Looks like AXP is experiencing the "GE Phenomenon" – – – kissing the underbelly of a major retracement level. Look out below.

In the middle of Monday, at 1:33 EST, I said the market was going to toss its tacos. Thirteen minutes later, it reached its ultimate peak of the day, then it started plunging. A nearly 200 point rise on the Dow was laid waste.

Some people wonder what amazing indicator I must have used to pinpoint this reversal. Well, I'll reveal it to you. It's called the OTIS indicator. It is activated when I look at the screen and say, "Oh This Is Silly". This occurred when I saw what was happening with BAC, C, AIG, and a host of other good-for-nothing stocks.

And I'm being quite serious. Do you know how many of ProphetCharts' nearly 200 indicators I use? Zero. (OK, molecool, don't get excited; I mean the number zero). Zilch. Not a one.

If you ever see me putting up a stochastic or a moving average, it's just to satiate those who are hungry for less-simple charts. But I'm faking it. I don't use that stuff. At all.

Just OTIS.

Today was a really good day for me. As I indicated, I took profits as quickly as I could on my "lottery plays" and I closed out a fair number of my regular long positions. I also amplified my shorts, particularly FAZ.

The /ES is my general guide to what equities are going to do, and the shooting star on this daily chart indicates more weakness to come.

The core question is……….what happens at the ~730 level? Do we bounce? Do we plunge into the abyss? I have no idea. I will almost certainly trim certain shorts at that level – – particularly my NQ and ES shorts – – but that line in the sand is just that – a line – and not a brick wall. But it is still an important technical level to keep in mind.

Whether we get the green arrow (a bounce up to 800) or a blue arrow (a plunge, thus wrecking all the beneficial bullish construction that has happened recently) remains to be seen. But I think we'll have our answer before the week is over.

Heidi is the proprietor of a bar in Berlin. In order to increase sales, she decides to allow her loyal customers – most of whom are unemployed alcoholics
– to
drink now but pay later.

She keeps track of the drinks consumed on a ledger (thereby granting the customers loans).
Word gets around and as a result increasing numbers of customers flood into Heidi's bar. Taking advantage of her customers' freedom from immediate payment constraints,
Heidi increases her prices for wine and beer, the most-consumed beverages.

Her sales volume increases massively.
A young and dynamic customer service consultant at the local bank recognizes these customer debts as valuable future assets and increases Heidi's borrowing limit. He sees no reason for undue concern since he has the debts of the alcoholics as collateral.
At the bank's corporate headquarters, expert bankers transform these customer assets into DRINKBONDS, ALKBONDS and PUKEBONDS. These securities are then traded on markets worldwide. No one really understands what these abbreviations mean and how the securities are guaranteed.Nevertheless, as their prices continuously climb, the securities become top- selling items.

One day, although the prices are still climbing, a risk manager of the bank, (subsequently of course fired due to his negativity), decides that slowly the time has come to demand payment of the debts incurred by the drinkers at Heidi's bar.
However they cannot pay back the debts.
Heidi cannot fulfill her loan obligations and claims bankruptcy.
DRINKBOND and ALKBOND drop in price by 95 %. PUKEBOND performs better, stabilizing in price after dropping by 80 %.
The suppliers of Heidi's bar, having granted her generous payment due dates and having invested in the securities are faced with a new situation.
Her wine
supplier claims bankruptcy; her beer supplier is taken over by a competitor.
The bank is saved by the Government following dramatic round-the-clock consultations by leaders from the governing political parties.

The funds required for this purpose are obtained by a tax levied on the non- drinkers.

I am cranking up all short positions. I have built up very large positions in FAZ, NQM9 (short), ESM9 (short), and precious metals across the board.

If I owned financials at this point (BAC, C, and so forth) I would thank my lucky stars for my profits and rush to the exits at warp speed.