BEARS BE READY

I apologize for the lack of posts this week. I have been a bit sick. As you may know by now, I have a very weak immune system and I seem to catch every virus that goes around. The drastic change in weather didn't help either. We had a high of about 65 degrees on Monday, but it dropped down into the 40's since then. I'm not ready for winter. The market staged a rally today, but it was on lighter volume. The move down on Monday and Tuesday looks very impulsive. This could mean that today's move up was just a correction of the new downtrend. With the Dow and S&P 500 still above their 50 day MA's, I'm hesitant to call for a new downtrend. However...I think that if we close below Tuesday's lows, it will significantly increase the probability that we will move lower...much lower. With the debt agreement in Greece falling apart (I told you so...at least those students in my recent classes), this next move down could resume as early as tomorrow. There is a possibility that the market will try to move a bit higher, but that would have to happen very soon. A close below Tuesday's lows would likely decrease the probability for another move up. You could start to look at buying FAZ and TZA calls, but be careful. Look at the December options rather than November. If we do try to rally up a bit further, you could get stung pretty bad with November options. Also, try to limit your purchase. I'd look to buy a small amount and be willing to risk that entire amount in the trade...in other words, don't set a stop. The way this market is swinging back and forth, you would likely get stopped out on any stop that was set. This means that you better be willing to lose the money you are putting into the trade. You could also look at puts on the DIA, SPY, or QQQ. This is still not an area to get too aggressive...but we could be getting close. I'm still looking for a bit more confirmation. I'd really like to see the Dow Transports and Russell 2000 have a bigger percentage move down than the Dow and S&P 500. I'm still bearish on gold and silver and bullish on the dollar. I like calls on the TLT. If the market does end up rallying much higher, I like COST as a bullish trade. I'd like to see it break above about $86.50 first...as confirmation.