Our general rule of thumb is that dip buyers only learn their lesson after they have been burned 3 times and, so far, only the August dip buyers are being really burned but a failure to retake that line and a move lower...

This is a CORRECTION – which means the prices you are starting to see are CORRECT, not low…

As with skiing, a nice drop can be lots of fun – if you are ready for it. If not, things can get broken…

We've failed the 50 dma on the S&P, Nasdaq, NYSE and Russell and the Russell failed its 200 dma long ago. We're still waiting for the Dow to cross below 16,940 and confirm the carnage but we made those bets long ago with our DXD Oct $24 calls, which are now 0.70 from our 0.45 entry back on 9/18.

So much for 2,000 holding. Fortunately, our Big Chart kept us cautiously bearish into the weekend and the hedges in our Short-Term Portfolio functioned perfectly, gaining $13,000 on the day and completely offsetting the drop of $8,000 in our Long-Term Portfolio.

Despite the HUGE rally signals, I remained skeptical and said we needed to confirm 17,160 on the Dow and 11,000 on the NYSE before we even began thinking of looking for our real bullish goals of 1,200 on the Russell and 17,600 on the Dow.