The wedge is now finally broken on SPX.
I bought a small DIA PUT position and QQQQ, if the market goes down more The Q's have more downside potential as well.
I think the key index to watch now is the DOW and the Transports. The Dow is closer to its November Lows then SPX.
The Dow is sitting 124 points away from the Nov Lows. But the line in this chart is 75.52 the, to me this is more of a significant support level, since it was the lowest close we had. 75.52 represents the close of the first Nov Low Candle and the open of the second. The DOW is 1 point away from that.
Confirming this down move is the Dow Theory, Transports have made another new low. If I see a follow through on Transports, I would expect the Dow to follow.
I am being defensive of my PUTs right now, for a couple of reason. The VIX spiked this morning but as the market continued its decline, the VIXs always declined, although there was a spike at the end of the day.
Also TRIN never moved above 1.00 for the day, which could be seen as bullish, but this number might have to do with the inverse ETF's getting a lot of volume today.
Plus to me this is perfect, F-the little guy time, tomorrow we have housing and Fed Minutes and Obama talks about his "Save the idiots" plan. Plus its OP EX week and we all know the BS that goes on that Friday.
