Stocks made a dramatic move lower today but it's not a breakdown yet. You can see from the chart below that the S&P 500 index is on the verge of breaking down from its sideways consolidation. Of course there is always the chance that traders buy this dip near the trendline of higher lows.
Sometimes the best trade is no trade. U.S. markets might churn sideways in a volatile range while we wait for news on the Super committee's plan (or lack thereof) for $1.5 trillion in spending cuts. Their deadline is November 23rd.
If you are looking or a trade then further weakness in the S&P 500 might be an entry point to buy puts (on the SPY) and aim for the 1200 level (120). Of you could buy puts on the Dow Industrials Diamonds ETF. Alternatively you could be ready to buy the dip in the NASDAQ composite as it nears support at the 2600 level. To play the NASDAQ you could buy calls on the QQQ or the TQQQ.
Chart of the S&P 500 index: