We closed the month to the downside as the Dow fell 620 points on very heavy volume. The advance/declines were around 3 to 1 negative. The summation index is heading lower. This week had the first real selling that we've seen for a while. The S&P 500 closed at its 50 day moving average. On a weekly basis the S&P is right at the up trend line that began with the lows last March. At the rate we're going this line isn't going to hold. The next support in my mind comes in at around 3500 and we are no where near that. The weekly indicators have rolled over and they have plenty of room to go lower. So we may perhaps be in the midst of an actual correction. 3500 on the S&P would be roughly a 10% correction. That's what I'll be looking for going forward. Could things turn around next week and the up trend line hold? Of course that could happen but I'm not thinking that it will. On a short term basis the S&P is oversold but not completely just yet. Volatility is back. GE was off 3/8 on heavy volume. Gold was up a little today but fell back far from its best levels of the session. The US dollar finished slightly higher. The XAU and GDX had slight fractioanl losses after opening up much higher. Both got pushed back from their 50 day moving averages. Volume was light. The price action was negative. With all that is going on at the moment, which includes the stock price manipulation on shorted stocks along with the recent market volatility, I would have expected to see a flight to gold. It hasn't happened. Perhaps trying the GDX February calls here is the wrong idea. My open order is still out there but I'll definately have to reconsider this over the weekend. Mentally I'm feeling OK. The VIX bounced around today and finished higher. We've already reached VIX levels that have ended recent declines in the market. I'm not sure if that is going to happen this time around. I'm looking for more weakness in stocks to come as the summation index is heading lower. 350 would be the target for the SPY but it is probably too late to try the puts there. We'll see what happens in the beginning of next week and go from there. There's still three weeks left in the February option cycle. Plenty of charts to look at over the weekend. Europe and Asia sold off to finish the trading week overseas. It's Friday afternoon and time for a break.