Pros let me know what you think. ========================================== My technical analysis yielded four results. CLICK FOR CHART 1) The head and shoulders pattern which had manifested in February and ended with a breakdown of the neck line on August 2. 2) The bearish cross-over of the 61.8% Fibonacci retracement level on August 4. 3) The bearish cross-overs of the 13-day and 50-day moving average below the 200-day moving average on August 5 and 17 respectively. 4) The emerging bearish pennant pattern which began on August 9 and continues as we speak. ========================================== I determined the slope formulas for the pennant pattern which calculated a convergence and confirmation of the pattern by September 11, 2011 at $115.72. If the continuation pattern proves correct as I believe it will, we will see a continuation of the selling pressure we have seen between July 25 and August 8 with heavy volume. Top Line = y = -0.225x + 172.725 Bottom Line = y = 0.165x + 73.805 x = Day of the Year y = SPY Price Intercept Point = (254, $115.72) September 11, 2011 is the 254th day of the year. I would have to conclude that SPY and the market in general will be declining further. Accordingly, it would be wise to be very cautious in the short term if long on SPY. ========================================== My course of action: 1) Prepare to buy SPY in reasonable increments all the way down to the bottom. 2) Sell November 2011 $116 call options in an amount which covers the amount of shares owned. If this trade goes against me, I buy back the call options when SPY breaks above the 61.8% Fibonacci retracement level.