Confirmation!

So, as predicted, there was more downside today. The S&P dipped over 2% on high (but not stunning) volume. Though it hasn't pushed below it's lows of last week, it is not safe... It has breached its recently established channel, and has reentered its old one, which has a current base at about 1285-1290 or so. That is a lot of possible downside. OTOH, its new channel is, well, new, and has barely been breached, so it may still be finding its baseline.

Though investor sentiment has become more bearish over the past ten days or so, it is still in the bullish camp. This suggests that there some possibility of downside, but the fact that investors aren't assuming this to be a massive buying opportunity means that it might actually be just that. On the other hand... Look at this P&F chart of the VIX. WTF?!?!

Volitility is through the roof. It's not just high, it seems to be estabishing a new, huge, major trend in high volitility. What this means, folks, is that we ought to baton down the hatches because the whipsaws aren't done. If I were me, I'd be looking at a high-risk hedging strategy, with a short-term horizon. Buy big dips, like today, sell big swells (as we'll likely have over the next few days).

Stocks to scan:

buy: SGMS, KELYA, EBAY, CMGI
short: ASPV, CME (short at apx 590), NCS