Finally we saw some selling today that was long overdue as the Dow fell 475 points on average volume. The advance/declines were better than 3 to 1 negative. The summation index is still moving up. Things were moving along to the upside as usual until there were only a couple of hours left in the session. Then the selling started and just fed on itself as it was practically a straight line down closing on the lows of the day. The short term indicators for the S&P 500 have turned down but they are still overbought. I don't think that this is the beginning of some kind of huge decline but rather a well needed rest before the S&P goes on to a new all time high. We'll see. Perhaps we'll get a set up for the SPY January calls. Waiting for the end of the week and Fridays inflation numbers before commiting to any type of trade. Gold dropped $8 on the futures. The US dollar was higher and interest rates lower on the day. The XAU fell 2 7/8, while GDX lost 3/4. Volume was on the light side. The short term indicators for GDX are trying to roll over. The daily candlestick chart here now has a bearish engulfing pattern on it. There is also a potential negative divergence on the RSI daily indicator. So while we are inclined to try the GDX January calls, we will wait and see where things go from here with regards to the gold shares. Mentally I'm feeling OK. The VIX took off to the upside and closed above the upper Bollinger band. The short term indicators are moving up with room to go. I'm not sure what's next for the VIX as we got the volatility implied by the tight Bollinger bands today. Perhaps we'll travel up to the 50 day moving average at 15 but that's just a guess. We'll keep an eye on it. The extreme overbought market conditons are finally getting some relief. How long the relief lasts is the next question. The Santa Claus rally is supposed to start on Friday and last seven trading days. Perhaps todays decline will allow that to take place. We'll know as time moves on. Asia And Europe were mixed in yesterdays trading overseas. We'll see if there is any follow through selling in stocks tomorrow.