With the close of the market Thursday, the major market indices generated sell signals. I covered these "Sell Signals" and my downside targets in a special edition of the Sterling Weekly on Friday the 17th. The overall market moved lower on Friday and closed below my initial targets on the Dow Jones Industrial Average, S&P 500, and the NASDAQ 100. I am expecting the overall market to continue to move lower.

However, I would like to include a note of caution on today's market activity. When I was looking at a chart of the Dow this weekend, I drew a trendline from the October lows to the December lows to see where it would extend to. To my surprise it reached Friday's closing price. This poses a very interesting dilemma. Does the upward trendline hold and the market rallies back above 8,750 or does it not hold and the market continues lower????

What's going to happen? To be perfectly honest I'm not sure. I don't gaze into a crystal ball and see the future, I simply try to see what the chart is trying to tell me. However, my gut feeling is that the market will continue to move lower.

I am still watching the activity in General Electric to look for a point to enter the trade on the GE Puts.

PS. I am working on improving the graphics on the charts included in the newsletter.