UGLY TUESDAY?

At the time of this posting, the S&P futures are currently down 30 points. This means that the Dow could gap down around 300 points at the open. We'll see how the futures look in the morning, but I doubt they will come all the way back by market open. The price action near the end of the market was actually somewhat bullish....going from down 147 points on the Dow to down just 51 at the close. That should change at the open tomorrow barring a major reversal. This move down should eliminate the mixed signals we've been seeing in the market over the last week. At the close today, the three major averages all looked like they might be completing bullish ABC patterns. Assuming the market opens way down tomorrow, it would likely eliminate that pattern. Commodity prices also look like they will sell off. Oil, gold, and silver futures are all down at the time of this posting. The trade is puts on the SPY, DIA, and QQQQ. I wouldn't take on a big position at the open since I wouldn't want to chase it. There will often be snap back rallies within a downtrend so you will get other opportunities to get into the trend.