111 on the DIAmonds...

...is the last level of meaningful support (38.2 fibo drawn from the 10/10/02 low to the 10/11/07 high) - after which we have some minor support at 107 and 105 before hitting the 50% retracement level of 102. I'm anticipating some froth at the 111 level but in the end I believe a dead cat bounce will provide just the energy needed to crack this support level.

Also the declining volume on the subsequent big down days tells me that we have not yet reached the bottom. I'm looking for a big volume event on a substantial distribution day to mark the end of the downtrend - capitulation - but we ain't there yet.

I sold my DIA puts for a tidy profit in anticipation of a short bear market rally (or in the event that the 111 support holds), and have lightened up on my other broad market index ETFs. One exception - GLD - I bought puts today as GLD was banging its head on 93. The range between 85 and 93 has been pretty solid and I continue to trade this range with options.