I don't know - I have a bad feeling about tomorrow. Tomorrow is options expiration day and this has been a really really bad day for 10 of the last 12 years. I see nothing in the daily Dow chart to make me think 2011 is going to be any different. Also, all three futures are down at least 0.1% right now (1:15 AM EST). So today's little 2.5 point loss still keeps us in the middle of the rising RTC and therefore the swing trend remains intact.
However, the indicators are still all very overbought (the RSI is actually more overbought than it was on Tuesday) and today's down volume was higher than yesterday. Although the shape of today's candle is a doji indicating indecision, I'm really not looking for any gains at all tomorrow and would not be surprised to see a drop to the 11,778 area which represents minor support for the Dow.
Note also as I mentioned yesterday how the action of the last three days seems to be replaying what we saw starting January 6th. From the peak on the 5th, we had two declining dojis, very much like we saw today and yesterday. If this pattern plays out, look for a hammer tomorrow, though still ending lower.
The one bright spot is that the VIX hit its upper Bollinger band today and then retreated from that. Almost every time when this happens (going back over a year), the VIX goes lower within two days, implying stocks go higher. So if tomorrow is in fact lower, and especially if tomorrow replays the action of the 10th and forms a hammer, I'd expect to see a rally start early next week.
Today I bough a bit more ANH at 6.86 for my low price/high yield portfolio. It has pulled back over the last three days and reached some strong support, forming a bullish gravestone doji today. Although the LP/HY portfolio took a 10% hit yesterday, that still leaves it above the level it was at just six days ago. I think its downside from here is limited regardless of tomorrow's broader action.