GET READY BEARS!

It looks like we finally got confirmation for a pull back in the market. All three indexes closed very near the lows of the day. The VIX closed right at the high of the day after a 5 point move up! The DOW, S&P 500, and Nasdaq all closed below their 10 day MA for the first time in a long time (early February). You can probably buy puts on just about anything that was overextended during this last move up. Some of these trades will be considered "counter trend" trades, but they can be managed easily with stops above yesterday's (Monday's) high. This creates a very nice reward to risk for many trades. I warned you months ago that the Greece financial crisis was not over...and that there would be more to come. I will make a bold prediction again...there will be more to come! The initial targets for this correction would be about 1150 on the S&P 500, 10740 on the DOW, and possibly 2330 on the Nasdaq. I didn't have time today to get into any put option trades on any specific stocks. I bought puts at the close on the SPY and the QQQQ (I didn't get filled on my DIA puts). I'll put a stop above Monday's high. If I get stopped out, then this sell off would be another false alarm. I'm prepared to get pretty aggressive tomorrow....especially if we gap up at all (or trade up at all) at the open. I'm pretty confident that we are moving lower...and I haven't been confident about much lately. If you haven't taken profits on your recent bullish positions, you better consider selling them soon. Portugal will be the big news tomorrow. It's stocks are getting annihilated in the early part of their trading day (yes, I am writing this at 2am my time). Keep an eye on the Gold stocks (GLD, GFI, GDX) particularly the GLD. This news could cause a spike in gold as everyone runs for cover. The dollar should move up and the Euro should move down. You can trade the dollar using the UUP and the Euro using the FXE. I'd be okay with put options on AAPL if you placed a stop above Monday's high. It could drop another $20 before it finds support (at possibly the .382 Fibonacci retracement). Just about all the financial sector should continue to drop as traders try to figure out if the European crisis will affect the U.S. banks. We already know that Goldman Sachs will be fine because they are probably short on all the European countries...that was a joke in case you were wondering. GENZ still looks good for a put option trade.