It's time to step out from my 'normal' role as the 'energy expert' and make a comment or two on the markets in general, just as a professional trader who's seen quite a bit in his almost 3 decades of daily experience with capital markets and the way they act. Patterns emerge that aren't foolproof, but they've served well over the years and they are making some very visceral noises to me, even observing the action at longer range on vacation.

Here's something that won't be news to you - the markets look terrible.

It's not just the fundamental information that most of the 'regular' equity analysts have been filling you full of on every media outlet around: There's the lowering of expectations on earnings, not just the disappointments of 2nd quarter results (which were uninspiring). It's not just the continued bad indications from the emerging markets, whose growth rates continue to be guided downward. It's not the continuing bleat of 'taper talk' which (for those who believe this has been a totally fed-inspired rally) would be a total death knell for stocks.

You don't need me to point out any of this.

But here's what I see. There's a stock market that continues to ride the lower edges of some usually reliable technical indicators, like the RSI and Stochastic, usually a good sign for a technical rally. There's a market that's felt extended but now looks more like it's really rolling over, and not for any short-term of a few sessions or weeks, as we had earlier this year. We've got a bond market that may be even worse than equities, and is riding out into the sunset on a wave of panic, with very few analysts interested in buying. And we've got a pick-up in some of the most 'left-for-dead' commodities that were never supposed to come back, including copper and natural gas, up above $3.50/mcf again.

Every stock rally looks like it has to be sold and Gold actually looks like it should be bought.

These are not good signs, folks. These are the signs of a market that has put in it's best values for the next several months and has a best case scenario of moving sideways for the rest of the year, if not into the first few quarters of 2014.

But, where can you go? As an oil trader, I've got no problem being short commodities, but a lousy track record being short stocks. That's why I've advocated collecting premium wherever you can by selling calls either in the money or slightly out of it on most every issue you own in stocks. With your commodity exposure, I still maintain that most of the risk remains to the upside and the strong correlations between oil and stocks are slowing breaking.

In very, very unique cases, I might look to buy something undervalued, but it would have to have been undervalued for years, as the miners have been or perhaps inside the natural gas space. Over the last few columns, I've given you some ideas here and I'll continue to do that when appropriate.

But for now and into the near future, I'm hunkering down.

The market action just stinks.

By Dan Dicker of Oilprice.com

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