One would think that with the daily news filled with the credit crisis and sub prime issues, it's all downhill from here. Traders should understand that one of the essential the keys to market participants is Volatility and this can provide us with tradable opportunities.

Certainly volatility has picked up since July of 2007. If one compares the declines of July to August which was -11.17% to the current fall of -10.38% it certainly feels as if this decline is more serious than the previous one.

However considering historical studies which show that years ending in 7's are often poor performers, the current situation had provided a good Shorting opportunity at the July and October highs right into Fibonacci price levels.

Technically speaking, the recent decline is turning out to be either an ABC correction or possibly an Elliott wave 3 formation. We should watch for support at 12683 which is a Fibonacci 162% multiple of wave 1-2. Often this level provides the market with a potential trading opportunity. In the Dow's case a short-term rally.

Although over-run by time studies the November to January period is a positive season for the markets and the lows can provide us with a setup for good risk – reward ratios for sizeable profits.

A break above 13040 is required to resume the upward move towards 13280 as well as an upturn in momentum indicators. For the intermediate term, the trend is still down until 13370 is taken out.

Sandy Jadeja is Chief Market Strategist for ODL Markets and founder of where he teaches low risk trading strategies and money management.