Market Selloff Likely to Continue

Current Long Positions (stop-losses in parentheses): None Current Short
Positions (stop-losses in parentheses): GLD (136.40) BIAS: 7% Short Economic
Reports Due Out (Times are EST) : Jobless Claims (8:30 a.m.), Existing Home
Sales (10 a.m.), Leading Indicators (10 a.m.), Philadelphia Fed Survey (10
a.m.), EIA Natural Gas Report (10:30 a.m.), EIA Petroleum Status Report (11
a.m.) My Observations and What to Expect: Futures are slightly down heading into
the open. Asian markets saw heavy selling, well in excess of 1%. European
markets are seeing selling in the range of 0.5% to 1.4%. Positive earnings
reports yesterday from Apple (NASDAQ: AAPL ) and IBM (NYSE: IBM ) represented a
sell-the-news event. S&P 500 Index currently sits on the 10-day moving average
(MA). It did break it on an intraday basis, but held the support level at the
close. Evening star formation over the past three days in the market indicates
that we are at the very least, seeing a short-term top being put in place.
Volume was above average yesterday, but less than what we saw the day prior. The
bulls showed no willingness, or even attempted to buy the sell-off yesterday
another sign pointing to a potential breakdown in this market. Despite these
bearish observations that are unfolding, there is little in the way of technical
damage that has yet to be done to the charts themselves. Even the 10-day MA
remains intact. The market will now start showing more sensitivity to bad
economic numbers (previously ignored the bad and rallied on the good), so todays
jobs number is very important, and another miss, like last week, could create a
repeat of yesterday. On the intraday S&P 500 charts, the upward trend has been
broken and a lower-low" has been put in place (price dipped below the 1280
level). Three price levels/support levels to keep an eye on today (using the
S&P): 1280 which represents the 10-day moving average; 1275 which represents the
lower support level of the ascending price channel the S&P has been trading in;
and 1271, which represents the 20-day moving average (hasnt traded below it
since Dec. 1 when this rally started) 1261 represents the short-term higher-low.
The more long-term trend-line dating back to Sept. 1 currently has support at
1254. For the bears Follow through, Follow through, Follow through Squash the
dead cat! For the bulls Bounce, Bounce, Bounce! Hold the 10-day moving average.
Here Are The Actions I Will Be Taking : Unlikely I will be initiating any new
long trades today, unless the market shows an impressive recovery to yesterdays
sell-off. Initiating one to two short positions is in the cards today, depending
on how the market responds to the jobs report and once we dip below the 10-day
moving average Focus will also be on day-trading intraday price swings. Follow
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