Editor's Note: Good evening. I wanted take a few minutes to review market action today and where I think we may be headed from here. Obviously, the market has bounced much higher than I anticipated as the S&P 500 has gained over 75 points in 5 trading sessions since its lows last week. Honestly, I'm surprised it held up as well as it did today considering the sell-off in AA and CSX after earnings and the -2% decline in Apple. Something else interesting was the VIX and VXX not falling harder. Both of these indicators should have declined much more with today's gains (to the tune of -3%) but they were not. In fact, the VIX closed higher on the day. It feels to me that this market is being held up by an institution and it may have something to do with OPEX. This is the concern for long positions because when the rug is pulled this rally could fail very hard and fast. I've provided a 4-hour chart of the SPX that I am using to keep things in perspective. Now is logical reversal point but we need to see it happen.

After the bell today Intel reported their second straight "best ever quarter" and has popped significantly higher while YUM Brands is getting punished after earnings. Intel has a history of post earnings sell-offs and last quarter the markets went along for the ride in a big way. Will history repeat itself? We probably won't tank tomorrow but the fact is the major indexes are right at critical resistance areas, primary downtrend lines, and important SMA's. The momentum has obviously shifted but I will be surprised to see these levels broken on the first try. As I have stated recently I can not get behind this rally until a close and follow through above the 1,105 area on the S&P 500. And even then we may only rally another 25 points until the next resistance area near 1,130 has to be dealt with.

The same concerns about the economy that existed last week are still here but for now the fundamentals have been thrown out with the bath water. Whenever this bounce stops I do believe we retest lows or at least regress back to the 1,050 to 1,060 area. However, if we bust through this resistance then we'll follow the market and get more bullish. But until there is more clarity I am hesitant to release additional long plays. On the contrary, shorting now with tighter stops seems to be the better play. We've got plenty of open short positions to take advantage of a sell-off. Tomorrow looks like it will be a continuation of the rally up to the 1,105 area so we'll have to see how things close and how OPEX week ends.

I'm considering releasing a short trade on SPY, possibly tomorrow, but I need to see more price action first. I've provided a couple of long and short trade set-ups for those that are interested. These may or may not make into the model portfolio but I wanted to give readers a heads up.

Long ILMN: The stock looks like it wants to break out of resistance and to new 52-week highs. I would keep a tight leash on the breakout in case the broader market fails.

Long EWZ: The ETF has broken and closed above its primary downtrend line that started on 4/21. Profit target is about +5% higher.

Short Candidates include: LEG (rallying into resistance), EBAY (rallying into resistance), EBIX