This morning I bought e-minis at 1437 but a little while ago got stopped out at 1422.
Today's action is, at least in the short run, bearish. I had expected the market to dip briefly to 1435 or so in the e-minis but then rally strong by today's close well above the December 18 low at 1446. Instead, we have seen a wide range down day on the breakout below 1446. This tells me that the cash S&P should continue down to 1390 or so which would put the e-minis near 1400. A drop to 1390 would make the drop from the October top about as long as the drop from the July top to the August low.
There is an outside chance that we will see a bigger drop to 1360 in the cash S&P ( 1370 in the e-minis) which would be a temporary break below the August low at 1370 cash. However I think any such break down will prove to be temporary.
Despite all the bearish action and sentiment we have seen over the past few months I am still convinced that the market will rally to new bull market highs by the end of the first quarter of 2008.