PATIENCE

The market is near a critical area. Although the longer term forecast is for another move down, the shorter term expectation is less clear. A lot will depend on tomorrow's movement. The latest rally has brought the markets up near their .382 Fibonacci retracement levels. This level could act as a resistance level. The .382 level on the S&P 500 is around 1195. On the Dow it is around 11424...on the Nasdaq it is around 2534. These levels would allow for a small move up tomorrow. If this level holds as resistance, the S&P should move down to the next support area (around 1040). If we have a strong day tomorrow...which would be characterized by a big move up that closes well above that .382 Fibonacci level...we could see a short term run up to the 1225 to 1250 area on the S&P 500. This could allow you to set up some short term call option trades that would help to offset the paper losses on your current put option trades. If it does make it up to that 1225 to 1250 area, you could then get out of any call option trades and possibly even look to add to your longer term put option positions. The market is still very oversold, so a rally up to that area wouldn't be surprising. The next move would then likely be a drop to that 1040 area...that would be a big move down. I'll repeat what I have said earlier...if you are new to trading, you might want to sit out of the market for a couple of weeks. Based on the system that I will teach you, there aren't a lot of high probability trades right now. The market is far below its 50 day MA. This means that we could either move lower, or rally up a bit. How's that for certainty. The volatility of the markets does create a lot of day trading opportunities, but day trading is not a great way to start your trading career. There are too many ups and downs to day trading. You have to have a very high risk tolerance and you really need to know how to read your charts. Patience is the key. If you miss one or two opportunities, you will get others...so don't force a bad trade. One last note...keep an eye on gold. The margin requirements were recently raised on gold (last week). When these requirements were raised on silver back in late April, the SLV dropped dramatically. I'm not brave enough yet to buy puts on the GLD, but I will watch it.