199.89

I'm sorry for being so far off. I said 200 points yesterday and I fell short by .11. Let's be realistic here. I didn't predict a 200 point rally yesterday...but I did point out that if we rallied back hard (like a 200 point rally in the DOW), we would need to consider a continuation of the uptrend...and that the break below the 50 day MA could be a false breakout to the downside. Now I don't want to cause a rush back to bullish positions. We probably need to see if there is going to be some continuation tomorrow. The fact that we completely reversed Wednesday's sell off was impressive. We are back above the 50 day MA on the S&P 500. If we can get back above the 10 day MA (which is currently at about 1069), I think we could rally past 1100 and go to a new high. However...if this scenario does play out, I would only trade the move with a small percentage of the account. It feels like we are nearing a top. I will trust the trend, but I will also try to manage reward to risk. If I feel like the reward for staying long isn't work the risk of the market correcting, I will reduce the amount of money I have in trades and keep a larger percentage in cash. The thought is that if we really move higher, it would only be an opportunity cost. If we do sell off hard, it could save my account and allow me to have most of my money ready to play the next uptrend. I'm also watching the VIX right now. The VIX is the volatility index. It dropped significantly today (as the market rose), but it pulled right back to its 50 day MA. I'll be watching tomorrow to see if it drops below that average, or if that average acts as support. Also, the dollar (UUP) is sitting at a key support level as well. If the UUP breaks below 22.55, you should see commodity stocks rally hard. These would be gold, oil, copper, natural gas, etc. Do you have your watchlists set up? APA bounced off its 50 day MA, this could be a great play if the UUP continues to drop. Same with APC. Look at the GLD or AUY for gold. FCX for copper. Technology has been really weak during the last sell off and it didn't rally as much today. I might avoid these stocks right now...but I reserve the right to change my mind if things change in the next few days. A word of caution before I close...on September 28th we had a strong snap back rally...one day...which led to another move down. I'm not expecting that here, but it is worth watching. Also, keep an eye on the RUT (Russell 2000) and the DJT (Dow Transportation Average). The RUT didn't wipe out Wednesday's losses today. The DJT exactly reversed yesterday's losses...but didn't go further like the DOW and S&P 500 did. What I'm looking at is to see if these averages are leading or lagging...they usually lead, especially at tops.