I am going to employ a sequel to my strategy outlined Monday [Mar 15, 2010: Strategy For a Downside Move] except instead of striking when/if the S&P 500 breaks below 1140 (which it failed to do), move that figure up to 1160. Indeed it's an identical set up... on Monday the market had bounced off 1140-ish intraday the previous few sessions, and now it's 1160ish.
Unlike Monday however, we have a new support level (1150) standing between us and a gap fill at S&P 1124. (old resistance becomes new support) So the shorter term move would be to short below 1160 with a target of 1150 where certainly the persistent bid will show up to support the market. Then a break below 1150 would perhaps lead to our gap fill.
That said, with what I see as euphoric joy off a census laden jobs report a week from next Friday - plus end of quarter mark ups (not that this happens because the SEC is on the job) next week, I'd be surprised to see us break 1150. That said this is the general outline to perhaps try to catch 8-9 S&P points of downside if and when....
For now, I am sitting back and watching the absolute carnage... the DJIA is down 0.15%. The horror of it all. Someone stop this, I can't look anymore. Ban short selling immediately. (how come we never hear discussions of banning long purchases when the market is up say 23 of 25 sessions? Or that longs are manipulating the market? if it was the opposite - down 23 of 25 sessions - you'd have cries of injustice and talks that shorting needs to be stopped. Or bring back the uptick rule. Etc. Funny that.)