Another breathtaking day in the market, this time on the bullish side, pushed the S&P 500 exactly back to Tuesday’s level.

A modest rebound, fueled by better jobless claims and no bad news out of Europe, turned into a monster rally as short covering proved to be the catalyst to wipe out Wednesday’s losses.

Of course, as we have seen recently, short covering rallies don’t have much duration, which means I don’t read much into one day market bounces, since they tend to be head fakes more often than not.

This is the time to be either out of this market insanity or in a hedged position. Outright long or short positions can easily result in big losses.

As was to be expected, with that strong of a rebound, our Domestic Trend Tracking Index (TTI) rose and settled slightly on the plus side.

Here are today’s TTI closing numbers:

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If the market swings and this enormous volatility leave you speechless, you’re probably not alone.

Based on today’s market activity, yesterday sure looked like a dead cat bounce. Contributing to the negative bias were recession concerns at home and the ever worsening debt crisis in Europe, for which there simply is no painless solution.

This is the type of market that moves with lightening speed supporting my often voiced view that you have to prepare you exit strategy during times of calmness. This assures that you don’t stress out when the heat is on and you simply focus on executing your trailing sell stops as they get triggered. That’s how things are handled in my advisor practice.

Our Trend Tracking Indexes (TTIs) slipped with the market confirming my opinion that we have entered bear market territory. Here’s are today’s closing numbers:

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It was another wild day on Wall Street, as the Dow dropped from a gain of 150 points to a loss of more than 200 points, followed by a recovery of 430 points.

The main event of the day was the announcement by the Federal Reserve that QE-3 is not on the table (disappointment), but that interest rates may remain at records lows for some 2 years (euphoria).

Aiding the volatility was the fact that the markets had been extremely oversold, some profit taking was going on and, after a rebound off the bottom, heavy short covering set in to power the major market ETFs out of the abyss.

Things looked dicey for a while and, as announced yesterday, I added the SH component to set up our hedge for PRPFX. There is no clear cut entry point, especially when the market moves with lightening speed, but I indicated via the red arrow in the chart above when the hedge was finalized.

Obviously, with the benefit of hindsight today would have been a good day to be outright long, but you can never be sure beforehand.

This is where our hedge stands after today’s close:

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