8:50am (EST)

The bulls got a wake-up call on Thursday as the bears rang early and kept the pressure on all day until Dow 12,000 was cracked.  There were a lot of negative headlines that are continuing into this morning so let’s go over where we are at.

The Dow fell 228 points, or 1.9%, and closed at 11,984.  The index was flirting at holding the 12,000 level for much of the session but the bears will now look at 11,800 and then they will target 11,600-11,500.  A break above 12,000 would be bullish today and 12,200 would be near-term resistance.

The S&P 500 was down 25 points, or 1.9%, and finished at 1,295.  The close above 1,300 was big and we knew support might get stretched going into the close.  Lower level support is at 1,275 and then 1,250 if the bulls cannot get back over 1,300.  Resistance remains at 1,325.

The Nasdaq held 2,700 but dropped 50 points, or 1.8%, and settled at 2,701.  The index touched a low of 2,695 which opened the door for a possible test down to 2,650-2,600.  Resistance will now be 2,750 and then 2,800.

The expectations for a bounce next week could still come into play but futures are pointing towards a lower open this morning as the bulls face a fresh wave of negative headwinds.  We have covered a lot of information this week and we believe the next 30 days are going to be explosive.  We repeat, the next month will be an incredible opportunity to trade the current volatility and we are locked and loaded.  We have a number of calls and puts on our Watch List and next week is March options expiration so expect battles at key strike prices for a lot of stocks.

We got a lengthy update this morning inside our Members Area and we share more thoughts on the current market conditions as we get ready for a new batch of trades!  We have a number of trades winding down and we want to make sure of the market breakout (or possible breakdown) before we go fishing.  Our gut says the bulls won’t give up and they have one last push left in them for higher highs.  However, our gut is also growling and the bears are still hungry which is letting us know this 3-week trading range could be coming to an end. 

We will be around 1-ish with the afternoon update and a possible trade if we see an opening.  If we get a signal, we may release a trade shortly after the open.  Yesterday’s 2% drop was the worst decline since August for the market which is also telling us something.

As we head to press, Dow futures are lower by 36 points to 11,884 while the S&P futures are off by 2 points to 1,288.  Nasdaq 100 futures are down 6 points to 2,275.