BIGGER MOVE DOWN COULD BE UNDERWAY

Today's move increased the probability that we are starting another move down. I'd still like to see the Dow break below about 11650 and the S&P 500 to move below 1220 before I really turn bearish. This doesn't mean that you can't start to enter some call option positions in TZA or FAZ...or put options on DIA, SPY, or QQQ. If this selling continues, there are many stocks that could really drop including AAPL, AMZN, BIDU, CRM, LVS, WYNN, and just about any bank stock. We had a huge spike in the VIX today. This usually leads to more selling...especially since we haven't seen any "panic" selling yet. The volume today was modest, but not huge. I'd like to see those levels broken on the Dow and S&P 500 and the volume surge to some higher levels. Keep in mind that today's move could have just been a "C" wave of a bullish ABC pattern that might have started at the end of October. If this is the case, we could end up rallying up above the October 27th high. If we have a strong move up tomorrow on higher volume, I'd look to buy calls on the SPY, DIA, and QQQ. If we are flat or down tomorrow, we are likely headed lower. We'll see what happens.