STILL GOING

The reversal last Monday gave a strong indication that the market could rally. We are now nearing the end of that rally. It looked like today might start that reversal as we entered into the final hour. The market was pulling back from its highs and the volume was very light. However, things changed in that last hour. Volume picked up a bit and the market ended up closing at the highs of the day. This leads me to believe that we could still rally up a bit more. We took out the 1200 area, so the next resistance to look for would be the 1227 area. We are only 18 points away from that area. The 50 day MA is also in this area. If the market ends up gapping up then selling off tomorrow or Monday, this would indicate that the correction could be over and the downtrend could resume. Keep in mind that it is also possible that we might chop sideways within this range for the next few weeks. If you aren't in any trades right now, start getting ready to set up some put option trades. It's hard to know exactly when the next move down will start, but it looks like we are getting very close. The GLD put option trade has worked out pretty well. It is down almost $8 since the recommendation. Start taking profits off the table on that trade. You could try to hold onto a few contracts in case it goes lower, but start to take profits on the bulk of the position. Don't try to chase this market to the upside because you would likely be late. I love the reward to risk on these put option trades: PFE, XOM, GE, IBM, and BA. I also love the reward to risk on these call option trades: FAZ and TZA. Both of these are slightly below their 50 day MA. You could wait for them to get back above that moving average before getting into a trade. The market could go up a bit higher...but when it turns back down, you will want to consider some of these trades.