HERE WE GO AGAIN

Last Friday we got a stronger sell off than I was expecting. There should be more follow through tomorrow. Europe and Asia were down big on Monday (they didn't have the holiday). With fund managers back from their vacations, we could see much higher volume this week. The next target is 1120 on the S&P 500. It is possible that we could get there tomorrow if we have another 500 point drop in the Dow. If we do get down to 1120 early this week, we could see a bounce at that level. That would be a good area to take profits. I think it would be a good idea to take profits at the open tomorrow if we gap down big. I've often said that "a gap is a gift...take it". This is very true for big gaps up or down. It is easy to let your greed take over and expect even bigger moves down (or up). Remember that professionals take profits. You want to take consistent profits from the market. You don't want to count on the unusual "big" moves to bail you out every time. I think that we will eventually move down to 1040...maybe on this current downward move, but this doesn't mean that you couldn't sell most of your contracts near this area....and hold on to the rest in case we do move down to 1040. Gold futures are up about $40 at the time of this posting. This early sign of fear could spike up the VIX at the open and drive the market lower. Oil should continue to drop which will put pressure on the energy stocks. Patience on the FAZ trade paid off on Friday and you could see the big move tomorrow. I think that gold (and possibly silver) could continue to spike as the market works its way down to that 1040 area. After that expected drop, we could start to bounce sideways or move between the 1040 and 1120 range for a little while. This could cause gold to sell off again. I can't predict the future and these are only things to look for...I reserve the right to change my mind if the market action warrants it.