ARE YOU READY FOR THE NEXT MOVE???

The market continues to show weakness as it sold off going into the close. The market still looks like it wants to go down. The market will probably gap down at the open tomorrow. If the S&P 500 goes below Friday's low (about 1055), BUY SOME PUTS ON THE SPY!! The other scenario I see is that the market rallies up to around the 1100 area and we get a huge drop from there. I know that the market is extremely oversold and that we are due for a bounce, but today's price action showed us that there still aren't any buyers. In other words, it's not low enough yet!! Usually when I see this, it means that we could get another violent move down. Get out of your bullish positions. If you buy some puts and the market rallies a bit...buy more puts! Don't ignore sound money management, just understand that the money to be made in the market right now is to the downside. If you are worried that the buyers might suddenly show up and rally the market, then just buy a couple of put option contracts. You can always add more later. Look at July or August expiration so that you'll have enough time. Don't ignore the confirmation levels that I mentioned earlier in the posting.

Be ready to buy puts on Gold (you can use the GLD). We still need confirmation...I'll repeat...We still need confirmation, but Gold could be ready for a huge move down...possibly to 1000 (or 100 on the GLD). Wait until the GLD drops below its 50 day MA, then wait for my recommendation.

Don't get suckered into AAPL on the news today. Morgan Stanley raised its price target to $300. This is an attempt to bailout large institutional investors (Like maybe...Morgan Stanley?). It was not an official upgrade. It was an analyst who raised her price target. This is classic smoke and mirrors meant to hurt the retail investor and help her institutional buddies. View the lesson 4 recorded class (Sector Analysis) in your Option Magic Homework e-mail if you want the details of how this works (It is actually under the Lesson 3 homework assignments section). Let me be clear, it's not that I don't think that AAPL will eventually get to $300, but that is why the Morgan Stanley analyst will probably still be able to claim she was right. In the near term, AAPL will probably drop...possibly to at least the $200 to $210 area...maybe more. The institutional investors already unloaded a bunch of their stock today with the news of the higher target. They will likely continue to sell into that rush of buyers. After AAPL is done dropping, it could possibly work its way up to $300 a share. This could take several months, but it doesn't matter. The Morgan Stanley analyst would still be able to claim victory on her price target while still helping her institutional buddies (or more specifically... her employer) in the short term.