Tough market forces a waiting game

• Sell entire positions in Juniper Networks (JNPR, news, msgs) and TradeStation (TRAD, news, msgs) at the open.

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It took longer than I expected, but the other shoe has finally dropped.

Thanks to renewed concern over the state of the financial industry and tough talk from Fed officials about inflation, investors are once again opting for the safety of the sidelines. I can't say that I blame 'em -- this is a tough market to like, let alone love.

Earnings aren't going to excite anyone, rates aren't expected to fall any further (and the Fed is suggesting that it will actually raise rates to combat rising inflation), oil and food prices keep climbing and the job picture is deteriorating at a rapid pace.

Basically, there's not much to like other than the fact that stocks are a better investment than bonds and real estate. That's not the most compelling reason to own stocks, but it should at least keep the floor from falling out from under us.

A test of the recent low is possible, but don't look for the Dow to fall much further than the 11,500 area. (The Dow briefly fell under 12,000 on Wednesday but, on an otherwise dismal day, did manage to climb back above that level.)

Cash beats losing

The Dog Pound remains in neutral -- due to the fact that about half my portfolio is in cash. Cash might not be exciting, but it beats losing any day and I'm just trying to have some money left to play with when conditions improve.

So even though I like Juniper Networks (JNPR, news, msgs) for the long term, I'm not going to ride it any lower. The stock fell right after we placed the buy order, and 12% or so is enough to lose. I'm cutting my losses and search for something with better traction.

I'm also dumping my stake in TradeStation (TRAD, news, msgs). The stock has performed reasonably well since being added to the pound but it's apt to suffer from the market's current distaste for anything in the financial industry. Even though TradeStation has exhibited decent relative strength during the recent financial industry retreat, I'm not sure how much longer it will resist the selling pressure, so I'm booking my profits.

With Kinross Gold (KGC, news, msgs) hitting its sell target with Wednesday's open of $19.05, I'm left with just two positions: Walt Disney (DIS, news, msgs) and MEMC Electronic Materials (WFR, news, msgs). I'll hold both for now and look to add some new dogs over the next few days.