect sunlight. I loaded up on this today, but am am expecting pullbacks into the 50-52 range.

Nope. This is Accuray’s (ARAY) Cyberknife, and this is now! THis is the world’s first and only radiosurgery system to treat tumors ANYWHERE in the body. While the product is very cool, it’s stock is yet to see any love from Wall Street, but it does look to have bottomed out. I would keep this one on the watchlist as it does have the qualities of a potential winner.