BACK TO BEAR?

If you are tired of the flip flopping back and forth, get in line. I'm at the top of the list. This is getting frustrating, but that is a good sign. We usually see the big move when the majority has given up. There are several bearish signs that played out today. The resistance on the Dow at the 200 day MA, the move back below 1100 on the S&P 500, and the move of the VIX back above its 200 day MA. The question now is what will likely happen next? If we move back below the 50 day MA on the S&P 500, we will need to get more aggressive on our puts. A move below the 1065 area will really signal a need to get aggressive in buying puts (SPY, DIA, or QQQQ). On the other hand...if we reverse this sell off tomorrow (or within the next few days) and move above Friday's high, we will need to get more bullish. A move above the 200 day MA on the S&P 500 (currently at 1115) could signal a possible rally that could take the market up to around the 1160-1170 area. The rise in the VIX today was a key bearish signal, but still not big enough for me to call for all out put buying. If the market does move above Friday's high, look at MON as a possible call option trade. If we continue lower tomorrow, look at calls on FAZ. Gold is at a key area. If it can move above the June high, we could see a continued rally. Tuesday's gap up and sell off on the GLD could signal a new decline in gold. I'm still bearish on gold, but I'll be willing to switch if it can get above that June high.