The S&P retested Friday’s low early last night putting in a double bottom pattern on the point & figure charts. If this area is violated we will start moving in roughly 20 point increments, possibly as low as the mid 20’s.

The market is clearly in sell the rally mode. Now we just have to identify a good rally which could be as high as 1240 ish. This should continue to be a big trade with opportunity from both sides of the market. Trade what you see.

The currency to watch is the Aussie. A close under 102.30 signals that we will be in for a much bigger retracement. We’ll be doing a multi year retrace with much lower prices to come.

SPU/BONDS will be in full swing all day. Headline risk can surprise to the upside with rip your face of rallies in the equities due to the oversold nature of the indices.

Model trading Portfolio…Current Holdings

LONG

YCS

FXC

Any investor with residual positions should take the opportunity on any equity rally to close out.