The market hit its resistance, and now the obvious question becomes, 'do we keep going down or break through the highs?'
The SP500 looks to want to consolidate to around 1075. At that point, observing the continued liquidity, the market may bounce around a tight band until the end of the year, and a full break down should not take place. If it breaks upward, I will be expecting limited upside from 1100. (hence my 'prudence' post)
An indicator to this is Oil. I do not think crude will break the low 70s, let alone 75, and this should add support to the overall market. (just like the financials were an indicator of weakness for the market the other day)
If crude is to see mid/low 70s, I will play it via PBR. (PBR may see around 47 at that point.)
With the consolidating market GS should retest 175, coming off of its SMA resistance.
Depending on how the market, and GS, acts around 175, I will enter 170 Jan 09 calls.
Keep in mind, any trades I take on from now to the end of year, has no illusions of grandeur attached to them. (unless other wise stated) When the move is made, I will bounce from the trade.