"The weekly chart of the VIX (volatility index) above shows investor complacency. So.. the break or changing of the Mid to Longer term trend can come at any time."

"The weekly chart of the Dow Industrials index above shows that the Weekly charts are showing more and more weakness. This leads ShepWave to believe that a key TOP should be upon us soon. "

"The Monthly chart of the S&P 500 index shows some potential key analysis for LONG TERM Investors. If the S&P 500 can close below 1,403 for the Month of February there would be definite reason to be cautious as a long term investor."

"Per the Friday morning special update last week we have possibly the best trade set up as we have had for almost a year. The technicals we were looking for in Friday morning''s update unfolded nicely. We are expecting a 10% minimum move in the indexes to occur over the next few weeks. The move could be larger than 10% but for now 10% is our basic goal. I show initial targets in this Monday Morning Regular Scheduled Update."

For those of you who actually read ShepWave updates you know that we have been talking about the possible 'ending diagonal' pattern in the indexes for the rally which began in October 2002. Ending Diagonals are actually a bearish pattern. Once broken a precipitous drop is to be expected (for an upward diagonal). So, today's move is of no surprise to us. So now what?

The Dow Industrials index 'could' actually rally tomorrow (Wednesday) and still issue a potentially very bearish Monthly signal which could dictate the direction for the Mid and Long term for weeks, if not months,  to come.

In tonight's update I show what we are looking for to either confirm or negate the potential that the rally is over. Remember 'Objectivity' is our goal. We MUST take the emotion out of trading/investing to maintain objectivity at all times. I also show some potential targets for the short to mid term along with longer term targets.

Our recent short term trade in the QQQQ was up over $1.55 in 'after hours' trading this evening. We have adjusted the stop/loss area to Lock In Profits. Check the Shep's Trading Log for any stop/loss adjustments. For now we are keeping the position open.

Click here for today's ShepWave update.