Ringing in the beginning of a new year with a clang as the second day of trading resulted in more selling. The Dow fell 284 points on average volume. The advance/declines were better than 2 to 1 negative. The summation index is turning lower. The NASDAQ led the way lower again and that's a negative. The short term indicators for the S&P 500 are heading down with room to go. It appears that a decline has begun. The Santa Claus rally was wiped out and that usually means that the bears are now in control. Support for the S&P comes in at around 4600, which is roughly 100 points away. The S&P 500 is still pretty far away from its 50 day moving average. The potential negative RSI divergence was for real this time around. Is it too late for the SPY January puts? Maybe not if we see some kind of light volume rise from here. But we will probably wait for Fridays jobs report and the reaction to that before making a move. Gold fell $25 on the futures. The US dollar was higher and interest rates finished flat but lower than the worst levels on the day. The XAU dropped 3 1/4, while GDX shed over 3/4. Volume was heavy to the downside. It appears that the buy signal for GDX that we were getting from one of our indicators yesterday was off. That's why it is always better to have more than one signal going in your favor. GDX did make it down to the first up trend line at 29.5 today. It is not completely short term oversold yet though. So we are in the dilemma of whether to try the GDX January calls now or wait until it gets completely oversold. Again, if stocks continue to sell off the gold shares will most likely follow. However there are no guarantees one way or the other. I am now also thinking about the possibility of heading out to the February option cycle with regards to GDX. So as usual there are plenty of questions with no clear answers. Mentally I'm feeling OK. The VIX was up today but is still below its 50 day moving average. The short term technical indicators here are heading up and most have room to go higher. A break above the 50 day would be bearish as the VIX hasn't been above that line since the beginning of November. We'll look things over tonight and try to decide which road to take or simply remain on the sidelines. Europe and Asia were lower as perhaps we're in a worldwide liquidation of sorts at the moment. We'll see what tomorrow brings.