Good Morning, Traders. In last week's ShadowTrader Video Weekly and in earlier commentaries this week, I predicted that the Dow would more than likely be moving at least 100 points lower this week. Lo and behold it already almost has. Some serious sellers jumped into the fray pushing the Dow down by over 120, the S&P off by more than 11, and the Nasdaq lower by a bit more than 33. Overall volume was higher on both exchanges smacking the market with yet another distribution day. Generally, one would expect less action here ahead of an impending Fed meeting but the tight range of three inside days in a row got bulls and bears wound up like a top. Once prices broke through the consolidation area (roughly Dow 11,000), longs realized they were wrong and new bears also stepped in to fortify their positions causing the large point drop in the indices. My clients are continually instructed to look for oppportunities where the largest amount of people are going to be made wrong all at once. These are those "oh s*&%" moments when a very large number of traders and investors all realize at the same moment that they took positions ahead of a move on the strength of their own opinions, rather than waiting for the "train to leave the station." These individuals "bought their tickets on the platform rather than on the train." Overall bias is down with near-term bias sideways to down.

Peter Reznicek is the Chief Equity Strategist and a principal of the Prana Fund, a domestic hedge fund, and ShadowTrader, a subsidiary of thinkorswim which provides coaching and education to its clients on both intraday and swing trading of equities. For a free trial to the full version of The Big Picture or to learn about ShadowTrader's other services, visit shadowtrader.net or send an email to preznicek@shadowtrader.net.