Today [[RIO]] tested the previous high on 8/27 of $49.28, it went over it at 49.37 and closed under it at 47.97. Additionally we were lighter by 1 million shares which means that there are no more buyers. This may have legs tomorrow to test the last high on 8/8 of 49.39 but otherwise this is going south. I am currently short with OCT PUTs.

Perfect example of benchmarking volume and buying on retracement with [[BIG]]. There are several examples below which show a rejection of price and closing higher above previous low - this is strong and is the buying point. This is a sign of strength.

We are in a bounce this week and early next week in the [[QQQQ]]. Here is a weekly chart of the QQQQ and you can see that we are clearly over extended above the upper trend line. In the next few days we will test the high on 8/8 at 49.06. That is the time to short or buy the [[QID]]. I believe that we will go down to 45.50 first, test that swing then head down to 42.50 swing. I would start buying the QID in the $43-44 range.

[[RIO]] looks like a short now at 45.04, the target is 41.00. We need to fill that gap up on August 21 at a high of 41.45. Yesterday we could not break the high and we did it on lighter volume then Aug 8. This means not enough buyers versus sellers.

Like I wrote the other day the general market was getting toppy with no good news. There is plenty of bad news from the fed dropping short term rates by 50 basis points to lending $2 billion dollars to four banks. What a coincidence that $2 billion was invested by Bank of America into Countrywide. Was there a back end deal by the the feds to help bail out Countrywide?

So the market is heading down and will test Dow 12900 and NASDAQ 2440. There is good volume to drop another 2% before we see any support.

Continue to buy QID or DXD. You can short AAPL and CROX. FXI did an island reversal and will drop another 10 points to 131.87 to fill the gap.

The market has no legs today. The volume was low in the major indices. I believe that we may see one more day of light up then turn down. Both the Dow and NASDAQ hit the EMA(9) but could not close above this.

In the next few sessions

• Dow will drop 300 points to test 12900
• NASDAQ will drop 100 points to test 2440

The trade

• Buy the [[QID]]
• Short [[AAPL]] at 130.50 down target is first 120 then 115

Captone Turbine [[CPST]] small cap stock but has a lot of potential. I bought it a few months ago to ride from 0.80 to 1.11. I just bought again today at 0.98 and looking for it to test 1.10 then it should test 1.23. There were plenty of buyers in July so I am following the trend. It will be wild ride but should be a good 15% to 25% trade.