by Matt Walters

Brutal market today for the longs. It took off early in the morning with a significant gap down and never looked back, closing down over 8% on the day. This is going to send jitters throughout the world markets, and the question becomes, not so much if it goes down from here, but where does it put the breaks on at.

Honestly, one of the biggest discouraging factors for a bottom being put in this market, is that too many people are calling one at the current price levels, believing that the November's lows were the end to all the pain and suffering. Thus the reason that on a traditionally, low-volume, holiday week, we got such a huge rally.

But what I believe we will see is a the November lows taken out, and the chorus of CNBC yuppies that insistently call these bottoms will be shut up, and never again call a bottom; all the retail investors, and bloggers will finally give in and say, "I give up on finding the bottom" and then at that point, the bottom likely will be formed.

Am I Predicting a bottom? Absolutely Not! Maybe we go to 7000, perhaps 6000, heck maybe even 4000 on the Dow. I don't know and I honestly don't care. What I will be doing is compiling a list of stocks that I will focus on once, the market finally does turn over a new leaf, and be ready for the incredible opportunity that will be before us.

by Matt Walters

Thanksgiving Holiday started off with bang by holding on to Friday's enormous gains and then adding more to the tune of +6%. The most interesting part of the day however came at the very end, when the markets were up about 8% or so, and in the last 10 minutes, sold off heavily to put each of the indices at or below important levels of resistance, and as a result, though the markets made significant progress from a percentage standpoint, there was little to no progress made on the technical side of things.

In fact, from a bearish perspective, things are looking good for tomorrow. The stocks are right below major resistance levels, after rallying over 13% in two days; any failure to push through these levels, could send the stocks tumbling downward. Let's face it, the crisis is not over and done with, just because we have had two positive days in-a-row. In fact, the "V"-shaped bottom the index put in bodes well for the bears as these types of bounces are very difficult to sustain.

But if you're the bulls, you are going to need to put in a nice run past 925, and when the next wave of selling kicks in, then hold on to that 850 level. Now that's the ideal scenario if you are a bull, but the chances of that happening are not that great. Instead, if I were long in this market right now, I'd be looking at taking profits on this rally that seems more like a gift than anything else.

Here's the Nasdaq and S&P charts...

by Matt Walters

Unbelievable what the market uses as reason to bounce. Lets face it, heading into the open the  markets were up already over 2-3%, and even though it gave back all of those gains rather quickly at the open, news of President-Elect Obama's pick for the Treasury gave the market with enough momentum to rally 6%.

But let's be really honest...does Obama's pick of Tim Geithner as Treasury Secretary, really get the markets that excited? No. This was just an instance of where the market was so desperate for a non-negative news piece, that Obama could have probalby appointed the family dog as the Treasury Secretary and the markets would have been fine with it. It was more of a rally due to the fact he actually appointed some one rather than who he actually appointed.

That's why this rally sets up as a very favorable shorting opportunity. But remember, Thanksgiving has traditionally been a good week for the bulls - except for  last year in which it saw about a 3% loss headinging into Turkey Day. Nonetheless, with all the selling that has taken place of late, next week could be a week for which the market works off some of those oversold conditions.

Here's the Nasdaq and S&P charts...