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S&P 500 Continues to Fly Its Bear Flag

"Your success in investing will depend, in part, on your character and guts, and in part on your ability to realize at the height of ebullience and the depth of despair alike, that this too shall pass." -- John Bogle

NEW YORK (TheStreet) -- Tuesday we saw the S&P 500 (SPY) begin to give up Monday's oversold gains early before the selling accelerated very quickly in the afternoon. Several stocks hit buy points but then failed, as has been the norm this summer. Cash remains a great place to be.

Read More: A Simple Options Trading Strategy That Beats the S&P 500

Why put money at risk when it is too dangerous to do so? Enjoy the summer and wait for clearer markets.

That said, more weakness looks due, but perhaps not for a few more days.

Gold (GLD) and silver (SLV) diverged this afternoon, as gold moved higher on market weakness, but silver continued lower. I've told subscribers that silver seemed to be taking the lead lately, so I'm not expecting this gold strength to continue.

The S&P 500 is still building a bear flag and needs a few more days from what I see before we can see more release to the downside.

Read More: 4 Stocks Warren Buffett Is Selling in 2014

Today's weakness was strong and swift, but a few more days of chop between $191.50 and $194 or so would be best. The next move lower should take us to $188.

I did get short today using some S&P 500 ETF puts, but I was making a smoothy and missed the initial swift move in the first minute, so I ended up taking a small loss on the trade.

Have a great summer night.

At the time of publication, the author held no positions in any of the stocks mentioned, although positions may change at any time.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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