http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=9&dy=0&id=p83750808625&a=214966864

Today prices are breaking the nov 12 trendline, a potentially serious event.  There are other technical signs which may limit the damage — or at least make it calculable.  What we are seeing at 3 may be a bear flag.  If this is so then the target of prices following this scenario is 1707.  (initial analysis which may change.  Could be worse.)  Flags tend, in general, to terminate waves rather than initiate them, but as always there is no guarantee of anything but taxes.  Even death is being negotiated with.  (See Ted Williams.)

We have pared our portfolio back to just the leveraged SPX and most of that is hedged.  edwards-magee.com is not a trading advisory, but an educational site.  Nonetheless readers should evaluate their positions with the knowledge that we are in for more downside volatility.  While our main account is partially hedged we have other important accounts which are grinning and bearing it — or maybe crying and baring it.  These accounts will just sit it out.  As soon as the knife stops falling we will be adding on to positions in all accounts.  This last requires some trading skills, so readers should stay alert.