Game Over

I have to laugh at the title of yesterday's post, Still Technically Bullish. Although, as of yesterday's open, it was still the case. As of this morning, not so much. Futures are down over 30 points in the pre-market.

It is the S&P cash action today that will tell the tale. We will likely be left with a 3-leg structure that I was looking for, but maybe not the look I was expecting. No problem.

I was probing yesterday with calls and they'll be almost worthless. But now I feel the market has tipped its hand. So I don't feel so badly. I will play them again today, too.

Let me repeat this from yesterday:

However, any weakness could morph into more weakness at any time -- Friday's pattern left the market with some interesting options. But unless the S&P quickly heads below 1265 and fails at the 1245-1248 area (61.8% retracement zone) I will continue to look for 1300-1306, but will play it very cautiously. The EU debt deal is precarious at best, and is symbolic of too much lingering hope. When hope is finally displaced by outright FEAR, people can do extreme things.

Futures down over 30 points is what this looks like.

Structurally, it looks like game over for the bulls. That does not mean there cannot be a bounce, or even another wave of bullishness that takes us to recovery highs. It just means that structurally the market has created a bearish signature and that it should be respected until proven otherwise.

At best today we could see perhaps 1240-1245 or perhaps a close of this morning's gap. Below is the 38% retracement from Thursday's 1292.66 high measured from the October 4th 1074.77 lows. It is roughly 1209.