What's Next

Although I completely and utterly missed a golden opportunity to make enough money last week to pay off the debt of some small nations, I believe I have a pretty clear idea what's about to happen with the market (side note: what I'm talking about is that I had buckets of puts on the SPX and selected stocks, and every single one of them skyrocketed in value after I closed the position. Anyway.)

The market has gotten pummeled, and it's going to recover. Maybe for a day. Maybe two. Or three. Or even a week. But it's only going to retrace to the zone (shown in this picture on the $SPX shaded in green) representing the 'neckline'. And once it retraces, and once the $VIX settles back - - - then all hell is going to break lose. I don't know what event will be used as the excuse for it. But it's going to get trampled. And hopefully I can recover some of the pride I lost last week by letting that huge fish (OK, it was a whale) get away.

Even though the $SPX isn't a head & shouders pattern, the market is absolutely filled with them. I've never seen so many of these patterns at once. My short candidates (for when the market finishes retracing) are as follows; some of these are head & shoulders, and some have broken major uptrends:

ASEI
ATI
BNI
CELG
CNI
CRS
CTSH
CZR
GD
HET
IIVI
IJR
IVGN
JLL
MAR
MGG
MOS
MVL
NC
NSC
NVR
PHS
TBL
TTC
UB
VMC
VTIV