Timberrrrr!

I think traders realized today that the markets need to go back and test the area they were in before this whole Mideast thing started brewing with Egypt….around 1294, which also happens to be last week’s low before the reversal on Thursday.

What I would like to see tomorrow is a gap down to the line and then reverse back up. If we break through to the downside, I’ll give it one more chance at the 1280-5 area before I capitulate my longs and concede we have a change in trend.

According to The Arms Index: a TRIN close over 2.0 results in a bounce the next day 9 times out of 10. No bounce? Market is in trouble. The TRIN close today was 2.66, well over 2.

The jobs bonanza starts tomorrow with the Challenger Lay Off report and the ADP Employment report, both as a warm-up to Fridays BLS report. Oil inventories report and the Beige Book also will inject some volatility on Wednesday. Futures are down this Tuesday evening, but not by much….still 10 hours before the US cash open.

In trading, somedays you are the pigeon and some days you are the statue!!