HAS THE NEXT DOWNWARD MOVE STARTED?

Much of what I talked about last night happened today. The Dow Transportation Index moved down at a greater percentage than the market. The VIX spiked up. The volume increased a bit today. The next question is how far will we drop? If this is just a retracement of the recent upward move, I would expect the market to pull back to around the 1150-1170 area...and do so on average to lighter volume. If this is a bigger move down, I would expect to move back down to the 1120 area. If this is a bigger move down, we should see more of what we saw today...the Dow Transports dropping at a larger percentage than the market, the VIX spiking higher, and the volume picking up on those down days. We don't necessarily need more selling tomorrow, but the market should be moving down quite a bit by the end of the week. IBM is down in after hours trading despite a decent earnings report. We've seen what has happened to Google after their big gap up. If Apple's earnings can't rally the market on Wednesday (Apple reports after the bell on tomorrow), I don't see anything else out there that will. I think that the professionals are looking to sell their Apple stock into the earnings report (just like they did with Google). I wouldn't be long this market right now....but I also wouldn't be heavily short either. Earnings releases can cause weird things to happen in the market. I still really like calls on FAZ and TZA. GMCR had a big move down today on high volume. It is likely going lower...at least to $73. CRM looks like it could move back down to $110. CMG is also looking more bearish with a possible move down to $285...or even $272. You may want to wait for CMG to move back below its 50 day MA for more confirmation. PCLN is also looking weak. As long as NFLX doesn't move above Friday's high, I like it as a put option trade. It held up pretty good today on a big down day in the market, but the volume was very light. It still looks like it is going lower. Here are some less expensive put option picks from the Dow 30: AA, AXP, BA, CAT (bearish engulfing pattern on higher volume. This gets five stars ***** as a great bearish trade. Put your stop above today's high), GE (put a stop above Friday's high. Great reward to risk. Target $15), HPQ, etc. I could go on and on. After just looking at all those Dow 30 stocks, I feel very confident that we are starting a bigger move down. Many of those are good looking bearish trades.