Seanote, good entry on your shorts from a few days ago! We could be seeing a bad number from IBM and another major company might warn tonight (it is warnings season).
The market in general. F looks like an interesting play. If you get put the stock, you could turn around and sell the Jan calls and probably pick up another .50.
The Dow yesterday halted at 8255, just below its 50-day moving average, which stands at 8279. The Dow low of 7286 (Oct. 9). At the top end of the rally we have yesterday's closing high of 8255. The Dow will either break out above 8255 or it will break down below 7286. The Transports will have to confirm. Yesterday's high close for the Transports was 2286. The Transport low of Oct. 9 was 2013.
Transport confirmation is old old Dow Theory, which made sense during the Industrial heyday, but in today's economy, so highly service and information oriented, transport confirmation is less relevant than it was decades ago.
The Transports are the only sector that have yet to confirm lows over the past 2 years. I think that alone is very important in relation to the Dow and does carry significant weight for future decline in the Dow. I agree with your comment that today's economy is based off of sectors that have more implications on the indexs compared to the Transports, but at this point in the market they need to be paid attention to.