Easy come, easy go

9:10 am (Hawaii) Is this a paper mache market today? I woke up a few times in the past few hours, checked volume, and went back to sleep. Traders who stepped in on Monday and early today made their profits, but beyond today, it's all fluff, I'm guessing. Though my Regular watch list is 82% green, just about every upside play has anemic volume. A few have similar volume to yesterday or volume that's close to average. But a large majority are up on hardly any trading. Major caution sign!

Monster Worldwide (MWW) is an exception. Big volume, nice candlestick. CYB (Wisdom Tree Chinese yuan fund) is also up on huge volume. I'm always interested in ways to play yuan long term. Anyone (not me) with a huge stack of benjamins in the bank has to think about buying a significant amount of yuan to hedge against inflation.

73% of my Metals list is green, but it's the same trap there with light volume. It's true that there have been big moves, week-long moves, right after stocks trade lightly. Maybe we just don't have any sellers left. Maybe China saving the Eurozone (temporarily) is enough. Maybe the Fed buying up Treasurys is enough. Maybe Nike beating expectations is plenty. But I'm not sold on this.

The one byproduct of today's gains (DJ +1.1%, Nas +1.3%, S&P +1.1%) is that silver's downward momentum has finally stopped, at least for today. GPL (+5.9%), EXK (+4.6%), AG (+2.7%), SIL (+2.5%), SLW (+2.4%, PSLV (+2.2%) all helping the miners sector. But it's hard to get excited when volume is so restrained.

Gold also has a bunch of healthy players, including NUGT (+2.9%), NGD (+2.3%) and GDXJ (+2%), but again, thin volume. XG and GG are up on massive volume. Crude oil is up. Copper is up. But on the whole, it all smells more like end-of-month buying by hedge funds to pretty up the books, not a legit turnaround. There isn't another clear catalyst in sight, which means we could see a slow meltdown for days to come. Perhaps weeks. Same scenario we had a week ago, but in slow-motion. It's thinnish markets like this that set up the average guy for a beatdown via flash crash. I'm content to be mostly cash and getting my sleep.

It ain't your dollars

10:20 pm (Hawaii) I used to believe in 401(k) plans and stuff like that. To an extent, I still do. But there are so many unstable issues, factors that are unavoidable, when hard-earned dollars are tied into equities. It gets more complicated now with the possibility of a bill that would reduce the number of loans a working citizen can take out of his/her 401(k).

The government is changing rules in midstream all the time, but this is really going to be tough pill to swallow for most folks. Is it fair? No. But times are tough from top to bottom for most people. But this is probably just the start of the Fed's manipulation of retirement accounts. It's a given. We owe, as a country, $3 trillion to China. The national debt is nearly five times that amount and growing by the second.

Dollars? Not quite what they used to be. If there's one tenet that still holds water, it's the necessity of diversity. And speaking of water, liquidity is just as important. That's why I like precious metals. That's why I don't trust the notion of holding almost anything paper overnight (no flash crashes for me anymore). And retirement money (electronic, really) that can be raided by the Fed? Not such a good idea for the modest assets of most citizens like me. I don't need a lot to be happy. I just want to be protected in the long run, and that means embracing diversity and liquidity.