IS THE RALLY ALREADY OVER?

Although the market finished in positive territory for the first time in about 10 days, the price action for the day was very bearish. The market gave back nearly all of its gains from earlier in the session. I will continue to watch the 1040 level in the S&P 500. If we close above that level, it might mean that the market could stage another correction similar to the one from May to June. The key is the closing price. The S&P 500 was above that 1040 level during the session today (1042 to be exact), but it ended up closing at 1028. There still isn't any strong buying on any of the rallies. This means that we are still expecting the S&P 500 to drop and we will keep the 950-960 area as a target. I'm waiting for some sort of capitulation to the downside before I will start to take any significant profits. The VIX has continued to drop which signals that the market is becoming a bit less fearful. However, the price action today would indicate that the fear might be about to re-enter the market. The VIX gapped down, but managed to close higher than where it opened for the day. That is a bullish candlestick formation which could mean that the VIX is getting ready to rise. The Asian markets are trading down at the time of this posting. Gold continues its drop with the GLD down 1.67% today. I'm going to look at the $114 area as an initial target. I think that ultimately it will drop down to $102, but that is only if the top has already formed. A move below $114 would indicate that it has a high probability of getting to $102. It would also likely drop to $102 very quickly if that $114 support level is broken.