I closed my position in eBay at a small loss. That was the sum of my activity last week. I've come close several times to taking other positions, but stopped myself each time. Much as Monkey would love to be part of the action, that's no reason to be in a trade.

I try to be very precise with my entries and usually have a very speci"c price in mind. If I can't get that price, I won't trade.

For example, I was eyeing up a short position in Amazon at around the $39.45 area. The price made it as high as $39.32 on Wednesday before dropping off by a dollar.

Of course, this prompted the usual bout of cursing and self"agellation on my part, but it's better to be choosy than to be impatient. The better the price I can get, the smaller my stop loss order.

The smaller my stop loss order, the bigger my position. The bigger my position, the bigger my (potential) pro"ts.

That's the theory anyway. Of course, it's still frustrating to be a bystander as the market goes bananas, but my time will come. No trades one week might be followed by ten or more trades the next - you just never know.

As for the markets, the bulls "nally got some joy on Monday, with the Nasdaq running up almost 2% and the Dow enjoying its biggest gain since last July. European and Asian markets enjoyed similar jumps but, considering the walloping of the previous week (with global losses of almost $2 trillion), such action should be seen as an oversold bounce rather than a de"nitive bottom. I'm looking to short into the next rally attempt.

Why do I not think the correction is over? Many reasons. For one, everyone seems to be assuming this to be a correction, blathering on about how the fundamentals are "ne and how this is a buying opportunity.

Corrections end when the ordinary Joe throws in the towel, when they cry 'I don't care about the price, just make the pain stop'. I'd prefer to see some panic, a bit of blood and guts and pain.

I'm looking at some speci"c indicators to tell me when this correction is at an end. Despite last week's slaughter, over 75% of S&P 500 companies are trading above their 200-day moving average.

Think about that for a minute - over 75%. Over the past three years, there have been "ve corrections of note (excluding the current one). All ended once the aforementioned percentage dropped to between 40% and 50%. We've still got some way to go.

An even better indicator is to look at the percentage of stocks trading above their 50-day moving average.

At the moment, 35% of stocks are trading above this level. That's a big drop - it was 80% less than a fortnight ago - but we're not quite "nished yet, methinks.

Over the past three years, 20% has been the magic number, with each correction ending at or around this juncture.

What does this mean for my trading? Basically, I'm looking to get short on any near-term bounce and ride those shorts until we reach the aforementioned levels. If the market does get as oversold as I expect it to, I'm going to load up on long positions - big time.

Ordinarily, I risk no more than 2% of my capital on any one trade. For example, with my account standing at around Euro38,000, each trade carries a maximum loss of around Euro800 or less. If we get some real panic selling and the market tanks, I'm throwing the rule book out the window and getting ready to risk in the region of 5% on an index trade (it's too risky to bet like that on an individual stock).

It's a bit like poker. Poker players will not risk their shirt on an average hand. If they've got four aces, however, they'll bet big. I make such bets rarely - once or twice a year - and it's not for the inexperienced trader.

Of course, none of this might happen. The market may very well have bottomed. I doubt it, but it's possible.

Certainly, there are some bullish signs, especially if one looks at indicators of so-called 'dumb money'. The number of odd-lot short sales have gone through the roof. Odd-lot short sales refer to short sales of 100 shares or less, typically made by the undercapitalised and less sophisticated retail trader.

Sentiment surveys have shown a dramatic fall in con"dence, with current readings showing that 45% of the AAII (American Association of Individual Investors) are bearish in outlook as opposed to 35% in the bull camp. If the bearish number gets up to 50% - a relatively rare occurrence, as the small investor spends most of his days in a bullish daydream - the market will likely be very near a bottom.

It's also possible that the market will drop and keep dropping, in which case poor monkey will be seriously out of pocket.

You need a plan, however, and I'm pleased with mine. This is an exciting time for traders. At least, I'm excited. If the above scenario plays out, it could be a real opportunity to make some outsize returns.