Here's something I sent out yesterday to someone who asked me about market direction. I thought I'd share it here. Since I wrote this, we've seen two runs at the 10,850 support - both have held:
My last two trades were sells. I haven't entered a new position in a week now. I think the problem is a combination of the fact that we've had a long unbroken upward run that's running out of steam just before reaching a natural barrier (the 11,000 mark in the Dow). I think we're going to see a few attempts to push through 11K (see the last three days in the Dow) and they'll fail taking us back to the first support around 10,850. I think that will give the market a chance to rest and reload for the next charge. This sort of thing seems to happen a lot at these levels. Check out the action the last few times the Dow has tried to cross 11K (the first one was in 1999). Also, the VIX is about as low as it's been for a few years lately.