If there was one chart that terrifies me, it is shown below. It shows what could be a very formidable inverted H&S pattern on the IWM which, if fulfilled, would be explosively powerful for the bulls.

Conversely, if there was one chart right now that gave me comfort that the bullish nonsense of the past six weeks had, thank God, finally petered out, it would be the chart below.

One thing I will note is that volume continues to whither away. Today's volume on the IWM was 90% less than it was last August 16th. The volume today is akin to what was seen on Christmas Eve.

Now, I know only enough about Elliott Wave to hurt myself, but I've made a stab at labeling the AMEX China Index, which looks ready to resume its sweep downward. Any of you EWT folks, let me know how I did.

As for the $INDU, it was wiggling up and down all day long and wound up slightly down. I think most traders were falling asleep out of boredom.

The Russell was relatively strong, and I have to admit, I am so concerned about the aforementioned pattern that I closed out my Russell puts at a loss. I simply don't want to tolerate that kind of risk of something happening like Wednesday rolling around and being up 400 points. What if a recession hasn't started? What if the Fed produces whatever love juice the bulls are craving? Wednesday is going to be gigantic.

The S&P is a deliriously interesting pattern right now. Three different patterns at play here – – a descending trendline, a horizontal line, and a channel, all of which spell "short!" unless they are violated.

The Transports were particularly strong, pushing up to its next Fib level.

And gold, in which I have no position, looks like it could be headed for a much steeper fall soon.

Now a handful of stocks. There are a ton of stocks which have enjoyed multi-hundred (or thousand) percent gains. Anything to do with fertilizer or agriculture, it seems, has been blessed. Some of these are finally showing a bit of weakness, such as AGU.

I don't know if I've had a trade on KLAC in the past decade, but I'm intrigued by this one. It has a nice, clean stop too.

I've got a few put positions on investment banks, and this is probably my favorite of them.

I confess to feeling pretty down lately. I've pulled some chips off the table out of fear. I will be more comfortable trading these markets once the one-two punch of Wednesday is past us.

The past six weeks have been pretty much a bull-fest. Now that we're mushing up against the upper boundaries of what (God willing) will be the end of this rally, activity has shriveled up, and people are alternating between watching (i) grass grow; and (ii) paint dry.

The VIX has whithered away back down to the teens. Complacency is king again. Just look at the smirking bull on the cover of Barron's this week. I, for one, welcome our new bull overlords.

Although today alone is going to be pretty quiet on the economic front, this is a blockbuster week for news, particularly the Big Kahuna – Wednesday – where the GDP comes out (answering- – not speculating – – as to whether we're in a recession or not) and the Fed announces (rate cut? steady?). Expect mid-week to be insane with volatility.