This market is set up for a rude awakening. There will be a bounce from this current pullback, probably either on Friday or Monday after CNBC stops showing videos of Spain riots. But we are getting the increase in volatility that I've been waiting for. I still want to see some rally attempts that fail to make absolutely sure that we are going lower. But it looks like 1450 and higher is safe to short next week. If we get there.
There is way too much complacency in this market with "In Fed We Trust". With earnings coming up next month, more anxiousness building for a possible fiscal cliff, and China crashing, you have a lot of bearish catalysts coming up. Targeting a sharp pullback, 80-100 points (between 5-7%) by mid to late October, to around the 1350-1370 zone.
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